ASSET PURCHASE AGREEMENT

Exhibit 10.2

ASSET PURCHASE AGREEMENT

SPECTRA ENERGY VIRGINIA PIPELINE COMPANY,

and

EAST TENNESSEE NATURAL GAS, LLC,
as Buyer
dated as of
December 13, 2007

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions			1
Section 1.2 Rules of Construction			8
ARTICLE II
PURCHASE AND SALE; CLOSING
Section 2.1 Purchase and Sale of Purchased Assets			9
Section 2.2 Consideration			9
Section 2.3 The Closing			9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
RELATING TO SELLER
Section 3.1 Organization			11
Section 3.2 Authorization; Enforceability			11
Section 3.3 No Conflict			11
Section 3.4 Investment Representation			11
Section 3.5 Litigation			12
Section 3.6 Brokers’ Fees			12
Section 3.7 Contracts			12
Section 3.8 Taxes			13
Section 3.9 Condition of Pipelines			13
Section 3.10 Environmental Matters			13
Section 3.11 Legal Compliance			14
Section 3.12 Permits			14
Section 3.13 Insurance			14

		Page
Section 3.14 Title to Properties and Related Matters			15
Section 3.15 Absence of Certain Changes			15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES RELATING TO BUYER
Section 4.1 Organization of Buyer			15
Section 4.2 Authorization; Enforceability			15
Section 4.3 No Conflict			16
Section 4.4 Litigation			16
Section 4.5 Brokers’ Fees			16
Section 4.6 Ownership of P-25 Common Units			16
Section 4.7 Spectra MLP SEC Documents			17
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business			17
Section 5.2 Access			18
Section 5.3 Third Party Approvals			18
Section 5.4 Company Guarantees			18
Section 5.5 Update Information			18
Section 5.6 Books and Records			19
Section 5.7 Permits			19
Section 5.8 Recording			19
Section 5.9 Excluded Assets			19
ARTICLE VI
TAX MATTERS
Section 6.1 Ad Valorem Taxes			19
Section 6.2 Transfer Taxes			20

		Page
Section 6.3 Tax Indemnity			20
Section 6.4 Scope			21
Section 6.5 Tax Refunds			21
ARTICLE VII
CONDITIONS TO OBLIGATIONS
Section 7.1 Conditions to Obligations of Buyer			21
Section 7.2 Conditions to the Obligations of Seller			22
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival			22
Section 8.2 Indemnification			23
Section 8.3 Indemnification Procedures			24
Section 8.4 Additional Agreements Regarding Indemnification			25
Section 8.5 Waiver of Other Representations			25
Section 8.6 P-25 Total Unit Consideration Adjustment			26
Section 8.7 Exclusive Remedy			26
ARTICLE IX
TERMINATION
Section 9.1 Termination			27
Section 9.2 Effect of Termination			27
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices			27
Section 10.2 Assignment			28
Section 10.3 Rights of Third Parties			28
Section 10.4 Expenses			29
Section 10.5 Counterparts			29

		Page
Section 10.6 Entire Agreement			29
Section 10.7 Disclosure Schedule			29
Section 10.8 Amendments			29
Section 10.9 Publicity			29
Section 10.10 Severability			29
Section 10.11 Governing Law; Jurisdiction			30
Section 10.12 Action by Buyer			30

Disclosure Schedule

Schedule A		-		Purchased Assets
Schedule 1.1(i)		-		Buyer Knowledge
Schedule 1.1(ii)		-		Seller Knowledge
Schedule 1.1(iii)		-		Permitted Liens
Schedule 3.3		-		Seller Approvals
Schedule 3.5		-		Litigation
Schedule 3.6		-		Seller Brokers’ Fees
Schedule 3.7(a)		-		Material Contracts
Schedule 3.7(c)		-		Enforceability of Material Contracts; No Defaults
Schedule 3.8		-		Taxes
Schedule 3.10		-		Environmental Matters
Schedule 3.13		-		Insurance
Schedule 3.14(a)		-		Material Real Estate Leases
Schedule 4.3		-		Buyer Approvals
Schedule 4.5		-		Buyer Brokers’ Fees
Schedule 5.1		-		Conduct of Business
Schedule 5.4		-		Company Guarantees

ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT, dated as of December 13, 2007 (this “ Agreement ”), is entered into by and between Spectra Energy Virginia Pipeline Company, a corporation organized under the Laws of the Commonwealth of Virginia (“ Seller ”), and East Tennessee Natural Gas, LLC, a limited liability company organized under the Laws of the State of Tennessee (“ Buyer ”).

