Exhibit 10.1

Execution Version

 

 

 

 

TARGA RESOURCES PARTNERS LP

TARGA RESOURCES PARTNERS FINANCE CORPORATION

AND EACH OF THE GUARANTORS PARTY HERETO

5 1⁄8% SENIOR NOTES DUE 2025

5 3⁄8% SENIOR NOTES 2027

 

 

INDENTURE

Dated as of October 6, 2016

 

 

U.S. BANK NATIONAL ASSOCIATION

Trustee

 

 

 

 

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

CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section   Indenture Section 310(a)(1)   7.10       (a)(2)  
7.10       (a)(3)   N.A.       (a)(4)   N.A.       (a)(5)   7.10       (b)  
7.10       (c)   N.A. 311(a)   7.11       (b)   7.11       (c)   N.A. 312(a)  
2.05       (b)   12.03       (c)   12.03 313(a)   7.06       (b)(1)   N.A.
      (b)(2)   7.06; 7.07       (c)   7.06; 12.02       (d)   7.06 314(a)  
4.03; 12.02; 12.05       (b)   N.A.       (c)(1)   12.04       (c)(2)   12.04
      (c)(3)   N.A.       (d)   N.A.       (e)   12.05       (f)   N.A. 315(a)  
7.01       (b)   7.05; 12.02       (c)   7.01       (d)   7.01       (e)   6.11
316(a)(last sentence)   2.09       (a)(1)(A)   6.05       (a)(1)(B)   6.04
      (a)(2)   N.A.       (b)   6.07       (c)   2.12 317(a)(1)   6.08
      (a)(2)   6.09       (b)   2.04 318(a)   12.01       (b)   N.A.       (c)  
12.01

 

N.A. means not applicable.

* This Cross Reference Table is not part of the Indenture.

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

TABLE OF CONTENTS

 

         Page  

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

  

  

Section 1.01  

Definitions

     1    Section 1.02  

Other Definitions

     28    Section 1.03  

Incorporation by Reference of Trust Indenture Act

     28    Section 1.04  

Rules of Construction

     29   

ARTICLE 2

 

THE NOTES

  

  

Section 2.01  

Form and Dating

     29    Section 2.02  

Execution and Authentication

     30    Section 2.03  

Registrar and Paying Agent

     30    Section 2.04  

Paying Agent to Hold Money in Trust

     31    Section 2.05  

Holder Lists

     31    Section 2.06  

Transfer and Exchange

     31    Section 2.07  

Replacement Notes

     44    Section 2.08  

Outstanding Notes

     44    Section 2.09  

Treasury Notes

     44    Section 2.10  

Temporary Notes

     44    Section 2.11  

Cancellation

     45    Section 2.12  

Defaulted Interest

     45   

ARTICLE 3

 

REDEMPTION AND REPURCHASE

  

  

Section 3.01  

Notices to Trustee

     45    Section 3.02  

Selection of Notes to Be Redeemed

     46    Section 3.03  

Notice of Redemption

     46    Section 3.04  

Effect of Notice of Redemption

     47    Section 3.05  

Deposit of Redemption or Purchase Price

     47    Section 3.06  

Notes Redeemed or Purchased in Part

     47    Section 3.07  

Optional Redemption

     48    Section 3.08  

[Reserved]

     49    Section 3.09  

Offer to Purchase by Application of Excess Proceeds

     49   

ARTICLE 4

 

COVENANTS

  

  

Section 4.01  

Payment of Notes

     51    Section 4.02  

Maintenance of Office or Agency

     52    Section 4.03  

Reports

     52   

 

-i-

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

         Page   Section 4.04  

Compliance Certificate

     53    Section 4.05  

Taxes

     54    Section 4.06  

Stay, Extension and Usury Laws

     54    Section 4.07  

Restricted Payments

     54    Section 4.08  

Dividend and Other Payment Restrictions Affecting Subsidiaries

     57    Section 4.09  

Incurrence of Indebtedness and Issuance of Disqualified Equity

     59    Section 4.10  

Asset Sales

     62    Section 4.11  

Transactions with Affiliates

     64    Section 4.12  

Liens

     65    Section 4.13  

[Reserved]

     65    Section 4.14  

Corporate Existence

     65    Section 4.15  

Offer to Repurchase Upon Change of Control

     66    Section 4.16  

[Reserved]

     68    Section 4.17  

[Reserved]

     68    Section 4.18  

Additional Guarantees

     68    Section 4.19  

Designation of Restricted and Unrestricted Subsidiaries

     68    Section 4.20  

Termination of Covenants

     69   

ARTICLE 5

 

SUCCESSORS

  

  

Section 5.01  

Merger, Consolidation, or Sale of Assets

     69    Section 5.02  

Successor Person Substituted

     71   

ARTICLE 6

 

DEFAULTS AND REMEDIES

  

  

Section 6.01  

Events of Default

     71    Section 6.02  

Acceleration

     73    Section 6.03  

Other Remedies

     73    Section 6.04  

Waiver of Past Defaults

     74    Section 6.05  

Control by Majority

     74    Section 6.06  

Limitation on Suits

     74    Section 6.07  

Rights of Holders of Notes to Receive Payment

     75    Section 6.08  

Collection Suit by Trustee

     75    Section 6.09  

Trustee May File Proofs of Claim

     75    Section 6.10  

Priorities

     75    Section 6.11  

Undertaking for Costs

     76   

ARTICLE 7

 

TRUSTEE

  

  

Section 7.01  

Duties of Trustee

     76    Section 7.02  

Rights of Trustee

     77    Section 7.03  

Individual Rights of Trustee

     77    Section 7.04  

Trustee’s Disclaimer

     78    Section 7.05  

Notice of Defaults

     78    Section 7.06  

Reports by Trustee to Holders of the Notes

     78   

 

-ii-

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

         Page   Section 7.07  

Compensation and Indemnity

     78    Section 7.08  

Replacement of Trustee

     79    Section 7.09  

Successor Trustee by Merger, etc.

     80    Section 7.10  

Eligibility; Disqualification

     80    Section 7.11  

Preferential Collection of Claims Against the Issuers

     80   

ARTICLE 8

 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  

  

Section 8.01  

Option to Effect Legal Defeasance or Covenant Defeasance

     80    Section 8.02  

Legal Defeasance and Discharge

     81    Section 8.03  

Covenant Defeasance

     81    Section 8.04  

Conditions to Legal or Covenant Defeasance

     82    Section 8.05  

Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions

     83    Section 8.06  

Repayment to the Issuers

     83    Section 8.07  

Reinstatement

     84   

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND WAIVER

  

  

Section 9.01  

Without Consent of Holders of Notes

     84    Section 9.02  

With Consent of Holders of Notes

     85    Section 9.03  

Compliance with Trust Indenture Act

     86    Section 9.04  

Revocation and Effect of Consents

     86    Section 9.05  

Notation on or Exchange of Notes

     87    Section 9.06  

Trustee to Sign Amendments, etc.

     87   

ARTICLE 10

 

NOTE GUARANTEES

  

  

Section 10.01  

Guarantee

     87    Section 10.02  

Limitation on Guarantor Liability

     88    Section 10.03  

Execution and Delivery of Note Guarantee

     88    Section 10.04  

Guarantors May Consolidate, etc., on Certain Terms

     89    Section 10.05  

Releases

     90   

ARTICLE 11

 

SATISFACTION AND DISCHARGE

  

  

Section 11.01  

Satisfaction and Discharge

     90    Section 11.02  

Application of Trust Money

     91   

 

-iii-

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

         Page  

ARTICLE 12

 

MISCELLANEOUS

  

  

Section 12.01  

Trust Indenture Act Controls

     92    Section 12.02  

Notices

     92    Section 12.03  

Communication by Holders of Notes with Other Holders of Notes

     93    Section 12.04  

Certificate and Opinion as to Conditions Precedent

     93    Section 12.05  

Statements Required in Certificate or Opinion

     94    Section 12.06  

Rules by Trustee and Agents

     94    Section 12.07  

No Personal Liability of Directors, Officers, Employees and Stockholders

     94    Section 12.08  

Governing Law

     94    Section 12.09  

No Adverse Interpretation of Other Agreements

     94    Section 12.10  

Successors

     94    Section 12.11  

Severability

     95    Section 12.12  

Counterpart Originals

     95    Section 12.13  

Table of Contents, Headings, etc.

     95    Section 12.14  

Payment Date Other Than a Business Day

     95    Section 12.15  

Evidence of Action by Holders

     95    Section 12.16  

U.S.A. Patriot Act

     97    Section 12.17  

Force Majeure

     97   

 

-iv-

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

EXHIBITS

 

Exhibit A-1    FORM OF 2025 NOTE Exhibit A-2    FORM OF 2027 NOTE Exhibit B   
FORM OF CERTIFICATE OF TRANSFER Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF CERTIFICATE ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E    FORM OF NOTATION OF GUARANTEE Exhibit F    FORM OF SUPPLEMENTAL
INDENTURE

SCHEDULE

Schedule 4.11 AFFILIATE TRANSACTIONS

 

-v-

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

INDENTURE dated as of October 6, 2016 among TARGA RESOURCES PARTNERS LP, a
Delaware limited partnership (“Targa Resources Partners”), TARGA RESOURCES
PARTNERS FINANCE CORPORATION, a Delaware corporation (“Finance Corp.” and,
together with Targa Resources Partners, the “Issuers”), the Guarantors (as
defined) and U.S. BANK NATIONAL ASSOCIATION, as trustee.

The Issuers, the Guarantors and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders (as defined) of
the 5 1⁄8% Senior Notes due 2025 (the “2025 Notes”) and the 5 3⁄8% Senior Notes
due 2027 (the “2027 Notes”):

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions.

“144A Global Note” means a Global Note substantially in the form of Exhibit A-1
hereto, in the case of the 2025 Notes, or Exhibit A-2 hereto, in the case of the
2027 Notes, bearing the Global Note Legend, the Private Placement Legend and the
OID Legend, if applicable, deposited with the Custodian and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes of the applicable series sold in
reliance on Rule 144A.

“2008 Indenture” means the Indenture, dated June 18, 2008, relating to the
formerly outstanding 8 1⁄4% Senior Notes due 2016 of the Issuers, as amended and
supplemented.

“2011 Indenture” means the Indenture, dated February 2, 2011, relating to the
6 7⁄8% Senior Notes due 2021 of the Issuers, as amended or supplemented from
time to time.

“2012 (January) Indenture” means the Indenture, dated January 31, 2012, relating
to the 6 3⁄8% Senior Notes due 2022 of the Issuers, as amended or supplemented
from time to time.

“2012 (October) Indenture” means the Indenture, dated October 22, 2012, relating
to the 5 1⁄4% Senior Notes due 2023 of the Issuers, as amended or supplemented
from time to time.

“2013 Indenture” means the Indenture, dated May 14, 2013, relating to the 4 1⁄4%
Senior Notes due 2023 of the Issuers, as amended or supplemented from time to
time.

“2014 Indenture” means the Indenture, dated October 28, 2014, relating to the
4.125% Senior Notes due 2019 of the Issuers, as amended or supplemented from
time to time.

“2015 (January) Indenture” means the Indenture, dated January 30, 2015, relating
to the 5% Senior Notes due 2018 of the Issuers, as amended or supplemented from
time to time.

“2015 (May) Indenture” means the Indenture, dated May 11, 2015, relating to the
6 5⁄8% Senior Notes due 2020 of the Issuers, as amended or supplemented from
time to time.

“2015 (September) Indenture” means the Indenture, dated September 14, 2015,
relating to the 6 3⁄4% Senior Notes due 2024 of the Issuers, as amended or
supplemented from time to time.

 

1

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

“2025 Notes” has the meaning given to it in the preamble of this Indenture. The
Initial 2025 Notes and any Additional Notes, Exchange Notes and Private Exchange
Notes, in each case, of the same series as the Initial 2025 Notes, shall be
treated as a single class for all purposes under this Indenture, and unless the
context otherwise requires, all references to the 2025 Notes shall include the
Initial 2025 Notes and any Additional Notes, any Exchange Notes and any Private
Exchange Notes of that series.

“2027 Notes” has the meaning given to it in the preamble of this Indenture. The
Initial 2027 Notes and any Additional Notes, Exchange Notes and Private Exchange
Notes, in each of case, of the same series as the Initial 2027 Notes, shall be
treated as a single class for all purposes under this Indenture, and unless the
context otherwise requires, all references to the 2027 Notes shall include the
Initial 2027 Notes and any Additional Notes, any Exchange Notes and any Private
Exchange Notes of that series.

“Acquired Debt” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person, but excluding Indebtedness which is extinguished, retired or
repaid in connection with such Person merging with or into or becoming a
Subsidiary of such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

“Additional Notes” means with respect to either series of Notes, additional
Notes (other than the Initial 2025 Notes or Initial 2027 Notes) of that series
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as
part of the same series as the Initial 2025 Notes or Initial 2027 Notes, as
applicable.

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control; provided, further, that
any third Person which also beneficially owns 10% or more of the Voting Stock of
a specified Person shall not be deemed to be an Affiliate of either the
specified Person or the other Person merely because of such common ownership in
such specified Person. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.

“Agent” means any Registrar or Paying Agent.

“Applicable Premium” means, with respect to:

(A) any 2025 Note, at the time of computation, the greater of:

(1) 1.0% of the principal amount of the 2025 Note; or

(2) the excess of: (a) the present value at such time of (i) the redemption
price of the 2025 Note at February 1, 2020 (such redemption price being set
forth in the table appearing in

 

2

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

Section 3.07(a) hereof) plus (ii) all required interest payments due on the 2025
Note through February 1, 2020 (excluding accrued but unpaid interest to the
Redemption Date), computed using a discount rate equal to the Treasury Rate as
of such time plus 50 basis points, discounted to the Redemption Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months);
over (b) the principal amount of the 2025 Note; and

(B) any 2027 Note, at the time of computation, the greater of:

(1) 1.0% of the principal amount of the 2027 Note; or

(2) the excess of: (a) the present value at such time of (i) the redemption
price of the 2027 Note at February 1, 2022 (such redemption price being set
forth in the table appearing in Section 3.07(b) hereof) plus (ii) all required
interest payments due on the 2027 Note through February 1, 2022 (excluding
accrued but unpaid interest to the Redemption Date), computed using a discount
rate equal to the Treasury Rate as of such time plus 50 basis points, discounted
to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months); over (b) the principal amount of the 2027
Note.

“Applicable Procedures” means, with respect to any transfer or exchange of or
for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition of any properties or
assets; provided, however, that the sale, lease, conveyance or other disposition
of all or substantially all of the properties or assets of Targa Resources
Partners and its Subsidiaries taken as a whole will be governed by Section 4.15
hereof and/or Section 5.01 hereof and not by Section 4.10 hereof; and

(2) the issuance of Equity Interests in any of Targa Resources Partners’
Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries.

Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:

(1) any single transaction or series of related transactions that involves
properties or assets having a Fair Market Value of less than $25.0 million;

(2) the sale or discount of accounts receivable arising in the ordinary course
of business in connection with the compromise or collection thereof and
dispositions of Receivables and any related assets to or by a Securitization
Subsidiary in connection with a Permitted Receivables Financing;

(3) transfer of properties or assets between or among Targa Resources Partners
and its Restricted Subsidiaries;

(4) an issuance or sale of Equity Interests by a Restricted Subsidiary of Targa
Resources Partners to Targa Resources Partners or to a Restricted Subsidiary of
Targa Resources Partners;

 

3

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

(5) the sale or lease of products, equipment, services or accounts receivable in
the ordinary course of business and any sale or other disposition of damaged,
worn-out or obsolete properties or assets in the ordinary course of business;

(6) the sale or other disposition of cash or Cash Equivalents, Hedging
Obligations or other financial instruments in the ordinary course of business;

(7) a Restricted Payment that does not violate Section 4.07 hereof or a
Permitted Investment;

(8) any trade or exchange by Targa Resources Partners or any Restricted
Subsidiary of properties or assets of any type for properties or assets of any
type owned or held by another Person, including any disposition of some but not
all of the Equity Interests of a Restricted Subsidiary in exchange for assets or
properties and after which the Person whose Equity Interests have been so
disposed of continues to be a Restricted Subsidiary; provided that the Fair
Market Value of the properties or assets traded or exchanged by Targa Resources
Partners or such Restricted Subsidiary (together with any cash or Cash
Equivalents and liabilities assumed) is reasonably equivalent to the Fair Market
Value of the properties or assets (together with any cash or Cash Equivalents
and liabilities assumed) to be received by Targa Resources Partners or such
Restricted Subsidiary; and provided, further, that any cash received must be
applied in accordance with Section 4.10 hereof;

(9) the creation or perfection of a Lien that is not prohibited by Section 4.12
hereof and any disposition in connection with a Permitted Lien;

(10) dispositions of Investments in Joint Ventures to the extent required by, or
made pursuant to customary buy/sell arrangements between the Joint Venture
parties set forth in, Joint Venture agreements or any similar binding
arrangements:

(11) surrender or waiver of contract rights or the settlement, release or
surrender of contract, tort or other claims of any kind; and

(12) the grant in the ordinary course of business of any non-exclusive license
of patents, trademarks, registrations therefor and other similar intellectual
property.

“Attributable Debt” in respect of a sale and leaseback transaction means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP; provided, however, that
if such sale and leaseback transaction results in a Capital Lease Obligation,
the amount of Indebtedness represented thereby will be determined in accordance
with the definition of “Capital Lease Obligation.”

“Available Cash” has the meaning assigned to such term in the Partnership
Agreement, as in effect on the date of this Indenture.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as

 

4

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

that term is used in Section 13(d)(3) of the Exchange Act), such “person” will
be deemed to have beneficial ownership of all securities that such “person” has
the right to acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only after the passage of time.
The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding
meaning.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation or
any committee thereof duly authorized to act on behalf of such board;

(2) with respect to a partnership, the board of directors or board of managers
of the general partner of the partnership, or, if such general partner is itself
a limited partnership, then the board of directors or board of managers of its
general partner;

(3) with respect to a limited liability company, the board of managers or
directors, the managing member or members or any controlling committee of
managing members thereof; and

(4) with respect to any other Person, the board or committee of such Person
serving a similar function.

“Broker-Dealer” has the meaning attributed to the term “Participating
Broker-Dealer” in the initial Registration Rights Agreement.

“Business Day” means any day other than a Legal Holiday.

