Document:

Exhibit

Exhibit  10.2

MEMBERSHIP INTEREST PURCHASE AGREEMENT
dated as of March 29, 2016
by and between
SEMPRA REX HOLDINGS, LLC,
and
ROCKIES EXPRESS HOLDINGS, LLC

 

TABLE OF CONTENTS
	
			
	Article I DEFINITIONS
	1
	

	Section 1.1 Definitions.
	1
	

	Section 1.2 Construction.
	4
	

	Article II PURCHASE AND SALE; CLOSING
	4
	

	Section 2.1 Purchase and Sale.
	4
	

	Section 2.2 Purchase Price.
	5
	

	Section 2.3 Closing.
	5
	

	Section 2.4 Transfer Taxes.
	5
	

	Article III REPRESENTATIONS AND WARRANTIES OF SELLER
	6
	

	Section 3.1 Organization and Existence.
	6
	

	Section 3.2 Authority and Approval.
	6
	

	Section 3.3 No Conflict; Consent.
	6
	

	Section 3.4 Title to Subject Interest.
	7
	

	Section 3.5 Litigation.
	7
	

	Section 3.6 Brokerage Arrangements.
	7
	

	Section 3.7 Taxes.
	7
	

	Section 3.8 Contracts
	8
	

	Article IV REPRESENTATIONS AND WARRANTIES OF Buyer
	8
	

	Section 4.1 Organization and Existence.
	8
	

	Section 4.2 Authority and Approval.
	8
	

	Section 4.3 No Conflict; Consents.
	9
	

	Section 4.4 Brokerage Arrangements.
	9
	

	Section 4.5 Litigation.
	9
	

	Section 4.6 Investment Intent.
	10
	

	Section 4.7 Certain Matters.
	10
	

	Article V COVENANTS
	10
	

	Section 5.1 ROFR.
	10
	

	Section 5.2 Company Approvals.
	11
	

	Section 5.3 No Solicitation of Other Bids.
	11
	

	Section 5.4 Purchase Following Closing.
	11
	

	Section 5.5 Confidentiality.
	12
	

	Section 5.6 Post-Closing Audits and Examinations.
	12
	

	Section 5.7 Tallgrass Holdco Payment.
	12
	

	Article VI CONDITIONS TO CLOSING
	12
	

	Sections 6.1 Conditions to Obligations of Buyer.
	12
	

	Sections 6.2 Conditions to Obligations of Seller.
	14
	

	Article VII TERMINATION
	16
	

	Section 7.1 Termination.
	16
	

	Section 7.2 Effect of Termination.
	17
	

	Article VIII INDEMNITY
	18
	

	Section 8.1 Indemnification.
	18
	

	Section 8.2 Notification and Defense of Claim.
	18
	

	Section 8.3 Limitations.
	20
	

	Article IX MISCELLANEOUS
	20
	

	Section 9.1 Acknowledgments.
	20
	

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Table of Contents 
(Continued)

	
			
	Section 9.2 Cooperation; Further Assurances.
	20
	

	Section 9.3 Expenses.
	21
	

	Section 9.4 Notices.
	21
	

	Section 9.5 Governing Law.
	22
	

	Section 9.6 Initial Public Statements.
	23
	

	Section 9.7 Survival.
	23
	

	Section 9.8 Entire Agreement; Amendments and Waivers.
	23
	

	Section 9.9 Conflicting Provisions.
	24
	

	Section 9.10 Binding Effect and Assignment; Certain Restrictions.
	24
	

	Section 9.11 Severability.
	25
	

	Section 9.12 Interpretation.
	25
	

	Section 9.13 Headings and Exhibits.
	25
	

	Section 9.13 Multiple Counterparts.
	26
	

EXHIBITS

Exhibit A - Form of Assignment Agreement
Exhibit B - Transfer Notice
Exhibit C - Joinder Agreement
Exhibit D - Letter Agreement

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MEMBERSHIP INTEREST PURCHASE AGREEMENT 
This Membership Interest Purchase Agreement (this "Agreement") is made and effective as of March 29, 2016 (the “Effective Date”), by and between Sempra REX Holdings, LLC, a Delaware limited liability company (the "Seller"), and Rockies Express Holdings, LLC, a Delaware limited liability company ("Tallgrass Holdco" and together with any Person executing a joinder to this Agreement on a several basis, "Buyer"). 
RECITALS 
WHEREAS, Seller owns a twenty-five percent (25%) membership interest (the "Subject Interest") in Rockies Express Pipeline LLC, a Delaware limited liability company (the "Company");
WHEREAS, Seller desires to sell and transfer to Buyer the Subject Interest pursuant to the terms of this Agreement and the Assignment Agreement, and Buyer desires to purchase and acquire the Subject Interest in accordance with the terms of this Agreement and the Assignment Agreement; 
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:
"Action" means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, whether civil, criminal, administrative, regulatory or otherwise, and whether at law or in equity.
"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 Person.  
"Agreement" has the meaning ascribed to such term in the preamble.
"Assignment Agreement" means the Assignment Agreement substantially in the form of Exhibit A attached hereto, pursuant to which Seller will assign the Subject Interest to Buyer and Buyer will assume all of Seller’s obligations with respect to the Subject Interest under the REX LLC Agreement arising from and after such assignment.
"Business Day" means any day except Saturday, Sunday or any other day on which commercial banks located in the State of New York are authorized or required by Law to be closed for business.
"Buyer" has the meaning ascribed to such term in the preamble. 
"Claim" has the meaning ascribed to such term in Section 8.1.
"Closing" has the meaning ascribed to such term in Section 2.3(a). 
"Closing Date" has the meaning ascribed to such term in Section 2.3(a).
"Code" means the Internal Revenue Code of 1986, as amended.

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"Company" has the meaning ascribed to such term in the recitals.
"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. 
"Delaware LLC Act" means the Delaware Limited Liability Company Act, as amended. 
"Effective Date" has the meaning ascribed to such term in the preamble. 
"GAAP" means generally accepted accounting principles in the United States of America. 
"Governmental Authority" means any federal, state, municipal or other government, governmental court, department, commission, board, bureau, agency or instrumentality. 
"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
"Indemnified Party" and "Indemnified Parties" has the meaning ascribed to such term in Section 8.1.
"Law" means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, or rule of law of any Governmental Authority.
"Lien" means any mortgage, deed of trust, lien, security interest, pledge, conditional sales contract, charge, restriction (whether on voting, sale, transfer, disposition or otherwise and excluding any restrictions in this Agreement or in the REX LLC Agreement) or other encumbrance of every type and description. 
 "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) that impacts the natural gas transportation industry generally, (b) in United States or global political conditions (including any acts of war or terrorist activities), (c) in global, United States or regional economic conditions or financial, banking or securities markets in general, (d) in wholesale or retail markets for or costs of commodities or supplies, including natural gas and fuel, (e) in weather, meteorological events or other natural disasters or natural occurrences, (f) in Law or regulatory policy or the interpretation or enforcement thereof, including any rate or tariff, (g) in GAAP or the interpretation thereof, (h) from any labor strike, request for representation, organizing campaign, work stoppage, slowdown or other labor dispute, (i) arising from the announcement, execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby, or (j) arising from the negligence or willful misconduct of Buyer or any of its Affiliates; provided, that in the case of clauses (a), (b), (c), (d), (e), (f) and (g), 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 Seller to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.
"Notice" has the meaning ascribed to such term in Section 9.4.
"P66 Holdco" means P66REX LLC, a Delaware limited liability company formerly known as COPREX LLC.
"Permitted Lien" means any Lien set forth in or created by the REX LLC Agreement or under the Securities Act or any other applicable securities laws. 
"Person" means an individual or entity, including any partnership, corporation, association, trust, limited liability company, joint venture, Governmental Authority, unincorporated organization or other entity. 
"Purchase Price" has the meaning ascribed to such term in Section 2.2. 

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"Representative" means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
"REX LLC Agreement" means that certain Second Amended and Restated Limited Liability Company Agreement of the Company dated effective as of January 1, 2010, among Tallgrass Holdco (as successor by assignment to Kinder Morgan W2E Pipeline LLC), Seller, and P66 Holdco, as amended by that certain Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of the Company effective November 13, 2012, among Kinder Morgan W2E Pipeline LLC, Seller, Tallgrass Holdco, and P66 Holdco.  
"ROFR" means that certain right of first refusal as set forth in Section 7.1.3 of the REX LLC Agreement. 
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning ascribed to such term in the preamble. 
"Subject Interest" has the meaning ascribed to such term in the recitals.
"Tallgrass Holdco" has the meaning ascribed to such term in the preamble.
"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 or any liability for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined or taken into account with reference to the liability of any other Person. 
"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. 
"Transaction" means (1) the sale and transfer of the Subject Interest and (2) the delivery of the Purchase Price.
"Transfer Taxes" has the meaning ascribed to such term in Section 2.4.
"Ultra Agreement" has the meaning ascribed to such term in Section 4.7.

		
	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," "Exhibit," "preamble" or "recitals" shall be references to an Article, Section, 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.

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ARTICLE II
PURCHASE AND SALE; CLOSING

		
	Section 2.1
	Purchase and Sale.

Upon the terms and subject to the conditions set forth in this Agreement and in the Assignment Agreement, on the Closing Date, Seller shall sell to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest in and to the Subject Interest, free and clear of all Liens, other than Permitted Liens, for the consideration specified in Section 2.2.  

		
	Section 2.2
	Purchase Price.

The aggregate purchase price for the Subject Interest shall be $440,000,000, plus any cash contributions paid by Seller to Company with respect to the Subject Interest from the Effective Date until the Closing Date, less any cash distributions by the Company paid to Seller with respect to the Subject Interest from the Effective Date until the Closing Date (the "Purchase Price").  In addition, Tallgrass Holdco will pay Seller any amount due pursuant to Section 5.7.

		
	Section 2.3
	Closing.

		
	(a)
	Subject to the terms and conditions of this Agreement, the purchase and sale of the Subject Interest contemplated hereby shall take place at a closing (the "Closing") on a date and at a time specified by Tallgrass Holdco, which must be no earlier than three Business Days after satisfaction or waiver of the conditions to Closing set forth in Article VI (except those conditions that by their nature will be satisfied at the Closing), and not later than five Business Days following the later of (i) ten Business Days following expiration of the Offer Period (as defined in the REX LLC Agreement), or (ii) forty-five days after the Effective Date, at the offices of Tallgrass Holdco at 4200 W. 115th Street, Suite 350, Leawood, Kansas 66211, or at such other time or on such other date or at such other place as Seller and Tallgrass Holdco may mutually agree upon in writing (the day on which the Closing takes place being the "Closing Date").  Tallgrass Holdco will give the parties no less than three Business Days’ prior written notice of its specified Closing Date.

		
	(b)
	At the Closing, Buyer shall deliver to Seller:

		
	(i)
	the Purchase Price by wire transfer of immediately available funds to an account of Seller designated in writing by Seller to Buyer no later than two Business Days prior to the Closing Date; and

		
	(ii)
	the Assignment Agreement and all other agreements, documents, instruments or certificates required to be delivered by Buyer at or prior to the Closing pursuant to Section 6.2 of this Agreement.

		
	(c)
	At the Closing, Seller shall deliver to Buyer the Assignment Agreement and all other agreements, documents, instruments or certificates required to be delivered by Seller at or prior to the Closing pursuant to Section 6.1 of this Agreement.

		
	Section 2.4
	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 equally by Buyer and Seller.  Seller shall file all necessary Tax Returns and other documentation with respect to such Transfer Taxes, Buyer shall cooperate with respect thereto as necessary, and in the event Transfer Taxes are owed, Buyer shall 

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transfer an amount equal to fifty percent (50%) of such Transfer Taxes to Seller within 30 days of receiving a Tax Return reflecting the Transfer Taxes owed.  

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:   

		
	Section 3.1
	Organization and Existence.

Seller 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. Seller does not own, or have any interest in, any other assets other than the Subject Interest.

		
	Section 3.2
	Authority and Approval.

		
	(a)
	Seller has full limited liability company 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 Seller 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 Seller have been duly authorized and approved by all requisite limited liability company action on the part of Seller.  No approval by the shareholders of Sempra Energy is required to be obtained in connection with the execution, delivery and performance of this Agreement and the Assignment Agreement or the consummation of the transactions contemplated hereby or thereby. 

		
	(b)
	This Agreement has been duly executed and delivered by Seller and constitutes the valid and legally binding obligation of Seller, 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 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 Seller, enforceable against Seller 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 in the REX LLC Agreement: 
		
	(a)
	the execution, delivery and performance of this Agreement by Seller does not, and the execution, delivery and performance of the Assignment Agreement by Seller 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 liability company 

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agreement or other organizational documents of Seller; (ii) conflict with or violate any provision of any Law or Governmental Order applicable to Seller; or (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 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 Seller is a party or to which its properties are subject; other than, in the case of each of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a 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 Seller 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 contemplated hereby or thereby except as have been waived or obtained.

		
	Section 3.4
	Title to Subject Interest.

Seller owns, beneficially and of record, the Subject Interest free and clear of all Liens, other than Permitted Liens, and will convey good and indefeasible title, free and clear of all Liens, other than Permitted Liens, to the Subject Interest to Buyer on the Closing Date. The Subject Interest is not subject to any agreements or understandings with respect to the voting, transfer or other rights and obligations of any of the Subject Interest (except as contemplated by this Agreement, the REX LLC Agreement, including, without limitation, the ROFR, and restrictions under applicable federal and state securities laws).  