RECITALS

     WHEREAS, Seller desires to transfer to Buyer all of its right, title and interest in approximately 72 miles of 8”natural gas transmission pipeline, commencing at Seller’s meter station located at Chilhowie, VA, and continuing eastward to Seller’s meter station located at Radford, VA, together with 0.5 miles of the 4” Marion lateral and certain other assets, liabilities and obligations associated with such pipeline facilities and described on Schedule A attached hereto (the “ Purchased Assets ”), and Buyer desires to purchase the Purchased Assets, in exchange for the P-25 Common Units (as defined below), the assumption by Buyer of the Assumed Liabilities (as defined below) and payment by Buyer to Seller of the P-25 CapEx Reimbursement (as defined below), all upon the terms and subject to the conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties (as defined below) agree as follows:

ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION

      Section 1.1 Definitions . As used herein, the following capitalized terms shall have the following meanings:

     “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, “control” means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise.

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

     “ Assignments ” has the meaning provided such term in Section 2.3(b).

     “ Assumed Liabilities ” means any and all liabilities directly relating to or arising out of the Purchased Assets and excludes the Excluded Assets and Liabilities.

     “ Balance Sheet Date ” means October 31, 2007.

     “ Bill of Sale ” has the meaning provided such term in Section 2.3(b).

     “ Billed Party ” has the meaning provided such term in Section 6.1.

     “ Business ” means the ownership and operation of the Purchased Assets.

     “ Business Day ” means any day that is not a Saturday, Sunday or legal holiday in the State of Texas or a federal holiday in the United States.

     “ Buyer ” has the meaning provided such term in the recitals of this Agreement.

     “ Buyer Approvals ” has the meaning provided such term in Section 4.3.

     “ Buyer Indemnified Parties ” has the meaning provided such term in Section 8.2(a).

     “ Claim Notice ” has the meaning provided such term in Section 8.3(a).

     “ Closing ” has the meaning provided such term in Section 2.3(a).

     “ Closing Date ” has the meaning provided such term in Section 2.3(a).

     “ Code ” means the Internal Revenue Code of 1986.

     “ Commission ” means the United States Securities and Exchange Commission.

     “ Common Units ” has the meaning provided such term in the Spectra MLP Partnership Agreement.

     “ Company Guarantees ” means all guaranties, letters of credit, bonds, sureties, cash collateral accounts and other credit support or assurances provided by Seller or any of its Affiliates in support of any obligations related to the Business, including those obligations listed on Schedule 5.4 .

     “ Contract ” means any legally binding agreement, commitment, lease, license or contract.

     “ Cross Receipt ” means a cross receipt acknowledging the receipt of the items in Section 2.3(b)(i), (ii), (iii), (v) and (vi) by Buyer and the items in Section 2.3(c)(i), (ii), (iii), (iv) and (vi) by Seller.

     “ Disclosure Schedule ” means the schedules attached hereto.

     “ Dollars ” and “ $ ” mean the lawful currency of the United States.

     “ Effective Time ” has the meaning provided such term in Section 2.3(a).

     “ Environment ” means (a) the navigable waters, the waters of the contiguous zone, and the ocean waters of which the natural resources are under the exclusive management authority of the United States under the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq ., and (b) any other surface water, ground water, drinking water supply, land

surface or subsurface strata, or ambient air within the United States or under the jurisdiction of the United States.

     “ Environmental Law ” means any Law relating to the environment, natural resources, or the protection thereof, including any applicable provisions of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. , the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. , the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. , the Clean Water Act, 33 U.S.C. § 1251 et seq. , the Clean Air Act, 42 U.S.C. § 7401 et seq. , the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq. , the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq. , the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. , the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. , and any Law relating to health, safety, the Environment, natural resources or the protection thereof, and all analogous state or local statutes, and the regulations promulgated pursuant thereto.