“Capital Lease Obligation” means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance
with GAAP, excluding liabilities resulting from a change in GAAP subsequent to
the date of this Indenture, and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be prepaid by the lessee without payment of
a penalty.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

(3) in the case of a partnership or limited liability company, partnership
interests (whether general or limited) or membership interests; and

(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person,

but excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.

 

5

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

“Cash Equivalents” means:

(1) United States dollars or, in an amount up to the amount necessary or
appropriate to fund local operating expenses, other currencies;

(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than one
year from the date of acquisition;

(3) certificates of deposit and Eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding six months and overnight bank deposits, in each case,
with any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson BankWatch Rating of “B” or better;

(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;

(5) commercial paper having one of the two highest ratings obtainable from
Moody’s or S&P and, in each case, maturing within six months after the date of
acquisition; and

(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.

“Change of Control” means the occurrence of any of the following:

(1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of Targa Resources Partners and its Subsidiaries taken as a whole to any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act), which
occurrence is followed by a Ratings Decline within 90 days;

(2) the adoption of a plan relating to the liquidation or dissolution of Targa
Resources Partners or the removal of the General Partner by the limited partners
of Targa Resources Partners;

(3) the consummation of any transaction (including, without any merger or
consolidation), the result of which is that any “person” (as defined above)
becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the General Partner or of Targa Resources Partners, measured by
voting power rather than number of shares, units or the like, and as a result of
such transaction Targa is no longer the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of either the General Partner
or Targa Resources Partners, measured by voting power rather than number of
shares, units or the like, which occurrence is followed by a Ratings Decline
within 90 days; or

(4) the first day on which a majority of the members of the Board of Directors
of the General Partner are not Continuing Directors, which occurrence is
followed by a Ratings Decline within 90 days.

 

6

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

Notwithstanding the preceding, a conversion of Targa Resources Partners from a
limited partnership to a corporation, limited liability company or other form of
entity or an exchange of all of the outstanding limited partnership interests
for capital stock in a corporation, for member interests in a limited liability
company or for Equity Interests in such other form of entity shall not
constitute a Change of Control, so long as following such conversion or exchange
the “persons” (as defined above) who Beneficially Owned the Capital Stock of
Targa Resources Partners immediately prior to such transactions continue to
Beneficially Own in the aggregate more than 50% of the Voting Stock of such
entity, or continue to Beneficially Own sufficient Equity Interests in such
entity to elect a majority of its directors, managers, trustees or other persons
serving in a similar capacity for such entity, and, in either case Targa
Beneficially Owns more than 50% of the Voting Stock of such entity.

“Clearstream” means Clearstream Banking, Société Anonyme, or any successor
securities clearance agency.

“Company Order” means a written order delivered to the Trustee by Targa
Resources Partners and executed on its behalf by an Officer of the General
Partner.

“Consolidated Cash Flow” means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus, without
duplication:

(1) an amount equal to (i) any extraordinary loss plus (ii) any net loss
realized by such Person or any of its Restricted Subsidiaries in connection with
an Asset Sale or the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person
or any of its Restricted Subsidiaries, in each case, to the extent such losses
were deducted in computing such Consolidated Net Income; plus

(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus

(3) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, any
interest, premiums, fees, discounts, expenses and losses on the sale or
contribution of accounts receivable (and any amortization thereof) payable by
Targa Resources Partners or any Restricted Subsidiary in connection with a
Permitted Receivables Financing, and any yields or other charges or other
amounts comparable to, or in the nature of, interest payable by Targa Resources
Partners or any Restricted Subsidiary under any Permitted Receivables Financing,
and net of the effect of all payments, if any, made or received pursuant to
interest-rate Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus

(4) depreciation, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; plus

 

7

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

(5) unrealized non-cash losses resulting from foreign currency balance sheet
adjustments required by GAAP to the extent such losses were deducted in
computing such Consolidated Net Income; plus

(6) all extraordinary, unusual or non-recurring items of gain or loss, or
revenue or expense; minus

(7) non-cash items increasing such Consolidated Net Income for such period,
other than items that were accrued in the ordinary course of business,

in each case, on a consolidated basis and determined in accordance with GAAP.

“Consolidated Net Income” means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

(1) the aggregate Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or
similar distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person; provided that with respect to any Joint Venture, the
aggregate Net Income of such Joint Venture will be included to the extent of
Targa Resources Partners’ and a Restricted Subsidiary’s percent ownership of
such Joint Venture so long as the declaration or payment of dividends or similar
distributions by such Joint Venture of that Net Income is at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Joint Venture or its stockholders,
partners or members;

(2) the Net Income of any Restricted Subsidiary that is not a Guarantor will be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, partners or members;

(3) the cumulative effect of a change in accounting principles will be excluded;

(4) unrealized losses and gains under derivative instruments included in the
determination of Consolidated Net Income, including those resulting from the
application of FASB ASC Topic No. 815, Derivatives and Hedging, will be
excluded;

(5) in the case of a successor to such Person by consolidation, merger or
disposition of its properties or assets, any Net Income of the successor prior
to such transaction will be excluded;

(6) any charges relating to any premium or penalty paid, write off of deferred
finance costs or other charges in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity will be excluded; and

(7) net after-tax gains or losses attributable to sales of receivables under any
Permitted Receivables Financing will be excluded.

 

8

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

“Consolidated Net Tangible Assets” means, with respect to any Person at any date
of determination, the aggregate amount of total assets included in such Person’s
most recent quarterly or annual consolidated balance sheet prepared in
accordance with GAAP less applicable reserves reflected in such balance sheet,
after (i) adding the aggregate incremental amount of total assets that would
have resulted from an acquisition of assets from an Affiliate that is accounted
for as a pooling had it been accounted for using purchase accounting and
(ii) deducting the following amounts: (a) all current liabilities reflected in
such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt
discounts and expenses and other like intangibles reflected in such balance
sheet.

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the General Partner who:

(1) was a member of such Board of Directors on the date of this Indenture; or

(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.

“Corporate Trust Office of the Trustee” means the office of the Trustee in the
City of New York at which at any time its corporate trust business shall be
administered, which office at the date hereof is located at 100 Wall Street,
Suite 1600, New York, New York 10005, Attn: Corporate Trust Department, or such
other address in the City of New York as the Trustee may designate from time to
time by notice to the Holders and the Issuers, or the principal corporate trust
office in the City of New York of any successor Trustee (or such other address
as a successor Trustee may designate from time to time by notice to the Holders
and the Issuers).

“Credit Agreement” means that certain Second Amended and Restated Credit
Agreement, dated October 3, 2012, by and among Targa Resources Partners LP, as
Borrower, Bank of America, N.A., as the Administrative Agent, Collateral Agent,
Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association and The
Royal Bank of Scotland plc, as the Co-Syndication Agents, Deutsche Bank
Securities Inc. and Barclays Bank plc, as the Co-Documentation Agents, and the
other lenders party thereto, including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and, in
each case, as amended by the First Amendment, Waiver and Incremental Commitment
Agreement, dated as of February 23, 2015, by and among Targa Resources Partners
LP, Bank of America, N.A. and the parties signatory thereto, and as further
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.

“Credit Facilities” means, one or more debt facilities (including the Credit
Agreement), commercial paper facilities or secured capital markets financings,
in each case, with banks or other institutional lenders or institutional
investors providing for revolving credit loans, term loans, accounts receivable
financing (through the sale or contribution of accounts receivable to such
lenders or to special purpose entities formed to borrow from such lenders
against such accounts receivable), including a Permitted Receivables Financing,
letters of credit or secured capital markets financings, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced
(including by means of any capital markets transaction) in whole or in part from
time to time.

“Custodian” means the Trustee, as custodian with respect to the Notes in global
form, or any successor entity thereto.

“Customary Recourse Exceptions” means, with respect to any Non-Recourse Debt of
an Unrestricted Subsidiary, exclusions from the exculpation provisions with
respect to such Non-Recourse

 

9

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

Debt for the voluntary bankruptcy of such Unrestricted Subsidiary, fraud,
misapplication of cash, environmental claims, waste, willful destruction and
other circumstances customarily excluded by lenders from exculpation provisions
or included in separate indemnification agreements in non-recourse financings.

“Default” means any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default.

“Definitive Note” means a certificated Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06 hereof, substantially in the
form of Exhibit A-1 hereto, in the case of the 2025 Notes, or Exhibit A-2
hereto, in the case of the 2027 Notes, except that such Note shall not bear the
Global Note Legend and shall not have the “Schedule of Exchanges of Interests in
the Global Note” attached thereto.

“Depositary” means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

“Disqualified Equity” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Equity Interest),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Equity Interest, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature. Notwithstanding
the preceding sentence, any Equity Interest that would constitute Disqualified
Equity solely because the holders of the Equity Interest have the right to
require Targa Resources Partners to repurchase such Equity Interest upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Equity if the terms of such Equity Interest provide that Targa
Resources Partners may not repurchase or redeem any such Equity Interest
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07 hereof.

“Domestic Subsidiary” means any Restricted Subsidiary of Targa Resources
Partners that was formed under the laws of the United States or any state of the
United States or the District of Columbia and all of whose outstanding Capital
Stock is Beneficially Owned by Targa Resources Partners.

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale of Equity Interests (other
than Disqualified Equity) made for cash on a primary basis by Targa Resources
Partners after the date of this Indenture.

“Euroclear” means Euroclear Bank SA/NV., or any successor securities clearance
agency.

“Exchange Notes” means the Notes of either series issued in an Exchange Offer
with respect to such series pursuant to Section 2.06(f) hereof.

“Exchange Offer” has the meaning set forth in the applicable Registration Rights
Agreement.

 

10

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

“Exchange Offer Registration Statement” has the meaning set forth in the
applicable Registration Rights Agreement.

“Existing Indebtedness” means the aggregate principal amount of Indebtedness of
Targa Resources Partners and its Subsidiaries (other than Indebtedness under the
Credit Agreement) in existence on the date of this Indenture, until such amounts
are repaid.

“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors of the
General Partner in the case of amounts over $50.0 million and otherwise by an
executive officer of the General Partner.

“FERC Subsidiary” means a Restricted Subsidiary of Targa Resources Partners that
is subject to the regulatory jurisdiction of the Federal Energy Regulatory
Commission (or any successor thereof) under Section 7(c) of the Natural Gas Act
of 1938.

“Finance Corp.” has the meaning given to it in the preamble of this Indenture
and includes any successor thereof.

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any
four-quarter reference period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. If
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems Disqualified Equity subsequent to the commencement of the
applicable four-quarter reference period and on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio is made
(the “Calculation Date”), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase, redemption, defeasance or other discharge of
Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity,
and the use of the proceeds therefrom, as if the same had occurred at the
beginning of such period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date will be given pro forma effect as if they had occurred on the first day of
the four-quarter reference period, including any Consolidated Cash Flow and any
pro forma expense and cost reductions that have occurred or are reasonably
expected to occur, in the reasonable judgment of the chief financial or
accounting officer of such Person (regardless of whether those cost savings or
operating improvements could then be reflected in pro forma financial statements
in accordance with Regulation S-X promulgated under the Securities Act or any
other regulation or policy of the SEC related thereto);

(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be excluded;

(3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date;

 

11

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

(4) interest income reasonably anticipated by such Person to be received during
the applicable four quarter period from cash or Cash Equivalents held by such
Person or any Restricted Subsidiary of such Person, which cash or Cash
Equivalents exist on the Calculation Date or will exist as a result of the
transaction giving rise to the need to calculate the Fixed Charge Coverage
Ratio, will be included;

(5) any Person that is a Restricted Subsidiary of the specified Person on the
Calculation Date will be deemed to have been a Restricted Subsidiary of the
specified Person at all times during such four-quarter period;

(6) any Person that is not a Restricted Subsidiary of the specified Person on
the Calculation Date will be deemed not to have been a Restricted Subsidiary of
the specified Person at any time during such four-quarter period;

(7) if any Indebtedness bears a floating rate of interest, the interest expense
on such Indebtedness will be calculated as if the average rate in effect from
the beginning of the applicable period to the Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging
Obligation applicable to such Indebtedness, but if such Hedging Obligation has a
remaining term as at the Calculation Date of less than 12 months, then such
Hedging Obligation shall only be taken into account for that portion of the
period equal to the remaining term thereof); and

(8) if any Indebtedness is incurred under a revolving credit facility and is
being given pro forma effect, the interest on such Indebtedness shall be
calculated based on the average daily balance of such Indebtedness for the four
fiscal quarters subject to the pro forma calculation.

“Fixed Charges” means, with respect to any specified Person for any period,
(A) the sum, without duplication, of:

(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, any
interest, premiums, fees, discounts, expenses and losses on the sale of accounts
receivable (and any amortization thereof) payable by Targa Resources Partners or
any Restricted Subsidiary in connection with a Permitted Receivables Financing,
and any yield or other charges or other amounts comparable to, or in the nature
of, interest payable by Targa Resources Partners or any Restricted Subsidiary
under any Permitted Receivables Financing, but excluding (a) amortization of
deferred financing charges incurred in respect of the notes and the Credit
Agreement on or prior to the date of this Indenture and (b) the write off of any
deferred financing fees or debt discount, and net of the effect of all payments
made or received pursuant to Hedging Obligations in respect of interest rates;
plus

(2) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus

 

12

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

(3) any interest expense respecting Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus

(4) all dividends, whether paid or accrued and whether or not in cash, on any
series of Disqualified Equity of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of Targa Resources Partners (other than Disqualified Equity) or to
Targa Resources Partners or a Restricted Subsidiary of Targa Resources Partners;
minus

(B) to the extent included in (A) above, write-offs of deferred financing costs
of such Person and its Restricted Subsidiaries during such period and any charge
related to, or any premium or penalty paid in connection with, paying any such
Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated
Maturity.

“Foreign Subsidiary” means any Restricted Subsidiary of Targa Resources Partners
(i) that is not a Domestic Subsidiary and (ii) that has 50% or more of its
consolidated assets located outside the United States or any territory thereof.

“GAAP” means generally accepted accounting principles in the United States,
which are in effect from time to time.

“General Partner” means Targa Resources GP LLC, a Delaware limited liability
company, and its successors and permitted assigns as general partner of Targa
Resources Partners or as the business entity with the ultimate authority to
manage the business and operations of Targa Resources Partners.

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof,
which is required to be placed on all Global Notes issued under this Indenture.

“Global Notes” means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes registered in the name of the
Depositary or its nominee, deposited with the Custodian, substantially in the
form of Exhibit A-1 hereto, in the case of the 2025 Notes, or Exhibit A-2
hereto, in the case of the 2027 Notes, that bears the Global Note Legend and
that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Section 2.01 or 2.06 hereof.

“Government Securities” means direct obligations of, or obligations guaranteed
by, the United States of America for the payment of which guarantee or
obligations the full faith and credit of the United States of America is
pledged.

“Guarantee” means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness.

“Guarantors” means each of:

(1) the Subsidiaries of Targa Resources Partners, other than Finance Corp.,
executing this Indenture as initial Guarantors; and

 

13

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

(2) any other Subsidiary of Targa Resources Partners that becomes a Guarantor in
accordance with the provisions of this Indenture,

and their respective successors and assigns, in each case, until the Note
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.

“Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person incurred in the ordinary course of business and not
for speculative purposes under:

(1) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements entered into with one or more financial institutions and designed to
reduce costs of borrowing or to protect the Person or any of its Restricted
Subsidiaries entering into the agreement against fluctuations in interest rates
with respect to Indebtedness incurred;

(2) other agreements or arrangements designed to manage interest rates or
interest rate risk;

(3) foreign exchange contracts and currency protection agreements entered into
with one of more financial institutions and designed to protect the Person or
any of its Restricted Subsidiaries entering into the agreement against
fluctuations in currency exchange rates with respect to Indebtedness incurred;

(4) any commodity futures contract, commodity option, commodity swap agreement
or other similar agreement or arrangement designed to protect against
fluctuations in the price of Hydrocarbons used, produced, processed or sold by
that Person or any of its Restricted Subsidiaries at the time; and

(5) other agreements or arrangements designed to protect such Person or any of
its Restricted Subsidiaries against fluctuations in currency exchange rates or
commodity prices.

“Holder” means a Person in whose name a Note is registered.

“Hydrocarbons” means crude oil, natural gas, natural gas liquids, casinghead
gas, drip gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all constituents, elements or compounds thereof and products
refined or processed therefrom.

“Indebtedness” means, with respect to any specified Person, any indebtedness of
such Person, whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);

(3) in respect of bankers’ acceptances;

(4) representing Capital Lease Obligations or Attributable Debt in respect of
sale and leaseback transactions;

(5) representing a Permitted Receivables Financing of such Person;

 

14

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

(6) representing the balance deferred and unpaid of the purchase price of any
property or services due more than six months after such property is acquired or
such services are completed; or

(7) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term “Indebtedness” includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.

Notwithstanding the foregoing, the following shall not constitute
“Indebtedness”:

(1) accrued expenses and trade accounts payable arising in the ordinary course
of business;

(2) any obligation of such Person or any of its Restricted Subsidiaries in
respect of bid, performance, surety and similar bonds issued for the account of
such Person and any of its Restricted Subsidiaries in the ordinary course of
business, including Guarantees and obligations of such Person or any of its
Restricted Subsidiaries with respect to letters of credit supporting such
obligations (in each case other than an obligation for money borrowed);

(3) any Indebtedness that has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or Government Securities (in an amount
sufficient to satisfy all such Indebtedness at fixed maturity or redemption, as
applicable, and all payments of interest and premium, if any) in a trust or
account created or pledged for the sole benefit of the holders of such
Indebtedness and subject to no other Liens, and the other applicable terms of
the instrument governing such Indebtedness;

(4) any obligation arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business; provided, however, that such
obligation is extinguished within five Business Days of its incurrence; and

(5) any obligation arising from any agreement providing for indemnities,
guarantees, purchase price adjustments, holdbacks, contingency payment
obligations based on the performance of the acquired or disposed assets or
similar obligations (other than Guarantees of Indebtedness) incurred by any
Person in connection with the acquisition or disposition of assets.

The term “Indebtedness” also excludes any repayment or reimbursement obligation
of such Person or any of its Restricted Subsidiaries with respect to Customary
Recourse Exceptions, unless and until an event or circumstance occurs that
triggers the Person’s or such Restricted Subsidiary’s direct repayment or
reimbursement obligation (as opposed to contingent or performance obligations)
to the lender or other Person to whom such obligation is actually owed, in which
case the amount of such direct payment or reimbursement obligation shall
constitute Indebtedness.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Initial 2025 Notes” means the first $500,000,000 aggregate principal amount of
2025 Notes issued under this Indenture on the date hereof.