		
	Section 3.5
	Litigation.

As of the Effective Date, there are no Actions pending or threatened that (a) question or involve the validity or enforceability of any of Seller's obligations under this Agreement or the Assignment Agreement, or (b) seek (i) to prevent or delay the consummation by Seller of the transactions contemplated by this Agreement or the Assignment Agreement or (ii) damages in connection with any such consummation. 

		
	Section 3.6
	Brokerage Arrangements.

Seller has not entered (directly or indirectly) into any agreement with any Person that would obligate Seller or any of its Affiliates or any other Person 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 3.7
	Taxes.

Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Code. Seller has not received any notice of assessment or proposed assessment in connection with any Tax or Tax Return, and there are no pending, proposed or threatened Tax audits or examinations of or Tax claims asserted against Seller, with respect to the Subject Interest. To Seller’s knowledge, there are no Tax proceedings presently pending with regard to any Tax Returns or Taxes of Seller with respect to the Subject Interest and no notice has been received from any Governmental Authority of the expected commencement of such a proceeding. Seller has not extended or waived, or sought the extension or waiver of, the application of Section 6229 of the Code or any statute of limitations of any jurisdiction regarding the assessment or collection of any Taxes with respect to the Subject Interest. Seller has not taken a position on any Tax Return with respect to the Subject Interest or any income, gain, loss, distribution or payment from the Company that is inconsistent from the Tax reporting position taken by the Company with respect to such items or events. Seller has claimed depreciation deductions related to the Company's assets for federal income tax purposes only by virtue of its 

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distributive share of Company items. The Transaction, together with any other prior transfers of the Subject Interest by Seller and the prior owners of such Subject Interest during the twelve month period prior to the Effective Date, will not result in a termination of the Company for purposes of Section 708 of the Code.

		
	Section 3.8
	Contracts.

Seller, on behalf of the Company, has not entered into any contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures or any other agreements, commitments or legally binding arrangements, whether written or oral. 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER 
Buyer hereby represents and warrants to Seller as follows:

		
	Section 4.1
	Organization and Existence.

Buyer is a limited liability company duly formed, validly existing and in good standing under the laws of the state of its organization 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.   

		
	Section 4.2
	Authority and Approval.

		
	(a)
	Buyer has full limited liability company 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 Buyer have been duly authorized and approved by all requisite limited liability company action of Buyer.  

		
	(b)
	This Agreement has been duly executed and delivered by or on behalf of Buyer and constitutes the valid and legally binding obligation of Buyer, enforceable against Buyer 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 Buyer, enforceable against Buyer 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 4.3
	No Conflict; Consents.

Except as set forth in the REX LLC Agreement: 
		
	(a)
	The execution, delivery and performance of this Agreement by Buyer does not, and the execution, delivery and performance of the Assignment Agreement by Buyer 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 

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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 liability company agreement or other organizational documents of Buyer; (ii) conflict with or violate any provision of any Law or Governmental Order applicable to Buyer or any property or asset of the Buyer; or (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 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 Buyer is a party or by which it is bound or to which any of its property is subject; other than, in the case of each of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement; 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 or with respect to Buyer 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.

		
	Section 4.4
	Brokerage Arrangements.

Buyer has not entered (directly or indirectly) into any agreement with any Person that would obligate Buyer or any of its Affiliates or any other Person 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 4.5
	Litigation.

As of the Effective Date, there are no Actions pending or threatened that (a) question or involve the validity or enforceability of any of Buyer's obligations under this Agreement or the Assignment Agreement or (b) seek (i) to prevent or delay the consummation by Buyer of the transactions contemplated by this Agreement or the Assignment Agreement or (ii) damages in connection with any such consummation. 

		
	Section 4.6
	Investment Intent.

Buyer 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.  Buyer is an “accredited investor” (as defined in Rule 501 under the Securities Act) and has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of its investment in the Subject Interest.  Buyer acknowledges that the Subject Interest has not been and 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. 

		
	Section 4.7
	Certain Matters.

As of the Effective Date, the Firm Transportation Service Agreement dated June 5, 2008 between Ultra Resources, Inc. and the Company (bearing contract no. 553082), as amended by the Firm Transportation Negotiated Rate Agreement dated June 5, 2008, each as have been amended from time to time (the “Ultra Agreement”) has terminated.  As of the Effective Date, neither Tallgrass Holdco, the Company, nor any of their respective officers has any agreement or arrangement with Ultra Petroleum Corp. or any of its Affiliates to (i) enter into an agreement in lieu 

8

of or to otherwise replace the Ultra Agreement, in whole or in part, or (ii) satisfy or discharge, in whole or in part, any claims, damages or other amounts owed under the Ultra Agreement, nor are any proposals pending between the Company or Tallgrass Holdco, on the one hand, and Ultra Petroleum Corp. or any of its Affiliates or any of their respective Representatives, on the other hand, with respect to any such agreement or arrangement. 

ARTICLE V
COVENANTS 

		
	Section 5.1
	ROFR.

In accordance with Section 7.1.2 and Section 7.1.3 of the REX LLC Agreement, Seller shall promptly (and in any event within three Business Days following the Effective Date) deliver to P66 Holdco a transfer notice, substantially in the form of Exhibit B attached hereto.  The execution of this Agreement by Seller and Tallgrass Holdco is deemed to be delivery of a transfer notice to Tallgrass Holdco, as an Optionee (as defined in the REX LLC Agreement), pursuant to the ROFR and an irrevocable election by Tallgrass Holdco, as an Optionee, to exercise the ROFR with respect to its proportionate share of the Subject Interest on the terms and conditions set forth herein.  If P66 Holdco elects to exercise the ROFR for its proportionate share of the Subject Interest, it shall enter into a joinder agreement in the form of Exhibit C.  If P66 Holdco does not elect to exercise the ROFR for its proportionate share of the Subject Interest, then the Optionees will have failed to purchase the entire Subject Interest pursuant to the terms and conditions of Section 7.1.3 of the REX LLC Agreement, and Seller shall be entitled to consummate the sale to Tallgrass Holdco, as Transferee (as defined in the REX LLC Agreement), of 100% of the Subject Interest pursuant to the terms of this Agreement.

		
	Section 5.2
	Company Approvals.

		
	(a)
	Prior to the Closing, Seller will approve, with such approval effective as of immediately prior to the Closing, as a member of the Company in accordance with the REX LLC Agreement, amending and extending those certain Firm Transportation Service Agreements numbered 551979, 553078 and 553372 between the Company and Encana Marketing (USA), Inc., on substantially the terms as previously presented to the members of the Company prior to the Effective Date (as modified prior to the Closing). 

		
	(b)
	The parties acknowledge that, at the Closing, the Company and Sempra Rockies Marketing, LLC will enter into the letter agreement in the form of Exhibit D attached hereto.  Buyer and Tallgrass Holdco shall cause the officers of the Company to execute and deliver such letter agreement, and Seller shall cause Sempra Rockies Marketing, LLC to execute and deliver such letter agreement.  At the Closing, Buyer and Tallgrass Holdco will approve and ratify, with such approval and ratification effective as of immediately following the Closing, as a member of the Company in accordance with the REX LLC Agreement, the Company’s entering into the letter agreement in the form of Exhibit D attached hereto.  

Section 5.3    No Solicitation of Other Bids.
		
	(a)
	Seller shall not, and shall not authorize or permit any of its Affiliates or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Seller shall immediately cease and cause to be terminated, and shall cause its Affiliates and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal. For purposes hereof, "Acquisition Proposal" shall 

9

mean any inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates or in accordance with the ROFR) concerning the purchase of the Subject Interest.  
		
	(b)
	In addition to the other obligations under this Section 5.3, Seller shall promptly (and in any event within three Business Days after receipt thereof by Seller or its Representatives) advise Buyer orally and in writing of Seller’s receipt of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with respect to an Acquisition Proposal, and the material terms and conditions of such Acquisition Proposal, request or inquiry.

		
	Section 5.4
	Purchase Following Closing.

If, during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, Tallgrass Holdco or any of its Affiliates acquires, in whole or in part, the membership interest in the Company held by P66 Holdco (or its successor) for total consideration that is greater on a proportional basis than the Purchase Price received by Seller, then Tallgrass Holdco will pay Seller cash in an amount equal to such proportional difference within two Business Days following such acquisition by wire transfer of immediately available funds to an account of Seller designated in writing by Seller to Tallgrass Holdco.  Notwithstanding the foregoing, Tallgrass Holdco will not owe Seller any payment if Tallgrass Holdco acquires P66 Holdco's membership interest in the Company as a result of exercising its rights under the ROFR during such twelve month period in connection with a proposed sale by P66 Holdco (or its successor) to a Person other than Tallgrass Holdco or its Affiliates.

Section 5.5    Confidentiality.
Buyer and Seller shall, and shall cause each of their respective Affiliates and Representatives to, abide by the terms of Section 2.5 of the REX LLC Agreement  (including the survivability of such obligations) with respect to any information provided by a party to the other party pursuant to this Agreement, all such information being deemed "Confidential Information" for purposes of Section 2.5 of the REX LLC Agreement; provided, that any disclosures in any initial public announcement or statement issued by either party pursuant to Section 9.6 will not be deemed “Confidential Information” following the making of such initial public announcement or statement. 

		
	Section 5.6
	Post-Closing Audits and Examinations.

In the event of any Tax audits or examinations affecting a pre-Closing taxable year of the Company that result in a change to the distributive share of income, gain, loss, or deduction with respect to the Subject Interest, Buyer will notify, or cause the Company to notify, the Seller of such audit or examination, and in addition, Buyer will provide, or will take the necessary steps to cause the Company to provide, to Seller amended Tax returns and associated Tax filings related to the Subject Interest for such pre-Closing years of the Company. 

		
	Section 5.7
	Tallgrass Holdco Payment.

If Tallgrass Holdco acquires the entire Subject Interest from Seller, then at Closing, concurrent with payment of other amounts due Seller from Tallgrass Holdco under this Agreement, Tallgrass Holdco will pay Seller cash in an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000.00).  

10

ARTICLE VI
CONDITIONS TO CLOSING

		
	Section 6.1
	Conditions to Obligations of Buyer.

The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, or Buyer's waiver in its sole discretion, at or prior to the Closing, of each of the following conditions:
		
	(a)
	Other than the representations and warranties of Seller contained in Section 3.1, Section 3.2, Section 3.4, and Section 3.6, the representations and warranties of Seller contained in this Agreement, the Assignment Agreement and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the Effective Date and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Seller contained in Section 3.1, Section 3.2, Section 3.4, and Section 3.6 shall be true and correct in all respects on and as of the Effective Date and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

		
	(b)
	Seller shall have duly performed and complied in all material respects with each agreement and covenant required by this Agreement and the Assignment Agreement to be performed or complied with by it prior to or on the Closing Date; provided, that, with respect to agreements and covenants that are qualified by materiality, Seller shall have performed such agreements and covenants, as so qualified, in all respects.

		
	(c)
	No temporary restraining order or preliminary or permanent injunction or other order by any court of competent jurisdiction preventing consummation of the transactions contemplated by this Agreement shall have been issued and be continuing in effect, and the transactions contemplated by this Agreement and the Assignment Agreement shall not have been prohibited under any applicable federal or state Law. 

		
	(d)
	The consent of Seller pursuant to Section 5.2(a) shall have been received by the Company and Buyer prior to the Closing.

		
	(e)
	Seller shall have delivered to Buyer that certain letter agreement in the form of Exhibit D attached hereto duly executed and delivered by Sempra Rockies Marketing, LLC.

		
	(f)
	From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, would reasonably be expected to result in a Material Adverse Effect.

		
	(g)
	Seller shall have duly executed and delivered the Assignment Agreement to Buyer.

		
	(h)
	Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 6.1(a) and Section 6.1(b) have been satisfied.

		
	(i)
	Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that attached thereto are true and complete copies of all resolutions adopted by the Seller authorizing the execution, delivery and performance of this Agreement 

11

and the Assignment Agreement and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted by the Seller in connection with the transactions contemplated hereby and thereby.
		
	(j)
	Seller shall have delivered a written resignation of Seller's director serving on the Board (as defined in the REX LLC Agreement) of the Company, such resignation to be effective as of the Closing Date.

		
	(k)
	Seller shall have delivered to Buyer a good standing certificate for the Seller from the Secretary of State of Delaware.  

		
	(l)
	Seller shall have delivered to Buyer a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Code.

		
	(m)
	Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

		
	Section 6.2
	Conditions to Obligations of Seller.

The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, or Seller's waiver in its sole discretion, at or prior to the Closing, of each of the following conditions:
		
	(a)
	Other than the representations and warranties of Buyer contained in Section 4.1, Section 4.2 and Section 4.4, the representations and warranties of Buyer contained in this Agreement and the Assignment Agreement and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the Effective Date and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Buyer contained in Section 4.1, Section 4.2 and Section 4.4 shall be true and correct in all respects on and as of the Effective Date and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

		
	(b)
	Buyer shall have duly performed and complied in all material respects with each agreement and covenant required by this Agreement and the Assignment Agreement to be performed or complied with by it prior to or on the Closing Date; provided, that, with respect to agreements and covenants that are qualified by materiality, Buyer shall have performed such agreements and covenants, as so qualified, in all respects. 