     “ Excluded Assets and Liabilities ” means any and all of the following: (a) all cash or cash equivalents of Seller; (b) all accounts payable or accounts receivable or other working capital items of Seller; (c) any Indebtedness for Borrowed Money owed to or by Seller; (d) the Virginia Pipeline Company’s Storage System; (e) all insurance policies and rights thereunder of Seller, including rights to any cancellation value as of the Closing Date; (f) all records of Seller that do not constitute Records; (g) all proprietary or confidential business or technical information, intellectual property, Records and policies which relate to Seller and its lines of business other than the Purchased Assets; (h) all marks of Seller, including any and all trademarks or service marks, trade names, slogans, logos or other like property relating to or including the name “Virginia Pipeline” and any derivatives or variations thereof; and (i) all refunds of costs or expenses borne by Seller prior to the Closing Date.

     “ Exchange Act ” means the Securities Exchange Act of 1934 and the rules and regulations of the Commission promulgated thereunder.

     “ Fundamental Representations and Warranties ” means the representations and warranties contained in Sections 3.1 and 3.2.

     “ GAAP ” means generally accepted accounting principles of the United States, consistently applied.

     “ Governmental Authority ” means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency, court or arbitral body.

     “ Hazardous Substance(s) ” means each substance defined, designated or classified as a hazardous waste, hazardous substance, hazardous material, pollutant, containment or toxic substance under any Environmental Law and any petroleum or petroleum products that have been Released into the environment.

     “ Indebtedness for Borrowed Money ” means with respect to any Person, at any date, without duplication, (a) all obligations of such Person for borrowed money (including intercompany obligations), including all principal, interest, premiums, fees, expenses, overdrafts and penalties with respect thereto, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the

deferred purchase price of property, except trade payables incurred in the ordinary course of business, (d) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (e) all capitalized lease obligations of such Person and (f)  all indebtedness of any other Person of the type referred to in clauses (a) to (e) above directly or indirectly guaranteed by such Person or secured by any assets of such Person, whether or not such indebtedness has been assumed by such Person.

     “ Indemnified Party ” has the meaning provided such term in Section 8.3(a).

     “ Indemnified Tax Claim ” has the meaning provided such term in Section 6.3(b).

     “ Indemnifying Party ” has the meaning provided such term in Section 8.3(a).

     “ Knowledge ” as to Buyer means the actual knowledge of those Persons listed on Schedule 1.1(i) , and; as to Seller means the actual knowledge of those Persons listed on Schedule 1.1(ii) ; provided, however , that those Persons noted in such Schedule 1.1(ii) as not having knowledge as to the Purchased Assets shall be disregarded with respect to any representation relating to the Purchased Assets qualified by “Knowledge”.

     “ Lands ” means all of the fee property, leases, servitudes, easements, assignments, rights-of-way and licenses associated with the Purchased Assets that have been granted to or are held by Seller.

     “ Law ” means any applicable law, rule, regulation, ordinance, order, judgment or decree of a Governmental Authority.

     “ Lien(s) ” means, with respect to any property or asset, any mortgage, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.

     “ Losses ” means all actual liabilities, losses, damages, fines, penalties, judgments, settlements, awards, costs and expenses (including reasonable fees and expenses of counsel); provided, however , that Losses shall not include any special, punitive, exemplary, incidental, consequential or indirect damages nor shall Losses include lost profits, lost opportunities or other speculative damages; provided, further, however , that the preceding proviso shall not apply to the extent a Party is required to pay such damages to a third party in connection with a matter for which such Party is entitled to indemnification under Article VIII.