 

15

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

“Initial 2027 Notes” means the first $500,000,000 aggregate principal amount of
2027 Notes issued under this Indenture on the date hereof.

“Initial Purchasers” means, (i) with respect to the Initial 2025 Notes, Wells
Fargo Securities, LLC, Citigroup Global Markets Inc., Barclays Capital Inc., RBC
Capital Markets, LLC, BBVA Securities Inc., PNC Capital Markets LLC, MUFG
Securities Americas Inc., SMBC Nikko Securities America Inc., SunTrust Robinson
Humphrey, Inc., TD Securities (USA) LLC, BNP Paribas Securities Corp., Citizens
Capital Markets, Inc., and Scotia Capital (USA) Inc., (ii) with respect to the
Initial 2027 Notes, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Deutsche Bank Securities Inc., Capital One Securities, Inc.,
Goldman, Sachs & Co., J.P. Morgan Securities LLC, ABN AMRO Securities (USA) LLC,
Credit Suisse Securities (USA) LLC, ING Financial Markets LLC, Morgan Stanley &
Co. LLC, BB&T Capital Markets, a division of BB&T Securities, LLC, The
Huntington Investment Company, and U.S. Bancorp Investments, Inc. and (iii) with
respect to any Additional Notes of either series, the initial purchasers
thereof.

“Institutional Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, who is not also a QIB.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s or BBB- (or the equivalent) by S&P.

“Investments” means, with respect to any Person, (a) all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding (1) commission, travel and similar advances to officers
and employees made in the ordinary course of business and (2) advances to
customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender) and (b) purchases or other
acquisitions of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If Targa Resources Partners or any Restricted
Subsidiary of Targa Resources Partners sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of Targa Resources
Partners such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of Targa Resources Partners, Targa
Resources Partners will be deemed to have made an Investment on the date of any
such sale or disposition equal to the Fair Market Value of Targa Resources
Partners’ Investments in such Restricted Subsidiary that were not sold or
disposed of in an amount determined as provided in Section 4.07(c) hereof.

“Issuers” has the meaning given to it in the preamble of this Indenture.

“Joint Venture” means (i) any Person that is not a direct or indirect Subsidiary
of Targa Resources Partners in which Targa Resources Partners or any of its
Restricted Subsidiaries makes any Investment (provided that, for purposes of the
proviso to clause (1) of the definition of “Consolidated Net Income,” Targa
Resources Partners and its Restricted Subsidiaries own at least 20% of the
Equity Interests of such Person on a fully diluted basis or control the
management of such Person pursuant to a contractual agreement) or (ii) an
Unrestricted Subsidiary of Targa Resources Partners that (a) has no Indebtedness
and (b) was an Affiliate of Targa Resources Partners as of the date of this
Indenture.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of Houston, the City of New York or at a place of
payment are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.

 

16

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

“Letter of Transmittal” means the letter of transmittal to be prepared by the
Issuers and sent to all Holders of the Notes for use by such Holders in
connection with an Exchange Offer.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction other than a
precautionary financing statement respecting a lease not intended as a security
agreement. In no event shall a right of first refusal be deemed to constitute a
Lien.

“Liquidated Damages” means all liquidated damages then owing pursuant to a
Registration Rights Agreement.

“Moody’s” means Moody’s Investors Service, Inc., or any successor to the rating
agency business thereof.

“Net Income” means, with respect to any specified Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:

(1) any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with:

(a) any Asset Sale; or

(b) the disposition of any securities by such Person or the extinguishment of
any Indebtedness of such Person; and

(2) any extraordinary gain (but not loss), together with any related provision
for taxes on such extraordinary gain (but not loss).

“Net Proceeds” means the aggregate cash proceeds received by Targa Resources
Partners or any of its Restricted Subsidiaries in respect of any Asset Sale
(including any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:

(1) the direct costs relating to such Asset Sale, including legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale,

(2) taxes paid or payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements,

(3) amounts required to be applied to the repayment of Indebtedness, other than
revolving credit Indebtedness except to the extent resulting in a permanent
reduction in availability of such Indebtedness under a Credit Facility, secured
by a Lien on the properties or assets that were the subject of such Asset Sale
and all distributions and payments required to be made to minority interest
holders in Restricted Subsidiaries as a result of such Asset Sale, and

(4) any amounts to be set aside in any reserve established in accordance with
GAAP or any amount placed in escrow, in either case for adjustment in respect of
the sale price of such properties or assets or for liabilities associated with
such Asset Sale and retained by Targa

 

17

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

Resources Partners or any of its Restricted Subsidiaries until such time as such
reserve is reversed or such escrow arrangement is terminated, in which case Net
Proceeds shall include only the amount of the reserve so reversed or the amount
returned to Targa Resources Partners or its Restricted Subsidiaries from such
escrow arrangement, as the case may be.

“Non-Recourse Debt” means Indebtedness:

(1) as to which neither Targa Resources Partners nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), except for
Customary Recourse Exceptions, (b) is directly or indirectly liable as a
guarantor or otherwise or (c) is the lender;

(2) no default with respect to which (including any rights that the holders of
the Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness (except the Notes) of Targa Resources Partners or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment of the Indebtedness to be accelerated or payable prior to its Stated
Maturity; and

(3) as to which the lenders have been notified in writing that they will not
have any recourse to the Equity Interests or assets of Targa Resources Partners
or any of its Restricted Subsidiaries except (a) as contemplated by clause
(10) of the definition of Permitted Liens and (b) Customary Recourse Exceptions.

For purposes of determining compliance with Section 4.09 hereof, if any
Non-Recourse Debt of any of Targa Resources Partners’ Unrestricted Subsidiaries
ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event will
be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary
of Targa Resources Partners.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Note Guarantee” means the Guarantee by each Guarantor of the Issuers’
obligations under this Indenture and the Notes, pursuant to the provisions of
this Indenture.

“Notes” means any 2025 Notes and 2027 Notes issued hereunder.

“Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.

“Offering Memorandum” means the final Offering Memorandum of the Issuers, dated
September 22, 2016, with respect to the Initial 2025 Notes and Initial 2027
Notes offered thereunder to the Initial Purchasers.

“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the President – Finance and
Administration, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person (or, if such Person is a limited partnership, the
general partner of such Person, except it shall be the General Partner in the
case of Targa Resources Partners).

“Officers’ Certificate” means, with respect to any Person, a certificate signed
on behalf of such Person by any two of its Officers, one of whom must be the
principal executive officer, the principal financial officer or the principal
accounting officer of such Person that meets the requirements of Section 12.05
hereof.

 

18

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

“OID Legend” means the legend set forth in Section 2.06(g)(3) hereof to be
placed on all Notes issued under this Indenture that have more than a de minimis
amount of original issue discount for U.S. Federal income tax purposes.

“Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to Targa Resources Partners, the
General Partner, any Subsidiary of Targa Resources Partners or the General
Partner or the Trustee.

“Opinion of Outside Counsel” means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Section 12.05 hereof. The counsel may be an employee of or counsel to the
Trustee but not an employee of an Issuer or an Affiliate thereof.

“Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of Targa Resources Partners LP, dated as of October 15,
2015, as amended, modified or supplemented from time to time.

“Permitted Business” means either (1) gathering, transporting, treating,
processing, fractionating, marketing, distributing, storing or otherwise
handling Hydrocarbons, or activities or services reasonably related or ancillary
thereto including entering into Hedging Obligations to support these businesses,
or (2) any other business that generates gross income that constitutes
“qualifying income” under Section 7704(d) of the Internal Revenue Code of 1986,
as amended.

“Permitted Business Investments” means Investments by Targa Resources Partners
or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of Targa
Resources Partners or in any Joint Venture, provided that:

(1) either (a) at the time of such Investment and immediately thereafter, Targa
Resources Partners could incur $1.00 of additional Indebtedness under the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (b) such
Investment does not exceed the aggregate amount of Incremental Funds (as defined
in Section 4.07 hereof) not previously expended at the time of making such
Investment;

(2) if such Unrestricted Subsidiary or Joint Venture has outstanding
Indebtedness at the time of such Investment, either (a) all such Indebtedness is
Non-Recourse Debt or (b) any such Indebtedness of such Unrestricted Subsidiary
or Joint Venture that is recourse to Targa Resources Partners or any of its
Restricted Subsidiaries (which shall include all Indebtedness of such
Unrestricted Subsidiary or Joint Venture for which Targa Resources Partners or
any of its Restricted Subsidiaries may be directly or indirectly, contingently
or otherwise, obligated to pay, whether pursuant to the terms of such
Indebtedness, by law or pursuant to any guarantee, including any “claw-back,”
“make-well” or “keep-well” arrangement) could, at the time such Investment is
made, be incurred at that time by Targa Resources Partners and its Restricted
Subsidiaries under the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof; and

(3) such Unrestricted Subsidiary’s or Joint Venture’s activities are not outside
the scope of the Permitted Business.

 

19

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

“Permitted Investments” means:

(1) any Investment in Targa Resources Partners or in a Restricted Subsidiary of
Targa Resources Partners (including through purchases of the Notes or other
Senior Indebtedness);

(2) any Investment in Cash Equivalents;

(3) any Investment by Targa Resources Partners or any Restricted Subsidiary of
Targa Resources Partners in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of Targa Resources Partners; or

(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its properties or assets to, or is
liquidated into, Targa Resources Partners or a Restricted Subsidiary of Targa
Resources Partners;

(4) any Investment made as a result of the receipt of non-cash consideration:

(a) from an Asset Sale that was made pursuant to and in compliance with
Section 4.10 hereof; or

(b) pursuant to clause (7) of the items deemed not to be Asset Sales under the
definition of “Asset Sale”;

(5) any Investment in any Person solely in exchange for the issuance of Equity
Interests (other than Disqualified Equity) of Targa Resources Partners;

(6) any Investments received in compromise or resolution of (A) obligations of
trade creditors or customers that were incurred in the ordinary course of
business of Targa Resources Partners or any of its Restricted Subsidiaries,
including pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer, or as a result of a
foreclosure by Targa Resources Partners or any of its Restricted Subsidiaries
with respect to any secured Investment in default; or (B) litigation,
arbitration or other disputes with Persons who are not Affiliates;

(7) Investments represented by Hedging Obligations permitted to be incurred;

(8) loans or advances to employees of Targa Resources Partners or any of its
Affiliates made in the ordinary course of business of Targa Resources Partners
or any Restricted Subsidiary of Targa Resources Partners in an aggregate
principal amount not to exceed $2.5 million at any one time outstanding;

(9) any Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility, workers’ compensation and performance and other
similar deposits and prepaid expenses made in the ordinary course of business;

(10) Investments arising as a result of any Permitted Receivables Financing;

 

20

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

(11) Guarantees of Indebtedness of Targa and its Subsidiaries (other than
Unrestricted Subsidiaries of Targa Resources Partners) permitted under
Section 4.09 and performance guarantees (not in respect of Indebtedness) in the
ordinary course of business;

(12) Permitted Business Investments; and

(13) other Investments in any Person having an aggregate Fair Market Value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (13) that are at the time outstanding not to exceed
the greater of (a) $100.0 million and (b) 5.0% of Targa Resources Partners’
Consolidated Net Tangible Assets; provided, however, that if any Investment
pursuant to this clause (13) is made in any Person that is not a Restricted
Subsidiary at the date of the making of such Investment and such Person becomes
a Restricted Subsidiary after such date, such Investment shall thereafter be
deemed to have been made pursuant to clause (1) of this definition and shall
cease to have been made pursuant to this clause (13) for so long as such Persons
continues to be a Restricted Subsidiary.

“Permitted Liens” means:

(1) Liens securing any Indebtedness under any of the Credit Facilities and all
Obligations and Hedging Obligations relating to such Indebtedness;

(2) Liens in favor of Targa Resources Partners or the Guarantors;

(3) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with Targa Resources Partners or any Subsidiary of
Targa Resources Partners; provided that such Liens were in existence prior to
such merger or consolidation and do not extend to any assets other than those of
the Person merged with or into or consolidated with Targa Resources Partners or
the Subsidiary;

(4) Liens on property existing at the time of acquisition of the property by
Targa Resources Partners or any Restricted Subsidiary of Targa Resources
Partners; provided that such Liens were in existence prior to, such acquisition,
and not incurred in contemplation of, such acquisition;

(5) Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business;

(6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted
by clause (4) of Section 4.09(b) hereof covering only the assets acquired with
or financed by such Indebtedness;

(7) Liens existing on the date of this Indenture (other than Liens securing the
Credit Facilities);

(8) Liens created for the benefit of (or to secure) the Notes (or the Note
Guarantees);

(9) Liens on any property or asset acquired, constructed or improved by Targa
Resources Partners or any of its Restricted Subsidiaries, which (a) are in favor
of the seller of such property or asset, in favor of the Person developing,
constructing, repairing or improving such property or asset, or in favor of the
Person that provided the funding for the acquisition,

 

21

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

development, construction, repair or improvement cost, as the case may be, of
such property or asset, (b) are created within 360 days after the acquisition,
development, construction, repair or improvement, (c) secure the purchase price
or development, construction, repair or improvement cost, as the case may be, of
such property or asset in an amount up to 100% of the Fair Market Value of such
acquisition, construction or improvement of such asset or property, and (d) are
limited to the asset or property so acquired, constructed or improved (including
the proceeds thereof, accessions thereto and upgrades thereof);

(10) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
or any Joint Venture owned by Targa Resources Partners or any Restricted
Subsidiary of Targa Resources Partners to the extent securing Non-Recourse Debt
or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;

(11) Liens in favor of collecting or payor banks having a right of setoff,
revocation, refund or chargeback with respect to money or instruments of Targa
Resources Partners or any of its Restricted Subsidiaries on deposit with or in
possession of such bank;

(12) Liens to secure performance of Hedging Obligations of Targa Resources
Partners or any of its Restricted Subsidiaries;

(13) Liens arising under construction contracts, interconnection agreements,
operating agreements, joint venture agreements, partnership agreements, oil and
gas leases, farmout agreements, division orders, contracts for purchase,
gathering, processing, fractionating, sale, transportation or exchange of crude
oil, natural gas liquids, condensate and natural gas, natural gas storage
agreements, unitization and pooling declarations and agreements, area of mutual
interest agreements, real property leases and other agreements arising in the
ordinary course of business of Targa Resources Partners and its Restricted
Subsidiaries that are customary in the Permitted Business;

(14) Liens upon specific items of inventory, receivables or other goods or
proceeds of Targa Resources Partners or any of its Restricted Subsidiaries
securing such Person’s obligations in respect of bankers’ acceptances or
receivables securitizations issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory, receivables or
other goods or proceeds and permitted by Section 4.09;

(15) Liens securing (a) any defeasance trust, provided that such Liens do not
extend to any assets or properties that are not part of such defeasance trust,
or (b) any Indebtedness equally and ratably with all Obligations due under the
Notes or any Note Guarantee pursuant to a contractual covenant that limits Liens
in a manner substantially similar to Section 4.12;

(16) any interest or title of a lessor to any property subject to a Capital
Lease Obligation;

(17) Liens arising in connection with a Permitted Receivables Financing;

(18) Liens incurred in the ordinary course of business of Targa Resources
Partners or any Restricted Subsidiary of Targa Resources Partners; provided,
however, that, after giving effect to any such incurrence, the aggregate
principal amount of all Indebtedness then outstanding and secured by any Liens
pursuant to this clause (18) does not exceed the greater of (a) $100.0 million
and (b) 5.0% of Targa Resources Partners’ Consolidated Net Tangible Assets at
such time; and

 

22

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

(19) any Lien renewing, extending, refinancing or refunding a Lien permitted by
clauses (1) through (18) above; provided that (a) the principal amount of
Indebtedness secured by such Lien does not exceed the principal amount of such
Indebtedness outstanding immediately prior to the renewal, extension, refinance
or refund of such Lien, plus all accrued interest on the Indebtedness secured
thereby and the amount of all fees, expenses and premiums incurred in connection
therewith, and (b) no assets encumbered by any such Lien other than the assets
permitted to be encumbered immediately prior to such renewal, extension,
refinance or refund are encumbered thereby.

“Permitted Receivables Financing” means any receivables financing facility or
arrangement pursuant to which a Securitization Subsidiary purchases or otherwise
acquires Receivables and related assets of Targa Resources Partners or any
Restricted Subsidiary and enters into a third party financing or sale thereof on
terms that the Board of Directors of the General Partner has approved.

“Permitted Refinancing Indebtedness” means any Indebtedness of Targa Resources
Partners or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to renew, refund, refinance, replace, defease or
discharge other Indebtedness of Targa Resources Partners or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1) the principal amount of such Permitted Refinancing Indebtedness does not
exceed the principal amount of the Indebtedness renewed, refunded, refinanced,
replaced, defeased or discharged (plus all accrued interest on the Indebtedness
and the amount of all fees and expenses, including premiums, incurred in
connection therewith);

(2) such Permitted Refinancing Indebtedness has a final maturity date no earlier
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged;

(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased
or discharged is subordinated in right of payment to the Notes or the Note
Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes or the Note Guarantees, on terms at least as favorable to
the Holders of Notes as those contained in the documentation governing the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged; and

(4) such Indebtedness is not incurred by a Restricted Subsidiary of Targa
Resources Partners (other than Finance Corp. or any Guarantor) if Targa
Resources Partners or any Guarantor is the obligor on the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged.

For the avoidance of doubt, any Indebtedness incurred under Credit Facilities
pursuant to Section 4.09 shall be subject only to the refinancing provision in
the definition of Credit Facilities and not pursuant to the requirements set
forth in this definition of Permitted Refinancing Indebtedness.

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

“Private Exchange Notes” means the Notes of either series issued in a Private
Exchange pursuant to Section 2.06(f) hereof.

 

23

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

“Private Exchange” has the meaning set forth in the applicable Registration
Rights Agreement.

“Private Placement Legend” means the legend set forth in Section 2.06(g)(1)(A)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Ratings Categories” means:

(1) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB,
B, CCC, CC, C and D (or equivalent successor categories); and

(2) with respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa,
Ba, B, Caa, Ca, C and D (or equivalent successor categories).

“Ratings Decline” means a decrease in the rating of either series of the Notes
by either Moody’s or S&P by one or more gradations (including gradations within
Rating Categories as well as between Rating Categories). In determining whether
the rating of either series of the Notes has decreased by one or more
gradations, gradations within Ratings Categories, namely + or - for S&P, and 1,
2, and 3 for Moody’s, will be taken into account; for example, in the case of
S&P, a ratings decline either from BB+ to BB or BB to BB- will constitute a
decrease of one gradation.