		
	(c)
	No temporary restraining order or preliminary or permanent injunction or other order by any court of competent jurisdiction preventing consummation of the transactions contemplated by this Agreement shall have been issued and be continuing in effect, and the transactions contemplated by this Agreement and the Assignment Agreement shall not have been prohibited under any applicable federal or state Law. 

		
	(d) 
	Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 6.2(a) and Section 6.2(b) have been satisfied.

12

		
	(e)
	Seller shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by Buyer authorizing the execution, delivery and performance of this Agreement and the Assignment Agreement and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted by the Buyer in connection with the transactions contemplated hereby and thereby.

		
	(f)
	Buyer shall have delivered to Seller a good standing certificate for the Buyer from the secretary of state of the state of its origination.

		
	(g)
	Buyer shall have delivered to Seller cash in an amount equal to the Purchase Price, and Tallgrass Holdco shall have delivered to Seller in cash any amount due pursuant to Section 5.7, in each case by wire transfer in immediately available funds, to an account or accounts designated at least two Business Days prior to the Closing Date by Seller in a written notice to Buyer and Tallgrass Holdco.

		
	(h)
	Buyer shall have duly executed and delivered the Assignment Agreement to Seller.

		
	(i)
	Buyer shall have delivered to Seller such other documents or instruments as Seller reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

		
	(j)
	Buyer and Tallgrass Holdco shall have delivered the approval and ratification required pursuant to Section 5.2(b).

		
	(k)
	Buyer shall have delivered to Sempra Rockies Marketing, LLC and Seller that certain letter agreement in the form of Exhibit D attached hereto duly executed and delivered by the Company.

		
	(l)
	Tallgrass Holdco shall have duly performed and complied in all material respects with each agreement and covenant required by this Agreement and the Assignment Agreement to be performed or complied with by it prior to or on the Closing Date; provided, that, with respect to agreements and covenants that are qualified by materiality, Tallgrass Holdco shall have performed such agreements and covenants, as so qualified, in all respects.  Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Tallgrass Holdco, that the conditions set forth in this Section 6.2(l) have been satisfied. 

ARTICLE VII
TERMINATION

		
	Section 7.1
	Termination.

This Agreement may be terminated at any time prior to the Closing:
		
	(a)
	by the mutual written consent of Seller and Buyer;

		
	(b)
	by Buyer by written notice to Seller if:

		
	(i)
	Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure has not been cured by Seller within ten days of Seller's receipt of written notice of such breach from Buyer; or

13

		
	(ii)
	any of the conditions set forth in Section 6.1 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the first Business Day following the seventieth (70th) calendar day from the Effective Date, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants or agreements hereof to be performed or complied with by it prior to the Closing;

		
	(c)
	by Seller by written notice to Buyer if:

		
	(i)
	Seller is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from Seller; or

		
	(ii)
	any of the conditions set forth in Section 6.2 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the first Business Day following the seventieth (70th) calendar day from the Effective Date, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants or agreements hereof to be performed or complied with by it prior to the Closing;

		
	(d)
	by Buyer or Seller by written notice to the other party or parties in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable; or

		
	(e)
	by Buyer or Seller by written notice to the other party or parties in the event that the Closing has not occurred on or before July 1, 2016; unless such failure of the Closing to occur shall be due to the failure of the terminating party to perform or comply with any of the covenants or agreements hereof to be performed or complied with by it prior to the Closing.

		
	Section 7.2
	Effect of Termination.

		
	(a)
	If this Agreement is terminated pursuant to Section 7.1, all obligations of the parties under this Agreement will terminate, except that Section 5.5 (with respect to confidentiality obligations) and Article VIII (with respect to indemnity) will each survive in accordance with its terms, and Section 9.3 (with respect to expenses) and Section 9.5 will survive. 

		
	(b)
	If this Agreement is terminated by Buyer pursuant to Section 7.1(b), then Buyer’s right to pursue all legal remedies will survive such termination unimpaired and nothing in this Section 7.2 shall be deemed to release Seller from any liability for any breach of the terms, conditions, covenants, representations, warranties and other provisions of this Agreement. 

		
	(c)
	If this Agreement is terminated by Seller pursuant to Section 7.1(c), then Seller's right to pursue all legal remedies will survive such termination unimpaired and nothing in this Section 7.2 shall be deemed to release Buyer from any liability for any breach of the terms, conditions, covenants, representations, warranties and other provisions of this Agreement.

14

		
	(d)
	If P66 Holdco elects to exercise the ROFR and executes the joinder agreement attached as Exhibit C, then: 

		
	(i)
	P66 Holdco and Tallgrass Holdco shall each be considered a Buyer for all purposes of this Agreement and their rights and obligations hereunder shall be several and not joint with respect to the portion of the Subject Interest each such Buyer has agreed to purchase under the ROFR;

		
	(ii) 
	if (x) this Agreement is terminated by the mutual written consent of P66 Holdco and Seller pursuant to Section 7.1(a), (y) P66 Holdco terminates this Agreement pursuant to Section 7.1(b), or (z) Seller terminates this Agreement pursuant to Section 7.1(c) as a result of P66 Holdco’s failure to perform or comply with any of the covenants or agreements of this Agreement to be performed or complied with by it prior to the Closing, then: (A) this Agreement will terminate solely with respect to P66 Holdco, with the effect provided in this Section 7.2; and (B) Tallgrass Holdco shall have the right and obligation to purchase the entire Subject Interest pursuant to the terms hereof; and

		
	(iii)
	if (x) this Agreement is terminated by the mutual written consent of Tallgrass Holdco and Seller pursuant to Section 7.1(a), (y) Tallgrass Holdco terminates this Agreement pursuant to Section 7.1(b), or (z) Seller terminates this Agreement pursuant to Section 7.1(c) as a result of Tallgrass Holdco's failure to perform or comply with any of the covenants or agreements of this Agreement to be performed or complied with by it prior to the Closing, then: (A) this Agreement will terminate solely with respect to Tallgrass Holdco, with the effect provided in this Section 7.2; and (B) P66 Holdco may elect to either (1) terminate this Agreement without further liability on its part, in which case any further attempts by Seller to transfer the Subject Interest shall be subject to Article 7 of the REX LLC Agreement, or (2) elect to purchase the entire Subject Interest pursuant to the terms hereof.

ARTICLE VIII
INDEMNITY

		
	Section 8.1
	Indemnification.

Subject to the terms and conditions set forth in this Article VIII, Tallgrass Holdco agrees to hold harmless, save, defend and indemnify Seller, its Affiliates and their respective officers, directors, members, managers, employees, successors and assigns (each, an "Indemnified Party" and collectively the "Indemnified Parties") from and against all any and all liabilities, judgments, costs and other expenses (including reasonable legal fees and expenses), obligations, causes of action at law or in equity and other claims of any and every kind as a result of any claim made by or on behalf of P66 Holdco that relates to or arises out of this Agreement or any of the transactions contemplated hereby (a "Claim").  Notwithstanding the foregoing, Tallgrass Holdco will not be liable as an indemnitor under this Agreement for any consequential, incidental, special, indirect, punitive or exemplary damages suffered or incurred by an Indemnified Party; provided, however, that the foregoing shall not apply to any such damages that are awarded on account of a Claim made by or on behalf of P66 Holdco against an Indemnified Party, and Tallgrass Holdco and Seller hereby agree that any such damages awarded against an Indemnified Party on account of a Claim made by or on behalf of P66 Holdco shall constitute direct damages of the Indemnified Party.  

		
	Section 8.2
	Notification and Defense of Claim.

		
	(a)
	An Indemnified Party shall promptly notify Tallgrass Holdco in writing upon its discovery of facts giving rise to a potential Claim (a “Claim Notice”), including receipt by it of notice of any demand, assertion, claim, action or proceeding, judicial or otherwise, and such notice 

15

shall include a formal demand for indemnification under this Agreement and contain a description of the nature and estimated amount (if then known) of such Claim; provided, that, subject to Section 8.3 below, the failure to so notify or a delay in notifying Tallgrass Holdco will not relieve it of its obligations hereunder, except to the extent that Tallgrass Holdco is actually prejudiced as a result thereof.  If requested by Tallgrass Holdco or its counsel, the Indemnified Party will, at the sole cost and expense of Tallgrass Holdco, reasonably cooperate with Tallgrass Holdco in the investigation, defense and settlement of such Claim. Without limiting the foregoing, Indemnified Party will provide Tallgrass Holdco with all records, documents, materials and information in its possession or control, and reasonable access to personnel, relevant to such Claim.  If it gives written notice of its intention to do so to the Indemnified Party within thirty (30) days after receipt of the Claim Notice, except as provided in Section 8.2(c) below, Tallgrass Holdco will have the right to assume, conduct and control the defense of any Claim and all negotiations for its settlement or compromise, which may be conducted in the name and on behalf of Tallgrass Holdco or the Indemnified Party, as may be appropriate.  Except as provided in Section 8.2(c) below, Tallgrass Holdco will have the right to select counsel (that is reasonably satisfactory to the Indemnified Party) to provide representation in connection with such Claim.  The Indemnified Party may in its sole discretion, and at its expense (but subject to Section 8.2(c)  below), participate with its own counsel in the defense of any such Claim.  If the Indemnified Party elects to so participate, except as provided in Section 8.2(c) below, Tallgrass Holdco shall have no obligation to indemnify such Indemnified Party or any other person for the expenses and fees of counsel incurred by such Indemnified Party in connection with such participation.
		
	(b)
	An Indemnified Party shall agree to any settlement, compromise or discharge of a Claim that Tallgrass Holdco may recommend that (and Tallgrass Holdco shall not enter into any settlement, compromise or discharge of a Claim without the prior written consent of the Indemnified Party unless such settlement, compromise or discharge) by its terms (i) obligates Tallgrass Holdco to pay to discharge in full the liability in connection with such Claim, (ii) releases such Indemnified Party completely and unconditionally in connection with such Claim, (iii) does not contain any finding, statement or admission of fault or culpability by any Indemnified Party, and (iv) does not contain any sanction or restriction upon the conduct or operation of any business by such Indemnified Party.  Tallgrass Holdco will not be liable to indemnify an Indemnified Party under this Agreement for any amounts paid in settlement of any Claim without Tallgrass Holdco's prior written consent.  Indemnified Party shall not settle any action or claim in any manner which would impose any penalty or limitation on Tallgrass Holdco without Tallgrass Holdco’s prior written consent.  Neither Tallgrass Holdco, nor any Indemnified Party, will unreasonably withhold, condition or delay its consent to any proposed settlement, compromise or discharge of any such Claim.

		
	(c)
	Notwithstanding the foregoing, if (i) Tallgrass Holdco does not assume the defense of any Claim in accordance with the thirty (30) day period specified in Section 8.2(a), or (ii) the named parties to the proceeding for the Claim include both an Indemnified Party and Tallgrass Holdco (or any of its Affiliates) and either Tallgrass Holdco or an Indemnified Party determines, based on the advice of counsel, that there may be one or more legal defenses available to it that are materially different from or additional to those available to the other party or that a conflict of interest between those parties would reasonably be expected to exist in respect thereto, then the named Indemnified Party or Parties shall have the right, by prior written notice given to Tallgrass Holdco, to control the defense of the Claim; provided that Tallgrass Holdco shall be entitled, at its expense, to participate in (but not control) that defense.  In those circumstances, the named Indemnified Party or Parties shall defend the Claim in good faith and have full control of such defense and proceedings with respect to such Indemnified Parties; provided, however, that the Indemnified Parties may not enter into any settlement, compromise or discharge of such Claim if indemnification 

16

is to be sought hereunder, without Tallgrass Holdco’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).  If requested by an Indemnified Party or its counsel, Tallgrass Holdco agrees, at its sole cost and expense, to reasonably cooperate with such Indemnified Party and its counsel in contesting any Claim for which an Indemnified Party is conducting the defense, including providing reasonable access to documents, records and information in its possession or control relevant to such Claim.
		
	(d) 
	Subject to the terms and provisions of this Article VIII, Tallgrass Holdco shall reimburse any and all costs, expenses, legal fees, expert fees and other charges reasonably incurred by an Indemnified Party pursuant to Section 8.2(c) as they are incurred (to be reimbursed within thirty (30) days following receipt of invoices for those charges); provided, however, that Tallgrass Holdco may condition any reimbursement on receipt of a promise by Seller and/or such Indemnified Party to repay those amounts if it is ultimately determined that Tallgrass Holdco was not required to indemnify the Indemnified Parties for those amounts hereunder. 

		
	Section 8.3
	Limitations.

Tallgrass Holdco will not have any liability under Section 8.1 unless the Claim Notice is received by Tallgrass Holdco within twenty-four (24) months following the Closing Date.  In no event will Tallgrass Holdco have aggregate liability under Section 8.1 in excess of $10,000,000.

ARTICLE IX
MISCELLANEOUS

		
	Section 9.1
	Acknowledgements.

Buyer acknowledges that except for the representations and warranties expressly and specifically set forth in Article III, the Subject Interest is being sold “AS-IS, WHERE-IS,” and neither the Seller nor any of its Affiliates or Representatives makes any other express or implied representation or warranty with respect to the Seller, the Subject Interest, the Company or the transactions contemplated by this Agreement or the Assignment Agreement.  Seller acknowledges that except for the representations and warranties expressly and specifically set forth in Article IV, neither the Buyer nor any of its Affiliates or Representatives makes any other express or implied representation or warranty with respect to the Buyer, the Subject Interest, the Company or the transactions contemplated by this Agreement or the Assignment Agreement.  Each party acknowledges that it has relied on the representations and warranties of the other party expressly and specifically set forth in this Agreement.  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, whether made the parties, any of their respective Affiliates, or any of their respective Representatives.