     “ Material Adverse Effect ” means, with respect to any Person or the Purchased Assets, any circumstance, change or effect that (a) is or would reasonably be expected to be materially adverse to the business, operations or financial condition of such Person or the Purchased Assets, or (b) materially impedes or would reasonably be expected to impede the ability of such Person to complete the transactions contemplated herein, but shall exclude any circumstance, change or effect resulting or arising from:

          (i) any change in general economic conditions in the industries or markets of which the Purchased Assets are a part;

          (ii) seasonal reductions in revenues or earnings relating to the Purchased Assets substantially consistent with the historical results of such Purchased Assets;

          (iii) national or international political conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack;

          (iv) changes in Law or GAAP; or

          (v) the entry into or announcement of this Agreement, actions contemplated by this Agreement or the consummation of the transactions contemplated hereby.

     Notwithstanding the foregoing, clauses (i), (iii) and (iv) shall not apply in the event of a disproportionate effect on the Purchased Assets as compared to other similar assets in the industry or markets of which the Purchased Assets are a part.

     “ Material Contracts ” has the meaning provided such term in Section 3.7(a).

      “Material Real Estate Leases” has the meaning provided such term in Section 3.14.

     “ Organizational Documents ” means any charter, certificate of incorporation, certificate of formation, articles of association, bylaws, partnership agreement, operating agreement or similar formation or governing documents and instruments.

     “ P-25 CapEx Reimbursement ” means the sum of the capital expenditures incurred by Seller with respect to the Purchased Assets during the 24 month period prior to the Closing Date; provided, however , that such amount shall not exceed $1,000,000.

     “ P-25 Common Units ” means the number of Common Units that is computed by dividing the P-25 Total Unit Consideration by the Per Unit Value.

     “ P-25 Pipeline ” means approximately 72 miles of 8” transmission pipeline operated by Seller.

     “ P-25 Total Unit Consideration ” means the difference of the P-25 Total Value less the P-25 CapEx Reimbursement.

     “ P-25 Total Value ” means $25,300,000.

     “ Parties ” means Seller and Buyer.

     “ Per Unit Valuation Date ” means the date that is three days prior to the Closing Date.

     “ Per Unit Value ” means the volume-weighted average price of the Common Units on the New York Stock Exchange during the 20 trading days immediately preceding the Per Unit Valuation Date, calculated using the Bloomberg SEP Equity AQR function.

     “ Permits ” means authorizations, licenses, permits or certificates issued by Governmental Authorities; provided, however , right-of-way agreements and similar rights and approvals are not included in the definition of Permits.

      “Permitted Liens” means (a) Liens for Taxes not yet delinquent or being contested in good faith by appropriate proceedings, (b) statutory Liens (including materialmen’s, warehousemen’s, mechanic’s, repairmen’s, landlord’s and other similar Liens) arising in the ordinary course of business securing payments not yet delinquent or being contested in good faith by appropriate proceedings, (c) the rights of lessors and lessees under leases, and the rights of third parties under any agreement, in each case executed in the ordinary course of business and that do not materially and adversely affect the ability of Seller to conduct the Business as currently conducted, (d) the rights of licensors and licensees under licenses executed in the ordinary course of business and that do not materially and adversely affect the ability of Seller to conduct the Business as currently conducted, (e) restrictive covenants, easements and defects, imperfections or irregularities of title or Liens, if any, of a nature that do not materially and adversely affect the assets or properties subject thereto, (f) preferential purchase rights and other similar arrangements with respect to which consents or waivers are obtained for this transaction or as to which the time for asserting such rights has expired at the Closing Date without an exercise of such rights, (g) restrictions on transfer with respect to which consents or waivers are obtained for this transaction, (h) Liens granted in the ordinary course of business which do not secure the payment of Indebtedness for Borrowed Money and which do not materially and adversely affect the ability to conduct the Business as currently conducted, (i) Liens listed in Schedule 1.1(iii) , and (j) Liens created by Buyer or its successors and assigns.

     “ Person ” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

     “ Pre-Closing Taxable Period ” means any taxable period ending on or before the Effective Time and that portion of any taxable period beginning before and ending after the Effective Time that ends on the Effective Time.

     “ Purchased Assets ” has the meaning provided such term in the recitals of this Agreement.

     “ Reasonable Efforts ” means efforts in accordance with reasonable commercial practice and without the incurrence of unreasonable expense.