“Receivables” means accounts receivable (including all rights to payment created
by or arising from the sale of goods, leases of goods or the rendition of
services, no matter how evidenced (including in the form of a chattel paper).

“Reporting Default” means a Default described in clause (4) under Section 6.01.

“Registration Rights Agreement” means (i) with respect to the Initial 2025
Notes, the Registration Rights Agreement, dated as of October 6, 2016, among the
Issuers, the Guarantors and the applicable Initial Purchasers, (ii) with respect
to the Initial 2027 Notes, the Registration Rights Agreement, dated as of
October 6, 2016, among the Issuers, the Guarantors and the applicable Initial
Purchasers and (iii) with respect to any Additional Notes of either series, the
comparable agreement, in each case as such agreement may be amended, modified or
supplemented from time to time.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Global Note substantially in the form of
Exhibit A-1 hereto, in the case of the 2025 Notes, or Exhibit A-2 hereto, in the
case of the 2027 Notes, bearing the Global Note Legend, the Private Placement
Legend and OID Legend, if applicable, deposited with the Custodian and
registered in the name of the Depositary or its nominee, and issued in a
denomination equal to the outstanding principal amount of the Notes of the
applicable series sold or issued in reliance on Rule 903 of Regulation S.

“Responsible Officer” when used with respect to the Trustee, means any officer
within the Corporate Trust Administration of the Trustee (or any successor group
of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

 

24

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

“Restricted Definitive Note” means a Definitive Note that is a Restricted Note.

“Restricted Global Note” means a Global Note that is a Restricted Note.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Note” has the meaning set forth in Rule 144(a)(3) under the
Securities Act for the term “restricted securities”; provided, however, that the
Trustee shall be entitled to request and conclusively rely upon an Opinion of
Outside Counsel with respect to whether any Note is a Restricted Note.
Restricted Notes are required to bear the Private Placement Legend.

“Restricted Period” means the 40-day distribution compliance period as defined
in Regulation S.

“Restricted Subsidiary” of a Person means any Subsidiary of the specified Person
that is not an Unrestricted Subsidiary. Notwithstanding anything in this
Indenture to the contrary, Finance Corp. shall be a Restricted Subsidiary of
Targa Resources Partners.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 903” means Rule 903 promulgated under the Securities Act.

“Rule 904” means Rule 904 promulgated under the Securities Act.

“S&P” means S&P Global Ratings, a division of S&P Global Inc., or any successor
to the rating agency business thereof.

“SEC” means the Securities and Exchange Commission.

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

“Securitization Subsidiary” means Targa Receivables LLC and any other
Unrestricted Subsidiary of Targa Resources Partners that

(1) is designated a “Securitization Subsidiary” by Targa Resources Partners and

(2) does not engage in any activities other than Permitted Receivables
Financings and any activity necessary, incidental or related thereto.

“Senior Indebtedness” means with respect to any Person, Indebtedness of such
Person, unless the instrument creating or evidencing such Indebtedness provides
that such Indebtedness is subordinate in right of payment to the Notes or the
Note Guarantee of such Person, as the case may be.

“Shelf Registration Statement” means a registration statement effecting a Shelf
Registration as defined in the applicable initial Registration Rights Agreement.

“Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.

 

25

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

“Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity (other than a
partnership or limited liability company) of which more than 50% of the total
voting power of the Voting Stock is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and

(2) any partnership (whether general or limited) or limited liability company
(a) the sole general partner or member of which is such Person or a Subsidiary
of such Person, or (b) if there is more than a single general partner or member,
either (x) the only managing general partners or managing members of which are
such Person or one or more Subsidiaries of such Person (or any combination
thereof) or (y) such Person owns or controls, directly or indirectly, a majority
of the outstanding general partner interests, member interests or other Voting
Stock of such partnership or limited liability company, respectively.

“Targa” means Targa Resources Corp., a Delaware corporation.

“Targa Resources Partners” has the meaning given to it in the preamble of this
Indenture and includes any successor thereof.

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§
77aaa-77bbbb).

“Treasury Rate” means, with respect to any Redemption Date, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to such time (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to February 1, 2020 with respect to
the 2025 Notes, or from the Redemption Date to February 1, 2022 with respect to
the 2027 Notes; provided, however, that if such period is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, Targa Resources Partners shall obtain the Treasury Rate
by linear interpolation (calculated to the nearest one twelfth of a year) from
the weekly average yields of United States Treasury securities for which such
yields are given, except that if the period from the Redemption Date to
February 1, 2020 with respect to the 2025 Notes, or from the Redemption Date to
February 1, 2022 with respect to the 2027 Notes, is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year will be used. Targa Resources
Partners will (a) calculate the Treasury Rate no later than the second Business
Day (and no earlier than the fourth Business Day) preceding the applicable
Redemption Date (or, in the case of any redemption in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture, on
the Business Day preceding such event) and (b) prior to such Redemption Date
file with the Trustee a statement setting forth the Applicable Premium and the
Treasury Rate and showing the calculation of each in reasonable detail.

“Trustee” means U.S. Bank National Association, until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.

 

26

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

“Unrestricted Definitive Note” means a Definitive Note of either series that is
an Unrestricted Note.

“Unrestricted Global Note” means a Global Note that is an Unrestricted Note.

“Unrestricted Notes” means one or more Notes of either series that do not and
are not required to bear the Private Placement Legend including, without
limitation, the Exchange Notes, any Notes sold in connection with an effective
Shelf Registration Statement pursuant to the applicable Registration Rights
Agreement, any Notes from which the Private Placement Legend has been removed in
accordance with Section 2.06(g) and, with respect to Unrestricted Global Notes,
Notes in which a Holder acquires an interest pursuant to Section 2.06(j).

“Unrestricted Subsidiary” means any of (i) Cedar Bayou Fractionators, L.P.,
DEVCO Holdings LLC, Downstream Energy Ventures Co., L.L.C., Targa Receivables
LLC, Venice Energy Services Company, L.L.C., Venice Gathering System, L.L.C. and
Versado Gas Processors, L.L.C., (ii) Targa Pipeline Partners GP, LLC and Targa
Pipeline Partners LP and its Subsidiaries and (iii) any Subsidiary of Targa
Resources Partners (other than Finance Corp. or any successor to it) that is
designated by the Board of Directors of the General Partner as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:

(1) except to the extent permitted by subclause (2)(b) of the definition of
“Permitted Business Investments,” has no Indebtedness other than Non-Recourse
Debt;

(2) except as permitted under Section 4.11 hereof, is not party to any
agreement, contract, arrangement or understanding with Targa Resources Partners
or any Restricted Subsidiary of Targa Resources Partners unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
Targa Resources Partners or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of Targa Resources
Partners; and

(3) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of Targa Resources Partners or any of its
Restricted Subsidiaries.

All Subsidiaries of an Unrestricted Subsidiary shall be also Unrestricted
Subsidiaries.

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under
the Securities Act.

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person that is at the time entitled (without regard to the occurrence of
any contingency) to vote in the election of the Board of Directors of such
Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

 

27

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

Section 1.02 Other Definitions.

 

Term

   Defined in Section “act”    12.15 “Affiliate Transaction”    4.11 “Asset Sale
Offer”    3.09 “Authentication Order”    2.02 “Change of Control Offer”    4.15
“Change of Control Payment”    4.15 “Change of Control Payment Date”    4.15
“Covenant Defeasance”    8.03 “DTC”    2.03 “Event of Default”    6.01 “Excess
Proceeds”    4.10 “Incremental Funds”    4.07 “incur”    4.09 “Legal Defeasance”
   8.02 “Offer Amount”    3.09 “Offer Period”    3.09 “Paying Agent”    2.03
“Permitted Debt”    4.09 “Payment Default”    6.01 “Purchase Date”    3.09
“Redemption Date”    3.07 “Registrar”    2.03 “Restricted Payments”    4.07
“Resale Restriction Termination Date”    2.06

Section 1.03 Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes and the Note Guarantees;

“indenture security holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Note Guarantees means the Issuers and the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.

 

28

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

Section 1.04 Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

(3) “or” is not exclusive;

(4) words in the singular include the plural, and in the plural include the
singular;

(5) both “shall” and “will” shall be interpreted to express a command, and no
distinction of meaning is intended between these two words;

(6) provisions apply to successive events and transactions; and

(7) references to sections of or rules under the Securities Act or Exchange Act
will be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.

ARTICLE 2

THE NOTES

Section 2.01 Form and Dating.

(a) General. The Notes and the Trustee’s certificate of authentication will be
substantially in the form of Exhibit A-1 hereto, in the case of the 2025 Notes,
or Exhibit A-2 hereto, in the case of the 2027 Notes. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in minimum denominations of $2,000 and integral multiples of $1,000 in excess
thereof.

The terms and provisions contained in the Notes will constitute, and are hereby
expressly made, a part of this Indenture and the Issuers, the Guarantor and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.

(b) Global Notes. Notes of either series offered and sold in reliance on Rule
144A shall be issued initially in the form of one or more Rule 144A Global
Notes, and any Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of one or more Regulation S Global Notes. Notes in
global form will be substantially in the form of Exhibit A-1 hereto, in the case
of the 2025 Notes, or Exhibit A-2 hereto, in the case of the 2027 Notes (in each
case, including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Each Global Note of either
series will represent such of the outstanding Notes of the applicable series as
will be specified therein and each shall provide that it represents the
aggregate principal amount of outstanding Notes of such series from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes of
such series represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges and redemptions. Any endorsement of a
Global Note of either series to reflect the amount of any increase or decrease
in the aggregate principal amount of outstanding Notes of such series
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.

 

29

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

(c) Definitive Notes. Notes initially issued to or transferred to affiliates (as
defined in Rule 144) of the Issuers shall only be issued in definitive form. All
Definitive Notes will be substantially in the form of Exhibit A-1 hereto, in the
case of the 2025 Notes, or Exhibit A-2 hereto, in the case of the 2027 Notes (in
each case without the Global Note Legend thereon and without the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Unless and until
exchanged for an Exchange Note or sold in connection with an effective Shelf
Registration Statement pursuant to the applicable Registration Rights Agreement,
affiliates of the Issuers may hold an interest in Notes of either series only in
the form of Definitive Notes and are prohibited from taking a beneficial
interest in one or more Global Notes. Notwithstanding any other provision of
this Article 2, any issuance of Definitive Notes shall be at the Issuers’
discretion, except in the circumstances set forth in this Section 2.01(c) and in
Section 2.06.

Section 2.02 Execution and Authentication.

At least one Officer must sign the Notes for each of the Issuers by manual or
facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the
time a Note is authenticated, the Note will nevertheless be valid.

A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.

The Trustee will, upon receipt of a written order of the Issuers signed by two
Officers of each Issuer (an “Authentication Order”), authenticate Notes of
either series for original issue that may be validly issued under this
Indenture, including any Additional Notes and Exchange Notes of either series.
The aggregate principal amount of Notes of either series outstanding at any time
may not exceed the aggregate principal amount of Notes of such series authorized
for issuance by the Issuers pursuant to one or more Authentication Orders,
except as provided in Section 2.07 hereof.

The Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Notes of either series. An authenticating agent may authenticate
Notes of either series whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Issuers.

Section 2.03 Registrar and Paying Agent.

The Issuers will maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”) and an office or agency
in New York, New York where Notes of each series may be presented for payment
(“Paying Agent”). The Registrar will keep a register of the Notes of each series
and of their transfer and exchange. The Issuers may appoint one or more
co-registrars and one or more additional paying agents. The term “Registrar”
includes any co-registrar and the term “Paying Agent” includes any additional
paying agent. The Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Issuers will notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. Targa Resources Partners, Finance Corp. or any of Targa
Resources Partners’ other Subsidiaries may act as Paying Agent or Registrar.

 

30

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

The Issuers initially appoint The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes.

The Issuers initially appoint the Trustee to act as the Registrar and Paying
Agent at the Corporate Trust Office of the Trustee and to act as Custodian with
respect to the Global Notes.

Section 2.04 Paying Agent to Hold Money in Trust.

The Issuers will require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders of
the applicable series of Notes or the Trustee all money held by the Paying Agent
for the payment of principal, premium or Liquidated Damages, if any, or interest
on the Notes of such series, and will notify the Trustee of any default by the
Issuers in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee,
the Issuers at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than Targa Resources Partners or a Subsidiary) will have no further liability
for the money. If Targa Resources Partners or a Subsidiary acts as Paying Agent,
it will segregate and hold in a separate trust fund for the benefit of the
Holders of the applicable series of Notes all money held by it as Paying Agent.
Upon any bankruptcy or reorganization proceedings relating to Targa Resources
Partners, the Trustee will serve as Paying Agent for the Notes of each series.

Section 2.05 Holder Lists.

The Trustee will preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of all Holders of
each series of Notes and shall otherwise comply with TIA § 312(a). If the
Trustee is not the Registrar for a series of Notes, the Issuers will furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of such series of Notes and the Issuers shall otherwise
comply with TIA § 312(a).

Section 2.06 Transfer and Exchange.

(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the Depositary or to another nominee of the Depositary, or
by the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary. All Global Notes of either series will be exchanged
by the Issuers for Definitive Notes of the same series in minimum denominations
of $2,000 and integral multiples of $1,000 in excess thereof if:

(1) the Issuers deliver to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Issuers within 90 days after the
date of such notice from the Depositary;

(2) the Issuers, at their option but subject to the requirements of the
Depositary, notify the Trustee in writing that they elect to cause the issuance
of Definitive Notes of such series; or

 

31

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

(3) there has occurred and is continuing an Event of Default with respect to
such series of Notes and the Depositary notifies the Trustee of its decision to
exchange the Global Notes for Definitive Notes of such series.

Upon the occurrence of any of the preceding events in (1), (2) or (3) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs of this Section 2.06, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend. Beneficial interests in any Unrestricted Global Note
of either series may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note of the same series.
No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.
In connection with all transfers and exchanges of beneficial interests that are
not subject to Section 2.06(b)(1) above, the transferor of such beneficial
interest must deliver to the Registrar either:

(A) both:

(i) a written order from a participant or an indirect participant in the
Depositary given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a beneficial interest
in another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged; and

(ii) instructions given in accordance with the Applicable Procedures containing
information regarding the participant account to be credited with such increase;
or

(B) both:

(i) a written order from a participant or an indirect participant in the
Depositary given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged; and

 

32

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

(ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (i) above.

Upon consummation of an Exchange Offer with respect to either series of Notes,
if any, by the Issuers in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied
upon receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes of such series. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes of such series or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(3) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note of either series may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Note of the same series if the transfer
complies with the requirements of Section 2.06(b)(2) above and the Registrar
receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in
the 144A Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in
the Regulation S Global Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (2) thereof,
and if such transfer occurs prior to the expiration of the Restricted Period,
then the transferee must hold such beneficial interest through either
Clearstream or Euroclear (as indirect participants in the Depositary).

(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note
for Beneficial Interests in an Unrestricted Global Note. A beneficial interest
in any Restricted Global Note of either series may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note of the same
series or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in such an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:

(A) such exchange or transfer is effected pursuant to an Exchange Offer for such
series in accordance with the related Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal (or via the Depositary’s book-entry system) that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the
Issuers;

(B) such transfer is effected pursuant to a Shelf Registration Statement in
accordance with the related Registration Rights Agreement;

 

33

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

(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the related Registration Rights
Agreement; or

(D) the Registrar receives the following:

(i) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(a) thereof; or

(ii) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Outside
Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note of the applicable series has not yet been
issued, the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note of
either series proposes to exchange such beneficial interest for a Restricted
Definitive Note of the same series or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of such a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note,
a certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with
Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

34

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

(D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion of Counsel
required by item (3)(d) thereof, if applicable;

(F) if such beneficial interest is being transferred to Targa Resources Partners
or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or

(G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.

(2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note of either
series may exchange such beneficial interest for an Unrestricted Definitive Note
of the same series or may transfer such beneficial interest to a Person who
takes delivery thereof in the form of such an Unrestricted Definitive Note only
if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer for such
series in accordance with the related Registration Rights Agreement and the
holder of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal (or via the Depositary’s book-entry system) that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the
Issuers;

(B) such transfer is effected pursuant to a Shelf Registration Statement in
accordance with the related Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the related Registration Rights
Agreement; or

(D) the Registrar receives the following:

(i) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for an Unrestricted Definitive
Note, a certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (l)(b) thereof; or

 

35

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

(ii) if the holder of such beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any holder of a beneficial interest in an Unrestricted Global Note of
either series proposes to exchange such beneficial interest for a Definitive
Note of the same series or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of such a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the
Trustee will cause the aggregate principal amount of the applicable Global Note
to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers
will execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(3) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from or
through the Depositary and its participant or indirect participant. The Trustee
will deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global
Notes. If any Holder of a Restricted Definitive Note of either series proposes
to exchange such Note for a beneficial interest in a Restricted Global Note of
the same series or to transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in such a Restricted
Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof; or

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(2) thereof,

the Trustee shall cancel the Restricted Definitive Note, the Registrar shall
increase or cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the case of
clause (B) above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.

 

36

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

(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of a Restricted Definitive Note of either series may exchange
such Note for a beneficial interest in an Unrestricted Global Note of the same
series or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in such an Unrestricted
Global Note only if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer for such
series in accordance with applicable Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal (or via the
Depositary’s book-entry system) that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who is
an affiliate (as defined in Rule 144) of the Issuers;

(B) such transfer is effected pursuant to a Shelf Registration Statement in
accordance with the applicable Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer
Registration Statement in accordance with the applicable Registration Rights
Agreement; or

(D) the Registrar receives the following:

(i) if the Holder of such Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or

(ii) if the Holder of such Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Outside
Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(2), the Trustee shall cancel the Definitive Notes and the
Registrar shall increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.

(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of an Unrestricted Definitive Note of either series may exchange
such Note for a beneficial interest in an Unrestricted Global Note of the same
series or transfer such Definitive Note to a Person who takes delivery thereof
in the form of a beneficial interest in such an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and the Registrar shall
increase or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraph (2)(B), (2)(D) or (3) above at a time when
an Unrestricted Global Note of the

 

37

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

applicable series has not yet been issued, the Issuers shall issue and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request
by a Holder of Definitive Notes and such Holder’s compliance with the provisions
of this Section 2.06(e), the Registrar will register the transfer or exchange of
such Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder must present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. In addition, the requesting Holder must provide any
additional certifications, documents and information, as applicable, required
pursuant to the following provisions of this Section 2.06(e).