		
	Section 9.2
	Cooperation; Further Assurances.

The parties shall use their respective commercially reasonable efforts to obtain all approvals and consents (if any) required by or necessary for the transactions contemplated by this Agreement and the Assignment Agreement, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things required by or necessary to consummate and make effective the transactions contemplated by this Agreement and the Assignment Agreement. 

17

		
	Section 9.3
	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 the Assignment Agreement and all action taken in preparation for carrying this Agreement and the Assignment Agreement into effect.

		
	Section 9.4
	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 certified or registered mail (return receipt requested, postage prepaid), as follows:
If to Seller, addressed to: 
Sempra REX Holdings, LLC
488 8th Avenue
San Diego, California 92101
Attention: President
Tel: (619) 696-2000

with copies (which shall not constitute notice) to: 

Sempra U.S. Gas & Power, LLC
488 8th Avenue
San Diego, California 92101
Attention: General Counsel
Tel: (619) 696-2000

If to Tallgrass Holdco, addressed to: 
Rockies Express Holdings, LLC
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: William R. Moler
Tel: (913) 928-6008

with copies (which shall not constitute notice) to: 
Rockies Express Holdings, LLC
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: General Counsel's Office
Tel: (913) 928-6038

If to P66 Holdco: as provided in the Joinder Agreement.

Notice given by personal delivery or courier service shall be effective upon actual receipt.  Notice given by certified or registered mail shall be effective four (4) Business Days after mailing.  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.

18

		
	Section 9.5
	Governing Law.

		
	(a)
	This Agreement shall be subject to and governed by the laws of the State of Delaware.  Each of the parties agree that any legal proceeding with respect to or arising out of this Agreement or the Assignment Agreement shall be brought in the United States District Court for New York or the courts of the State of New York, in the City of New York.  By execution and delivery of this Agreement, each of the parties irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and to the appellate courts therefrom.  Each of the parties irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, at the applicable address set forth in Section 9.4 (or at such address as may be subsequently changed in accordance with Section 9.4).   

		
	(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 ASSIGNMENT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ASSIGNMENT AGREEMENT.

		
	(c)
	Each party to this Agreement waives, to the fullest extent permitted by 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.

		
	(d)
	Each of the parties agree that the rights and remedies for failure to comply with this Agreement shall include having the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the non-breaching party and that money damages would not provide an adequate remedy to the non-breaching party, and the breaching party hereby waives any requirements for the non-breaching party to post a bond or other security in connection therewith.  Any such specific or equitable relief granted shall not be exclusive and each of the parties shall be entitled to pursue any other remedy available to it at law or in equity.

		
	Section 9.6
	Initial Public Statements.

The parties shall consult with each other regarding any initial public announcement or statement with respect to this Agreement and the transactions contemplated hereby, and no party shall issue any such initial public announcement or statement, without first providing the other parties at least twenty-four (24) hours’ prior notice of such initial public announcement or statement.  For the avoidance of doubt, nothing contained in this Agreement shall prohibit a party, or such party's Affiliate, from making any public disclosures required by applicable Law or obligations pursuant to any listing agreement with any national securities exchange, as reasonably determined by the party making such public disclosure, provided that, each party making any such public disclosure shall endeavor to provide prior notice of such public disclosure to the other parties. 

		
	Section 9.7
	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 two year anniversary of the Closing Date, except (i) the representations and warranties of Seller set forth in Section 3.1 (Organization and Existence), Section 3.2 (Authority and Approval), Section 3.4 (Title to Subject Interest) and Section 3.6 (Brokerage Arrangements) shall survive forever, and (ii) the representations and warranties of Buyer set forth in Section 4.1 (Organization and Existence), Section 4.2 (Authority and Approval) and Section 4.4 (Brokerage Arrangements) shall survive forever.  Notwithstanding the foregoing, any 

19

claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

		
	Section 9.8
	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 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 9.9
	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 9.10
	Binding Effect and Assignment; Certain Restrictions.

		
	(a)
	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; provided, however, that (i) Tallgrass Holdco may assign its rights and obligations under this Agreement to a direct or indirect wholly owned subsidiary of Tallgrass Energy Partners, LP for purposes of having such entity take ownership of some or all of the Subject Interest so long as Tallgrass Holdco remains jointly and severally obligated to satisfy all of Tallgrass Holdco’s obligations under this Agreement, as a Buyer or otherwise, and (ii) if P66 Holdco elects to exercise the ROFR and executes the joinder agreement attached as Exhibit C, P66 Holdco may assign its rights and obligations under this Agreement to a direct or indirect wholly owned subsidiary of Phillips 66 Partners LP for purposes of having such entity take ownership of some or all of the Subject Interest so long as P66 Holdco remains jointly and severally obligated to satisfy all of P66 Holdco’s obligations under this Agreement, as a Buyer or otherwise.  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.

		
	(b)
	Beginning on the Effective Date and ending twenty-four months following the Closing Date (or, if Tallgrass Holdco has received one or more Claim Notice(s) during such period then ending on the date, if later, that all such potential Claim(s) have been fully and finally resolved and any amounts owed to the Indemnified Parties under Article VIII have been paid 

20

in full), Tallgrass Holdco (both individually and as a Buyer) shall not (i) assign, sell, transfer, divest or otherwise dispose of the portion of the Subject Interest in the Company it acquires pursuant to this Agreement and the Assignment Agreement, in whole or in part, to any Person or (ii) merge or consolidate with or into any Person (excluding a merger or consolidation where Tallgrass Holdco is the surviving entity), in each case unless in connection with the consummation of such transaction, the assignee/acquirer of such membership interest or the surviving entity in such merger or consolidation, as applicable, agrees to assume in full and discharge when due, on a joint and several basis, the obligations of Tallgrass Holdco (both individually and as a Buyer) under this Agreement and the Assignment Agreement (but in the case of clause (i) above, with the percentage of the obligations so assumed limited to the relative portion of the Subject Interest so assigned or acquired in such transaction). For avoidance of doubt, but without limiting or waiving any rights or remedies of Seller at law or in equity, the foregoing does not apply to the fifty percent (50%) membership interest in the Company held by Tallgrass Holdco on the Effective Date. Any such assignment, sale, transfer, divestiture, disposal, merger or consolidation in violation of the restrictions set forth in this Section 9.10(b) shall be null and void.
		
	(c)
	Beginning on the Effective Date and ending twenty-four months following the Closing Date, if P66 Holdco elects to exercise the ROFR and executes the joinder agreement attached as Exhibit C, P66 Holdco (both individually and as a Buyer) shall not (i) assign, sell, transfer, divest or otherwise dispose of the portion of the Subject Interest in the Company it acquires pursuant to this Agreement and the Assignment Agreement, in whole or in part, to any Person or (ii) merge or consolidate with or into any Person (excluding a merger or consolidation where P66 Holdco is the surviving entity), in each case unless in connection with the consummation of such transaction, the assignee/acquirer of such membership interest or the surviving entity in such merger or consolidation, as applicable, agrees to assume in full and discharge when due, on a joint and several basis, the obligations of P66 Holdco (both individually and as a Buyer) under this Agreement and the Assignment Agreement (but in the case of clause (i) above, with the percentage of the obligations so assumed limited to the relative portion of the Subject Interest so assigned or acquired in such transaction). For avoidance of doubt, but without limiting or waiving any rights or remedies of Seller at law or in equity, the foregoing does not apply to the twenty-five percent (25%) membership interest in the Company held by P66 Holdco on the Effective Date. Any such assignment, sale, transfer, divestiture, disposal, merger or consolidation in violation of the restrictions set forth in this Section 9.10(c) shall be null and void.

		
	Section 9.11
	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 parties shall promptly meet and negotiate in good faith substitute provisions for those rendered or declared illegal or unenforceable so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner, but all of the remaining provisions of this Agreement shall remain in full force and effect.

		
	Section 9.12
	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, 

21

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.

		
	Section 9.13
	Headings and Exhibits.

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 Exhibits referred to herein are attached hereto and incorporated herein by this reference, and unless the context expressly requires otherwise, such Exhibits are incorporated in the definition of "Agreement."

		
	Section 9.14
	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.  Each party agrees that the execution and delivery of this Agreement and the Assignment Agreement by facsimile or other electronic transmission shall have the same force and effect as delivery of original signatures.
*    *    *    *     * 

22

 

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

SELLER:

SEMPRA REX HOLDINGS, LLC
By:      /s/ William R. Engelbrecht         
Name:     William R. Engelbrecht        
Title:    Vice President              

BUYER:

ROCKIES EXPRESS HOLDINGS, LLC
By:                      
Name:                     
Title:                      

Signature Page to Membership Interest Purchase Agreement

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

SELLER:

SEMPRA REX HOLDINGS, LLC
By:                       
Name:                     
Title:                      

BUYER:

ROCKIES EXPRESS HOLDINGS, LLC
By:      /s/ David G. Dehaemers, Jr.    
Name:     David G. Dehaemers, Jr.         
Title:    Chief Executive Officer          

Signature Page to Membership Interest Sale Agreement

 

Exhibit A

Form of Assignment Agreement

[See Attached]

 

ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Assignment"), dated as of [________], is entered into by and between Sempra REX Holdings, LLC, a Delaware limited liability company ("Assignor"), [_______________] ("Assignee") and [Rockies Express Holdings, LLC, a Delaware limited liability company (“Tallgrass Holdco”) / P66REX LLC, a Delaware limited liability company (“P66 Holdco”)].  Assignor, Assignee and [Tallgrass Holdco/P66 Holdco] may be referred to individually as a "Party" or collectively as the "Parties."
RECITALS
Pursuant to the terms of a Membership Interest Purchase Agreement (the "Purchase Agreement", with capitalized terms used but not defined herein having the respective meanings set forth in the Purchase Agreement), dated as of March 29, 2016, among Assignor and Assignee, Assignor will transfer to Assignee [____ percent (___%)] membership interest (the "Subject Interest") in Rockies Express Pipeline LLC, a Delaware limited liability company (the "Company").
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 and Assumption 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.  With effect from and after such assignment, Assignee hereby agrees to assume and discharge, when due, any and all obligations arising under the REX LLC Agreement with respect to the Subject Interest after the Closing (the “Assumed Obligations”).  For avoidance of doubt, each of Assignee, [Tallgrass Holdco/P66 Holdco] and Assignor hereby acknowledge and agree that Assignor shall have no liability nor responsibility for the Assumed Obligations from and after the Closing.
1.2    No Other Representations or Warranties.  Except for the representations and warranties of Assignor expressly and specifically set forth in Article III of the Purchase Agreement or any certificate delivered by Assignor at the Closing, (x) the Subject Interest is being assigned and transferred “AS-IS, WHERE-IS” and with all faults, and (y) Assignor expressly disclaims any representations or warranties of any kind or nature, express, statutory or implied, with respect thereto.
1.3.    Purchase Agreement.  This Assignment is subject to, in all respects, the terms and conditions of the Purchase Agreement, and nothing contained herein is meant to enlarge, diminish or otherwise alter the terms and conditions of the Purchase Agreement or the Parties’ duties and obligations contained therein.  To the extent there is a conflict between this Assignment and the Purchase Agreement, the terms of the Purchase Agreement will control.
1.4.    Binding Effect.  This Assignment shall be binding upon and inure to the benefit of the Parties and their respective heirs, successors and assigns.
1.5.    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.  Each of the Parties agree that any legal proceeding with respect to or arising out of this Assignment or the Purchase Agreement shall be brought in the United States District Court for New York or the courts of the State of New York, in the City of New York.  By execution and delivery of this Assignment, each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and to the appellate courts therefrom.  Each of the Parties irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, at the applicable address set forth in Section 9.4 of the Purchase Agreement (or at such address as may be subsequently changed in accordance with Section 9.4 of the Purchase Agreement).  EACH OF THE PARTIES TO THIS ASSIGNMENT IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS ASSIGNMENT OR THE PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS ASSIGNMENT OR THE PURCHASE AGREEMENT.  Each Party to this Assignment waives, to the fullest extent permitted by 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.  Each Party to this Assignment agrees that the rights and remedies for failure to comply with this Assignment shall include having the provisions of this Assignment specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the non-breaching Party and that money damages would not provide an adequate remedy to the non-breaching Party, and the breaching Party hereby waives any requirements for the non-breaching Party to post a bond or other security in connection therewith.  Any such specific or equitable relief granted shall not be exclusive and each of the Parties shall be entitled to pursue any other remedy available to it at law or in equity.
1.6.    Further Assurances.  The Parties agree to execute all instruments and to take all actions that are reasonably necessary to effect the transactions contemplated hereby.
1.7.    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. Delivery of an executed counterpart of a signature page to this Assignment by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Assignment.
[Signature Page Follows]

 

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

SEMPRA REX HOLDINGS, LLC

By:                          
Name:                        
Title:                                          

ASSIGNEE:

[                        ]

By:                          
Name:                        
Title:                            

[TALLGRASS HOLDCO/P66 HOLDCO]:

[                        ]

By:                          
Name:                        
Title:                                                      

 

Exhibit B

Form of Transfer Notice

[See Attached]

 