     “ Release ” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or disposing of, without limitation, Hazardous Substances, into the Environment.

     “ Representatives ” means, as to any Person, its officers, directors, employees, counsel, accountants, financial advisers and consultants.

     “ SE Transmission ” means Spectra Energy Transmission, LLC, a limited liability company organized under the Laws of the State of Delaware.

     “ Securities Act ” means the Securities Act of 1933 and the rules and regulations of the Commission promulgated thereunder.

     “ Seller ” has the meaning provided such term in the recitals of this Agreement.

     “ Seller Approvals ” has the meaning provided such term in Section 3.3.

     “ Seller Indemnified Parties ” has the meaning provided such term in Section 8.2(b).

     “ Spectra Energy Corp ” means Spectra Energy Corp, a Delaware corporation.

     “ Spectra MLP ” means Spectra Energy Partners, LP, a Delaware limited partnership.

     “ Spectra MLP Financial Statements ” has the meaning provided such term in Section 4.7.

     “ Spectra MLP Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of Spectra MLP dated as of July 2, 2007.

     “ Spectra MLP SEC Documents ” has the meaning provided such term in Section 4.7.

     “ Tax ” means (a) all taxes, assessments, duties, levies, imposts or other similar charges imposed by a Governmental Authority, including all income, franchise, profits, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental (including taxes under Code Section 59A), alternative minimum, add-on, value-added, withholding (including backup withholding) and other taxes, assessments, duties, levies, imposts or other similar charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), and all estimated taxes, deficiency assessments, additions to tax, additional amounts imposed by any Governmental Authority, penalties and interest and (b) any liability related to the Purchased Assets for the payment of any amounts of any of the foregoing types as a result of Seller being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability of Seller for payment of such amounts was determined or taken into account with reference to the liability of any other Person.

     “ Tax Authority ” means any Governmental Authority having jurisdiction over the assessment, determination, collection or imposition of any Tax.

     “ Tax Benefit ” means, with respect to a Loss, an amount by which the Tax liability of a Person (or group of corporations filing a Tax Return that includes the Person), with respect to a taxable period, is reduced as a result of such Loss or the amount of any Tax refund or Tax credit that is generated (including by deduction, loss, credit or otherwise) as a result of such Loss, and any related interest received from any relevant Tax Authority; provided, however , in each case, only the reasonable present value of any Tax Benefit shall be considered with respect to a Loss.

     “ Tax Indemnified Party ” has the meaning provided such term in Section 6.3(b).

     “ Tax Indemnifying Party ” has the meaning provided such term in Section 6.3(b).

     “ Tax Proceeding ” means any audit, litigation or other proceeding with respect to Taxes.

     “ Tax Returns ” means any report, return, election, document, estimated Tax filing, declaration or other filing provided to any Tax Authority, including any amendments thereto.

     “ Third Party Claim ” has the meaning provided such term in Section 8.3(a).

     “ United States ” or “ U.S. ” means United States of America.

     “ Virginia Pipeline Company’s Storage System ” means those storage facilities owned by Seller and the related intrastate natural gas transmission system other than the Purchased Assets.

      Section 1.2 Rules of Construction.

          (a) All article, section, schedule and exhibit references used in this Agreement are to articles, sections, schedules and exhibits to this Agreement unless otherwise specified. The schedules and exhibits attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes.

          (b) If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Terms defined in the singular have the corresponding meanings in the plural, and vice versa. Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa. The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear.

          (c) The Parties acknowledge that each Party and its attorney have reviewed this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement.

          (d) The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

          (e) All references to currency herein shall be to, and all payments required hereunder shall be paid in, Dollars.

          (f) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.

          (g) Any event hereunder requiring the payment of cash or cash equivalents on a day that is not a Business Day shall be deferred until the next Business Day.

          (h) References to any Law are references to such Law as it may be amended from time to time, and references to particular provisions of a Law include a reference to the corresponding provisions of any succeeding Law.

ARTICLE II
PURCHASE AND SALE; CLOSING

      Section 2.1 Purchase and Sale of Purchased Assets .

