STOCK PURCHASE AGREEMENT

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

by and among

Regency Energy Partners LP,

Pueblo Holdings, Inc.,

as Buyer,

Bear Cub Investments, LLC,

the Members of Bear Cub Investments, LLC identified herein,

as Sellers,

and

Robert J. Clark,

as Sellers’ Representative

Dated

April 2, 2007

TABLE OF CONTENTS

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “ Agreement ”) dated April 2, 2007 is by and among Regency Energy Partners LP, a Delaware limited partnership (the “ Partnership ”), Pueblo Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Partnership (“ Pueblo Holdings ” and, together with the Partnership, the “ Buyers ”), Bear Cub Investments, LLC, a Colorado limited liability company (“ Bear Cub ”), and each of the members of Bear Cub set forth on Schedule A attached hereto (collectively, the “ Members ,” and together with Bear Cub, the “ Sellers ”). The Buyers, Bear Cub and Sellers are sometimes referred to collectively herein as the “ Parties ” and individually as a “ Party .”

RECITALS

     1. As of the date hereof, the Members own all of the outstanding Equity Interests (the “ Interests ”) of Pueblo Midstream Gas Corporation, a Texas corporation (“ Pueblo ”), as set forth on Schedule A attached hereto.

     2. Concurrently with the execution and delivery of this Agreement, each Member shall execute and deliver to Bear Cub a stock transfer power (“ Stock Powers ”) with respect to the Interests owned by such Member, and Bear Cub shall retain such Stock Powers and any and all stock certificates evidencing the Interests for delivery to Buyers at Closing.

     3. Prior to the execution and delivery of this Agreement, each Member has executed and delivered to each of Bear Cub and Buyers a power of attorney in substantially the form attached hereto as Exhibit A appointing Robert J. Clark to act as attorney-in-fact for such Member with respect to the matters set forth therein (the “ Power of Attorney ”).

     4. Concurrently with the execution and delivery of this Agreement, each Member listed on Section 3.4(e) of the Disclosure Letter has executed and delivered a purchaser’s representative letter in the form attached hereto as Exhibit B .

     5. Buyers desire to purchase, and Sellers desire to sell to Buyers, the Interests for the consideration set forth below, subject to the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

     1.1 Certain Defined Terms . Capitalized terms used in this Agreement that are not defined in the text of the body of this Agreement shall have the meanings given such terms as set forth in Schedule B attached to this Agreement, which Schedule B is incorporated herein by reference with the same force and effect as is set forth herein in full.

     1.2 Other Definitional Provisions . As used in this Agreement, unless expressly stated otherwise or the context requires otherwise, (a) all references to an “Article,” “Section,” or

“subsection” shall be to an Article, Section, or subsection of this Agreement, (b) the words “this Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar import shall refer to this Agreement as a whole and not to a particular Article, Section, subsection, clause or other subdivision hereof, (c) the words used herein shall include the masculine, feminine and neuter gender, and the singular and the plural, (d) the word “including” shall mean “including, without limitation” and (e) the word “day” or “days” shall mean a calendar day or days, unless denoted as a Business Day.

     1.3 Headings . The headings of the Articles and Sections of this Agreement and of the Schedules and Exhibits are included for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation hereof or thereof.

     1.4 Other Terms . Other terms may be defined elsewhere in the text of this Agreement and shall have the meanings indicated throughout this Agreement.

ARTICLE II
THE TRANSACTION

     2.1 The Transaction . Subject to and upon the terms and conditions of this Agreement, at the Closing, each Member shall sell, transfer, convey, assign and deliver to Buyers, and Buyers shall purchase and acquire from each Member, all of such Member’s Equity Interest in Pueblo, including all of such Member’s Interests, free and clear of all Liens. The Interests to be acquired by Buyers at Closing shall constitute all of the outstanding Equity Interests in Pueblo.

     2.2 Consideration .

          (a) The aggregate consideration to be paid by Buyers for the Interests shall consist of (i) Transaction Units and (ii) the Cash Amount (together, the “ Aggregate Consideration ”). The “ Cash Amount ” of the Aggregate Consideration shall be $34,735,049.00 (Thirty Four Million Seven Hundred Thirty Five Thousand Forty Nine and no/100 dollars) less (i) the sum of (A) the Debt Payoff Amount, (B) to the extent not paid prior to the Measurement Time, the Expenses, and (C) the Working Capital Deficit, if any, plus (ii) the Working Capital Surplus, if any. The Aggregate Consideration shall be payable in the manner described in Section 2.2(b) and Section 2.3 .

          (b) At the Closing:

                (i) (A) Pueblo Holdings shall pay to the Sellers’ Representative, by wire transfer of immediately available funds to the account designated in writing by Sellers’ Representative to Buyer at least two Business Days prior to Closing, an amount in Cash equal to the Estimated Cash Amount minus the Escrow Deposit and (B) the Partnership shall deliver to the Sellers’ Representative irrevocable instructions to the Partnership’s transfer agent to prepare and deliver to the Sellers’ Representative a share certificate in the name of each Member and in the amount set forth opposite such Member’s name as set forth on Schedule A ;

                (ii) the Partnership shall deposit with the Escrow Agent the Escrow Deposit to secure and be available to satisfy the rights of Buyers under Section 2.3(d)(i) ;

                (iii) to the extent unpaid, Pueblo Holdings shall pay to the payees of any Expenses by wire transfer of immediately available funds to the account(s) designated by such Persons in the applicable Payoff Letters; the amounts specified in the Payoff Letters; and

                (iv) Pueblo Holdings shall pay to each holder of any Third-Party Debt, by wire transfer of immediately available funds to the account(s) designated by such Persons in the applicable Debt Payoff Letters, the amounts specified in the Debt Payoff Letters.

     2.3 Adjustments .

          (a) Preparation of Estimated Closing Statement . The Sellers’ Representative shall prepare in good faith and deliver to Pueblo Holdings, at least four Business Days prior to the Closing Date and at the sole expense of Sellers, a statement as of the Closing Date (the “ Estimated Closing Statement ”), setting forth a detailed determination of the Estimated Cash Amount. The “ Estimated Cash Amount ” shall be $34,735,049.00 minus (i) the sum of (A) the Debt Payoff Amount, (B) to the extent unpaid as of the Measurement Time, the Expenses, and (C) the estimated amount of Working Capital Deficit, if any, plus (ii) the estimated amount of Working Capital Surplus, if any. The Debt Payoff Amount and the Expenses shall be based on amounts set forth in the Debt Payoff Letters or the Payoff Letters, or, to the extent a Debt Payoff Letter or a Payoff Letter has not been provided for a Third-Party Debt or Expense, an estimate of such amounts, and in each case, shall be subject to final determination in the Final Closing Statement. Each estimation set forth in the Estimated Closing Statement shall be made as of the Measurement Time. Appropriate adjustments to the Aggregate Consideration Price shall be made after the Closing pursuant to Sections 2.3(b) , (c) , and (d) .

          (b) Preparation of Closing Statement . As soon as reasonably practicable after the Closing Date (and, in any event, within 90 days after the Closing Date), Pueblo Holdings shall prepare and deliver to Sellers’ Representative, at the sole expense of Pueblo Holdings, a closing statement as of the Measurement Time (the “ Proposed Closing Statement ”), setting forth the proposed final calculation of (i) Net Working Capital, (ii) Debt Payoff Amount, (iii) Expenses, and (iv) the Cash Amount of the Aggregate Consideration. If Pueblo Holdings does not deliver the Proposed Closing Statement when required, Sellers’ Representative may prepare and deliver it to Pueblo Holdings, and, in such case, Pueblo Holdings shall have Sellers’ Representative objection rights under this Section 2.3 .