(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note of either series may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted Definitive
Note of the same series if the Registrar receives the following:

(A) if the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 904, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and

(C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.

(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note of either series may be exchanged by the Holder thereof for an
Unrestricted Definitive Note of the same series or transferred to a Person or
Persons who take delivery thereof in the form of such an Unrestricted Definitive
Note if:

(A) such exchange or transfer is effected pursuant to an Exchange Offer in for
such series accordance with the related Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal (or via the
Depositary’s book-entry system) that it is not (i) a Broker-Dealer, (ii) a
Person participating in the distribution of the Exchange Notes or (iii) a Person
who is an affiliate (as defined in Rule 144) of the Issuers;

(B) any such transfer is effected pursuant to a Shelf Registration Statement in
accordance with the related Registration Rights Agreement;

(C) any such transfer is effected by a Broker-Dealer pursuant to an Exchange
Offer Registration Statement in accordance with the related Registration Rights
Agreement; or

 

38

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

(D) the Registrar receives the following:

(i) if the Holder of such Restricted Definitive Notes proposes to exchange such
Notes for an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item (1)(d) thereof;
or

(ii) if the Holder of such Restricted Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Outside Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance
with the Securities Act.

(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes of either series may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive Note
of the same series. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.

(f) Exchange Offer; Private Exchange Offer.

(1) Upon the occurrence of an Exchange Offer with respect to either series of
the Notes, if any, in accordance with the related Registration Rights Agreement,
the Issuers will issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee will authenticate:

(A) one or more Unrestricted Global Notes of such series in an aggregate
principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal (or via the
Depositary’s book-entry system) that (I) they are not Broker-Dealers, (II) they
are not participating in a distribution of the Exchange Notes and (III) they are
not affiliates (as defined in Rule 144) of the Issuers; and

(B) Unrestricted Definitive Notes of such series in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer by Persons that certify in the applicable
Letters of Transmittal that (or via the Depositary’s book-entry system) (I) they
are not Broker-Dealers, (II) they are not participating in a distribution of the
Exchange Notes and (III) they are not affiliates (as defined in Rule 144) of the
Issuers.

Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Issuers will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.

(2) If, prior to consummation of an Exchange Offer with respect to either series
of Notes, any Initial Purchaser holds Notes of such series acquired by it as
part of the initial distribution thereof, the Issuers, upon written request of
such Initial Purchaser, simultaneously with the delivery of the Exchange Notes
pursuant to the Exchange Offer, shall issue and deliver to such Initial
Purchaser and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall

 

39

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

authenticate, one or more Restricted Definitive Notes of such series
representing Private Exchange Securities in a Private Exchange for the Notes
held by such Initial Purchaser, in an aggregate principal amount equal to the
Notes so exchanged by such Initial Purchaser in the Private Exchange. The
Private Exchange Notes shall bear the same CUSIP thereafter as such Exchange
Notes if permitted by the CUSIP Service Bureau.

(g) Legends. The following legends will appear on the face of all Global Notes
and Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.

(1) Private Placement Legend.

(A) Unless and until (w) a Note is exchanged for an Exchange Note or sold in
connection with an effective Shelf Registration Statement pursuant to the
applicable Registration Rights Agreement, (x) with respect to a Restricted
Global Note, all of the beneficial interests in such Restricted Global Note have
been exchanged for beneficial interests in the Unrestricted Global Note in
accordance with Section 2.06(j), (y) with respect to any Restricted Note, the
Private Placement Legend has been removed from such Restricted Note in
accordance with Section 2.06(b)(4), 2.06(c)(2), 2.06(d)(2) or 2.06(e)(2), or
(z) Targa Resources Partners determines and there is delivered to the Trustee an
Opinion of Outside Counsel reasonably satisfactory to the Trustee and a letter
of representation of the Issuers reasonably satisfactory to the Trustee to the
effect that the following legend and the related restrictions on transfer are
not required in order to maintain compliance with the provisions of the
Securities Act, each Global Note and each Definitive Note (and all Notes issued
in exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR
(7) UNDER THE SECURITIES ACT (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL
NOT WITHIN [IN THE CASE OF NOTES SOLD IN RELIANCE ON RULE 144A: ONE YEAR] [IN
THE CASE OF NOTES SOLD IN RELIANCE ON REGULATION S: 40 DAYS] AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH AN ISSUER OR ANY
AFFILIATE OF AN ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY (THE “RESALE RESTRICTION TERMINATION DATE”) RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE

 

40

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

OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF AN ISSUER SO REQUESTS), OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUERS SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AS USED HEREIN.
THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER OR AN ISSUER ON OR AFTER THE RESALE
RESTRICTION TERMINATION DATE.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraph (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3),
(f) or (j) of this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement Legend.

(2) Global Note Legend. Each Global Note will bear a legend in substantially the
following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH

 

41

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

NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE
ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(3) OID Legend. Each Note issued hereunder that has more than a de minimis
amount of original issue discount for U.S. Federal income tax purposes will bear
a legend in substantially the following form:

“THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271
ET SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH
NOTES BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE
FOLLOWING ADDRESS: TARGA RESOURCES PARTNERS LP, 1000 LOUISIANA ST., SUITE 4300,
HOUSTON, TEXAS 77002, ATTENTION: INVESTOR RELATIONS.”

(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges.

(1) To permit registrations of transfers and exchanges, the Issuers will execute
and the Trustee will authenticate Global Notes and Definitive Notes upon receipt
of a Company Order or at the Registrar’s request.

(2) No service charge will be made to a Holder of a beneficial interest in a
Global Note or to a Holder of a Definitive Note for any registration of transfer
or exchange, but the Issuers may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof).

 

42

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

(3) [Reserved.]

(4) All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes will be the valid
obligations of the Issuers, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.

(5) Neither the Registrar nor the Issuers will be required:

(A) to issue, to register the transfer of or to exchange, any Notes during a
period beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending at the
close of business on the day of selection;

(B) to register the transfer of or to exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed in
part; or

(C) to register the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.

(6) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Issuers may deem and treat the Person in whose name
any Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Notes and for all other
purposes, and none of the Trustee, any Agent or the Issuers shall be affected by
notice to the contrary.

(7) The Trustee will authenticate Global Notes and Definitive Notes for original
issue in accordance with the provisions of Section 2.02 hereof.

(8) All certifications, certificates, Opinions of Counsel and Opinions of
Outside Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.

(j) Automatic Exchange from Restricted Global Note to Unrestricted Global Note.
Upon compliance with the Applicable Procedures, all of the beneficial interests
in a Restricted Global Note shall be exchanged for beneficial interests in the
Unrestricted Global Note as of the Resale Restriction Termination Date. Upon
such exchange of beneficial interests pursuant to this Section 2.06(j), the
Registrar shall endorse the Schedule of Exchanges of Interests in the Global
Note to the relevant Global Notes and reflect on its books and records the date
of such transfer and a decrease and increase, respectively, in the principal
amount of the applicable Restricted Global Note(s) and the Unrestricted Global
Note, respectively, equal to the principal amount of beneficial interests
transferred. Following any such transfer pursuant to this Section 2.06(j), the
relevant Restricted Global Note(s) shall be cancelled.

(k) Transfers of Notes Held by Affiliates. Any certificate (i) evidencing a Note
that has been transferred to an affiliate (as defined in Rule 405) of the
Issuers within one year after the date hereof, as evidenced by a notation on the
assignment form for such transfer or in the representation letter delivered in
respect thereof or (ii) evidencing a Note that has been acquired from an
affiliate (other than by an affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until one year after the
last date on which either the Issuers or any affiliate of the Issuers was an
owner of such Note, in each case, be in the form of a Restricted Definitive
Note. The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to this Section 2.06. The Issuers, at
their sole cost and expense, shall have the right to inspect and make copies of
all such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.

 

43

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

Section 2.07 Replacement Notes.

If any mutilated Note is surrendered to the Trustee or the Issuers and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Issuers will issue and the Trustee, upon receipt of a Company
Order, will authenticate a replacement Note if the Trustee’s requirements are
met. If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Issuers to protect the Issuers, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Issuers and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is an additional obligation of each of the Issuers and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes of the same series duly issued hereunder.

Section 2.08 Outstanding Notes.

The Notes of each series outstanding at any time are all the Notes of such
series authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Issuers
or an Affiliate of the Issuers holds the Note; however, Notes held by Targa
Resources Partners or a Subsidiary of Targa Resources Partners shall not be
deemed to be outstanding for purposes of Section 3.07(a) or (b) hereof.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest and Liquidated Damages, if any,
on it cease to accrue.

If the Paying Agent (other than Targa Resources Partners, a Subsidiary or an
Affiliate of any thereof) holds as of 11:00 a.m. Eastern Time, on a Redemption
Date or other maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes will be deemed to be no longer
outstanding and will cease to accrue interest and Liquidated Damages, if any.

Section 2.09 Treasury Notes.

In determining whether the Holders of the required principal amount of Notes of
either series have concurred in any direction, waiver or consent, Notes owned by
the Issuers or any Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuers or any Guarantor, will be considered as though not outstanding, except
that for the purposes of determining whether the Trustee will be protected in
relying on any such direction, waiver or consent, only Notes of such series that
the Trustee knows are so owned will be so disregarded.

Section 2.10 Temporary Notes.

Until certificates representing Notes are ready for delivery, the Issuers may
prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Issuers

 

44

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

consider appropriate for temporary Notes and as may be reasonably acceptable to
the Trustee, upon receipt of an Authentication Order. Without unreasonable
delay, the Issuers will prepare and the Trustee will authenticate definitive
Notes in exchange for temporary Notes.

Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.

Section 2.11 Cancellation.

The Issuers at any time may deliver Notes to the Trustee for cancellation. The
Registrar and Paying Agent will forward to the Trustee any Notes surrendered to
them for registration of transfer, exchange or payment. The Trustee and no one
else will cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and will destroy canceled Notes (subject to
the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Issuers. The Issuers
may not issue new Notes to replace Notes that they have paid or that have been
delivered to the Trustee for cancellation.

Section 2.12 Defaulted Interest.

If the Issuers default in a payment of interest on the Notes, they will pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Issuers will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Issuers (or, upon
the written request of the Issuers, the Trustee in the name and at the expense
of the Issuers) will send or cause to be sent to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.

ARTICLE 3

REDEMPTION AND REPURCHASE

Section 3.01 Notices to Trustee.

If the Issuers elect to redeem Notes of either series pursuant to the optional
redemption provisions of Section 3.07 hereof, Targa Resources Partners must
furnish to the Trustee, at least five Business Days before the giving of the
notice of redemption pursuant to Section 3.03, an Officers’ Certificate setting
forth:

(1) the clause of this Indenture pursuant to which the redemption shall occur,

(2) the Redemption Date;

(3) the principal amount of Notes of such series to be redeemed; and

(4) the redemption price, if then determinable and, if not, then a method for
determination.

 

45

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

Section 3.02 Selection of Notes to Be Redeemed.

If less than all of the Notes of a series are to be redeemed at any time, the
Trustee will select Notes of such series for redemption as follows:

(1) if the Notes of such series are listed on any national securities exchange,
in compliance with the requirements of the principal national securities
exchange on which the Notes of such series are listed; or

(2) if the Notes of such series are not listed on any national securities
exchange, on a pro rata basis, by lot or by such other method as the Trustee
shall deem fair and appropriate (or, in the case of Global Notes, the Notes of
such series represented thereby will be selected in accordance with the
prescribed method of the Depositary).

No Notes of $2,000 or less can be redeemed in part.

Section 3.03 Notice of Redemption.

At least 30 days but not more than 60 days before a Redemption Date, the Issuers
will send or cause to be sent, in the manner provided in Section 12.02 hereof, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address, except that redemption notices may be sent more than 60 days
prior to a Redemption Date if the notice is issued in connection with a
defeasance of the Notes of either series or a satisfaction and discharge of this
Indenture pursuant to Articles 8 or 11 hereof.

The notice will identify the Notes to be redeemed and will state:

(1) the Redemption Date;

(2) the redemption price, if then determinable, and, if not, then a method for
determination;

(3) if any Note is being redeemed in part, the portion of the principal amount
of such Note to be redeemed and that, after the Redemption Date upon surrender
of such Note, a new Note or Notes of the relevant series in principal amount
equal to the unredeemed portion will be issued upon cancellation of the original
Note;

(4) the name and address of the Paying Agent;

(5) that Notes called for redemption must be surrendered to the Paying Agent to
collect the redemption price;

(6) that, unless the Issuers default in making such redemption payment, interest
and Liquidated Damages, if any, on Notes called for redemption ceases to accrue
on and after the Redemption Date;

(7) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed; and

(8) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.

 

46

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

At the Issuers’ request, the Trustee will give the notice of redemption in the
Issuers’ names and at their expense; provided, however, that the Issuers have
delivered to the Trustee, at least five Business Days prior to the date of
giving such notice, an Officers’ Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph. Such Officers’ Certificate may be combined
with the Officers’ Certificate referred to in Section 3.01.

Section 3.04 Effect of Notice of Redemption.

Once notice of redemption is delivered in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable (subject to the
immediately succeeding sentence) on the redemption date at the redemption price.
A redemption may, at the Issuers’ discretion, be subject to one or more
conditions precedent, including any related Equity Offering. If such redemption
is subject to the satisfaction of one or more conditions precedent, the related
notice shall describe each such condition, and if applicable, shall state that,
in the Issuers’ discretion, the Redemption Date may be delayed until such time
as any or all such conditions shall be satisfied or waived (provided that in no
event shall such Redemption Date be delayed to a date later than 60 days after
the date on which such notice was sent), or such redemption may not occur and
such notice may be rescinded in the event that any or all such conditions shall
not have been satisfied or waived by Redemption Date, or by the Redemption Date
as so delayed. Unless the Issuers default in the payment of the redemption
price, interest and Liquidated Damages, if any, will cease to accrue on the
Notes or portions thereof called for redemption on the applicable Redemption
Date.

Section 3.05 Deposit of Redemption or Purchase Price.

By 11:00 a.m. Eastern Time on the redemption or purchase date, the Issuers will
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption or purchase price of and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed or purchased on that date. The Trustee or the
Paying Agent will promptly return to the Issuers any money deposited with the
Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to
pay the redemption or purchase price of, and accrued interest and Liquidated
Damages, if any, on, all Notes to be redeemed or purchased.

If the Issuers comply with the provisions of the preceding paragraph, on and
after the redemption or purchase date, interest and Liquidated Damages, if any,
will cease to accrue on the Notes or the portions of Notes called for redemption
or surrendered for purchase. If a Note is redeemed or purchased on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption or surrendered for purchase is not so paid upon surrender
for redemption or purchase because of the failure of the Issuers to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Issuers will
issue and, upon receipt of a Company Order, the Trustee will authenticate for
the Holder at the expense of the Issuers a new Note of the relevant series equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.

 

47

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

Section 3.07 Optional Redemption.

(a) 2025 Notes.

(1) At any time prior to February 1, 2020, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the 2025 Notes
(including any Additional Notes of such series) issued under this Indenture,
upon giving notice as provided in Section 3.03, at a redemption price of
105.125% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Redemption Date), in an amount
not greater than the net cash proceeds of one or more Equity Offerings by Targa
Resources Partners; provided that:

(i) at least 65% of the aggregate principal amount of the 2025 Notes (including
any Additional Notes of such series) issued under this Indenture (excluding 2025
Notes held by Targa Resources Partners and its Subsidiaries) remains outstanding
immediately after the occurrence of such redemption; and

(ii) the redemption occurs within 180 days of the date of the closing of such
Equity Offering.

(2) On or after February 1, 2020, the Issuers may redeem all or a part of the
2025 Notes upon giving notice as provided in Section 3.03, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the 2025 Notes
redeemed to the applicable Redemption Date, if redeemed during the twelve-month
period beginning on February 1 of each year indicated below, subject to the
rights of Holders of 2025 Notes on the relevant record date to receive interest
on an interest payment date that is on or prior to the Redemption Date:

 

Year

   Percentage  

2020

     103.844 % 

2021

     102.563 % 

2022

     101.281 % 

2023 and thereafter

     100.000 % 

(3) At any time prior to February 1, 2020, the Issuers may also redeem all or a
part of the 2025 Notes, upon giving notice as provided in Section 3.03, at a
redemption price equal to 100% of the principal amount of the 2025 Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest and
Liquidated Damages, if any, to the date of redemption (the “Redemption Date”),
subject to the rights of Holders on the relevant record date to receive interest
due on an interest payment date that is on or prior to the Redemption Date.

(b) 2027 Notes.

(1) At any time prior to February 1, 2020, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the 2027 Notes
(including any Additional Notes of such series) issued under this Indenture,
upon giving notice as provided in Section 3.03, at a redemption price of
105.375% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Redemption Date), in an amount
not greater than the net cash proceeds of one or more Equity Offerings by Targa
Resources Partners; provided that:

(i) at least 65% of the aggregate principal amount of 2027 Notes (including any
Additional Notes of such series) issued under this Indenture (excluding 2027
Notes held by Targa Resources Partners and its Subsidiaries) remains outstanding
immediately after the occurrence of such redemption; and

 

48

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

(ii) the redemption occurs within 180 days of the date of the closing of such
Equity Offering.

(2) On or after February 1, 2022, the Issuers may redeem all or a part of the
2027 Notes upon giving notice as provided in Section 3.03, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the 2027 Notes
redeemed to the applicable Redemption Date, if redeemed during the twelve-month
period beginning on February 1 of each year indicated below, subject to the
rights of Holders of 2027 Notes on the relevant record date to receive interest
on an interest payment date that is on or prior to the Redemption Date:

 

Year

   Percentage  

2022

     102.688 % 

2023

     101.792 % 

2024

     100.896 % 

2025 and thereafter

     100.000 % 

(3) At any time prior to February 1, 2022, the Issuers may also redeem all or a
part of the 2027 Notes, upon giving notice as provided in Section 3.03, at a
redemption price equal to 100% of the principal amount of 2027 Notes redeemed
plus the Applicable Premium as of, and accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, subject to the rights of
Holders on the relevant record date to receive interest due on an interest
payment date that is on or prior to the Redemption Date

(c) The Issuers may redeem all (but not a portion of) the Notes of either series
when permitted by, and pursuant to the conditions in, Section 4.15(d) hereof.

(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.

Section 3.08 [Reserved].

Section 3.09 Offer to Purchase by Application of Excess Proceeds.

In the event that, pursuant to Section 4.10 hereof, Targa Resources Partners is
required to commence an offer to all Holders to purchase Notes of each series
then outstanding (an “Asset Sale Offer”), it will follow the procedures
specified below.