          (a) At the Closing, upon the terms and subject to the conditions set forth in this Agreement, Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase and acquire from Seller, the Purchased Assets.

          (b) At the Closing, upon the terms and subject to the conditions set forth in this Agreement, Buyer shall assume and agree to pay, perform and discharge Seller for the Assumed Liabilities.

          (c) For purposes of greater clarification, the Purchased Assets shall not include, and Buyer shall not obtain any rights whatsoever in, the Excluded Assets and Liabilities or in any other assets or rights of Seller other than the Purchased Assets.

      Section 2.2 Consideration .

          (a) At the Closing, upon the terms and subject to the conditions set forth in this Agreement, in exchange for the Purchased Assets, Buyer shall (i) distribute to Seller the P-25 Common Units, (ii) pay to Seller the P-25 CapEx Reimbursement, which amount shall be payable in cash and (iii) assume and agree to pay, perform and discharge Seller for the Assumed Liabilities. For purposes of determining the P-25 CapEx Reimbursement, Seller shall provide a binding good faith estimate of such amount at least ten days prior to the Closing Date.

          (b) The Parties acknowledge that the transactions described in this Article II are properly characterized as transactions described in Section 721(a) of the Code.

      Section 2.3 The Closing.

          (a) The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Vinson & Elkins L.L.P., 1001 Fannin, Houston, Texas 77002, commencing at 10:00 a.m. local time on the later of April 1, 2008 and the first day of the month following the date on which all conditions to the obligations of the Parties to consummate the transactions contemplated hereby have been satisfied or waived (other than conditions with respect to actions the Parties shall take at the Closing itself) or such other date as the Parties may mutually determine (the “ Closing Date ”); provided, however , the Closing shall be deemed to have been consummated at 12:01 a.m. Houston, Texas time on the Closing Date (the “ Effective Time ”).

          (b) At the Closing, Seller will deliver the following documents and deliverables to Buyer:

          (i) a deed in a form reasonably acceptable to Buyer and Seller conveying Seller’s interests in the Lands to Buyer;

          (ii) assignment and assumption agreement(s) in a form or forms reasonably acceptable to Buyer and Seller effecting the transfer to Buyer of all the rights, liabilities and obligations under each Material Contract included in the Purchased Assets (such agreement(s), the “ Assignments ”) executed by Seller;

          (iii) a bill of sale and assignment in a form reasonably acceptable to Buyer and Seller effecting the transfer to Buyer of ownership of all of the Purchased Assets, except the Lands and the Material Contracts included in the Purchased Assets (such bill of sale and assignment, the “ Bill of Sale ”) executed by Seller;

          (iv) the Cross Receipt executed by Seller;

          (v) a certification in the form prescribed by Treasury Regulation Section 1.1445-2(b)(2) to the effect that Seller is not a foreign person; and

          (vi) such other certificates, instruments of conveyance and documents as may be reasonably requested by Buyer and agreed to by Seller prior to the Closing Date to carry out the intent and purposes of this Agreement.

     (c) At the Closing, Buyer will deliver the following documents and deliverables to Seller:

          (i) the P-25 CapEx Reimbursement to Seller by wire transfer of immediately available U.S. federal funds to an account or accounts specified by Seller;

          (ii) the P-25 Common Units in certificated or book entry form;

          (iii) the Assignments executed by Buyer;

          (iv) the Bill of Sale executed by Buyer;

          (v) the Cross Receipt executed by Buyer; and

          (vi) such other certificates, instruments of conveyance and documents as may be reasonably requested by Seller and agreed to by Buyer prior to the Closing Date to carry out the intent and purposes of this Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES
RELATING TO SELLER

     Except as disclosed in the Disclosure Schedule, Seller hereby represents and warrants to Buyer as follows:

      Section 3.1 Organization . Seller is a corporation as of the date of this Agreement (and will be a limited liability company as of Closing), duly organized, validly existing and in good standing under the Laws of the Commonwealth of Virginia.