Sempra REX Holdings, LLC
488 8th Avenue
San Diego, CA 92101
March 30, 2016
VIA OVERNIGHT COURIER

P66REX LLC
c/o Phillips 66
600 North Dairy Ashford
Houston, Texas 77079
Attention:  Manager, Joint Ventures

		
	Re:
	Rockies Express Pipeline LLC 

Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Limited Liability Company Agreement (as amended, the “LLC Agreement”) of Rockies Express Pipeline LLC (the “Company”) effective as of January 1, 2010, by and among Rockies Express Holdings, LLC, a Delaware limited liability company (as successor by assignment to Kinder Morgan W2E Pipeline LLC, the “Tallgrass Member”), Sempra REX Holdings, LLC, a Delaware limited liability company (as successor by assignment to P&S Project I, LLC, the “Sempra Member”), and P66REX LLC, a Delaware limited liability company (f/k/a COPREX LLC, a Delaware limited liability company, the “Phillips 66 Member”).  Capitalized terms used but not defined in this letter have the meanings set forth in the LLC Agreement. In accordance with Section 12.1 of the LLC Agreement, this Transfer Notice is being sent by overnight courier and is therefore deemed to be received by the Phillips 66 Member on March 31, 2016. 
The Sempra Member intends to sell the 25% Membership Interest in the Company owned by the Sempra Member (together, the “Subject Interest”) to the Tallgrass Member (in such capacity, together with any permitted assignee of the Tallgrass Member under Section 9.10(a) of the Purchase Agreement (defined below), the "Transferee"), pursuant to the terms of a Membership Interest Purchase Agreement effective as of March 29, 2016 (the “Purchase Agreement”), between the Sempra Member and the Tallgrass Member (the “Sale”).  The purchase price for the Subject Interest under the Purchase Agreement is $440,000,000 (subject to adjustment as described in the Purchase Agreement), which shall be payable in cash at the closing.  A fully executed copy of the Purchase Agreement accompanies this letter. The complete terms and conditions for the Sale are set forth in the Purchase Agreement and are incorporated herein.
As set forth in Section 5.1 of the Purchase Agreement, the execution of the Purchase Agreement by the Sempra Member and the Tallgrass Member is also deemed to be (i) delivery of a Transfer Notice to the Tallgrass Member, as an Optionee, pursuant to Section 7.1.2 of the LLC Agreement and (ii) an irrevocable election by the Tallgrass Member, as an Optionee, to exercise its right of first refusal with respect to its proportionate share of the Subject Interest pursuant to Section 7.1.3 of the LLC Agreement, on the same terms and conditions as set forth in this Transfer Notice and in the Purchase Agreement.
This letter serves as the Transfer Notice to you, the Phillips 66 Member, with respect to the proposed Sale, which is required to be delivered by the Sempra Member pursuant to Section 7.1.2 of the LLC Agreement.  Pursuant to Section 7.1.3 of the LLC Agreement, the proposed Sale is subject to the right of the Phillips 66 Member, as an Optionee, to purchase up to its proportionate share of the Subject Interest on the same terms and conditions as set forth in this Transfer Notice and in the Purchase Agreement.  
Pursuant to Section 7.1.3 of the LLC Agreement, if the Optionees do not collectively agree to purchase 100% of the Subject Interest, then the Sempra Member will be permitted to sell the entire Subject Interest to the Transferee.  The Tallgrass Member has agreed to purchase its proportionate share of the Subject Interest as an Optionee, but is not willing to purchase more than its proportionate share of the Subject Interest as an Optionee.  As a result, if the Phillips 

66 Member elects to exercise its right of first refusal with respect to less than its proportionate share of the Subject Interest, then the Optionees will be deemed to have not elected to purchase all of the Subject Interest.
If the Phillips 66 Member desires to exercise its right of first refusal with respect to its proportionate share of the Subject Interest, then the Phillips 66 Member must execute and return to the Sempra Member the joinder agreement in the form attached as Exhibit C to the Purchase Agreement (the “Joinder Agreement”) within 30 days of receipt of the Transfer Notice, which is on or before April 30, 2016. The Sempra Member’s receipt of the Joinder Agreement will be deemed to constitute written notice to the Sempra Member of the Phillips 66 Member’s irrevocable election to accept the Sempra Member’s offer pursuant to this Transfer Notice, as required by Section 7.1.3 of the LLC Agreement. The closing of the purchase by Phillips 66 Member shall thereafter take place in accordance with Section 2.3 of the Purchase Agreement.  
The executed Joinder Agreement should be delivered to the Sempra Member at the following address:
Sempra REX Holdings, LLC
488 8th Avenue
San Diego, CA 92101 
Fax: 619-696-2119
Attention: Vice President – Commercial Development

With copy to:

Sempra U.S. Gas & Power, LLC
488 8th Avenue
San Diego, CA 92101
Fax: 619-696-1830
Attention: Vice President and General Counsel
If the Sempra Member has not received an executed Joinder Agreement from the Phillips 66 Member on or before April 30, 2016, then the Phillips 66 Member will be deemed to have rejected the offer, as provided by Section 7.1.3 of the LLC Agreement.  If the Phillips 66 Member elects to exercise its right of first refusal with respect to less than its proportionate share of the Subject Interest, then the Optionees will be deemed to have not elected to purchase all of the Subject Interest.  In either case, the Sempra Member will then be entitled to consummate the Sale to the Transferee for the entire Subject Interest at any time within 120 days thereafter pursuant to the terms of the Purchase Agreement. 

[SIGNATURE PAGE FOLLOWS]

Please do not hesitate to contact the undersigned at (619) 696-4484 if you have any questions regarding the matters addressed in this letter.    
Yours very truly,
Sempra REX Holdings, LLC
a Delaware limited liability company

 
By:    _________________________________
Name: William Engelbrecht
Title: Vice President 

cc:    Phillips 66
600 N. Dairy Ashford (PW 8133)
Houston, Texas  77079
Attention:  Deputy General Counsel, Commercial, Transportation and Marketing

P66REX LLC
c/o Phillips 66
3010 Briar Park Drive 
Houston, Texas  77042
Attention:  Van P. Williams

Diana Santos, REX Director for the Phillips 66 Member (via e-mail to Diana.Santos@p66.com)

Rockies Express Holdings, LLC
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: General Counsel 

Exhibit C

Joinder Agreement

[See Attached]

JOINDER AGREEMENT

This Joinder Agreement ("Joinder Agreement"), effective as of [●], 2016 (the "Effective Date"), is entered into by P66REX LLC, a Delaware limited liability company (f/k/a COPREX LLC, a Delaware limited liability company, "P66 Holdco"), Sempra REX Holdings, LLC, a Delaware limited liability company ("Seller"), and Rockies Express Holdings, LLC, a Delaware limited liability company ("REX Holdings"). Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Purchase Agreement (as defined below).

RECITALS

WHEREAS, Seller and REX Holdings entered into that certain Membership Interest Purchase Agreement, effective as of March 29, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the "Purchase Agreement"), whereby Seller agreed to sell its 25% membership interest (the "Subject Interest") in Rockies Express Pipeline LLC, a Delaware limited liability company (the "Company"), to REX Holdings (the "Sale"). 

WHEREAS, pursuant to Section 5.1 of the Purchase Agreement, and in accordance with Section 7.1.2 and Section 7.1.3 of the REX LLC Agreement, Seller delivered to P66 Holdco notice of the Sale (the "Notice"). 

WHEREAS, in accordance with the Notice and the REX LLC Agreement, the execution of this Joinder Agreement by P66 Holdco is deemed to be (i) an irrevocable election by P66 Holdco to exercise its right of first refusal with respect to its proportionate share of the Subject Interest and (ii) written notice to Seller of that fact, as required by Section 7.1.3 of the REX LLC Agreement. 

WHEREAS, this Joinder Agreement supplements the Purchase Agreement and is delivered by P66 Holdco pursuant to Section 5.1 of the Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, P66 Holdco, Seller and REX Holdings hereby agree as follows:

1.Joinder.  P66 Holdco acknowledges receipt of a true and correct copy of the Purchase Agreement.  P66 Holdco hereby joins the Purchase Agreement and, as of the date hereof, becomes a Buyer under the Purchase Agreement as if an original party thereto, subject to all of the terms, obligations, covenants, conditions, limitations, restrictions and provisions applicable to Buyer and P66 Holdco contained in the Purchase Agreement, which rights and obligations shall be several and not joint with respect to P66 Holdco’s proportionate share of the Subject Interest as set forth in Section 7.2(d)(i) of the Purchase Agreement.  By execution of this Joinder Agreement, P66 Holdco agrees that the Purchase Agreement shall be a binding obligation of P66 Holdco and any of its successors and permitted assigns, provided that, this Joinder Agreement, the Purchase Agreement and any of the rights, benefits or obligations hereunder or thereunder shall not be assigned or transferred by P66 Holdco, by operation of law or otherwise, without the prior written consent of each other party to the Purchase Agreement, except to the extent provided in Section 9.10 of the Purchase Agreement.  P66 Holdco hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to Buyer and P66 Holdco contained in the Purchase Agreement.
2.Notices.  For purposes of Section 9.4 of the Purchase Agreement, the notice address for P66 Holdco shall be: 

P66REX LLC
c/o Phillips 66
600 North Dairy Ashford 
Houston, Texas 77079
Attention:  Manager, Joint Ventures 

with copies (which shall not constitute notice) to: 

Phillips 66
600 N. Dairy Ashford (PW 8133)
Houston, Texas  77079
Attention:  Deputy General Counsel, Commercial, Transportation and Marketing

		
	3.
	Miscellaneous.

(a)    No supplement, modification or waiver of this Joinder Agreement shall be binding unless executed in writing by P66 Holdco, Seller and REX Holdings.
(b)    This Joinder Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to its conflict of law principles that would result in the application of the Laws of any other jurisdiction.  Each party to this Joinder Agreement agrees that any legal proceeding with respect to or arising out of this Joinder Agreement, the Assignment Agreement or the Purchase Agreement shall be brought in the United States District Court for New York or the courts of the State of New York, in the City of New York.  By execution and delivery of this Joinder Agreement, each party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and to the appellate courts therefrom.  Each party to this Joinder Agreement irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, at the applicable address set forth in Section 9.4 of the Purchase Agreement (or at such address as may be subsequently changed in accordance with Section 9.4 of the Purchase Agreement).  EACH OF THE PARTIES TO THIS JOINDER 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 JOINDER AGREEMENT, THE ASSIGNMENT AGREEMENT OR THE PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  Each party to this Joinder Agreement waives, to the fullest extent permitted by 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.  Each party to this Joinder Agreement agrees that the rights and remedies for failure to comply with this Joinder Agreement shall include having the provisions of this Joinder Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the non-breaching parties and that money damages would not provide an adequate remedy to the non-breaching parties, and the breaching party hereby waives any requirements for the non-breaching parties to post a bond or other security in connection therewith.  Any such specific or equitable relief granted shall not be exclusive and each of the parties shall be entitled to pursue any other remedy available to it at law or in equity.
(c)    The provisions of this Joinder Agreement shall be deemed severable and the invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of the other provisions hereof.   
(d)    Delivery of an executed counterpart of a signature page to this Joinder Agreement by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Joinder Agreement.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, each of P66 Holdco, Seller and REX Holdings has executed this Joinder Agreement as of the date first above written.
P66 HOLDCO:

P66REX LLC
By:                           
Name:                         
Title:                         

SELLER:

SEMPRA REX HOLDINGS, LLC
By:                           
Name:                         
Title:                          

REX HOLDINGS:

ROCKIES EXPRESS HOLDINGS, LLC
By:                           
Name:                         
Title:                          

Exhibit D

Letter Agreement

[See Attached]

CONFIDENTIAL
PRIVILEGED SETTLEMENT COMMUNICATION
SUBJECT TO FRE 408

April [__], 2016

Andrew Scull
Sempra Rockies Marketing, LLC 
488 8th Avenue
San Diego, CA 92101

Re:     Amendment to Negotiated Rate Agreement applicable to FTSA No. 553081
 

Dear Mr. Scull:

This binding Letter Agreement amends the Firm Transportation Negotiated Rate Agreement between Rockies Express Pipeline LLC (“Rockies Express”) and Sempra Rockies Marketing, LLC (“Shipper”) dated June 5, 2008 and designated Contract No. 553081 (the “NRA”), as amended by the settlement agreement that provides certainty regarding the scope and applicability of the Most Favored Nation rights applicable to Shipper (the “Settlement Agreement”), which was incorporated by reference in the NRA effective July 1, 2014.  Rockies Express and Shipper are referred to herein together as the “Parties” and individually as a “Party.”   

Rockies Express and the Shipper now hereby mutually acknowledge and agree to the following amendment of the Settlement Agreement:

		
	1.
	Section 3.2 of the Settlement Agreement is replaced in its entirety by the following: 

“The Settling Shipper’s MFN Rights can only be triggered by Eligible Contracts as further described in this Section 3.  “Eligible Contracts” are firm transportation contracts on Rockies Express’ mainline facilities, excluding the following:  (i) transportation contracts providing for east-to-west transportation within Zone 3; (ii) those Foundation Shipper’s and Anchor Shippers’ Firm Transportation Service Agreements in effect on June 1, 2014; (iii) any amendment(s) to the Foundation Shipper’s or Anchor Shippers’ Firm Transportation Service Agreements (but only if such Firm Transportation Service Agreements were in effect on June 1, 2014) affecting the commercial terms of the same, including without limitation changes to rate, term, and/or volume, provided that substantially similar Foundation Shipper or Anchor Shipper amendment terms are also offered to the Settling Shipper either prior to, or within five days after, execution of such an amendment (regardless of whether Settling Shipper’s maximum daily transportation quantity is less than the Foundation Shipper or Anchor Shipper).” 