The Asset Sale Offer shall be made to all Holders of such series and all holders
of other Indebtedness that is pari passu with the Notes of such series
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets. The Asset
Sale Offer will remain open for a period of at least 20 Business Days following
its commencement and not more than 30 Business Days, except to the extent that a
longer period is required

 

49

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

by applicable law (the “Offer Period”). No later than three Business Days after
the termination of the Offer Period (the “Purchase Date”), the Issuers will
apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes of such
series and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes of
such series and other Indebtedness tendered in response to the Asset Sale Offer.
Payment for any Notes of such series so purchased will be made in the manner
prescribed in the Notes of such series.

If the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest and Liquidated
Damages, if any, will be paid to the Person in whose name a Note is registered
at the close of business on such record date, and no additional interest or
Liquidated Damages will be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.

Upon the commencement of an Asset Sale Offer, the Issuers will send, in the
manner provided in Section 12.02 hereof, a notice to the Trustee and each of the
Holders. The notice will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and
Section 4.10 hereof and the length of time the Asset Sale Offer will remain
open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment will continue to accrue
interest and Liquidated Damages, if any;

(4) that, unless the Issuers default in making such payment, any Note accepted
for payment pursuant to the Asset Sale Offer will cease to accrue interest and
Liquidate Damages, if any, after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale
Offer may elect to have Notes purchased in denominations of $2,000 and integral
multiples of $1,000 in excess thereof only;

(6) that Holders electing to have Notes purchased pursuant to any Asset Sale
Offer will be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” attached to the Notes completed, or transfer by
book-entry transfer, to the Issuers, a depositary, if appointed by the Issuers,
or a Paying Agent at the address specified in the notice at least three Business
Days before the Purchase Date;

(7) that Holders will be entitled to withdraw their election if the Issuers, the
depositary or the Paying Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note the Holder delivered
for purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;

(8) that, if the aggregate principal amount of Notes tendered into the Asset
Sale Offer exceeds the amount of the Excess Proceeds allocated to the purchase
of the Notes, the Issuers will select the Notes to be purchased on a pro rata
basis (or, in the case of Global Notes, the Notes represented thereby will be
purchased in accordance with the Depositary’s prescribed method) based on the
principal amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Issuers so that only
Notes in denominations of $2,000, or integral multiples of $1,000 in excess
thereof, will be purchased); and

 

50

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

(9) that Holders whose Notes were purchased only in part will be issued new
Notes of the relevant series equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry transfer).

On or before the Purchase Date, the Issuers will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Offer Amount
allocable to the Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount allocable to the Notes has been
tendered, all Notes tendered, and will deliver or cause to be delivered to the
Trustee the Notes properly accepted together with an Officers’ Certificate
stating that such Notes or portions thereof were accepted for payment by the
Issuers in accordance with the terms of this Section 3.09. The Issuers, the
depositary or the Paying Agent, as the case may be, will promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Issuers for purchase, and the Issuers will
promptly issue a new Note of the same series, and the Trustee, upon receipt of a
Company Order, will authenticate and mail or deliver (or cause to be transferred
by book entry) such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
will publicly announce the results of the Asset Sale Offer on the Purchase Date.

Other than as specifically provided in this Section 3.09, any purchase pursuant
to this Section 3.09 shall be made pursuant to the provisions of Sections 3.05
and 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01 Payment of Notes.

The Issuers shall pay or cause to be paid the principal of, premium, if any, and
interest and Liquidated Damages, if any, on, the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest and
Liquidated Damages, if any will be considered paid on the date due if the Paying
Agent, if other than the Targa Resources Partners or a Subsidiary thereof, holds
as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest and Liquidated Damages, if any, then
due. The Issuers will pay all Liquidated Damages, if any, in the same manner as
interest on the dates and in the amounts set forth in the applicable
Registration Rights Agreement.

The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the then applicable interest rate on the Notes to the extent lawful; they
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.

The Issuers shall notify the Trustee of the amounts and payment dates of any
Liquidated Damages that may become payable under any Registration Rights
Agreement.

 

51

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

Section 4.02 Maintenance of Office or Agency.

The Issuers shall maintain an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee) in the City of New York where Notes may
be presented or surrendered for payment, and they shall maintain in the
continental United States an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuers shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers fail to maintain any such required office or
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

The Issuers may also from time to time designate one or more other offices or
agencies in the continental United States where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. Further, if at any time there shall be no such office or agency in
the City of New York where the Notes may be presented or surrendered for
payment, the Issuers shall forthwith designate and maintain such an office or
agency in the City of New York, in order that the Notes shall at all times be
payable in the City of New York. The Issuers shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

The Issuers hereby designate the Corporate Trust Office of the Trustee as one
such office or agency of the Issuers in accordance with Section 2.03 hereof.

Section 4.03 Reports.

(a) Whether or not required by the rules and regulations of the SEC, so long as
any Notes are outstanding, Targa Resources Partners will furnish to the Holders
of Notes or cause the Trustee to furnish to the Holders of Notes (whether
through furnishing hard copies or by posting on Targa Resources Partners’ or the
SEC’s website), within the time periods specified in the SEC’s rules and
regulations:

(1) all quarterly and annual reports that would be required to be filed with the
SEC on Forms 10-Q and 10-K if Targa Resources Partners were required to file
such reports; and

(2) all current reports that would be required to be filed with the SEC on Form
8-K if Targa Resources Partners were required to file such reports.

All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports, including
Section 3-10 of Regulation S-X. Each annual report on Form 10-K will include a
report on Targa Resources Partners’ consolidated financial statements by Targa
Resources Partners’ independent registered public accounting firm. In addition,
Targa Resources Partners will file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing) and will post the reports on its
website within those time periods.

If, at any time Targa Resources Partners is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, Targa Resources
Partners will nevertheless continue filing the reports specified in the
preceding paragraphs of this Section 4.03 with the SEC within the time

 

52

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

periods specified above unless the SEC will not accept such a filing; provided
that, for so long as Targa Resources Partners is not subject to the periodic
reporting requirements of the Exchange Act for any reason, the time period for
filing reports on Form 8-K shall be 5 Business Days after the event giving rise
to the obligation to file such report. Targa Resources Partners will not take
any action for the purpose of causing the SEC not to accept any such filings.
If, notwithstanding the foregoing, the SEC will not accept Targa Resources
Partners’ filings for any reason, Targa Resources Partners will post the reports
referred to in the preceding paragraphs on its website within the time periods
that would apply if Targa Resources Partners were required to file those reports
with the SEC.

So long as Targa Resources Partners is a consolidated Subsidiary of Targa (or
another parent company) for financial reporting purposes, Targa Resources
Partners may satisfy its obligations with respect to SEC reports specified in
clauses (1) and (2) of this Section 4.03(a) by furnishing the corresponding
reports of such parent company, within the time periods specified in the SEC’s
rules and regulations for filing such corresponding reports; provided, however,
that either (i) such parent company has fully and unconditionally guaranteed the
Notes pursuant to a supplemental indenture or (ii) any report of such parent
company on Form 10-K or 10-Q that is furnished pursuant to this Section 4.03(a)
includes consolidating information by way of footnotes or otherwise that
explains in reasonable detail the differences between the financial information
relating to such parent company and any of its other Subsidiaries, on the one
hand, and the financial information relating to Targa Resources Partners and its
Subsidiaries, on the other hand.

(b) Any and all Defaults or Events of Default arising from a failure to furnish
or file in a timely manner any report required by this Section 4.03 shall be
deemed cured (and Targa Resources Partners shall be deemed to be in compliance
with this Section 4.03) upon furnishing or filing such report as contemplated by
this Section 4.03 (but without regard to the date on which such information or
report is so furnished or filed); provided, that such cure shall not otherwise
affect the rights of the holders under Article 6 if principal, premium, if any,
and interest have been accelerated in accordance with the terms of this
Indenture and such acceleration has not been rescinded or cancelled prior to
such cure.

(c) For so long as any Notes remain outstanding, if at any time Targa Resources
Partners is not required to file with the SEC the reports required by
Section 4.03(a), the Issuers and the Guarantors will furnish to the Holders of
Notes and to securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

Section 4.04 Compliance Certificate.

(a) The Issuers and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers’ Certificate stating that a review of the
activities of the Issuers and Targa Resources Partners’ Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Issuers have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Issuers have kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and are not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default has occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Issuers are taking or propose to take with respect thereto).

(b) So long as any of the Notes are outstanding, the Issuers and the Guarantors
will deliver to the Trustee, promptly upon any Officer becoming aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default or
Event of Default and what action the Issuers are taking or propose to take with
respect thereto.

 

53

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

Section 4.05 Taxes.

The Issuers shall pay, and will cause each of Targa Resources Partners’
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws.

The Issuers and each of the Guarantors covenant (to the extent that they may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuers and
each of the Guarantors (to the extent that they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenants that
they will not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.

Section 4.07 Restricted Payments.

(a) Targa Resources Partners shall not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on
account of its outstanding Equity Interests (including any payment in connection
with any merger or consolidation involving Targa Resources Partners or any of
its Restricted Subsidiaries) or to the direct or indirect holders of Targa
Resources Partners’ or any of its Restricted Subsidiaries’ Equity Interests in
their capacity as such (other than distributions or dividends payable in Equity
Interests, excluding Disqualified Equity, of Targa Resources Partners and other
than distributions or dividends payable to Targa Resources Partners or a
Restricted Subsidiary);

(2) repurchase, redeem or otherwise acquire or retire for value (including in
connection with any merger or consolidation involving Targa Resources Partners)
any Equity Interests of Targa Resources Partners, any direct or indirect parent
of Targa Resources Partners or any of the Restricted Subsidiaries of Targa
Resources Partners;

(3) make any payment on or with respect to, or repurchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness of Targa Resources
Partners or any Guarantor that is contractually subordinated to the Notes or to
any Note Guarantee (excluding intercompany Indebtedness between or among Targa
Resources Partners and any of its Restricted Subsidiaries), except a payment of
interest or principal within one month of the Stated Maturity thereof; or

(4) make any Restricted Investment

 

54

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

(all such payments and other actions set forth in these clauses (1) through
(4) above being collectively referred to as “Restricted Payments”), unless, at
the time of and after giving effect to such Restricted Payment, no Default
(except a Reporting Default) or Event of Default has occurred and is continuing
or would occur as a consequence of such Restricted Payment and either:

(1) if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most
recently ended four full fiscal quarters for which internal financial statements
are available at the time of such Restricted Payment is not less than 1.75 to
1.0, such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by Targa Resources Partners and its Restricted
Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3),
(4) (to the extent, in the case of clause (4), payments are made to Targa
Resources Partners or a Restricted Subsidiary), (5), (6), (7) and (8) of
Section 4.07(b) hereof) during the quarter in which such Restricted Payment is
made, is less than the sum, without duplication, of:

(A) Available Cash as of the end of the immediately preceding quarter; plus

(B) 100% of the aggregate net cash proceeds received by Targa Resources Partners
(including the Fair Market Value of any Permitted Business or long-term assets
that are used or useful in a Permitted Business to the extent acquired in
consideration of Equity Interests of Targa Resources Partners (other than
Disqualified Equity)) since the date of the 2008 Indenture as a contribution to
its common equity capital or from the issue or sale of Equity Interests of Targa
Resources Partners (other than Disqualified Equity) or from the issue or sale of
convertible or exchangeable Disqualified Equity or convertible or exchangeable
debt securities of Targa Resources Partners that have been converted into or
exchanged for such Equity Interests (other than Equity Interests (or
Disqualified Equity or debt securities) sold to a Subsidiary of Targa Resources
Partners); plus

(C) to the extent that any Restricted Investment that was made after the date of
the 2008 Indenture is sold for cash or Cash Equivalents or otherwise liquidated
or repaid for cash or Cash Equivalents, the return of capital with respect to
such Restricted Investment (less the cost of disposition, if any); plus

(D) the net reduction in Restricted Investments resulting from dividends,
repayments of loans or advances, or other transfers of assets in each case to
Targa Resources Partners or any of its Restricted Subsidiaries from any Person
(including Unrestricted Subsidiaries) or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not
been included in Available Cash for any period commencing on or after the date
of the 2008 Indenture (items (b), (c) and (d) being referred to as “Incremental
Funds”); minus

(E) the aggregate amount of Incremental Funds previously expended pursuant to
this clause (1) and clause (2) below; or

(2) if the Fixed Charge Coverage Ratio for Targa Resources Partners’ most
recently ended four full fiscal quarters for which internal financial statements
are available at the time of such Restricted Payment is less than 1.75 to 1.0,
such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by Targa Resources Partners and its Restricted
Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3),
(4) (to the extent, in the case of clause (4), payments are made to Targa
Resources Partners or a Restricted Subsidiary), (5), (6), (7) and (8) of
Section 4.07(b) hereof) during the quarter in which such Restricted Payment is
made (such Restricted Payments for purposes of this clause (2) meaning only
distributions on common units of Targa Resources Partners, plus the related
distribution on the general partner interest), is less than the sum, without
duplication, of:

(A) $250.0 million less the aggregate amount of all prior Restricted Payments
made by Targa Resources Partners and its Restricted Subsidiaries pursuant to
this clause (2)(A) during the period since the date of the 2008 Indenture; plus

 

55

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

(B) Incremental Funds to the extent not previously expended to this clause
(2) or clause (1) above.

(b) The provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of
its declaration, if at the date of declaration the payment would have complied
with the provisions of this Indenture;

(2) the repurchase, redemption, defeasance or other acquisition or retirement
for value of subordinated Indebtedness of Targa Resources Partners or any
Guarantor or of any Equity Interests of Targa Resources Partners or any of its
Restricted Subsidiaries in exchange for, or out of the net cash proceeds of, a
substantially concurrent (a) capital contribution to Targa Resources Partners
from any Person (other than a Restricted Subsidiary of Targa Resources Partners)
or (b) sale (other than to a Restricted Subsidiary of Targa Resources Partners)
of Equity Interests of Targa Resources Partners, with a sale being deemed
substantially concurrent if such repurchase, redemption, defeasance or other
acquisition or retirement for value occurs not more than 120 days after such
sale; provided that proceeds from sale of Disqualified Equity may only be used
to repurchase, redeem, defease or otherwise acquire or retire for value
subordinated indebtedness or Disqualified Equity; provided further that the
amount of any such net cash proceeds that are utilized for any such repurchase,
redemption, defeasance or other acquisition or retirement for value will be
excluded (or deducted, if included) from the calculation of Available Cash and
Incremental Funds;

(3) the repurchase, redemption, defeasance or other acquisition or retirement
for value of any subordinated Indebtedness of Targa Resources Partners or any
Guarantor with the net cash proceeds from an incurrence of, or in exchange for,
Permitted Refinancing Indebtedness;

(4) the payment of any distribution or dividend by a Restricted Subsidiary of
Targa Resources Partners to the holders of its Equity Interests (other than
Disqualified Equity) on a pro rata basis;

(5) so long as no Default (except a Reporting Default) has occurred and is
continuing or would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of Targa Resources
Partners or any Restricted Subsidiary of Targa Resources Partners held by any
current or former officer, director or employee of Targa Resources Partners or
any Affiliate of Targa Resources Partners pursuant to any equity subscription
agreement or plan, stock or unit option agreement, shareholders’ agreement or
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0
million in any calendar year; provided further that such amount in any calendar
year may be increased by an amount not to exceed (a) the cash proceeds received
by Targa Resources Partners or any of its Restricted Subsidiaries from the sale
of Equity Interests of Targa Resources Partners to members of management or
directors of Targa Resources Partners or its Affiliates that occurs after the
date of the 2008 Indenture (to the extent the cash proceeds from the sale of
such Equity Interests have not otherwise been applied to the payment of
Restricted Payments by virtue of clause (1)(B) or (2)(B) of Section 4.07(a)
hereof), plus (b) the cash proceeds of key man life insurance policies received
by Targa Resources Partners or any of its Restricted Subsidiaries after the date
of the 2008 Indenture;

 

56

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

(6) so long as no Default (except a Reporting Default) has occurred and is
continuing or would be caused thereby, payments of dividends on Disqualified
Equity issued pursuant to Section 4.09 hereof;

(7) repurchases of Capital Stock deemed to occur upon exercise of stock options,
warrants or other convertible securities if such Capital Stock represents a
portion of the exercise price of such options, warrants or other convertible
securities; or

(8) cash payments in lieu of the issuance of fractional shares in connection
with the exercise of warrants, options or other securities convertible into or
exchangeable for Capital Stock of Targa Resources Partners.

(c) The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date the asset(s) or securities are proposed to be paid,
transferred or issued by Targa Resources Partners or such Restricted Subsidiary,
as the case may be, pursuant to the Restricted Payment, except that the Fair
Market Value of any non-cash dividend or distribution made within 60 days after
the date of declaration will be determined as of such date. The Fair Market
Value of any assets or securities that are required to be valued by this
Section 4.07 will be determined, in the case of amounts of no more than $50.0
million, by an Officer of the General Partner and, in the case of amounts over
$50.0 million, by the Board of Directors of the General Partner, whose
resolution with respect thereto shall be delivered to the Trustee. For the
purposes of determining compliance with this Section 4.07, if a Restricted
Payment meets the criteria of more than one of the categories of Restricted
Payments described in the preceding clauses (1)-(8), Targa Resources Partners
will be permitted to classify (or reclassify in whole or in part in its sole
discretion) such Restricted Payment in any manner that complies with this
Section 4.07.

Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.

(a) Targa Resources Partners shall not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

(1) pay dividends or make any other distributions on its Equity Interests to
Targa Resources Partners or any of its Restricted Subsidiaries or to pay any
indebtedness owed to Targa Resources Partners or any of its Restricted
Subsidiaries; provided, however, that the priority that any series of preferred
securities of a Restricted Subsidiary has in receiving dividends or liquidating
distributions before dividends or liquidating distributions are paid in respect
of common securities of such Restricted Subsidiary shall not constitute a
restriction on the ability to make dividends or distributions on Equity
Interests for purposes of this covenant so long as the terms of such preferred
securities do not expressly restrict the ability of such Restricted Subsidiary
to pay dividends or make distributions on its Equity Interests;

(2) make loans or advances to Targa Resources Partners or any of its Restricted
Subsidiaries (it being understood that the subordination of loans or advances
made to Targa Resources Partners or any Restricted Subsidiary to other
Indebtedness incurred by Targa Resources Partners or any Restricted Subsidiary
shall not be deemed a restriction on the ability to make loans or advances); or

 

57

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

(3) sell, lease or transfer any of its properties or assets to Targa Resources
Partners or any of its Restricted Subsidiaries.