          (c) Examination of Proposed Closing Statement . Sellers’ Representative shall review the Proposed Closing Statement to confirm the accuracy of the Proposed Closing Statement and Pueblo Holdings’ calculations. If Sellers’ Representative fails to give Pueblo Holdings written notice of any disputed amounts within 30 days after Sellers’ Representative receives the Proposed Closing Statement (the “ Review Period ”), then the Proposed Closing Statement shall become the Final Closing Statement for purposes hereof. If Sellers’ Representative gives Pueblo Holdings written notice of any disputed items within the Review Period, Pueblo Holdings and Sellers’ Representative shall attempt in good faith to agree on any adjustments that should be made to the Proposed Closing Statement. If Pueblo Holdings and Sellers’ Representative fail to resolve any disputed amounts within 60 days after Sellers’ Representative receives the Proposed Closing Statement, Pueblo Holdings and Sellers’ Representative will engage the Audit Firm to resolve any such disputed matters in accordance

with the terms of this Agreement, and, in connection with such engagement Pueblo Holdings, Pueblo and Sellers’ Representative shall execute any engagement, indemnity and other agreements as the Audit Firm may require as a condition to such engagement. The Audit Firm’s engagement shall be limited to the resolution of disputed amounts set forth in the Proposed Closing Statement that have been identified by Sellers’ Representative, and no other matter relating to the Final Closing Statement shall be subject to determination by the Audit Firm except to the extent affected by resolution of the disputed amounts. The Parties shall cooperate diligently with any reasonable request of the Audit Firm in an effort to resolve any disputed matter as soon as reasonably possible after the Audit Firm is engaged. If possible, the decision of the Audit Firm shall be made within 30 days after being engaged. In any event, the decision shall be final and binding on the Parties. The Proposed Closing Statement shall be revised, if necessary, to reflect the final determination of (i) Net Working Capital, (ii) Debt Payoff Amount, (iii) Expenses and (iv) the Cash Amount of the Aggregate Consideration (the final form of the Proposed Closing Statement, including any revisions that are made thereto pursuant to this Section 2.3(c) , is referred to herein as the “ Final Closing Statement ”).

          (d) Adjustments .

                (i) If the Cash Amount of the Aggregate Consideration as reflected on the Final Closing Statement is less than the Estimated Cash Amount (the amount of such shortfall, if any, being hereinafter referred to as the “ Aggregate Consideration Deficit ”), then an amount of Cash equal to such Aggregate Consideration Deficit shall be released promptly from the Escrow Fund and paid to Pueblo Holdings in accordance with Section 2.4(b)(i) .

                (ii) If the Cash Amount of the Aggregate Consideration as reflected on the Final Closing Statement is greater than the Estimated Cash Amount (the amount of such excess being hereinafter referred to as the “ Aggregate Consideration Surplus ”), then Pueblo Holdings shall immediately tender payment of such Aggregate Consideration Surplus, in Cash, to the Sellers’ Representative.

          (e) No Duplicative Effect . The provisions of this Section 2.3 and of any other Transaction Document shall apply in such a manner so as not to include in the components and calculations any duplicative effect of any item of adjustment and, except as otherwise expressly provided in this Agreement or as described in the Sample Balance Sheet, the Parties covenant and agree that no amount shall be (or is intended to be) included, in whole or in part (either as an increase or reduction) more than once in the calculation of Net Working Capital, the Debt Payoff Amount, Expenses, or the Unpaid Environmental Deductible in each case, if any, or the Cash Amount of the Aggregate Consideration or any component of any of the foregoing, or any other calculated amount pursuant to this Agreement if the effect of such additional inclusion (either as an increase or reduction) would be to cause such amount to be overstated or understated for purposes of such calculation. The Parties acknowledge and agree that, if there is a conflict between a determination, calculation or methodology set forth in the Sample Balance Sheet or the definitions contained in this Agreement, as applicable, on the one hand, and those provided by GAAP, on the other hand, (i) the determination, calculation or methodology set forth in the Sample Balance Sheet or the definitions contained in this Agreement, as applicable, shall control to the extent that the matter is included in the Sample Balance Sheet or the definitions contained

in this Agreement as a line item or specific adjustment and (ii) the determination, calculation or methodology prescribed by GAAP shall otherwise control.

          (f) Fees and Expenses of the Audit Firm . If the Parties submit any disputed amounts to the Audit Firm for resolution as provided in Section 2.3(c) above, the fees and expenses of the Audit Firm (the “ Audit Fees ”) will be paid by and apportioned between Pueblo Holdings and the Sellers based on the aggregate dollar amount of the amount in dispute and the relative recovery as determined by the Audit Firm of Sellers and Pueblo Holdings, respectively. The Sellers and Pueblo Holdings shall promptly, and in any event within five Business Days after the final determination of the Final Closing Statement, pay to the Audit Firm the amount of Audit Fees payable by Sellers and Pueblo Holdings pursuant to the preceding sentence.

     2.4 Escrow .

          (a) Escrow Deposit . At or prior to the Closing, Pueblo Holdings, Sellers’ Representative, Bear Cub and the Escrow Agent shall enter into the Escrow Agreement. Notwithstanding any other provision in this Agreement to the contrary, in order to secure the indemnity obligations of the Sellers to the Buyer Indemnities under this Agreement and the recovery by the Buyers of any Aggregate Consideration Deficit, Buyers shall deposit the Escrow Deposit with the Escrow Agent at Closing to be held in escrow pursuant to the terms of this Agreement and the Escrow Agreement.

          (b) Distribution of Escrow Fund .

                (i) Upon the Buyers becoming entitled to a distribution of all or a portion of the Escrow Fund pursuant to Section 2.3(d)(i) , the Escrow Agent shall deliver (A) to the Buyers out of the Escrow Fund, Cash in an amount equal to the Aggregate Consideration Deficit, (B) to the Audit Firm an amount in Cash equal to the amount payable to the Audit Firm by Sellers in accordance with Section 2.3(f) , if applicable, and (C) to Sellers’ Representative any Cash remaining in the Escrow Fund after the payments in clauses (A) and (B) of this Section 2.4(b)(i) have been made. If the Aggregate Consideration Deficit is greater than the amount of Cash in the Escrow Fund (such excess, the “ Escrow Cash Shortfall ”), then, in addition to the Cash distribution as provided above, each Member shall deliver to Pueblo Holdings, within 10 days after written notice of an Escrow Cash Shortfall to the Seller Representative (a “ Shortfall Notice ”), an amount in Cash equal to the Escrow Cash Shortfall multiplied by such Member’s Pro Rata Portion; provided that if any amounts are unpaid pursuant to this Section 2.4(b)(i) , Buyers shall be allowed to pursue a claim for such unpaid amounts in accordance with the procedures set forth in Section 10.4(h) . If it is determined that Buyers are not entitled to a distribution of the Escrow Fund pursuant to Section 2.3(d)(i) , the Escrow Agent shall deliver (A) to the Audit Firm an amount in Cash equal to the amount payable to the Audit Firm by Sellers in accordance with Section 2.3(f) , if applicable, and (B) to Sellers’ Representative all of the Cash remaining in the Escrow Fund upon such distribution.

                (ii) Notwithstanding anything in this Agreement to the contrary, the Escrow Agent shall distribute on a quarterly basis to the Sellers’ Representative, all interest, distributions, dividends and other income earned on the Escrow Fund.