If the amendments to the Settlement Agreement set forth in the immediately preceding paragraph are modified or conditioned, in any respect, by an order of the Federal Energy Regulatory Commission (“FERC”) upon a filing by Rockies Express to obtain FERC’s acceptance of the same, Rockies Express and Shipper shall each have thirty (30) days from and after the date of issuance of such order to determine whether such modification or condition is acceptable to such Party. If, within, such 30-day period, either Party notifies the other Party in writing that any such modification or condition is unacceptable, this Letter Agreement shall immediately terminate without liability or future obligation to either Party.
 
Except as expressly provided herein, all other terms and conditions of the NRA, including without limitation the Settlement Agreement and any amendments to the NRA, shall remain in full force and effect.  The amendments identified herein shall not affect the rights and/or obligations of any party to the Settlement Agreement that is not a signatory of this Letter Agreement.    

Please indicate Shipper’s agreement to this Letter Agreement by signing below.  Upon the Parties’ mutual execution below, this Letter Agreement will constitute the legal, valid, binding and enforceable obligation of the Parties as of the date first written above.  The Parties represent to each another that no further board or management approvals are necessary to give effect to this Letter Agreement. 

370 Van Gordon Street     Lakewood, CO  80228-1519      303.763.2950

 

Please do not hesitate to call me if you have any questions.

Thank you, 

Matthew P. Sheehy
President 
Rockies Express Pipeline LLC

	
		
	ACCEPTED AND AGREED BY:
Rockies Express Pipeline LLC

By: ______________________________________

Name: ____________________________________

Title: _____________________________________

Date: _____________________________________
	ACCEPTED AND AGREED BY:
Sempra Rockies Marketing, LLC 

By: ______________________________________

Name: ___________________________________

Title: _____________________________________

Date: _____________________________________Exhibit

Exhibit 10.3

ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this “Agreement”) is made and effective as of May 6, 2016 (the “Effective Date”) by and between Rockies Express Holdings, LLC, a Delaware limited liability company (“Assignor”), and TEP REX Holdings, LLC, a Delaware limited liability company (“Assignee”).  Additionally, Tallgrass Development, LP, a Delaware limited partnership (“Development”), is a party to this Agreement for the limited purposes set forth in Article III, Article VI and Article VII.  
RECITALS
WHEREAS, Assignor has entered into that certain Membership Interest Purchase Agreement, dated as of March 29, 2016 (the “Purchase Agreement”) with Sempra REX Holdings, LLC, a Delaware limited liability company (“Sempra”), pursuant to which Assignor has agreed to acquire Sempra’s 25% membership interest (the “Subject Interest”) in Rockies Express Pipeline LLC, a Delaware limited liability company (the “Company”), in exchange for payment of the Purchase Price (as defined therein) and, as applicable, other consideration recited in the Purchase Agreement;
WHEREAS, Assignor, Sempra and P66 Holdco have entered into that certain Letter Agreement, dated as of April 27, 2016 (the “Side Letter”), pursuant to which P66 Holdco waived all of its rights under the Original REX LLC Agreement related to the transactions contemplated by the Purchase Agreement, including the ROFR, and in exchange for such waiver, Assignor and Sempra agreed to amend the Original REX LLC Agreement by executing, immediately prior to the Subject Interest Closing, Amendment No. 2 to Second Amended and Restated Limited Liability Company Agreement of the Company (the “Amendment,” and such Original REX LLC Agreement as amended by the Amendment, the “REX LLC Agreement”), which will, among other things, amend certain approval, consent and presence requirements set forth in the Original REX LLC Agreement;
WHEREAS, pursuant to Section 9.10(a) of the Purchase Agreement, Assignor may assign its rights and obligations under the Purchase Agreement to a wholly owned subsidiary of Tallgrass Energy Partners, LP, a Delaware limited partnership (the “Partnership”), for purposes of having such entity take ownership of some or all of the Subject Interest so long as Assignor remains jointly and severally obligated to satisfy all of Assignor’s obligations under the Purchase Agreement;
WHEREAS, Assignee is an indirect wholly owned subsidiary of the Partnership;
WHEREAS, Assignor desires to assign to Assignee its rights and obligations under the Purchase Agreement, and Assignee desires to accept from Assignor such rights and obligations, pursuant to the terms of this Agreement; and
WHEREAS, the conflicts committee of the Board of Directors (as hereinafter defined) (the “Conflicts Committee”) has previously found the Transaction to be fair and reasonable to the Partnership and the holders of its Common Units (other than Assignor 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.  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.
“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, whether civil, criminal, administrative, regulatory or otherwise, and whether at law or in equity.
“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 Assignor, the term “Affiliate” shall exclude the Partnership, the General Partner and the Partnership’s subsidiaries, (ii) with respect to the Assignee, the term “Affiliate” shall exclude Assignor, Development, and its general partner, Tallgrass Energy Holdings, LLC, and (iii) the Company shall be deemed to be an “Affiliate” (x) prior to the Closing, of Assignor and (y) on and after the Closing, of both Assignor and Assignee.  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.
“Amendment” has the meaning ascribed to such term in the recitals.
“Assignee” has the meaning ascribed to such term in the preamble.
“Assignee Claim” has the meaning ascribed to such term in Section 6.1.
“Assignee Indemnified Parties” has the meaning ascribed to such term in Section 6.1.
“Assignment” has the meaning ascribed to such term in Section 2.1.
“Assignor” has the meaning ascribed to such term in the preamble.
“Assignor Claim” has the  meaning ascribed to such term in Section 6.2.
“Assignor Indemnified Parties” has the meaning ascribed to such term in Section 6.2.
“Assumption” has the meaning ascribed to such term in Section 2.2.
“Balance Sheet” has the meaning ascribed to such term in Section 3.5.
“Balance Sheet Date” has the meaning ascribed to such term in Section 3.5.
“Board of Directors” has the meaning ascribed to such term in the recitals.
“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in the State of Kansas are authorized or required by Law to be closed for business. 
“Ceiling Amount” has the meaning ascribed to such term in Section 6.5(a).
“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act.
“Claim” has the meaning ascribed to such term in Section 6.2.
“Claim Notice” has the meaning ascribed to such term in Section 6.3(a).
“Code” means the Internal Revenue Code of 1986, as amended.

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“Commission” means the Securities and Exchange Commission.
“Company” has the meaning ascribed to such term in the recitals.
“Company Assets” means all of the assets owned by the Company on the Effective Date.
“Conflicts Committee” has the meaning ascribed to such term in the recitals.
“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.
“Damages” means, collectively, liabilities, judgments, costs and other expenses (including reasonable legal fees and expenses), obligations, causes of action at law or in equity and other claims of any and every kind.
“Deductible Amount” has the meaning ascribed to such term in Section 6.5(a).
“Development” means Tallgrass Development, LP, a Delaware limited partnership.
“Disclosure Schedules” has the meaning ascribed to such term in Article III.  
“Effective Date” has the meaning ascribed to such term in the preamble.
“Environmental Laws” means , without limitation, the following laws, in effect as of the Effective Date, as such law may be amended after the Effective Date: (a) the Resource Conservation and Recovery Act; (b) the Clean Air Act; (c) CERCLA; (d) the Federal Water Pollution Control Act; (e) the Safe Drinking Water Act; (f) the Toxic Substances Control Act; (g) the Emergency Planning and Community Right-to Know Act; (h) the National Environmental Policy Act; (i) the Pollution Prevention Act of 1990; (j) the Oil Pollution Act of 1990; (k) the Hazardous Materials Transportation Act; (l) the Federal Insecticide, Fungicide and Rodenticide Act; (m) all laws, statutes, rules, regulations, orders, judgments or decrees promulgated or issued with respect to the foregoing Environmental Laws by Governmental Authorities with jurisdiction in the premises; and (n) 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.
“FERC” means the United States Federal Energy Regulatory Commission.
“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.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Hazardous Materials” means any substance, whether solid, liquid or gaseous: (a) 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; (b) which is or contains asbestos, polychlorinated biphenyls, radon, urea formaldehyde foam insulation, explosives or radioactive materials; (c) which is any petroleum, petroleum hydrocarbons, petroleum substances, petroleum or 

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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; (d) which is radioactive material, waste and pollutants, radiation, radionuclides and their progeny, or nuclear waste including used nuclear fuel; or (e) 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 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.
“Indemnified Party” and “Indemnified Parties” have the meanings ascribed to such terms in Section 6.2.
“Indemnitor” has the meaning ascribed to such term in Section 6.3(a).
“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” means the knowledge of the personnel of Assignor and Development designated on Exhibit A.
“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree or rule of law of any Governmental Authority.
“Lien” means any mortgage, deed of trust, lien, security interest, pledge, conditional sales contract, charge, restriction (whether on voting, sale, transfer, disposition or otherwise and excluding any restrictions in this Agreement, the Purchase Agreement or the REX LLC Agreement) or other encumbrance of every type and description.
“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 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 Purchase Agreement and the taking of any actions contemplated by this Agreement or the Purchase 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 Assignor to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.

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“Material Contract” has the meaning ascribed to such term in Section 3.9.
“Minimum Claim Amount” has the meaning ascribed to such term in Section 6.5(a).
“Notice” has the meaning ascribed to such term in Section 7.4.
“Original REX LLC Agreement” means that certain Second Amended and Restated Limited Liability Company Agreement of the Company dated effective as of January 1, 2010, among Assignor (as successor by assignment to Kinder Morgan W2E Pipeline LLC), Sempra and P66 Holdco, as amended by that certain Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of the Company effective November 13, 2012, among Kinder Morgan W2E Pipeline LLC, Sempra, Assignor and P66 Holdco.
“P66 Holdco” means P66REX LLC, a Delaware limited liability company formerly known as COPREX LLC.
“Partnership” has the meaning ascribed to such term in the recitals.
“Partnership 8-K” has the meaning ascribed to such term in Section 3.5.
“Permit” means any license, permit or authorization issued or granted or waived by a Governmental Authority that is necessary for the conduct of the Company’s business as now being conducted.
“Permitted Lien” 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 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; (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.
“Purchase Agreement” has the meaning ascribed to such term in the recitals.
“Representative” means, with respect to any Person, any and all directors, partners, members, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
“REX LLC Agreement” has the meaning ascribed to such term in the recitals.
“ROFR” means that certain right of first refusal set forth in Section 7.1.3 of the Original REX LLC Agreement. 
“Securities Act” means the Securities Act of 1933, as amended.
“Sempra” has the meaning ascribed to such term in the recitals.
“Side Letter” has the meaning ascribed to such term in the recitals.
“Subject Interest” has the meaning ascribed to such term in the recitals.

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“Subject Interest Closing” means the Closing as defined in the Purchase Agreement.
“Subject Interest Closing Date” means the Closing Date as defined in the Purchase Agreement.
“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 or any liability for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined or taken into account with reference to the liability of any other Person. 
 “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. 
“TEGP 8-K” has the meaning ascribed to such term in Section 3.5(b).
“Third Party Proceeds” has the meaning ascribed to such term in Section 6.5(b).
“Transaction” has the meaning ascribed to such term in Section 2.2.
“Transfer Tax” has the meaning ascribed to such term in Section 2.4. 
Section 1.2    Construction.
In constructing this Agreement: (a) the word “includes” and its derivatives means “includes, without limitation” and corresponding derivative expressions; (b) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified; (c) unless otherwise specified, all references in this Agreement to “Article,” “Section,” “Exhibit,” “preamble” or “recitals” shall be references to an Article, Section, Exhibit, preamble or recitals hereto; and (d) whenever the context requires, the words used in this Agreement shall include the masculine, feminine and neuter and singular and the plural.
ARTICLE II
ASSIGNMENT AND ASSUMPTION
Section 2.1    Assignment of Rights.
Assignor hereby conveys, assigns, transfers and delivers all of its rights under the Purchase Agreement to Assignee, such that, from and after the Effective Date, the Assignee shall have all of the rights and benefits of the Assignor under the Purchase Agreement (the “Assignment”).
Section 2.2    Assumption of Obligations.
Assignee hereby assumes the obligations and liabilities of Assignor arising under the Purchase Agreement immediately upon the Effective Date, and agrees to perform and observe all of the terms, covenants and conditions to which Assignor is bound under the Purchase Agreement (the “Assumption,” and together with the Assignment, the “Transaction”).