(b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or
restrictions existing under or by reason of:

(1) agreements as in effect on the date of this Indenture and any amendments,
restatements, modifications, renewals, supplements, refundings, replacements or
refinancings of those agreements or the Indebtedness to which they relate;
provided that the amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend, distribution and
other payment restrictions than those contained in those agreements on the date
of this Indenture;

(2) this Indenture, the Notes and the Note Guarantees;

(3) applicable law, rule, regulation or order;

(4) any instrument governing Indebtedness or Equity Interests of a Person
acquired by Targa Resources Partners or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
or Equity Interests were incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided, however, that, in the
case of Indebtedness, the incurrence thereof was otherwise permitted by the
terms of this Indenture;

(5) customary non-assignment provisions contracts for purchase, gathering,
processing, fractionating, sale, transportation or exchange of crude oil,
natural gas liquids, condensate and natural gas, natural gas storage agreements,
in transportation agreements or purchase and sale or exchange agreements,
pipeline or terminaling agreements, or similar operational agreements or in
licenses, leases, rights-of-way, easements or servitudes, in each case entered
into in the ordinary course of business;

(6) purchase money obligations for property acquired in the ordinary course of
business and Capital Lease Obligations that impose restrictions on the property
purchased or leased of the nature described in clause (3) of Section 4.08(a)
hereof;

(7) any agreement for the sale or other disposition of a Restricted Subsidiary
that restricts distributions by that Restricted Subsidiary pending its sale or
other disposition;

(8) Permitted Refinancing Indebtedness; provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are not
materially more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;

(9) restrictions pursuant to any Permitted Receivables Financing;

(10) Liens permitted to be incurred under the provisions of Section 4.12 hereof
that limit the right of the debtor to dispose of the assets subject to such
Liens;

(11) provisions limiting the disposition or distribution of assets or property
in joint venture agreements, asset sale agreements, sale-leaseback agreements,
stock sale agreements, buy/sell agreements and other similar agreements entered
into in the ordinary course of business;

 

58

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

(12) any agreement or instrument relating to any property or assets acquired
after the date hereof, so long as such encumbrance or restriction relates only
to the property or assets so acquired and is not and was not created in
anticipation of such acquisitions;

(13) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;

(14) any instrument governing Indebtedness of an FERC Subsidiary, provided that
such Indebtedness was otherwise permitted by this Indenture to be incurred;

(15) with respect to any Foreign Subsidiary, any encumbrance or restriction
contained in the terms of any Indebtedness or any agreement pursuant to which
such Indebtedness was incurred, if either (a) the encumbrance or restriction
applies only in the event of a payment default or a default with respect to a
financial covenant in such Indebtedness or agreement or (b) Targa Resources
Partners determines that any such encumbrance or restriction will not materially
affect Targa Resources Partners’ ability to make principal or interest payments
on the Notes, as determined in good faith by the Board of Directors of the
General Partner, whose determination shall be conclusive; and

(16) any other agreement governing Indebtedness of Targa Resources Partners or
any Restricted Subsidiary that is permitted to be incurred by the covenant in
Section 4.09 hereof; provided, however, that such encumbrances or restrictions
are not materially more restrictive, taken as a whole, than those contained in
this Indenture or the Credit Agreement as it exists on the date of this
Indenture.

Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Equity.

(a) Targa Resources Partners shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, “incur”) any
Indebtedness (including Acquired Debt), and Targa Resources Partners will not
issue any Disqualified Equity and will not permit any of its Restricted
Subsidiaries to issue any Disqualified Equity; provided, however, that Targa
Resources Partners and any Restricted Subsidiary may incur Indebtedness
(including Acquired Debt) and Targa Resources Partners and the Restricted
Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio
for Targa Resources Partners’ most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Equity is
issued, as the case may be, would have been at least 2.0 to 1.0, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Equity had been issued, as the case may be, at the beginning of
such four-quarter period.

(b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence
of any of the following items of Indebtedness (collectively, “Permitted Debt”)
or the issuance of any Disqualified Equity described in clause (ii) below:

(1) the incurrence by Targa Resources Partners and any Restricted Subsidiary of
additional Indebtedness (including letters of credit) under Credit Facilities,
provided that, after giving effect to such incurrence, the aggregate principal
amount of all Indebtedness incurred under this clause (1) (with letters of
credit being deemed to have a principal amount equal to the maximum potential
liability of Targa Resources Partners and its Restricted Subsidiaries
thereunder) and then outstanding does not exceed the greater of (a) $2,000.0
million and (b) the sum of $1.5 billion and 20% of Targa Resources Partners’
Consolidated Net Tangible Assets;

 

59

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

(2) the incurrence by Targa Resources Partners and its Restricted Subsidiaries
of the Existing Indebtedness;

(3) the incurrence by Targa Resources Partners, Finance Corp. and the Guarantors
of Indebtedness represented by the Notes and the related Note Guarantees to be
issued on the date of this Indenture and any Exchange Notes and the related Note
Guarantees that may be issued pursuant to a Registration Rights Agreement;

(4) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of Targa
Resources Partners or any of its Restricted Subsidiaries, including all
Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to this clause
(4), provided that after giving effect to such incurrence the aggregate
principal amount of all Indebtedness incurred pursuant to this clause (4) and
then outstanding does not exceed the greater of (a) $50.0 million and (b) 4.0%
of Targa Resources Partners’ Consolidated Net Tangible Assets;

(5) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge any Indebtedness (other than intercompany Indebtedness) that was
permitted by this Indenture to be incurred under Section 4.09(a) hereof or
clause (2) or (3) of this Section 4.09(b) or this clause (5);

(6) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of any Permitted Receivables Financing in an aggregate principal
amount at any time outstanding not to exceed $400.0 million;

(7) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among Targa Resources
Partners and any of its Restricted Subsidiaries; provided, however, that:

(A) if Targa Resources Partners or any Guarantor is the obligor on such
Indebtedness and the payee is not Targa Resources Partners or a Guarantor, such
Indebtedness must be expressly subordinated to the prior payment in full in cash
of all Obligations then due with respect to the Notes, in the case of Targa
Resources Partners, or the Note Guarantee, in the case of a Guarantor, and

(B) (1) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than Targa Resources Partners
or a Restricted Subsidiary of Targa Resources Partners and (2) any sale or other
transfer of any such Indebtedness to a Person that is not either Targa Resources
Partners or a Restricted Subsidiary of Targa Resources Partners, will be deemed,
in each case, to constitute an incurrence of such Indebtedness by Targa
Resources Partners or such Restricted Subsidiary, as the case may be, that was
not permitted by this clause (7);

 

60

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

(8) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of Hedging Obligations;

(9) the guarantee by Targa Resources Partners or any of its Restricted
Subsidiaries of Indebtedness of Targa Resources Partners or a Restricted
Subsidiary of Targa Resources Partners that was permitted to be incurred by
another provision of this Section 4.09; provided that if the Indebtedness being
guaranteed is subordinated to or pari passu with the Notes, then the Guarantee
shall be subordinated or pari passu, as applicable, to the same extent as the
Indebtedness guaranteed;

(10) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;

(11) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of Acquired Debt in connection with a transaction meeting either
one of the financial tests set forth in clause (4) under Section 5.01(a);

(12) the issuance by any of Targa Resources Partners’ Restricted Subsidiaries to
Targa Resources Partners or to any of its Restricted Subsidiaries of any
Disqualified Equity; provided, however, that:

(A) any subsequent issuance or transfer of Equity Interests that results in any
such Disqualified Equity being held by a Person other than Targa Resources
Partners or a Restricted Subsidiary of Targa Resources Partners; and

(B) any sale or other transfer of any such Disqualified Equity to a Person that
is not either Targa Resources Partners or a Restricted Subsidiary of Targa
Resources Partners

will be deemed, in each case, to constitute an issuance of such Disqualified
Equity by such Restricted Subsidiary that was not permitted by this clause (12);
and

(13) the incurrence by Targa Resources Partners or any of its Restricted
Subsidiaries of additional Indebtedness; provided that, after giving effect to
any such incurrence, the aggregate principal amount of all Indebtedness incurred
under this clause (13) and then outstanding does not exceed the greater of
(a) $150.0 million and (b) 7.5% of Targa Resources Partners’ Consolidated Net
Tangible Assets.

Targa Resources Partners shall not incur, and shall not permit Finance Corp. or
any Guarantor to incur, any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of
Targa Resources Partners, Finance Corp. or such Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the Notes
and the applicable Note Guarantee on substantially identical terms; provided,
however, that no Indebtedness of a Person shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of such Person solely
by virtue of being unsecured or by virtue of being secured on a first or junior
Lien basis.

For purposes of determining compliance with this Section 4.09, if an item of
proposed Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (13) above, or is entitled to be
incurred pursuant to Section 4.09(a) hereof, Targa Resources

 

61

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

Partners will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. Indebtedness
under Credit Facilities outstanding on the date on which Notes are first issued
and authenticated under this Indenture will initially be deemed to have been
incurred on such date in reliance on the exception provided by clause (1) of the
definition of Permitted Debt.

The accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, the reclassification of preferred stock as
Indebtedness due to a change in accounting principles, and the payment of
dividends on Disqualified Equity in the form of additional shares of the same
class of Disqualified Equity will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Equity for purposes of this
Section 4.09; provided, however, in each such case, that the amount of any such
accrual, accretion or payment is included in Fixed Charges of Targa Resources
Partners as accrued. Notwithstanding any other provision of this Section 4.09,
(i) the maximum amount of Indebtedness that Targa Resources Partners or any
Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be
deemed to be exceeded solely as a result of fluctuations in exchange rates or
currency values. Further, the accounting reclassification of any obligation of
Targa Resources Partners or any of its Restricted Subsidiaries as Indebtedness
will not be deemed an incurrence of Indebtedness for purposes of this Section
4.09.

Section 4.10 Asset Sales.

Targa Resources Partners shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

(1) Targa Resources Partners or any of its Restricted Subsidiaries receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise disposed of;

(2) such Fair Market Value is determined by (a) an Officer of the General
Partner if the value is less than $50.0 million, as evidenced by an Officers’
Certificate delivered to the Trustee, or (b) the Board of Directors of the
General Partner if the value is $50.0 million or more, as evidenced by a
resolution of such Board of Directors of the General Partner; and

(3) at least 75% of the aggregate consideration received by Targa Resources
Partners and its Restricted Subsidiaries in the Asset Sale and all other Asset
Sales since the date of the 2008 Indenture is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following shall be
deemed to be cash:

(A) any liabilities, as shown on Targa Resources Partners’ most recent
consolidated balance sheet, of Targa Resources Partners or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Note Guarantee) that are assumed by the
transferee of any such assets pursuant to a novation agreement that releases
Targa Resources Partners or such Restricted Subsidiary from further liability;
and

(B) any securities, notes or other obligations received by Targa Resources
Partners or any Restricted Subsidiary from such transferee that are within 180
days after the Asset Sale (subject to ordinary settlement periods), converted by
Targa Resources Partners or such Restricted Subsidiary into cash or Cash
Equivalents, to the extent of the cash or Cash Equivalents received in that
conversion.

 

62

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

Within 360 days after the receipt of any Net Proceeds from an Asset Sale, Targa
Resources Partners or any of its Restricted Subsidiaries may apply such Net
Proceeds:

(1) to repay Senior Indebtedness of Targa Resources Partners or its Restricted
Subsidiaries (or to make an offer to repurchase or redeem such Indebtedness;
provided that such repurchase or redemption closes within 45 days after the end
of such 360-day period) with a permanent reduction in availability for any
revolving credit Indebtedness;

(2) to acquire all or substantially all of the properties or assets of, or any
Capital Stock of, another Permitted Business, if, after giving effect to any
such acquisition of Capital Stock, the Permitted Business is or becomes a
Restricted Subsidiary of Targa Resources Partners;

(3) to make a capital expenditure in a Permitted Business; or

(4) to acquire other assets that are not classified as current assets under GAAP
and that are used or useful in a Permitted Business.

Pending the final application of any Net Proceeds, Targa Resources Partners or
any Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this
Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the second paragraph of this Section 4.10 will constitute “Excess Proceeds.”
When the aggregate amount of Excess Proceeds exceeds $50.0 million, within five
days thereof, Targa Resources Partners will make an Asset Sale Offer, pursuant
to Section 3.09, to all Holders of Notes and all holders of other Indebtedness
that is pari passu with the Notes containing provisions similar to those set
forth in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase or redeem, on a pro rata basis, the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased or redeemed out of the Excess Proceeds. The offer price in any
Asset Sale Offer will be equal to 100% of the principal amount plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase, subject
to the right of Holders of Notes on the relevant record date to receive interest
on an interest payment date that is on or prior to the purchase date, and will
be payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, Targa Resources Partners or any Restricted Subsidiary may use those
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds allocated to the purchase of Notes, then
the Notes shall be purchased on a pro rata basis (or, in the case of Global
Notes, the Notes represented thereby will be purchased in accordance with the
Depositary’s prescribed method) (with such adjustments as may be deemed
appropriate by the Issuers so that only Notes will be purchased in an authorized
denomination and integral multiples thereof). Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.

In making an Asset Sale Offer Targa Resources Partners will comply with the
applicable requirements of Rule 14e-1 under the Exchange Act and other
securities laws and regulations. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of Section 3.09
hereof or this Section 4.10, Targa Resources Partners will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.10 by
virtue of such compliance.

 

63

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

Section 4.11 Transactions with Affiliates.

(a) Targa Resources Partners shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of Targa Resources Partners (individually or as a
series of related transactions, an “Affiliate Transaction”), unless:

(1) the Affiliate Transaction is on terms that are no less favorable to Targa
Resources Partners or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by Targa Resources Partners or
such Restricted Subsidiary with an unrelated Person; and

(2) Targa Resources Partners delivers to the Trustee, with respect to any
Affiliate Transaction involving aggregate consideration in excess of $50.0
million, a resolution adopted by a majority of the disinterested members of the
Board of Directors of the General Partner approving such Affiliate Transaction
and set forth in an Officers’ Certificate certifying that such Affiliate
Transaction complies with clause (1) of this Section 4.11(a).

(b) The following items will not be deemed to be Affiliate Transactions and,
therefore, shall not be subject to the provisions of Section 4.11(a) hereof:

(1) any employment agreement, equity award, equity option or equity appreciation
agreement or plan or any similar arrangement entered into by Targa Resources
Partners or any of its Restricted Subsidiaries in the ordinary course of
business and payments pursuant thereto;

(2) transactions between or among Targa Resources Partners and/or its Restricted
Subsidiaries;

(3) transactions with a Person (other than an Unrestricted Subsidiary of Targa
Resources Partners) that is an Affiliate of Targa Resources Partners solely
because Targa Resources Partners owns, directly or through a Restricted
Subsidiary, an Equity Interest in, or controls, such Person;

(4) any issuance of Equity Interests (other than Disqualified Equity) of Targa
Resources Partners to Affiliates of Targa Resources Partners;

(5) Restricted Payments or Permitted Investments that do not violate
Section 4.07 hereof;

(6) transactions entered into as part of a Permitted Receivables Financing;

(7) customary compensation, indemnification and other benefits made available to
officers, directors or employees of Targa Resources Partners or any Affiliate of
Targa Resources Partners, including reimbursement or advancement of
out-of-pocket expenses and provisions of officers’ and directors’ liability
insurance;

(8) in the case of contracts for purchase, gathering, processing, fractionating,
sale, transportation and marketing of crude oil, natural gas, condensate and
natural gas liquids, hedging agreements, and production handling, operating,
construction, terminaling, storage, lease, platform use, or other operational
contracts, any such contracts are entered into in the ordinary

 

64

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

course of business on terms substantially similar to those contained in similar
contracts entered into by Targa Resources Partners or any Restricted Subsidiary
and third parties, or if neither Targa Resources Partners nor any Restricted
Subsidiary has entered into a similar contract with a third party, then the
terms are no less favorable than those available from third parties on an
arm’s-length basis;

(9) loans or advances to employees in the ordinary course of business not to
exceed $1.0 million in the aggregate at any one time outstanding; and

(10) the existence of, or the performance by Targa Resources Partners or any
Restricted Subsidiary of its obligations under the terms of, (i) any agreements
that (x) are described in the annual report on Form 10-K of Targa Resources
Partners for the year ended December 31, 2015 under the heading “Certain
Relationships and Related Party Transactions, and Director Independence” to
which it is a party on the terms described in such Annual Report on Form 10-K,
(y) are otherwise described in Schedule 4.11 to this Indenture, or (z) form part
of an Affiliate Transaction that meets the requirements of subclauses (1) and
(2) of Section 4.11(a) hereof, (ii) any amendments to such agreements and
(iii) any similar agreements which it may enter into thereafter; provided,
however, that the existence of, or the performance by Targa Resources Partners
or any Restricted Subsidiary of its obligations under, any future amendment to
such agreements or under any such similar agreements shall only be permitted by
this clause (10) to the extent that the terms of any such amendment or new
agreement, taken as a whole, are either on terms comparable to the agreements
referred to in the preceding clause (i) or are not less favorable to the Holders
in any material respect.

Section 4.12 Liens.

Targa Resources Partners will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) securing
Indebtedness (including any Attributable Debt) upon any of their respective
property or assets, now owned or hereafter acquired, unless all payments due
under the Notes or any Note Guarantee of such Restricted Subsidiary, as the case
may be, are secured on an equal and ratable basis or on a senior basis with the
Indebtedness so secured until such time as such Indebtedness is no longer
secured by a Lien (other than Permitted Liens).

Section 4.13 [Reserved].

Section 4.14 Corporate Existence.

Subject to Article 5 hereof, Targa Resources Partners shall do or cause to be
done all things necessary to preserve and keep in full force and effect:

(1) its limited partnership existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of Targa Resources Partners or any such Restricted Subsidiary; and

(2) the rights (charter and statutory), licenses and franchises of Targa
Resources Partners and its Restricted Subsidiaries;

provided, however, that Targa Resources Partners shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if it shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of Targa Resources Partners and its Restricted Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.

 

65

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

Section 4.15 Offer to Repurchase Upon Change of Control.