          (c) Written Instructions . Sellers’ Representative and Pueblo Holdings hereby covenant and agree that when any Person becomes entitled to any distribution from the Escrow Fund pursuant to any provision of this Agreement, Pueblo Holdings and Sellers’ Representative shall promptly execute and deliver to the Escrow Agent joint written instructions setting forth the amounts to be paid to such Person, if any, from the Escrow Fund in accordance with this Agreement and all other means of calculating amounts due under this Agreement (a “ Joint Direction ”). Each of Pueblo Holdings and Sellers’ Representative agree to confer as promptly as practicable and to use its reasonable best efforts to reach agreement as to the calculation of and entitlement to such amounts and the applicable Escrow Fund(s) from which such amounts will be distributed. In furtherance and not in limitation of the foregoing:

                (i) if the Sellers’ Representative or Pueblo Holdings shall fail to execute and deliver a Joint Direction, either of the Sellers’ Representative or Buyers, as applicable, shall be entitled to receive distributions from the Escrow Fund from the Escrow Agent promptly upon delivery to the Escrow Agent of a written instruction, order or judgment issued or entered by a court of competent jurisdiction setting forth the amount to be paid to such Party pursuant to Section 2.4(b)(i) (a “ Court Direction ”);

                (ii) Pueblo Holdings and Sellers’ Representative covenant and agree jointly to instruct the Escrow Agent in writing, (1) within five Business Days after the final determination, of the Final Closing Statement to make the Cash distributions, if any, required by Section 2.3(d)(i) , (2) if applicable, promptly within five Business Days after the determination by the Audit Firm of Net Working Capital, the Credit Agreement Balance, Third-Party Debt, Expenses, the Unpaid Environmental Deductible or the Cash Amount of the Aggregate Consideration, as applicable, to release, if applicable, to the Audit Firm out of the Escrow Fund the amount payable to the Audit Firm by the Sellers in accordance with Section 2.3(f) .

     2.5 Delivery to Sellers’ Representative . Each Member acknowledges and agrees that delivery to the Sellers’ Representative of any amounts and all Transaction Units to which such Member is entitled under this Agreement shall constitute delivery to such Member for all purposes and the Buyer shall have no further liability to such Member with respect to such amounts or Transaction Units so delivered to the Sellers’ Representative.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MEMBERS

     Subject to the limitations set forth in Article X , each Member, severally and not jointly with any other Member, represents and warrants as to itself to Buyers as follows (such representations and warranties being deemed to be made as of the date hereof and on a continuous basis until the Closing) except as set forth in the Disclosure Letter:

     3.1 Organization, Good Standing and Authority of Sellers .

          (a) Such Member, if other than an individual, is a corporation, limited liability company, limited partnership or trust duly organized or formed, validly existing and in good standing under the laws of its jurisdiction of incorporation, organization or formation, has all

requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

          (b) Such Member has the full right, power and authority to enter into this Agreement and the Transaction Documents to which it shall be a party and to transfer, convey and sell to Buyers at the Closing the Interests owned by it. If such Member is other than an individual, the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is or is intended to be a party have been duly authorized by all requisite corporate, limited liability company or limited partnership action on the part of such Member. This Agreement and the other Transaction Documents to which such Member is or shall be a party have been or will be duly executed and delivered by such Member, and (assuming due authorization, execution and delivery hereof by the other parties hereto and thereto) such Transaction Documents constitute or, if not yet executed, will at Closing constitute, legal, valid and binding obligations of such Member, enforceable against such Member in accordance with their terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

     3.2 Title to Interests . Such Member has good and valid record and beneficial title to the Interests as set forth beside such Member’s name on Schedule A , free and clear of any and all Liens. The Interests set forth opposite such Member’s name on Schedule A constitute all of the Equity Interests of Pueblo held of record or beneficially by such Member. Upon the Closing, Buyers will acquire good title to all of the Equity Interests of Pueblo as set forth opposite such Member’s name on Schedule A , free and clear of any Liens, other than any Liens created by Buyers. Neither such Member, nor, to the knowledge of such Member, Bear Cub or any other Member is a party to (i) any option, warrant, purchase right or other Contract (other than this Agreement) that could require any such Seller or, after the Closing, Buyers, to sell, transfer or otherwise dispose of any Equity Interest of Pueblo or (ii) any voting trust, proxy or other agreement or understanding with respect to the voting of any Equity Interest of Pueblo. As of the Closing, except for the Interests in Pueblo set forth opposite such Member’s name on Schedule A , such Member will not own any Equity Interests of Pueblo.

     3.3 No Conflicts . Neither the execution and delivery by such Member of this Agreement, any other Transaction Documents to which such Member is or shall be a party or any instrument required hereby or thereby to be executed and delivered by it at Closing nor the performance by such Member of its obligations hereunder or thereunder will require any consent under, conflict with, violate or breach the terms of, cause a default (with or without notice or lapse of time or both) or give rise to right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien on any of such Member’s Interests under (i) if such Member is other than an individual, the Organizational Documents of such Member, (ii) any Contract or other instrument to which such Member is a party or by which it or any of its properties or assets are bound, or (iii) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in Section 4.5 are duly and timely obtained any Law, Regulation or Order applicable to such Member.

     3.4 Investor Status

          (a) The Transaction Units are being acquired by such Member for investment purposes only, for such Member’s own account and not as nominee or agent for any other Person or entity, and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act. Such Member is not a party to or bound by, and does not intend or have any plans to enter into, any Contract with any Person to sell, transfer or pledge any part of the Transaction Units, except for bona fide pledges or sales or transfers made in compliance with all applicable securities laws.

          (b) Such Member has such expertise, knowledge and sophistication in financial and business matters generally that it is capable of evaluating, and has evaluated, the merits and economic risks of its investment in the Partnership and the suitability of the Transaction Units as an investment.

          (c) In connection with the acquisition of the Transaction Units hereunder, such Member (or such Member’s Purchaser Representative) has had the opportunity to examine all aspects of the Partnership, its operations, and its financial condition that such Member (or such Member’s Purchaser Representative) has deemed relevant, and has had access to all information with respect to the Partnership and its business in order to make an evaluation thereof. In connection with the acquisition of the Transaction Units hereunder, such Member (or such Member’s Purchaser Representative) has had the opportunity to ask such questions of and receive answers from directors, officers, employees and representatives of the Managing General Partner concerning the Partnership and to obtain such additional information about the Partnership as such Member (or such Member’s Purchaser Representative) deems necessary for an evaluation thereof. The investment decision of such Member to acquire the Transaction Units has been based solely upon the evaluation made by such Member (or such Member’s Purchaser Representative) of the Partnership. In evaluating the suitability of an investment in the Partnership, such Member has not been furnished and no Member (or such Member’s Purchaser Representative) has relied upon any representations or other information (whether oral or written) other than as contained in the representations and warranties of the Buyers in this Agreement.

          (d) Such Member acknowledges that copies have been made available to it, sufficiently in advance of this Agreement as such Member (or such Member’s Purchaser Representative) deems necessary to evaluate an investment in the Transaction Units, of each of the Partnership SEC Documents, and has been informed that copies of Exhibits to each of the Partnership SEC Documents will be made available to any Member (or such Member’s Purchaser Representative) upon such Member’s written request.

          (e) Such Member (i) is an “Accredited Investor” as defined in Rule 501 of Regulation D under the Securities Act or (ii) either alone or with his Purchaser’s Representative has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Partnership.

          (f) Such Member acknowledges that the Transaction Units have not been offered or sold by means of any form of general solicitation or general advertising or by means of publicly disseminated advertisements or sales literature.

     3.5 Status of Transaction Units; Disposition .

          (a) Such Member acknowledges that no registration statement relating to the Transaction Units has been filed under the Securities Act or any state securities law and that, consequently, the Transaction Units are “restricted securities” within the meaning of Rule 144 under the Securities Act, may not be sold, pledged, hypothecated or otherwise transferred (and, therefore, must be held by such Member) unless the Transaction Units subsequently are registered under the Securities Act and such state laws or until an exemption from such registration requirements is available.