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Section 2.3    Joinder.
Assignee acknowledges receipt of a true and correct copy of the Purchase Agreement.  Assignee hereby joins the Purchase Agreement and, as of the date hereof, becomes a Buyer under the Purchase Agreement as if an original party thereto, subject to all of the terms, obligations, covenants, conditions, limitations, restrictions and provisions applicable to Buyer and Assignor contained in the Purchase Agreement. By execution of this Agreement, Assignee agrees that the Purchase Agreement shall be a binding obligation of Assignee and any of its successors and permitted assigns.  Assignee hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to Buyer and Assignor contained in the Purchase Agreement; provided that Assignor shall remain jointly and severally obligated to satisfy all of Assignor’s obligations under the Purchase Agreement, as Buyer or otherwise. 
Section 2.4    Transfer Taxes
The parties do not expect that any transfer, documentary, sales, use, stamp, registration and other similar Taxes and fees (the “Transfer Taxes”) will be incurred in connection with the transactions contemplated pursuant to this Agreement.  In the event that any Transfer Taxes are due, such Transfer Taxes shall be borne by Assignee.  The Assignee shall file all necessary Tax Returns and other documentation with respect to such Transfer Taxes.  If required by applicable Law, Assignor shall, and shall cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DEVELOPMENT AND ASSIGNOR
Development and Assignor, jointly and severally, hereby represent and warrant to Assignee that, except as disclosed in the disclosure schedules delivered to Assignee on the date of this Agreement (collectively, the “Disclosure Schedule”) (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 and Existence.
		
	(a)
	Assignor 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 Material Adverse Effect.  Assignor has made available to Assignee true and complete copies of the organizational documents of the Company in effect as of the date of this Agreement.

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Section 3.2    Authority and Approval.
		
	(a)
	Assignor has full limited liability company power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform all of the obligations hereof to be performed by it. The execution and delivery by Assignor of this Agreement, the consummation of the transactions contemplated hereby and the performance of all of the obligations hereof to be performed by Assignor have been duly authorized and approved by all requisite limited liability company action on the part of Assignor.

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

		
	(c)
	This Agreement has been duly executed and delivered by Assignor and Development and constitutes the valid and legally binding obligation of each of Assignor and Development, 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 generally and by general principles of equity (whether applied in a proceeding at law or in equity).

Section 3.3    No Conflict; Consents.
		
	(a)
	The execution, delivery and performance of this Agreement by Development and Assignor does not, and the fulfillment and compliance with the terms and conditions hereof and the consummation of the transactions contemplated hereby 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 other organizational documents of Development or Assignor; (ii) 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 liability company agreement or other organizational documents of the Company; (iii) conflict with or violate any provision of any Law or Governmental Order applicable to Development, Assignor or the Company; or (iv) 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, Assignor or the Company is a party or by which any of them, their respective properties or the Company Assets are bound; other than, in the case of each of clauses (iii) and (iv) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on the ability of Assignor to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.

		
	(b)
	No notice to or consent, approval, license, permit, order or authorization of any Governmental Authority or other Person is required to be obtained or made by Development or Assignor in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except (i) as have been waived or obtained or (ii) for those which individually or in the aggregate would not reasonably be 

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expected to have a material adverse effect on the ability of Assignor to perform its obligations under this Agreement or to consummate the transactions contemplated hereby (including such consents, approvals, licenses, permits, orders or authorizations that are not customarily obtained prior to the Subject Interest Closing and are reasonably expected to be obtained in the ordinary course of business following the Subject Interest Closing).
Section 3.4    Capitalization.
		
	(a)
	To Assignor’s Knowledge, the Subject Interest is not subject to any agreement or understandings with respect to the voting, transfer or other rights and obligations of the Subject Interest (except as contemplated by this Agreement, the Purchase Agreement, the REX LLC Agreement and restrictions under applicable federal and state securities laws). 

		
	(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.  Except as set forth in the REX LLC Agreement, the Company has no obligation (contingent or other) to purchase, redeem or otherwise acquire any of its equity securities.  Except for this Agreement, the Purchase Agreement, the REX LLC Agreement and the Side Letter, to Assignor’s Knowledge, 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)
	Assignor has provided to Assignee a true and complete copy of the audited balance sheet as of December 31, 2015 (the “Balance Sheet Date”) for the Company on a consolidated basis (the “Balance Sheet”).  The Balance Sheet presents fairly in all material respects the financial position of the Company as of the date thereof.  As of the Balance Sheet Date, there are no off-balance sheet arrangements that have had or are reasonably likely to have a 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 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)
	Except as otherwise disclosed in (i) the Current Report on Form 8-K filed by the Partnership with the Commission on April 28, 2016 (the “Partnership 8-K”), (ii) the Current Report on Form 8-K filed by Tallgrass Energy GP, LP with the Commission on April 28, 2016 (the “TEGP 8-K”) or (iii) Disclosure Schedule 3.5(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 (x) liabilities or obligations reflected or reserved against in the Balance Sheet or any unaudited balance sheet of the Company previously provided to Assignee, (y) current liabilities incurred in the ordinary course of business since December 31, 2015, and (z) 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 Material Adverse Effect.

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Section 3.6    Title to Properties
		
	(a)
	Disclosure Schedule 3.6(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 (i) good and marketable fee simple title to the owned real property included on Disclosure Schedule 3.6(a), free and clear of any Liens (other than Permitted Liens or as set forth on Disclosure Schedule 3.6(a)) and (ii) 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 or as set forth on Disclosure Schedule 3.6(a)).  For purposes of this Section 3.6(a), “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 owned by the Company together with the tangible personal property owned by Affiliates of Assignor that provide services to or for the benefit of the Company includes all material tangible personal property 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).

Section 3.7    Litigation; Compliance with Laws.
Except as otherwise disclosed in the Partnership 8-K or the TEGP 8-K or as set forth on Disclosure Schedule 3.7:
		
	(a)
	There are no (i) civil, criminal or administrative actions, suits, claims, hearings, arbitrations, investigations or proceedings pending or, to Development’s and Assignor’s 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 Assignor’s 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 Material Adverse Effect.

		
	(b)
	As of the Effective Date, there are no Actions pending or threatened that (a) question or involve the validity or enforceability of any of Development’s or Assignor’s obligations under this Agreement or the Purchase Agreement, or (b) seek (i) to prevent or delay the consummation by Development or Assignor of the transactions contemplated by this Agreement or the Purchase Agreement or (ii) damages in connection with any such consummation.

		
	(c)
	Neither Assignor nor the Company is in violation of or in default under any applicable Law or Governmental Order, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

Section 3.8    No Adverse Changes.
Except as set forth on Disclosure Schedule 3.8, since the Balance Sheet Date:
		
	(a)
	there has been no Material Adverse Effect;

		
	(b)
	there has been no damage, destruction or loss to any material portion of the Company Assets, whether or not covered by insurance, in excess of $1,000,000;

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	(c)
	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 $1,000,000; and

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

Section 3.9    Taxes.
		
	(a)
	To the Knowledge of Development and Assignor, except as would not reasonably be expected to have a 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 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)
	In the twelve (12) month period ended December 31, 2015 and throughout the period in 2016 ending on the Subject Interest 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.

		
	(c)
	The Company has in effect an election under Section 754 of the Code for the taxable year that includes the Subject Interest Closing Date.

Section 3.10    Environmental Matters.
Except as disclosed in Disclosure Schedule 3.10, or as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:
		
	(a)
	the Company, the Company Assets and the operations and business of the Company are in compliance with applicable Environmental Laws;

		
	(b)
	no circumstances exist with respect to the Company, the Company Assets or the operations and business of the Company that give rise to an obligation by the Company 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, the Company Assets and the operations and business of the Company are not subject to any pending or, to the Knowledge of Development or Assignor, threatened, claim, action, suit, investigation, inquiry or proceeding under any Environmental Law (including 

11

designation as a potentially responsible party under CERCLA or any similar local or state law);
		
	(e)
	all Permits, 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 the Company Assets are in compliance with such authorizations; and

		
	(f)
	since the date Assignor acquired its 50% membership interest in the Company, there has been no release of any Hazardous Material into the environment by the Company, the Company Assets or the operations and business or the Company, or to the Knowledge of Development or Assignor, by a third party except in compliance with applicable Environmental Law.

Section 3.11    Licenses; Permits.
		
	(a)
	As of the date of this Agreement, except as set forth in Disclosure Schedule 3.11, the Company has all Permits, except, in each case, for such items for which the failure to obtain or have waived would not result in a 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 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 Material Adverse Effect.

		
	(d)
	There is no outstanding written notice, nor to Development’s and Assignor’s 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 Material Adverse Effect.

		
	(e)
	No proceeding is pending or, to Development’s and Assignor’s 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 3.12    Contracts.
		
	(a)
	Disclosure Schedule 3.12(a) contains a true and complete listing of the following contracts and other agreements to which the Company is, or immediately after the Subject Interest 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;

		
	(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 Assignor, on the other hand, is a party or is otherwise bound;

12

		
	(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 $5,000,000 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 the Company under a “shrink wrap,” “click wrap” or “off the shelf” software license that is generally commercially available on standard terms.

		
	(b)
	Assignor has made available to Assignee a correct and complete copy of each Material Contract listed in Disclosure Schedule 3.12(a).

		
	(c)
	Except as would not reasonably be expected to result in a Material Adverse Effect or as disclosed in Disclosure Schedule 3.12(a), 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, under any Material Contract; and (iv) to Development’s and Assignor’s 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 3.13    Employees.
The Company has no employees.
Section 3.14    Transactions with Affiliates.
Except as otherwise contemplated in this Agreement and the Purchase Agreement, the Company is not a party to, and immediately after the Subject Interest 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 Subject Interest Closing, on the other hand, other than those disclosed on Disclosure Schedule 3.12(a).

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Section 3.15    Insurance.
Assignor has provided Assignee 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 3.16    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 Assignor’s 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 Material Adverse Effect.  There is no Intellectual Property-related action, suit, proceeding, hearing, investigation, notice or complaint pending or, to Development’s and Assignor’s 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 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 Material Adverse Effect, the Company has taken reasonable measures to protect the confidentiality of all material trade secrets.
Section 3.17    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 Assignee.  
Section 3.18    Regulatory Matters.
Since the Balance Sheet Date, the Company, the Company Assets and the business and operations of the Company have 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 and tariffs of the FERC and any state public utility commission having jurisdiction over any of the Company, the Company Assets and the business and operations of the Company.  The Company has duly filed all forms and reports required to be filed by or with respect to the Company, the Company Assets and the business and operations of the Company with the FERC and any state public utility commission having jurisdiction over any of the Company, the Company Assets and the business and operations of the Company, 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 Material Adverse Effect.
Section 3.19    Purchase Agreement Breach.
Neither Assignor, nor to Assignor’s Knowledge, Sempra, is in breach of any of its representations, warranties or covenants contained in the Purchase Agreement. 
Section 3.20    Brokerage Arrangements.
Assignor has not entered (directly or indirectly) into any agreement with any Person that would obligate Assignor or any of its Affiliates or any other Person to pay any commission, brokerage or “finder’s fee” or other similar fee in connection with this Agreement, the Purchase Agreement or the transactions contemplated hereby or thereby.

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Section 3.21    Management Projections and Budget.
The projections and budgets identified on Disclosure Schedule 3.21, which were provided to Assignee by Assignor and its Affiliates as part of Assignee’s review in connection with this Agreement, were prepared based upon assumptions that Assignor’s management believed to be reasonable as of the date thereof and were consistent with Assignor’s management’s expectations at the time they were prepared.
Section 3.22    Title to Subject Interest.
Upon the Subject Interest Closing, Assignee will have record title to and beneficial ownership of the Subject Interest.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ASSIGNEE
Assignee hereby represents and warrants to Assignor as follows:
Section 4.1    Organization and Existence.
Assignee 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.
Section 4.2    Authority and Approval.
		
	(a)
	Assignee has full limited liability company power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to perform all of the obligations hereof to be performed by it. The execution and delivery by Assignee of this Agreement, the consummation of the transactions contemplated hereby and the performance of all of the obligations hereof to be performed by Assignee have been duly authorized and approved by all requisite limited liability company action on the part of Assignee.

		
	(b)
	This Agreement has been duly executed and delivered by Assignee and constitutes the valid and legally binding obligation of Assignee, 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 generally and by general principles of equity (whether applied in a proceeding at law or in equity).

Section 4.3    No Conflict; Consents.
		
	(a)
	The execution, delivery and performance of this Agreement by Assignee does not, and the fulfillment and compliance with the terms and conditions hereof and the consummation of the transactions contemplated hereby 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 liability company agreement or other organizational documents of Assignee; (ii) conflict with or violate any provision of any Law or Governmental Order applicable to Assignee; or (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 Assignee is a party or by which it or its properties are bound; other than, in the case of each 

15

of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a material adverse effect on the ability of Assignee to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.
		
	(b)
	No notice to or 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 Assignee in connection with the execution, delivery and performance of this Agreement or the Purchase Agreement or the consummation of the transactions contemplated hereby or thereby, except as have been waived or obtained; provided that no representation or warranty is made by Assignee herein with respect to the REX LLC Agreement.