      Section 3.2 Authorization; Enforceability . Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform all obligations to be performed by Seller hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and approved by all requisite action on Seller’s part, and no other proceeding on Seller’s part is necessary to authorize this Agreement. This Agreement has been duly and validly executed and delivered by Seller, and this Agreement constitutes a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity.

      Section 3.3 No Conflict . The execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated hereby by Seller (assuming all required filings, consents, approvals, authorizations and notices set forth in Schedule 3.3 (collectively, the “ Seller Approvals ”) have been made, given or obtained) do not and shall not:

          (a) violate in any material respect any Law applicable to Seller, SE Transmission or Spectra Energy Corp or require of Seller, SE Transmission or Spectra Energy Corp any filing with, consent, approval or authorization of, or notice to, any Governmental Authority;

          (b) violate any Organizational Document of Seller, SE Transmission or Spectra Energy Corp; or

          (c) (i) breach any material Contract to which Seller, SE Transmission or Spectra Energy Corp is a party or by which Seller, SE Transmission or Spectra Energy Corp may be bound or any Material Contract, (ii) result in the termination of any Material Contract, (iii) result in the creation of any Lien upon any of the Purchased Assets or under any Material Contract, (iv) constitute an event which, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien upon any of the Purchased Assets.

      Section 3.4 Investment Representation . Seller is purchasing the P-25 Common Units for its, SE Transmission’s and their respective Affiliates’ own accounts with the present intention of holding such units for investment purposes and not with a view to or for sale in connection with any public distribution of such units in violation of any federal or state securities Laws. Seller acknowledges that such P-25 Common Units have not been registered under federal and state securities Laws and that such P-25 Common Units may not be sold, transferred, offered for

sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is registered under federal and state securities Laws or pursuant to an exemption from registration under any federal or state securities Laws.

      Section 3.5 Litigation . Except as set forth in Schedule 3.5 , there are no legal actions before any Governmental Authority or lawsuits pending or, to the Knowledge of Seller, threatened against Seller or which relate to the Purchased Assets other than lawsuits or actions which could not reasonably be expected to have a Material Adverse Effect, and there are no orders or unsatisfied judgments from any Governmental Authority binding upon Seller or relating to the Purchased Assets that would adversely affect Seller’s ability to perform Seller’s obligations under this Agreement.

      Section 3.6 Brokers’ Fees . Except as set forth on Schedule 3.6 , no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by Seller or any of its Affiliates.

      Section 3.7 Contracts.

          (a)  Schedule 3.7(a) contains a true and complete listing of the following Contracts to which Seller is a party (such Contracts that are required to be listed on Schedule 3.7(a) being “ Material Contracts ”):

               (i) each Contract for the transportation of gas related to the Purchased Assets;

               (ii) each Contract related to the Purchased Assets involving a remaining commitment requiring payment of capital expenditures;

               (iii) each Contract related to the Purchased Assets for lease of personal property;

               (iv) any other Contract related to the Purchased Assets for the purchase of materials, supplies, goods, services, equipment or other assets;

               (v) any partnership or joint venture agreement related to the Purchased Assets;

               (vi) any Contract pursuant to which any third party has rights to own or use any material asset that is part of the Purchased Assets; and

               (vii) any Contract granting to any Person a right of first refusal, first offer or right to purchase any of the assets comprising the Purchased Assets, which right survives the Closing.

          (b) True and complete copies of all Material Contracts have been made available to Buyer.

          (c) Except as set forth in Schedule 3.7(c) , each Material Contract (other than such Material Contracts with respect to which all performance and payment obligations have been fully performed or otherwise discharged by all parties thereto prior to the Closing) (i) is in full force and effect and (ii) represents the legal, valid and binding obligation of Seller and, to the Knowledge of Seller, the legal, valid and binding obligation of the other parties thereto, in each case enforceable in accordance with its terms subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity. Except as set forth in Schedule 3.7(c) , neither Seller nor, to the Knowledge of Seller, any other party is in breach of any Material Contract and Seller has not received any written notice of termination or breach of any Material Contract.

      Section 3.8 Taxes . Except as set forth on Schedule 3.8 , (a) all Tax Returns required to be filed with respect to the Purchased Assets or the Business have been duly and ti