          (b) Neither such Member nor anyone acting on such Member’s behalf has offered or sold or will offer or sell any of the Transaction Units by means of any form of general solicitation or general advertising or has taken or will take any action that would constitute a distribution of the Transaction Units under the Securities Act, would render the disposition of the Transaction Units a violation of Section 5 of the Securities Act or any state or other applicable securities law, or would require registration or qualification pursuant thereto.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BEAR CUB

     Subject to the limitations set forth in Article X , Bear Cub represents and warrants to Buyers as follows (such representations and warranties being deemed to be made as of the date hereof and on a continuous basis until the Closing) except as set forth in the Disclosure Letter:

     4.1 Organization, Good Standing and Authority; Capitalization of Bear Cub .

          (a) Bear Cub is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Colorado and has all requisite limited liability company power and authority to carry on its business as it is now being conducted and to own, operate and lease the assets it now owns, operates or holds under lease.

          (b) Bear Cub has the full right, power and authority to enter into this Agreement and the Transaction Documents to which it shall be a party. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is or is intended to be a Party have been duly authorized by all requisite limited liability company action on the part of Bear Cub. This Agreement and the other Transaction Documents to which it is or shall be a Party have been or will be duly executed and delivered by Bear Cub, and (assuming due authorization, execution and delivery hereof by the other parties hereto and thereto) such Transaction Documents constitute or, if not yet executed, will at Closing constitute, legal, valid and binding obligations of Bear Cub, enforceable against Bear Cub in accordance with their terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

     4.2 Organization, Good Standing, Authority, Capitalization of Pueblo Companies .

          (a) Pueblo is a corporation duly organized, validly existing and in good standing under the Laws of the State of Texas and has all requisite corporate power and authority to carry on its business as it is now being conducted and to own, operate and lease the assets it now owns, operates or holds under lease. Pueblo is duly qualified to transact business and is in good standing in each jurisdiction listed on Section 4.2(a) of the Disclosure Letter , which constitute all of the jurisdictions in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification necessary, except jurisdictions in which the failure to be so qualified would not have a Material Adverse Effect on Pueblo.

          (b) The authorized capital stock of Pueblo consists of 2,500,000 shares of capital stock, no par value per share, of which 588,600 shares (being all the Interests) are issued and outstanding and listed on Schedule A . No shares of capital stock or other Equity Interests are reserved for issuance, there are no Equity Interest Equivalents outstanding and Pueblo is not obligated, by Contract or otherwise, to issue any Equity Interests. All the outstanding Interests have been duly authorized, validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive rights or other preferential rights of subscription or purchase of any Person.

          (c) Pueblo Subsidiary is a corporation duly organized, validly existing and in good standing under the Laws of the State of Texas and has all requisite corporate power and authority to carry on its business as it is now being conducted and to own, operate and lease the assets it now owns, operates or holds under lease. Pueblo Subsidiary is duly qualified to transact business and is in good standing in each of the jurisdictions listed on Section 4.2(c) of the Disclosure Letter which constitute all of the jurisdictions in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification necessary, except jurisdictions in which the failure to be so qualified would not have a Material Adverse Effect on Pueblo.

          (d) The authorized capital stock of Pueblo Subsidiary consists of 1,000 shares of capital stock, no par value per share, of which 1,000 shares are issued and outstanding. No shares of capital stock or other Equity Interests are reserved for issuance, there are no Equity Interest Equivalents outstanding and Pueblo Subsidiary is not obligated, by Contract or otherwise, to issue any Equity Interests. Pueblo owns, of record and beneficially, all of the outstanding Equity Interests of Pueblo Subsidiary free and clear of all Liens. All the outstanding shares of capital stock of Pueblo Subsidiary have been duly authorized, validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive rights or other preferential rights of subscription or purchase of any Person.

          (e) Pueblo Subsidiary is the only corporation, limited partnership, limited liability company or other Person in which Pueblo owns, directly or indirectly, an Equity Interest.

          (f) Bear Cub has heretofore delivered to Buyers true and complete copies of the Organizational Documents of each of Pueblo and the Pueblo Subsidiary.

     4.3 No Conflicts . Neither the execution and delivery by Bear Cub of this Agreement, any other Transaction Documents to which Bear Cub is or shall be a party or any instrument required hereby or thereby to be executed and delivered by it at Closing nor the performance by Bear Cub of its obligations hereunder or thereunder will conflict with, violate or breach the terms of, cause a default (with or without notice or lapse of time or both) or give rise to right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any Lien on any of the Assets of any Pueblo Company under, or otherwise result in a material detriment to Bear Cub or any Pueblo Company under, any provision of (i) the Organizational Documents of Bear Cub or Pueblo (each as amended to date) or any provision of the comparable charter or organizational documents of Pueblo Subsidiary, (ii) any Contract, instrument, permit, concession, franchise or license to which any of Bear Cub, any of its Subsidiaries, or any Pueblo Company is a party or by which or to which any of their respective properties or assets are bound or subject, (iii) any joint venture or other ownership arrangement applicable to Bear Cub or any Pueblo Company or (iv) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in Section 4.5 are duly and timely obtained or made, any Law, Regulation or Order applicable to Bear Cub, either Pueblo Company or any of their respective properties or assets.

     4.4 Regulation and Authorizations . To Bear Cub’s Knowledge, no Pueblo Company has engaged in any activities that would subject any Pueblo Company, its activities, or its facilities to the NGA jurisdiction of the FERC. All of the facilities of Pueblo used to transport natural gas are intrastate pipelines or “gathering” facilities and, as such, are not currently subject to regulation by any Governmental Authority under the NGA or the NGPA. The representations made by Bear Cub and the Pueblo Companies concerning the jurisdictional status of their facilities and operations to natural gas purchasers and interstate or intrastate pipelines in order to effect sales or to facilitate transportation transactions (whether for any Pueblo Company or any Third Person) were true when made and are true and correct in all material respects, and the Pueblo Companies have complied in all material respects with the terms and conditions of such sales, transportation or interconnect or similar arrangements (including “on behalf of” certificates).

     4.5 Consents and Authorizations .

          (a) Except for (i) Post-Closing Notifications, (ii) any Notifications set forth in Section 4.5(a)(ii) of the Disclosure Letter (the “ Required Notifications ”), (iii) any Third-Party Consent set forth in Section 4.5(a)(iii) of the Disclosure Letter (a “ Required Third-Party Consent ”), and (iv) any Authorizations set forth in Section 4.5(a)(iv) of the Disclosure Letter (a “ Required Authorization ”), no Authorization, Notification or Third-Party Consent is necessary for Bear Cub to execute, deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is or it shall be a party.

          (b) Each Pueblo Company possesses all material Authorizations, including all certificates of public convenience and necessity and rate authorizations required by the Governmental Authority of each state with jurisdiction over such matters, as are necessary to carry on its business as currently conducted. Such Authorizations are in full force and effect and have not been violated in any material respect and no suspension, revocation or cancellation thereof has been threatened. Neither Bear Cub nor any Pueblo Company has received any

written notification that any event has occurred or any circumstance or condition exists, and, to Bear Cub’s Knowledge, no event has occurred, and no circumstance or condition does exist, that (with or without notice or lapse of time) could reasonably be expected to constitute or result in a material violation or non-compliance by any of the Pueblo Companies with any such Authorization. Neither Bear Cub nor any of the Pueblo Companies has received from any Governmental Authority written notification that any such Authorizations (A) are not in full force and effect, (B) have been violated in any material respect or (C) are subject to any suspension, revocation, modification or cancellation. There is no Proceeding pending or, to Bear Cub’s Knowledge, threatened regarding suspension, revocation, modification or cancellation of any of such Authorizations.

