You are here: Agreements > Assignment and Assumption Agreement > ASSIGNMENT AND ASSUMPTION AGREEMENT

SITE SEARCH
AGREEMENTS / CONTRACTS
(optional)
(optional)
Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Assignment And Assumption Agreement

Assignment and Assumption Agreement

Legal Documents
You are currently viewing:

 This Assignment and Assumption Agreement involves

TALLGRASS ENERGY PARTNERS, LP | Additionally, Tallgrass Development, LP | Original REX LLC | Rockies Express Holdings, LLC | Rockies Express Pipeline LLC | Sempra REX Holdings, LLC | Tallgrass Energy Holdings, LLC | TEP REX Holdings, LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
 

Title: ASSIGNMENT AND ASSUMPTION AGREEMENT
Governing Law: Delaware     Date: 8/3/2016
Industry: Natural Gas Utilities     Law Firm: Baker Botts     Sector: Utilities

join now
50 of the Top 250 law firms use our Products every day

 

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.

 

2


 

 

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

 

3


 

 

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.

 

4


 

 

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.

 

5


 

 

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 ”).

 

6


 

 

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.

 

7


 

 

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

 

8


 

 

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.

 

9


 

 

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;

 

10


 

 


continue to document