Section 4.4    Brokerage Arrangements.
Assignee has not entered (directly or indirectly) into any agreement with any Person that would obligate Assignee or any of its Affiliates or any other Person to pay any commission, brokerage or “finder’s fee” or other similar fee in connection with this Agreement, the Purchase Agreement or the transactions contemplated hereby or thereby.
Section 4.5    Litigation.
As of the Effective Date, there are no Actions pending or threatened that (a) question or involve the validity or enforceability of any of Assignee’s obligations under this Agreement or (b) seek (i) to prevent or delay the consummation by Assignee of the transactions contemplated by this Agreement or the Purchase Agreement or (ii) damages in connection with any such consummation.
ARTICLE V
COVENANTS
Section 5.1    Confidentiality.
Assignor and Assignee shall, and shall cause each of their respective Affiliates and Representatives to, abide by the terms of Section 2.5 of the REX LLC Agreement (including the survivability of such obligations) with respect to any information provided by a party to the other party pursuant to this Agreement, all such information being deemed “Confidential Information” for purposes of Section 2.5 of the REX LLC Agreement; provided, however, that any disclosures in any public announcement or statement issued by either party pursuant to Section 7.6 will not be deemed “Confidential Information” following the making of such public announcement or statement.
ARTICLE VI
INDEMNIFICATION
Section 6.1    Indemnification of Assignee.
Subject to the limitations set forth in this Agreement, Development and Assignor, from and after the Effective Date, agree to, jointly and severally, hold harmless, save, defend and indemnify Assignee, its subsidiaries and securityholders, directors, officers and employees, and the respective officers, directors and employees of the Partnership and the General Partner, but otherwise excluding Development, its Affiliates and the Company (the “Assignee Indemnified Parties”), from and against any and all Damages suffered or incurred by any Assignee Indemnified Party as a result of or arising out of (a) any breach or inaccuracy of a representation or warranty of Development or Assignor in this Agreement or (b) any breach of any agreement or covenant on the part of Development or Assignor made under this Agreement or in connection with the transactions contemplated hereby (each, an “Assignee Claim”). For purposes of this Section 6.1, whether Development or Assignor 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”).

16

Section 6.2    Indemnification of Assignor.
Subject to the limitations set forth in this Agreement, Assignee, from and after the Effective Date, agrees to hold harmless, save, defend and indemnify Assignor and its Affiliates (other than any of the Assignee Indemnified Parties) and their respective securityholders, directors, officers and employees (the “Assignor Indemnified Parties,” and together with the Assignee Indemnified Parties, each, an “Indemnified Party,” and collectively, the “Indemnified Parties”) from and against any and all Damages suffered or incurred by any Assignor Indemnified Party as a result of or arising out of (a) any breach or inaccuracy of a representation or warranty of Assignee in this Agreement, (b) any breach of any agreement or covenant on the part of Assignee made under this Agreement or in connection with the transactions contemplated hereby or (c) payments made by Assignor on Assignee’s behalf in respect of Assignee’s obligations under the Purchase Agreement except to the extent Assignor owes an indemnity to Assignee hereunder in relation thereto  (each, an “Assignor Claim,” and together with Assignee Claims, each, a “Claim”).  For purposes of this Section 6.2, whether Assignor 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    Notification and Defense of Claim.
		
	(a)
	An Indemnified Party shall promptly notify the applicable indemnitor pursuant to this Article VI (the “Indemnitor”) in writing upon its discovery of facts giving rise to a potential Claim (a “Claim Notice”), including receipt by it of notice of any demand, assertion, claim, action or proceeding, judicial or otherwise, and such notice shall include a formal demand for indemnification under this Agreement and contain a description of the nature and estimated amount (if then known) of such Claim; provided, however, that, subject to Section 6.4 below, the failure to so notify or a delay in notifying the Indemnitor will not relieve it of its obligations hereunder, except to the extent that the Indemnitor is actually prejudiced as a result thereof. If requested by the Indemnitor or its counsel, the Indemnified Party will, at the sole cost and expense of the Indemnitor, reasonably cooperate with the Indemnitor in the investigation, defense and settlement of such Claim. Without limiting the foregoing, Indemnified Party will provide the Indemnitor with all records, documents, materials  and  information  in  its  possession  or  control  and  reasonable  access  to  personnel, in each case that is relevant to such Claim. If it gives written notice of its intention to do so to the Indemnified Party within thirty (30) days after receipt of the Claim Notice, except as provided in Section 6.3(c) below, the Indemnitor will have the right to assume, conduct and control the defense of any Claim and all negotiations for its settlement or compromise, which may be conducted in the name and on behalf of the Indemitor or the Indemnified Party, as may be appropriate. Except as provided in Section 6.3(c) below, the Indemnitor will have the right to select counsel (that is reasonably satisfactory to the Indemnified Party) to provide representation in connection with such Claim. The Indemnified Party may in its sole discretion, and at its expense (but subject to Section 6.3(c) below), participate with its own counsel in the defense of any such Claim. If the Indemnified Party elects to so participate, except as provided in Section 6.3(c) below, the Indemnitor shall have no obligation to indemnify such Indemnified Party or any other person for the expenses and fees of counsel incurred by such Indemnified Party in connection with such participation.

		
	(b)
	An Indemnified Party shall agree to any settlement, compromise or discharge of a Claim that the applicable Indemnitor may recommend that (and the Indemnitor shall not enter into any settlement, compromise or discharge of a Claim without the prior written consent of the Indemnified Party unless such settlement, compromise or discharge) by its terms (i) obligates the Indemnitor to pay to discharge in full the liability in connection with such Claim, (ii) releases such Indemnified Party completely and unconditionally in connection with such Claim, (iii) does not contain any finding, statement or admission of fault or culpability by any Indemnified Party, and (iv) does not contain any sanction or restriction upon the conduct or operation of any business by such Indemnified Party. The Indemnitor will not be liable to indemnify an Indemnified Party under this Agreement for any amounts paid in settlement of 

17

any Claim without the Indemnitor’s prior written consent.  An Indemnified Party shall not settle any action or claim in any manner which would impose any penalty or limitation on the Indemnitor without the Indemnitor’s prior written consent. Neither the Indemnitor, nor any Indemnified Party, will unreasonably withhold, condition or delay its consent to any proposed settlement, compromise or discharge of any such Claim.
		
	(c)
	Notwithstanding the foregoing, if (i) the Indemnitor does not assume the defense of any Claim in accordance with the thirty (30) day period specified in Section 6.3(a), or (ii) the named parties to the proceeding for the Claim include both an Indemnified Party and the Indemnitor (or any of its Affiliates) and either the Indemnitor or an Indemnified Party determines, based on the advice of counsel, that there may be one or more legal defenses available to it that are materially different from or additional to those available to the other party or that a conflict of interest between those parties would reasonably be expected to exist in respect thereto, then the named Indemnified Party or Parties shall have the right, by prior written notice given to the Indemnitor, to control the defense of the Claim; provided, however, that the Indemnitor shall be entitled, at its expense, to participate in (but not control) that defense. In those circumstances, the named Indemnified Party or Parties shall defend the Claim in good faith and have full control of such defense and proceedings with respect to such Indemnified Parties; provided, however, that the Indemnified Parties may not enter into any settlement, compromise or discharge of such Claim if indemnification is to be sought hereunder, without the Indemnitor’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed). If requested by an Indemnified Party or its counsel, the Indemnitor agrees, at its sole cost and expense, to reasonably cooperate with such Indemnified Party and its counsel in contesting any Claim for which an Indemnified Party is conducting the defense, including providing reasonable access to documents, records and information in its possession or control relevant to such Claim.

		
	(d)
	Subject to the terms and provisions of this Article VI, the Indemnitor shall reimburse any and all costs, expenses, legal fees, expert fees and other charges reasonably incurred by an Indemnified Party pursuant to Section 6.3(c) as they are incurred (to be reimbursed within thirty (30) days following receipt of invoices for those charges); provided, however, that the Indemnitor may condition any reimbursement on receipt of a promise by such Indemnified Party to repay those amounts if it is ultimately determined that the Indemnitor was not required to indemnify the Indemnified Parties for those amounts hereunder.

Section 6.4    Survival.
All the provisions of this Agreement shall survive the Effective Date, 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 Effective Date, except (a) the representations and warranties of Development and Assignor set forth in Section 3.9 (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 Assignor set forth in Section 3.10 (Environmental Matters) shall terminate and expire on the third (3rd) anniversary of the Effective Date, (c) the representations and warranties of Development and Assignor set forth in Section 3.1 (Organization and Existence), Section 3.2 (Authority and Approval), Section 3.20 (Brokerage Arrangements), and Section 3.22 (Title to Subject Interest) shall survive forever and (d) the representations and warranties of the Assignee set forth in Section 4.1 (Organization and Existence), Section 4.2 (Authority and Approval) and Section 4.4 (Brokerage Arrangements) 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 6.4, 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 

18

indemnification obligations under this Article VI or elsewhere in this Agreement shall apply regardless of 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 Effective Date shall survive the Effective Date. 
Section 6.5    Limitations.
		
	(a)
	To the extent the Assignee Indemnified Parties would otherwise be entitled to indemnification for Damages pursuant to Section 6.1, Development and Assignor will only be liable if (i) the Damages with respect to any individual claim exceed $100,000 (the “Minimum Claim Amount”) and (ii) the Damages for all claims that exceed the Minimum Claim Amount exceed, in the aggregate, $4,500,000 (the “Deductible Amount”), and then Development and Assignor shall be liable only for Damages to the extent of any excess over the Deductible Amount; provided, however, that in any event, except with respect to indemnification for Damages arising out of (i) third party claims or (ii) the representations and warranties of Development and Assignor set forth in Section 3.1(a) and (b) (Organization and Existence), Section 3.2 (Authority and Approval), Section 3.3 (No Conflicts; Consent) (except to the extent such representation and warranty applies to the Company), Section 3.7(b) (Litigation), Section 3.19 (Purchase Agreement Breach), Section 3.20, (Brokerage Arrangements) and Section 3.22 (Title to Subject Interests), Assignee’s Damages shall be calculated net to the Subject Interest.  In no event shall Development’s and Assignor’s aggregate liability to the Assignee Indemnified Parties under Section 6.1 exceed $45,000,000 (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 3.20 and Section 3.22.

		
	(b)
	Notwithstanding the foregoing but subject to the other limitations set forth in this Section 6.5, an Indemnitor’s obligations under this Article VI are limited to the amount of any Damages that remain after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by an Indemnified Party in respect of any such indemnity claim, less any related costs and expenses, including the aggregate cost of pursuing any related insurance claims and any related increases in insurance premiums or other charge-backs (the “Third Party Proceeds”).  No Indemnified Party has any obligation to seek to recover any Third Party Proceeds in connection with making a claim under this Article VI.  Promptly after receiving any insurance proceeds, indemnity, contribution or other similar payment, an Indemnified Party shall reimburse the applicable Indemnitor for the amount of such Third Party Proceeds, such that the applicable Indemnitor has paid no more than it is obligated pay pursuant to this Article VI after taking into account any applicable reductions under this Section 6.5(b) and the other limitations set forth in this Section 6.5.

		
	(c)
	Notwithstanding the foregoing, no Indemnitor will be liable under this Agreement for any consequential, incidental, special, indirect, punitive or exemplary damages suffered or incurred by an Indemnified Party.

Section 6.6    Sole Remedy.
No party shall have liability under this Agreement or the transactions contemplated hereby except as provided in this Article VI (other than claims or causes of action arising from fraud).

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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 Assignee, 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.
The parties hereto shall use their respective commercially reasonable efforts to obtain all approvals and consents required by or necessary for the transactions contemplated by this Agreement.  Each party acknowledges that certain actions may be necessary with respect to the matters and actions contemplated by this Agreement such as 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 Governmental Orders to make effective the transactions contemplated by this 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.
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 Assignor, addressed to:
Rockies Express Holdings, LLC
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: William R. Moler
Tel: (913) 928-6008
Fax: (913) 928-6009
with copies (which shall not constitute notice) to:
Tallgrass Development, LP
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: General Counsel's Office
Tel: (913) 928-6038
Fax: (913) 928-6039

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Baker Botts L.L.P.
98 San Jacinto Blvd., Suite 1500
Austin, Texas 78701
Attention: Mike Bengtson
Tel: (512) 322-2661
Fax: (512) 322-8349
If to Assignee, addressed to:
TEP REX Holdings, LLC
c/o Tallgrass Energy Partners, LP
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: General Counsel
Tel: (913) 928-6038
Fax: (913) 928-6039
with copies (which shall not constitute notice) to: 
Tallgrass Energy Partners, LP
4200 W. 115th Street, Suite 350
Leawood, KS 66211
Attention: Conflicts Committee Chair
Tel: (913) 928-6038
Fax: (913) 928-6039
Bracewell 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 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.

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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 constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes 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.

		
	(b)
	No amendment, supplement, modification or waiver of this Agreement shall be binding unless executed in writing by each party to be bound thereby and, in the case of Assignee, approved by the Conflicts Committee on behalf of Assignee.  No waiver of 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 sets forth the parties’ rights, responsibilities and liabilities with respect to the transactions contemplated by this Agreement.  In this Agreement, specific provisions prevail over general provisions. 
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 Assignor Indemnified Parties and the Assignee 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, Assignor and Assignee 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 this Agreement shall not be construed against any party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any provision hereof or who supplied the form of this 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 

22

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.
Section 7.12    Headings; Exhibits; 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.
*    *    *    *    *

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

ROCKIES EXPRESS HOLDINGS, LLC

By:     /s/ David G. Dehaemers, Jr.        
David G. Dehaemers, Jr.
Chief Executive Officer

ASSIGNEE:

TEP REX HOLDINGS, LLC

By:     /s/ David G. Dehaemers, Jr.        
David G. Dehaemers, Jr.
Chief Executive Officer

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 Energy Holdings, LLC,
its general partner

By:     /s/ David G. Dehaemers, Jr.        
David G. Dehaemers, Jr.
Chief Executive Officer

Signature Page to Assignment and Assumption Agreement

Exhibit A
Assignor and Development Knowledge Persons
		
	•
	David G. Dehaemers, Jr.

		
	•
	William R. Moler

		
	•
	Gary J. Brauchle

		
	•
	Richard L. Bullock

		
	•
	Christopher R. Jones

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