     4.6 Properties .

          (a) Pueblo and the Pueblo Subsidiaries, individually or together, (i) have such title or interest in and to the Pipeline Assets as is sufficient to enable them to conduct their business as currently conducted without material interference, and (ii) own or hold by valid leaseholds all of the other assets reflected in the Consolidated Balance Sheet (other than any assets reflected in the Consolidated Balance Sheet that have been sold or otherwise disposed of since the date of the Consolidated Balance Sheet consistent with Section 4.19(a) ) and all other assets (including Real Property Interests but excluding the Pipeline Assets) ((i) and (ii) collectively, the “ Assets ”) free and clear of all Title Defects. Neither Bear Cub nor any Pueblo Company has received any written notice of any claim asserting the existence of a Title Defect in connection with any material Assets. To Bear Cub’s Knowledge, there are no assessments against the Assets for public improvements. As of the date of this Agreement, there has been no actual or, to Bear Cub’s Knowledge, threatened taking (whether permanent, temporary, whole or partial) of any part of the Assets by reason of condemnation or, to Bear Cub’s Knowledge, the threat of condemnation.

          (b) The Assets, including the personal property owned or leased by the Pueblo Companies, constitute all of the assets, rights and properties, tangible or intangible, real or personal, that are used or, to Bear Cub’s Knowledge, necessary for use in connection with the operation of the business of the Pueblo Companies consistent with past practice and as currently operated. There are no preferential rights, rights of first refusal, rights of first offer or similar rights to purchase or with respect to the sale of any material Asset or material portion of the Assets.

          (c) Neither Bear Cub nor any Pueblo Company has received any notice of default or termination or, to Bear Cub’s Knowledge, is in default, under the terms of any leases, easements or rights of way with respect to the Real Property Interests, that has resulted in or could reasonably be expected to result in a material impairment or loss of title to the Real Property Interests or the value thereof or that has or would hinder or impede the operations of the assets of any Pueblo Company or adversely affect the ability of the Pueblo Companies to own and operate their assets from and after the Closing in the ordinary course of business as conducted by the Pueblo Companies prior to Closing.

          (d) The assets of the Pueblo Companies that are tangible assets are, in all material respects, in good operating and working order, repair and condition, subject to ordinary wear and tear.

     4.7 Taxes .

          (a) All Tax Returns required to be filed by or with respect to each Pueblo Company have been filed when due. All such Tax Returns are true, correct and complete in all material respects. All Taxes of each Pueblo Company (or for which any Pueblo Company could be liable), whether or not shown on any Tax Return, have been paid when due. All Tax withholding and deposit requirements imposed on or with respect to any Pueblo Company have been satisfied in full in all respects. There are no Liens on any of the Assets that arose in connection with any failure (or alleged failure) to pay any Tax.

          (b) No Pueblo Company has made any payments, is obligated to make any payments, or is a party to any plan or agreement that under certain circumstances could obligate it to make any payments that would not be deductible under Sections 162(m), 280G (determined without regard to the exceptions contained in Sections 280G(b)(4) and 280G(b)(6)), 404 or 409A of the Code.

          (c) No Pueblo Company has granted (or is subject to) any waiver or extension that is currently in effect of the period of limitations for the assessment or payment of any Tax or the filing of any Tax Return. No unpaid Tax assessment, deficiency or adjustment has been assessed or asserted against or with respect to any Pueblo Company by any Governmental Authority; there are no currently pending or, to Bear Cub’s Knowledge, threatened, audits, administrative or judicial proceedings, or any deficiency or refund litigation, with respect to Taxes of any Pueblo Company.

          (d) All of the Pueblo Companies are members of an affiliated group within the meaning of Section 1504(a) of the Code, of which Pueblo is the common parent, and such affiliated group files a consolidated federal income Tax Return. No Pueblo Company (1) has been a member of an affiliated group (other than the affiliated group of which Pueblo is the common parent) or (2) has any liability for the Taxes of any Person (other than another Pueblo Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, or otherwise.

          (e) Bear Cub has previously made available to Buyers true, correct and complete copies of (1) all income and other material Tax Returns filed by or on behalf of each Pueblo Company for all completed Tax years that remain open for audit or review by the relevant Governmental Authority and (2) all ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement agreements and any similar documents or communications sent or received by any Pueblo Company relating to Taxes.

          (f) None of the property of the Pueblo Companies is held in an arrangement that could be classified as a partnership for Tax purposes, and no Pueblo Company owns any interest in any controlled foreign corporation (as defined in Section 957 of the Code), passive

foreign investment company (as defined in Section 1297 of the Code) or other entity the income of which is or could be required to be included in the income of any Pueblo Company.

          (g) No claim has ever been made by any Governmental Authority in any jurisdiction in which a Pueblo Company does not file Tax Returns that such Pueblo Company is or may be subject to Taxation by that jurisdiction.

          (h) There are no intercompany transactions within the meaning of Treasury Regulation Section 1.1502-13 (deferred intercompany gain) or Treasury Regulation Section 1.1502-19 (excess loss accounts) and no Pueblo Company has any such gain or excess loss accounts.

          (i) No Pueblo Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any Taxable period ending after the Closing Date as a result of a change in accounting method for any Taxable period ending on or before the Closing Date or pursuant to any agreement with any Governmental Authority with respect to any such Taxable period. No Pueblo Company will be required to include in any period ending after the Closing Date any income that accrued in a prior period but was not recognized in any prior period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, or otherwise.

          (j) No Pueblo Company is party to or has any obligation under any tax-sharing, tax indemnity or tax allocation agreement or similar arrangement, nor does any Pueblo Company have any Liability or potential Liability to another party under any such agreement or arrangement.

          (k) No Pueblo Company has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (1) in the two years prior to the date of this Agreement or (2) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by the Transaction Documents.

          (l) No Pueblo Company has consummated, has participated in, or is currently participating in any transaction that was or is a “tax shelter,” “listed transaction” or “reportable transaction” as defined in Sections 6662, 6662A, 6011, 6012, 6111 or 6707A of the Code or the Treasury Regulations promulgated thereunder, including transactions identified by the IRS by notice, regulation or other form of published guidance as set forth in Treasury Regulation Section 1.6011-4(b)(2).

          (m) None of the Assets (directly or indirectly) secures any debt the interest on which is exempt from Tax under Section 103(a) of the Code, and none of the Assets consist of “tax-exempt use property” within the meaning of Section 168(h) of the Code.

          (n) No Pueblo Company has executed or entered into with the IRS, or any other Governmental Authority, a closing agreement pursuant to Section 7121 of the Code or any similar provision of state, local, foreign or other Tax law, that will require any increase in

Taxable income or alternative minimum Taxable income, or any reduction in Tax deductions or Tax credits for, any Pueblo Company for any Taxable period ending after the Closing Date.

     4.8 Compliance with Laws .

          (a) Each Pueblo Company is in compliance in all material respects with all applicable Laws and Regulations and no Pueblo Company has received specific written notice from any Governmental Authority that it is not in compliance in any material respects with any applicable Law.

          (b) To Bear Cub’s Knowledge, subject to Section 4.4 , no provision of any existing Law, Regulation or Order applicable to any Pueblo Company (i) would preclude any Pueblo Company from charging and collecting, without the necessity for approvals of any Governmental Authority and without refund obligation, market based rates for gathering, transporting, treating, processing, compressing, purchasing, or selling Hydrocarbons; (ii) would preclude any Pueblo Company from constructing additions to, modifications of or interconnections with Third Persons with respect to, its gathering, transportation, treating, processing or compression facilities; or (iii) has required or could reasonably be expected to require any Pueblo Company to make refunds of amounts collected for sales or services.

          (c) None of the Pueblo Companies is engaged in any natural gas or other futures or options trading or is a party to any price swaps, hedges, futures or similar instruments.

     4.9 Insurance . Section 4.9 of the Disclosure Letter sets forth a list, including the name of the insurer, the risks insured, and related limits of the insurance policies currently maintained by the Pueblo Companies and any material claim outstanding under such insurance policies. All such policies are in full force and effect. Except as otherwise disclosed, there is no material claim outstanding under any such insurance policy and, to Bear Cub’s Knowledge, no event has occurred, and no circumstance or condition exists, that has given rise to or serves as the basis for or (with or without notice or lapse of time) could reasonably be expected to give rise to or serve as the basis for any such claim under any such policy. No Pueblo Company has received any written notice from any insurer or reinsurer of any reservation of rights with respect to pending or paid claims. No Pueblo Company is a party to any Contract, and the insurance policies listed on Section 4.9 of the Disclosure Letter do not contain any provision, that would abrogate or limit the rights of any Pueblo Company under such insurance policies upon or as a result of the consummation of the transactions contemplated by this Agreement. As of the date hereof, Pueblo has paid $378,321.00 toward the deductible under the Current Environmental Insurance Policy.

     4.10 Material Contracts .

          (a) Section 4.10 of the Disclosure Letter contains a list of all Material Contracts. A true, correct and complete copy of each written Material Contract, and a written description of each oral Material Contract which is true, correct and complete in all material respects, has been provided to Buyers. None of the Pueblo Companies has received from any other party to a Material Contract any written notice of any material breach or material violation by any Pueblo Company of any Material Contract or termination or intention to terminate such

Material Contract. No event has occurred which (with notice or lapse of time, or both) would constitute a default or an event of default by any Pueblo Company under the terms of any Material Contract or give any other party to a Material Contract the right to terminate or modify the terms of such Material Contract. The Pueblo Companies have performed all of their obligations under the Material Contracts in all material respects. Each of the Material Contracts is enforceable and in full force and effect and constitutes a legal, valid and binding obligation of the Pueblo Company that is a party thereto and, to Bear Cub’s Knowledge, each other party thereto, and, to Bear Cub’s Knowledge, no other party to any Material Contract is in material breach of the terms, provisions or conditions of such Material Contract.

          (b) There are no Contracts that, upon the consummation of the transactions contemplated by this Agreement or the Transaction Documents, will restrict the ability of the Buyers from processing the Hydrocarbons currently dedicated to the Fashing Facility under the Treatment and Processing Agreements from being transported to and processed at any other location owned by Buyers or its Subsidiaries.

          (c) There are no other Co-Owner Agreements and Co-Owner has no other rights with respect to the Fashing Plant.

     4.11 Intellectual Property . There are no material trademarks, trade names, patents, service marks, brand names, computer programs, databases, industrial designs, copyrights or other intangible property (“ Intellectual Property ”), that are, to Bear Cub’s Knowledge, necessary for the operation, or continued operation, of the business of any Pueblo Company, or for the ownership and operation, or continued ownership and operation, of any assets of any Pueblo Company, for which the Pueblo Companies do not hold valid and continuing authority in connection with the use thereof. No Pueblo Company has received any written notice of infringement, misappropriation or conflict with respect to Intellectual Property from any Person with respect to the operation of the Assets owned by any Pueblo Company.

     4.12 Broker’s or Finder’s Fees . No investment banker, broker, finder or other Person is entitled to any brokerage or finder’s fee or similar commission in respect of the transactions contemplated by this Agreement or any Transaction Document based in any way on agreements, arrangements or understandings made by or on behalf of any Pueblo Company for which Buyer or any Pueblo Company shall have any obligation or liability.

     4.13 Employees .

          (a) No Pueblo Company has, or since October 1, 2003 has had, any employees or Employee Benefit Plans and no Pueblo Company has any liability (including any contingent liability) to any employee or with respect to any Employee Benefit Plan.

          (b) Section 4.13(a) of the Disclosure Letter lists all employees of Bear Cub the primary duties or activities of which are to perform services for the Pueblo Companies or the Assets (the “ Pueblo Employees ”), their current annual salary or hourly rate, as applicable, date of employment and employee benefits (the “ Current Salary/Benefits ”).

          (c) None of the Pueblo Companies has agreed to recognize any labor union or other collective bargaining representative and, to Bear Cub’s Knowledge, no labor union or other

collective bargaining representative claims to or is seeking to represent any Pueblo Employees. To Bear Cub’s Knowledge, no union organizational campaign or representation petition is currently pending with respect to any Pueblo Employee.

          (d) Neither any Pueblo Company nor any ERISA Affiliate contributes to or has an obligation to contribute to, nor has contributed to or had an obligation to contribute to, a multiemployer plan within the meaning of Section 3(37) of ERISA or any other employee benefit plan subject to Title IV of ERISA.

          (e) The execution, delivery and performance of, and consummation of the transactions contemplated by, this Agreement and the Transaction Documents will not (either alone or in conjunction with any other event) entitle any current or former employee, director, officer, consultant, independent contractor, contingent worker or leased employee (or any of their dependents, spouses or beneficiaries) of the Pueblo Companies to any (1) Severance Obligations, or (2) Change of Control Amounts (for each of clause (1) and (2), except as set forth in the Transition Services Agreement). Further, neither Pueblo Company has made any payments, is obligated to make any payments, or is a party to any Contract that, under certain circumstances, would obligate it to make any payments that would not be deductible under (or the deduction of which would be limited by) Section 280G or 162(m) of the Code or would be subject to tax under Section 209A of the Code.

     4.14 Financial Statements; Absence of Undisclosed Liabilities; Controls and Procedures .

          (a) Bear Cub has delivered to Buyers the unaudited consolidated balance sheets (the “ Consolidated Balance Sheet ”) and related unaudited consolidated statements of operations and statements of cash flows of Pueblo and its Subsidiary for the year ended December 31, 2004, December 31, 2005 and December 31, 2006 (such financial statements for the year ended December 31, 2004, December 31, 2005 and December 31, 2006 being the “ Financial Statements ”); and

          (b) The Financial Statements have been prepared in accordance with the books and records of Pueblo and the Pueblo Subsidiaries in all material respects. Each of the balance sheets included in the Financial Statements fairly presents in all material respects the consolidated financial position of the Pueblo Companies, as of the date thereof, and each of the consolidated income statements and statements of cash flows included in the Financial Statements fairly presents in all material respects the consolidated results of operations and cash flows, as the case may be, of the Pueblo Companies for the periods set forth therein, in each case in accordance with GAAP, subject to the absence of notes or other textual disclosures required under GAAP that are not, indirectly or in the aggregate, material.

          (c) There are no Liabilities of Pueblo or any Pueblo Subsidiaries that are not reflected or reserved against in the Financial Statements, other than Liabilities that are (i) current liabilities incurred in the ordinary course of business and consistent with past practices of the Pueblo Companies since December 31, 2006, (ii) not required to be presented in unaudited year end financial statements prepared in conformity with GAAP and that are not, individually or in the aggregate, material to the Pueblo Companies, taken as a whole and which, in any event, do

not exceed $25,000 in the aggregate, (iii) Liabilities under this Agreement or (iv) Liabilities for Expenses. Neither Pueblo Company has any Liability for funded indebtedness.

          (d) Each of the Pueblo Companies maintains books and records reflecting in all material respects its assets and liabilities and that in reasonable detail accurately and fairly reflect in all material respects the transactions and dispositions of the assets of the Pueblo Companies, and maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) transactions are executed with management’s authorization; (ii) transactions are recorded as necessary to permit preparation of the consolidated financial statements of the Pueblo Companies and to maintain accountability for the consolidated assets; (iii) access to the Pueblo Companies’ assets is permitted only in accordance with management’s authorization; (iv) the reporting of the Pueblo Companies’ assets is compared with existing assets at regular intervals; and (v) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

          (e) Bear Cub has delivered to the Buyers all unaudited financial statements of the Pueblo Companies prepared to date.

          (f) Pueblo’s accountants have not advised Pueblo of any material deficiencies in Pueblo’s disclosure controls and procedures.

     4.15 Internal and Disclosure Controls . Bear Cub and the Pueblo Companies are not and have not been at any time subject to the Sarbanes-Oxley Act of 2002 and as such, no specific internal or external review of Bear Cub’s or the Pueblo Companies’ internal and disclosure controls has been performed. Bear Cub has disclosed to Buyers in summary form the existence, to Bear Cub’s Knowledge, of each of the following (i) any material deficiency in the internal controls of the Pueblo Companies that could adversely affect the Pueblo Companies’ ability to record, process, summarize and report financial data; (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Pueblo Companies’ internal controls and (iii) any change in the internal controls or disclosure controls and procedures of the Pueblo Companies effected since January 1, 2006.

     4.16 Environmental Matters .

          (a) No Pueblo Company is in violation in any material respect of any Environmental Law. No Governmental Authority or other Third Person has alleged that any Pueblo Company is in violation of any Environmental Law, except for such allegations of violation that have been resolved to the satisfaction of the party making such allegation.

          (b) None of the Real Property Interests, none of any other properties used by any Pueblo Company, and none of the properties to which Hazardous Materials generated by any Pueblo Company or as a result of the operations of any Pueblo Company may have migrated or been transported is (i) listed on the CERCLA National Priorities List or any other similar list of sites of environmental concern maintained by any Governmental Authority or (ii) is the subject of any remediation, removal, cleanup, investigation, response action, claim, judgment, or enforcement action regarding any actual or alleged presence or release of Hazardous Materials.

          (c) No Pueblo Company has released, and to Bear Cub’s Knowledge there have not been any releases of, Hazardous Materials on, under, from, or into any of the Real Property Interests or any other property formerly owned, operated, or used by any Pueblo Company during or before the time of such Pueblo Company’s ownership, operation, or use of such properties.

          (d) To Bear Cub’s Knowledge, each Pueblo Company currently holds all material permits, licenses, and approvals required under any Environmental Law for its ownership, operation, or use of the Real Property Interests and the conduct of its operations. There are no outstanding or unresolved notices of violation or notices of noncompliance with respect to such permits, licenses, and approvals.

          (e) There are no civil, criminal, or administrative actions, suits, demands, claims, hearings, proceedings, or notices pending or, to Bear Cub’s Knowledge, threatened against any Pueblo Company under any Environmental Law, including without limitations those related to allegations of economic loss, personal injury, illness, or damage to real or personal property or the environment.

          (f) No Pueblo Company is a party or, to Bear Cub’s Knowledge, a successor in interest to any Contract under which any Pueblo Company has assumed or agreed to be responsible for any current or contingent Liabilities with respect to any Hazardous Materials or any matters arising under Environmental Laws.

          (g) To Bear Cub’s Knowledge, there are no actual or contingent Environmental Costs or Liabilities that any Pueblo Company may sustain in connection with any remediation, clean-up, modification, monitoring, repairs, work, construction, alterations or installations required as a result of any existing condition, fact or circumstance, including any Environmental Costs or Liabilities relating to capital improvements, physical upgrading or maintenance and repairs required by, or otherwise required to correct any Pueblo Company’s noncompliance with, any Environmental Law.

     4.17 Litigation .

          (a) There are no Proceedings pending or, to Bear Cub’s Knowledge, threatened against any Pueblo Company or the Assets, including any Proceeding that questions the validity or enforceability of this Agreement or any other Transaction Document.

          (b) To Bear Cub’s Knowledge, there are no facts or circumstances existing that could reasonably give rise to any litigation, arbitration, investigation or proceeding that, if resolved in a manner adverse to the Pueblo Companies, could reasonably be expected to give rise to a material Liability or have a Material Adverse Effect on Pueblo.

          (c) No Pueblo Company is subject to any outstanding Order (other than routine oil and gas field regulatory orders) or any executory compliance or settlement agreement, conciliation agreement, memorandum of understanding, or letter of commitment with a Third Party.

     4.18 Bankruptcy . There are no bankruptcy, reorganization or receivership proceedings pending, planned or being contemplated by any Pueblo Company or with respect to any of their respective Assets, or, to Bear Cub’s Knowledge, being threatened against Pueblo or any of the Pueblo Subsidiaries.

     4.19 Absence of Certain Changes . Except as reflected in the Financial Statements, since December 31, 2006, (a) neither Pueblo nor any Pueblo Subsidiary has acted or failed to act in a manner that would have been prohibited by Section 6.1 if the terms of such Section had been in effect as of and after such date and (b) there has not occurred, and neither Pueblo nor any Pueblo Subsidiary has incurred or suffered, any result, occurrence, change, fact, event, circumstance or effect of any of the foregoing that has had or could reasonably be expected to have, a Material Adverse Effect on Pueblo.

     4.20 Pipeline Matters . Section 4.20 of the Disclosure Letter sets forth summary historical throughput data and information (but only to the extent Pueblo possesses such throughput data and information) for the periods January 1, 2005 through January 31, 2007 relating to the Assets, including volumes of Hydrocarbons transported through the Pipeline Assets for the periods indicated. Such throughput data and information are accurate and complete in all material respects with respect to such periods. Subsequent to such periods, there have been no material adverse changes in the volumes of Hydrocarbons transported through the Pipeline Assets and no Person has provided written notice or, to Bear Cub’s Knowledge, oral notice to Bear Cub or any Pueblo Company of its intent to reduce materially the volume of Hydrocarbons transported through the Pipeline Assets. No fact or circumstance exists that would result in a material decrease in such volumes excluding, however, changes that may result from (a) market conditions, (b) matters that affect the energy industry in general or in the area in which the Assets are located, (c) non-performance by a party under the Hydrocarbon Contracts other than a Pueblo Company or (d) normal well decline or depletion in the ordinary course of operations or well volume declines caused by well operations.

     4.21 Affiliate Relationships . There are no Contracts or other arrangements between Bear Cub and any Pueblo Company or involving any Pueblo Company in which any member, manager, officer, director, or Affiliate of any Pueblo Company or Bear Cub is a party or has a financial interest.

     4.22 FCC Matters . Pueblo has properly filed with the FCC such application(s) as may be required to cancel in accordance with the FCC Rules all FCC Licenses set forth on Section 4.22 of the Disclosure Letter pursuant to the FCC’s Universal Licensing System (ULS) and has provided to Buyers copies of all such application(s) filed. No Pueblo Company holds any FCC Licenses.

     4.23 Bear Cub Financial Statements; Absence of Undisclosed Liabilities .

          (a) Bear Cub has delivered to Buyers the unaudited consolidated balance sheet (the “ Bear Cub Consolidated Balance Sheet ”) and related unaudited consolidated income statement of Bear Cub and its Subsidiaries for the year ended December 31, 2006 (such financial statements being the “ Bear Cub Year End Financial Statements ”).

          (b) The Bear Cub Year End Financial Statements have been prepared in accordance with the books and records of Bear Cub and its Subsidiaries in all material respects. The consolidated balance sheet included in the Bear Cub Year End Financial Statements fairly presents in all material respects the consolidated financial position of Bear Cub, as of the date thereof, and the consolidated income statement included in the Bear Cub Year End Financial Statements fairly presents in all material respects the consolidated results of operations of Bear Cub for the periods set forth therein, in each case in accordance with GAAP, subject to the absence of notes or other textual disclosures required under GAAP that are not, indirectly or in the aggregate, material.

          (c) There are no Liabilities of Bear Cub that are not reflected or reserved against in the Bear Cub Year End Financial Statements, other than Liabilities that are (A) current liabilities incurred in the ordinary course of business and consistent with past practices of Bear Cub since December 31, 2006, (B) not required to be presented in unaudited year end financial statements prepared in conformity with GAAP and that are not, individually or in the aggregate, material to Bear Cub, taken as a whole and which, in any event, does not exceed $25,000 in the aggregate, or (C) Liabilities under this Agreement.

     4.24 Powers of Attorney . The total consideration to be received for the sale of the Members’ Interest under this Agreement satisfies the condition in the Powers of Attorney executed by each Member, each Power of Attorney remains in full force and effect and no Member has revoked any Power of Attorney.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYERS

     The Buyers jointly and severally represent and warrant to Sellers as follows (such representations and warranties being deemed to be made as of the date hereof and on a continuous basis until the Closing), in each case except as to matters disclosed in the Partnership SEC Documents:

     5.1 Organization, Standing and Power . Each of the Partnership and Pueblo Holdings and its Significant Subsidiaries is a corporation, limited liability company or limited partnership duly organized or formed, validly existing and in good standing under the laws of its jurisdiction of incorporation, organization or formation, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and licensed, as may be required, and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification and licensing necessary, other than in such jurisdictions in which the failure so to be qualified and licensed could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Partnership. Each of the Partnership and Pueblo Holdings has heretofore made available to Sellers complete and correct copies of its Organizational Documents, each as amended to date.

     5.2 Authority; No Violations, Consents and Approvals .

          (a) Other than approval by the General Partner, which approval has been obtained, no vote of holders of any Equity Interest of the Partnership is necessary to approve this Agreement, the other Transaction Documents to which the Buyers are or will be a party, or the performance by the Buyers of their respective obligations hereunder or thereunder. The Buyers have all requisite limited partnership and corporate power and authority to enter into this Agreement and the other Transaction Documents to which it shall be a party and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary partnership and corporate action on the part of each of the Buyers. This Agreement has been duly executed and delivered by each of the Buyers and, assuming this Agreement constitutes the valid and binding obligation of Sellers and Sellers’ Representative, constitutes a valid and binding obligation of each of the Buyers enforceable in accordance with its terms, subject as to enforceability to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (b) The execution and delivery of this Agreement by the Buyers does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under, or give rise to a right of purchase under, result in the creation of any Lien upon any of the properties or assets of the Partnership or any of its Subsidiaries under, or otherwise result in a material detriment to the Partnership or any of its Subsidiaries under, any provision of (i) the Organizational Documents of the Partnership (each as amended to date) or any provision of the comparable charter or organizational documents of any of its Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license or other Contract applicable to the Partnership or any of its Subsidiaries, (iii) any joint venture or other ownership arrangement or (iv) assuming each Notification and Authorization referred to in Section 5.2 is duly and timely made or obtained, any Law, Regulation or Order applicable to the Partnership or any of its Subsidiaries or any of their respective properties or assets, other than, in the case of clause (ii) or (iii), any such conflicts, violations, defaults, rights, Liens or detriments that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect on the Partnership.

          (c) No Notification to, and no Authorization from, any Governmental Authority is required by or with respect to the Partnership or any of its Subsidiaries in connection with the execution and delivery by the Buyers of this Agreement and the other Transaction Documents to which they are or will be a party or the performance by the Buyers of their respective obligations hereunder or thereunder, except for: (i) such filings and/or notices as may be required under the Securities Act or the Exchange Act; (ii) filings with the Nasdaq; (iii) such filings and approvals as may be required by any applicable state securities, “blue sky” or takeover laws or environmental laws; (iv) any Post-Closing Notifications; and (v) any such

Notification or Authorization that the failure to obtain or make could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Partnership.

     5.3 SEC Documents . The Partnership has made available to Bear Cub and each Member a true and complete copy of each of the Partnership SEC Documents and exhibits to each of the Partnership SEC Documents. The Partnership SEC Documents constitute each registration statement, prospectus (other than preliminary prospectuses), and other material report and schedule filed by the Partnership with the SEC since December 31, 2005 (other than any registration statement and related prospectus relating to any employee benefit plan) and include all the material reports and schedules (other than preliminary material) that the Partnership was required to file with the SEC since December 31, 2005. As of their respective dates, the Partnership SEC Documents complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Partnership SEC Documents, and none of the Partnership SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Partnership included in the Partnership SEC Documents were prepared from the books and records of the Partnership and its subsidiaries, complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10.01 of Regulation S-X of the SEC) and fairly present in accordance with applicable requirements of GAAP (subject, in the case of the unaudited statements, to normal, recurring adjustments, none of which is material) the consolidated financial position of the Partnership and its consolidated subsidiaries as of their respective dates and the consolidated results of operations and the consolidated cash flows of the Partnership and its consolidated Subsidiaries for the periods presented therein. Notwithstanding the foregoing statements, the Buyers make no representation or warranty and shall have no liability with respect to any current report on Form 8-K of the Partnership that has been “furnished” rather than “filed” with the SEC.

     5.4 Absence of Certain Changes or Events . Except as disclosed in, or reflected in the financial statements included in, the Partnership SEC Documents, since December 31, 2005, the Partnership has conducted its business only in the ordinary course of business, and there has not been: (a) any material damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets owned or operated by the Partnership and its subsidiaries; or (b) any other transaction, commitment, dispute or other event or condition (financial or otherwise) of any character (whether or not in the ordinary course of business) that, individually or in the aggregate, has resulted in or could reasonably be expected to result in a Material Adverse Effect on the Partnership.

     5.5 Litigation . Except as disclosed in the Partnership SEC Documents, there is no suit, action or proceeding pending, or, to Buyers’ Knowledge, threatened against or affecting the Partnership or any Subsidiary of the Partnership (“ Partnership Litigation ”), and, to the Buyers’ Knowledge, there are no facts that are likely to give rise to any Partnership Litigation, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect on the Partnership, nor is there any judgment, decree, injunction, rule or order of any

Governmental Authority or arbitrator outstanding against the Partnership or any Subsidiary of the Partnership that could reasonably be expected to result in a Material Adverse Effect on the Partnership.

     5.6 Taxes . From and at all times since its formation, the Partnership has qualified as a partnership for U.S. federal income tax purposes under Section 7704(c) of the Code, and all Tax Returns have been prepared consistently therewith.

     5.7 Broker’s or Finder’s Fees . No investment banker, broker, finder or other Person is entitled to any brokerage or finder’s fee or similar commission in respect of the transactions contemplated by this Agreement or any Transaction Document based in any way on agreements, arrangements or understandings made by or on behalf of Buyers or any of its Affiliates that is, or following the Closing would be, an obligation of Pueblo, Sellers or any of their respective Affiliates.

     5.8 Investment Intent . Buyers are acquiring the Interests for their own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same; and neither Buyer has any present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof.

ARTICLE VI
COVENANTS

     6.1 Conduct of Business .

          (a) Bear Cub covenants and agrees that until the earlier of the Closing or the termination of this Agreement, except as otherwise set forth in Section 6.1(a) of the Disclosure Letter or unless Pueblo Holdings otherwise consents in writing, Bear Cub shall (A) use commercially reasonable efforts to retain the services of the Pueblo Employees, and (B) cause the Pueblo Companies:

               (i) to operate in the usual and ordinary course of business consistent with past practice;

               (ii) to preserve substantially intact their business organizations, to use commercially reasonable efforts to maintain their rights, privileges and immunities, and to maintain their relationships with their customers and suppliers;

               (iii) to use commercially reasonable efforts consistent with past practice to maintain and to keep their properties and assets in good repair and condition, ordinary wear and tear excepted (if there is any casualty loss or damage to any properties or assets of any Pueblo Company prior to Closing, Bear Cub shall consult, and shall cause Pueblo to consult, with Pueblo Holdings regarding the replacement or repair of such property or asset);

               (iv) to use commercially reasonable efforts to keep in full force and effect insurance applicable to their Assets and operations comparable in amount and scope of

coverage to that currently maintained, including the insurance policies described in Section 4.9 of the Disclosure Letter ; and

               (v) (A) to keep and maintain accurate books, Records and accounts; (B) to pay or accrue all Taxes, assessments and other governmental charges imposed upon any of their Assets