(a) Upon the occurrence of a Change of Control with respect to a series of the
Notes, Targa Resources Partners shall make an offer (a “Change of Control
Offer”) to each Holder of Notes of such series to repurchase all or any part
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that
Holder’s Notes of such series at a purchase price in cash equal to at least 101%
of the aggregate principal amount of Notes of such series repurchased, plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
repurchased to, but excluding, the date of purchase, subject to the right of
Holders of Notes of such series on the relevant record date to receive interest
due on an interest payment date that is on or prior to the purchase date (the
“Change of Control Payment”). Within 30 days following any Change of Control,
Targa Resources Partners will send a notice to each Holder of Notes of such
series describing the transaction or transactions that constitute the Change of
Control and stating:

(1) that the Change of Control Offer is being made pursuant to this Section 4.15
and that all Notes of such series tendered will be accepted for payment;

(2) the purchase price and the purchase date, which shall be no earlier than 20
Business Days and no later than 60 days from the date such notice is delivered
(the “Change of Control Payment Date”);

(3) that any Note not tendered will continue to accrue interest and Liquidated
Damages, if any;

(4) that, unless Targa Resources Partners Default in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest and Liquidated Damages, if any,
after the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled
“Option of Holder to Elect Purchase” attached to the Notes completed, or
transfer by book-entry transfer, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and

(7) that Holders whose Notes are being purchased only in part will be issued new
Notes of the same series equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $2,000 in
principal amount or an integral multiple of $1,000 in excess thereof.

 

66

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

Targa Resources Partners shall comply with the requirements of Rule 14e-l under
the Exchange Act and any other securities laws and regulations. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, Targa Resources Partners shall comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.15 by virtue of such compliance.

(b) Promptly following the expiration of the Change of Control Offer, Targa
Resources Partners shall, to the extent lawful, accept for payment all Notes of
the relevant series or portions thereof properly tendered pursuant to the Change
of Control Offer. Promptly after such acceptance, on the Change of Control
Payment Date, Targa Resources Partners will, to the extent lawful:

(1) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes of the relevant series or portions thereof
properly tendered; and

(2) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of
Notes of such series or portions thereof being purchased by the Issuers.

The Paying Agent shall promptly mail to each Holder of Notes of the relevant
series properly tendered the Change of Control Payment for such Notes (or, to
the extent such Notes are in global form, make such payment through the
facilities of DTC), and the Trustee will promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note of the same
series equal in principal amount to any unpurchased portion of the Notes
surrendered; provided that each new Note will be in a principal amount of $2,000
or an integral multiple of $1,000 in excess thereof. Targa Resources Partners
will publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.

The provisions described above that require the Issuers to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of this Indenture are applicable.

(c) Notwithstanding anything to the contrary in this Section 4.15, Targa
Resources Partners will not be required to make a Change of Control Offer upon a
Change of Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.15 and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer or (2) notice of redemption has been given
pursuant to Section 3.07 hereof, unless and until there is a default in payment
of the applicable redemption price.

(d) In the event that Holders of not less than 90% of the aggregate principal
amount of the outstanding Notes of either series accept a Change of Control
Offer and Targa Resources Partners (or the third party making the Change of
Control Offer as provided in Section 4.15(c)) purchases all of the Notes of such
series held by such Holders, Targa Resources Partners will have the right, upon
not less than 30 nor more than 60 days’ prior notice, given not more than 30
days following the purchase pursuant to the Change of Control Offer described
above, to redeem all of the Notes of such series that remain outstanding
following such purchase at a redemption price equal to the Change of Control
Payment plus, to the extent not included in the Change of Control Payment,
accrued and unpaid interest and Liquidated Damages, if any, on the Notes of such
series that remain outstanding, to, but excluding, the date of redemption
(subject to the right of Holders on the relevant record date to receive interest
due on an interest payment date that is on or prior to the redemption date).

 

67

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

(e) A Change of Control Offer may be made in advance of a Change of Control, and
conditioned upon the occurrence of such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making the Change
of Control Offer.

Section 4.16 [Reserved].

Section 4.17 [Reserved].

Section 4.18 Additional Guarantees.

If, after the date of this Indenture, any Restricted Subsidiary of Targa
Resources Partners that is not already a Guarantor guarantees any Indebtedness
of either of the Issuers or any Indebtedness of any Guarantor, or any Domestic
Subsidiary, if not then a Guarantor, incurs any Indebtedness under any Credit
Facility, then in either case that Subsidiary will become a Guarantor by
executing a supplemental indenture substantially in the form of Exhibit F hereto
and delivering it to the Trustee within 20 Business Days of the date on which it
guaranteed or incurred such Indebtedness, as the case may be; provided, however,
that the preceding shall not apply to Subsidiaries of Targa Resources Partners
that have been properly designated as Unrestricted Subsidiaries in accordance
with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries. Notwithstanding the preceding, any Note Guarantee of a Restricted
Subsidiary that was incurred pursuant to this paragraph as a result of its
guarantee of any Indebtedness shall be automatically and unconditionally
released upon the satisfaction of the conditions set forth in Section 10.05(c).

Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.

The Board of Directors of the General Partner may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default or Event of Default. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding
Investments owned by Targa Resources Partners and its Restricted Subsidiaries in
the Subsidiary designated as Unrestricted will be deemed to be either an
Investment made as of the time of the designation that will reduce the amount
available for Restricted Payments under Section 4.07 hereof or a Permitted
Investment under one or more clauses of the definition of Permitted Investments,
as determined by Targa Resources Partners; provided that any designation will
only be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

Any designation of a Subsidiary of Targa Resources Partners as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors of the General Partner
giving effect to such designation and an Officers’ Certificate certifying that
such designation complied with the preceding conditions and was permitted by
Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to
meet the requirements as an Unrestricted Subsidiary, it will thereafter cease to
be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of Targa Resources Partners as of such date and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.09 hereof, Targa
Resources Partners will be in default of such covenant.

The Board of Directors of the General Partner may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary of Targa Resources
Partners; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of Targa Resources Partners of any
outstanding Indebtedness of such Unrestricted Subsidiary, and such designation
will only be

 

68

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

permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.

Section 4.20 Termination of Covenants.

If at any time (a) the rating assigned to either series of the Notes by either
S&P or Moody’s is an Investment Grade Rating and (b) no Default or Event of
Default has occurred and is then continuing under this Indenture with respect to
such series, then upon the Issuers’ giving notice to the Trustee of such event
Targa Resources Partners and its Restricted Subsidiaries will no longer be
subject to the following provisions of this Indenture with respect to such
series:

(1) Section 4.10;

(2) Section 4.07;

(3) Section 4.08;

(4) Section 4.09;

(5) Section 4.11;

(6) Section 4.19; and

(7) Section 5.01(a)(4).

To effect such termination, Targa Resources Partners shall deliver to the
Trustee an Officers’ Certificate certifying to the satisfaction of the
conditions precedent to such termination. Once such termination has occurred,
Targa Resources Partners may not designate any of its Subsidiaries as
Unrestricted Subsidiaries pursuant to the definition of “Unrestricted
Subsidiary” in Section 1.01 hereof.

ARTICLE 5

SUCCESSORS

Section 5.01 Merger, Consolidation, or Sale of Assets.

(a) Neither of the Issuers may, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not such Issuer is the surviving
entity); or (2) sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the properties or assets of Targa Resources Partners
and its Subsidiaries, taken as a whole, in one or more related transactions, to
another Person, unless:

(1) either:

(A) such Issuer is the surviving entity; or

(B) the Person formed by or surviving any such consolidation or merger (if other
than such Issuer) or to which such sale, assignment, transfer, lease, conveyance
or other disposition has been made is a Person organized or existing under the
laws of the United States, any state of the United States or the District of
Columbia; provided, however, that Finance Corp. may not consolidate or merge
with or into any Person other than a corporation satisfying such requirement so
long as Targa Resources Partners is not a corporation;

 

69

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

(2) the Person formed by or surviving any such consolidation or merger (if other
than such Issuer) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made assumes all the obligations of
such Issuer under the Notes, this Indenture and each Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default or Event of Default exists;

(4) in the case of a transaction involving Targa Resources Partners and not
Finance Corp., Targa Resources Partners or the Person formed by or surviving any
such consolidation or merger (if other than Targa Resources Partners), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
has been made, will, either:

(A) be, on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a); or

(B) have a Fixed Charge Coverage Ratio, on the date of such transaction and
after giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter period,
not less than the Fixed Charge Coverage Ratio of Targa Resources Partners
immediately prior to such transaction; and

(5) such Issuer has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or disposition
and such supplemental indenture (if any) comply with this Indenture and all
conditions precedent therein relating to such transaction have been satisfied;

provided that clause (4) shall not apply to any sale of assets of a Restricted
Subsidiary to Targa Resources Partners or another Restricted Subsidiary or the
merger or consolidation of a Restricted Subsidiary into any Restricted
Subsidiary or Targa Resources Partners.

(b) Notwithstanding Section 5.01(a), Targa Resources Partners is permitted to
reorganize as any other form of entity in accordance with the procedures
established in this Indenture; provided that:

(1) the reorganization involves the conversion (by merger, sale, legal
conversion, contribution or exchange of assets or otherwise) of Targa Resources
Partners into a form of entity other than a limited partnership formed under
Delaware law;

(2) the entity so formed by or resulting from such reorganization is an entity
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;

(3) the entity so formed by or resulting from such reorganization assumes all
the obligations of Targa Resources Partners under the Notes, this Indenture and
each Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;

 

70

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

(4) immediately after such reorganization no Default or Event of Default exists;
and

(5) such reorganization is not materially adverse to the Holders of the Notes
(for purposes of this clause (5) it is stipulated that such reorganization shall
not be considered materially adverse to the Holders of the Notes solely because
the successor or survivor of such reorganization (a) is subject to federal or
state income taxation as an entity or (b) is considered to be an “includible
corporation” of an affiliated group of corporations within the meaning of
Section 1504(b)(i) of the Internal Revenue Code of 1986, as amended, or any
similar state or local law).

(c) A Guarantor may not sell or otherwise dispose of all or substantially all of
its properties or assets to, or consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person), another Person, other than Targa
Resources Partners or another Guarantor, except as permitted by Sections 10.04
and 10.05 hereof.

Section 5.02 Successor Person Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties or
assets of Targa Resources Partners in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof, the successor Person
formed by such consolidation or into or with which Targa Resources Partners is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the “Targa Resources Partners” shall refer instead to the successor Person and
not to Targa Resources Partners), and may exercise every right and power of
Targa Resources Partners under this Indenture with the same effect as if such
successor Person had been named as Targa Resources Partners herein.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

Each of the following is an “Event of Default” with respect to either series of
the Notes:

(1) default for 30 days in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Notes of such series;

(2) default in the payment when due (at fixed maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes of such
series;

(3) failure by the Issuers or the Guarantors to make a Change of Control Offer
or an Asset Sale Offer within the time periods set forth, or to consummate a
purchase of Notes of such series when required pursuant to the terms described
in Sections 4.15 or 4.10 or comply with the provisions of Section 5.01 hereof;

(4) failure by Targa Resources Partners for 90 days after notice to comply with
the provisions of Section 4.03 hereof;

(5) failure by the Issuers or the Guarantors for 60 days after written notice to
comply with any of the other agreements applicable to such series of Notes in
this Indenture;

 

71

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

(6) default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by Targa Resources Partners or any of its Restricted Subsidiaries (or
the payment of which is guaranteed by Targa Resources Partners or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date of this Indenture, if that default:

(A) is caused by a failure to pay principal of, or interest or premium, if any,
on, such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a “Payment Default”); or

(B) results in the acceleration of such Indebtedness prior to its express
maturity,

and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates in
excess of 3.0% of Targa Resources Partners’ Consolidated Net Tangible Assets;
provided, however, that if, prior to any acceleration of the Notes, (i) any such
Payment Default is cured or waived, (ii) any such acceleration of such
Indebtedness is rescinded, or (iii) such Indebtedness is repaid during the 30
day period commencing upon the end of any applicable grace period for such
Payment Default or the occurrence of such acceleration of such Indebtedness, as
applicable, any Default or Event of Default (but not any acceleration) caused by
such Payment Default or acceleration of such Indebtedness shall automatically be
rescinded, so long as such rescission does not conflict with any judgment,
decree or applicable law;

(7) failure by an Issuer or any of Targa Resources Partners’ Restricted
Subsidiaries to pay final judgments entered by a court or courts of competent
jurisdiction aggregating in excess of 3.0% of Targa Resources Partners’
Consolidated Net Tangible Assets, which judgments are not paid, discharged or
stayed for a period of 60 days;

(8) an Issuer or any of Targa Resources Partners’ Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries of Targa
Resources Partners that, taken together, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:

(A) commences a voluntary case,

(B) consents to the entry of an order for relief against it in an involuntary
case,

(C) consents to the appointment of a custodian of it or for all or substantially
all of its property,

(D) makes a general assignment for the benefit of its creditors, or

(E) generally is not paying its debts as they become due;

(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(A) is for relief against an Issuer or any of Targa Resources Partners’
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Targa Resources Partners that, taken together,
would constitute a Significant Subsidiary in an involuntary case;

 

72

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

(B) appoints a custodian of an Issuer or any of Targa Resources Partners’
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of Targa Resources Partners that, taken together, would
constitute a Significant Subsidiary or for all or substantially all of the
property of an Issuer or any of Targa Resources Partners’ Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of Targa Resources Partners that, taken together, would constitute
a Significant Subsidiary; or

(C) orders the liquidation of an Issuer or any of Targa Resources Partners’
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of Targa Resources Partners that, taken together, would
constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;
and

(10) except as permitted by this Indenture, any Note Guarantee is held in any
judicial proceeding to be unenforceable or invalid or ceases for any reason to
be in full force and effect, or any Guarantor, or any Person acting on behalf of
any Guarantor, denies or disaffirms its Obligations under its Note Guarantee.

Section 6.02 Acceleration.

In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to Finance Corp., Targa Resources Partners or
any Restricted Subsidiary of Targa Resources Partners that is a Significant
Subsidiary or any group of Restricted Subsidiaries of Targa Resources Partners
that, taken together, would constitute a Significant Subsidiary, all outstanding
Notes will become due and payable immediately without further action or notice.
If any other Event of Default occurs and is continuing with respect to either
series of the Notes, the Trustee or the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes of such series may declare, by
notice in writing to the Issuers, all the Notes of such series to be due and
payable immediately.

Upon any such declaration, the Notes of the relevant series shall become due and
payable immediately.

The Holders of a majority in aggregate principal amount of the then outstanding
Notes of either series by notice to the Trustee may, on behalf of the Holders of
all of the Notes of such series, rescind an acceleration or waive any existing
Default or Event of Default with respect to such series and its consequences
under this Indenture except a continuing Default or Event of Default in the
payment of interest or premium or Liquidated Damages, if any, on, or the
principal of, the Notes of such series.

Section 6.03 Other Remedies.

If an Event of Default with respect to either series of the Notes occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium and Liquidated Damages, if any, and interest on such Notes
or to enforce the performance of any provision of such Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder of a Note in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.

 

73

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

Section 6.04 Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes of either series by notice to the Trustee may on behalf of the
Holders of all of the Notes of such series waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium and Liquidated Damages, if
any, or interest on, the Notes of such series (including in connection with an
offer to purchase); provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes of such series may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

Section 6.05 Control by Majority.

Holders of a majority in aggregate principal amount of the then outstanding
Notes of either series may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it with respect to such series of Notes. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Notes of such series or that may involve the Trustee in
personal liability.

Section 6.06 Limitation on Suits.

A Holder of Notes of either series may pursue a remedy with respect to this
Indenture or the Notes of that series only if:

(1) such Holder gives to the Trustee written notice that an Event of Default
with respect to such series is continuing;

(2) Holders of at least 25% in aggregate principal amount of the then
outstanding Notes of such series make a written request to the Trustee to pursue
the remedy;

(3) such Holder or Holders offer and, if requested, provide to the Trustee
security or indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;

(4) the Trustee does not comply with the request within 60 days after receipt of
the request and the offer of security or indemnity; and

(5) during such 60-day period, Holders of a majority in aggregate principal
amount of the then outstanding Notes of such series do not give the Trustee a
direction inconsistent with such request.

A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.

 

74

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

Section 6.07 Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.

Section 6.08 Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(1) or (2) hereof occurs with
respect to either series of the Notes and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuers for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on, the Notes of such
series and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

Section 6.09 Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), their creditors or their property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

Section 6.10 Priorities.

If the Trustee collects any money or property pursuant to this Article 6 in
relation to either series of Notes, it shall pay out the money or property in
the following order:

First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;

 

75

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

Second: to Holders of Notes of such series for amounts due and unpaid on such
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal, premium and Liquidated Damages, if
any, and interest, respectively; and

Third: to the Issuers or to such party as a court of competent jurisdiction
shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note of either
series pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes of either series.

ARTICLE 7

TRUSTEE

Section 7.01 Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee will
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of such person’s
own affairs.

(b) Except during the continuance of an Event of Default:

(1) the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee will examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;

(2) the Trustee will not be liable for any error of judgment made in good faith
by a Responsible Officer;

 

76

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

(3) the Trustee will not be liable with respect to any action it takes or omits
to take in good faith in accordance with a direction received by it pursuant to
Section 6.05 hereof; and

(4) The Trustee may refuse to perform any duty or exercise any right or power
that would require it to expend its own funds or risk any liability if it shall
reasonably believe that repayment of such funds or adequate indemnity against
such risk is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.

(e) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuers. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.

Section 7.02 Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee will not be liable for
any action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel will be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.

(d) The Trustee will not be liable for any action it takes or omits to take in
good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers will be sufficient if signed by an
Officer of each of the Issuers.

(f) The Trustee will be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders of the Notes of either series unless such Holders have offered to the
Trustee reasonable indemnity or security against the losses, liabilities and
expenses that might be incurred by it in compliance with such request or
direction.

Section 7.03 Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the
Issuers with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest (as defined in the
TIA) after a Default has occurred and is continuing it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
(if this Indenture has been qualified under the TIA) or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.

 

77

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

Section 7.04 Trustee’s Disclaimer.

The Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuers’ use of the proceeds from the Notes or any money paid to the
Issuers or upon the Issuers’ direction under any provision of this Indenture, it
will not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.

Section 7.05 Notice of Defaults.

If a Default or Event of Default occurs and is continuing with respect to a
series of Notes and if it is known to the Trustee, the Trustee will send to
Holders of Notes of such series a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium or Liquidated Damages, if any, or
interest on, any Note of either series, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes of
such series.

Section 7.06 Reports by Trustee to Holders of the Notes.

Within 60 days after each May 15 beginning with the May 15 following the date of
this Indenture, and for so long as Notes remain outstanding, the Trustee will
send to the Holders of the Notes a brief report dated as of such reporting date
that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee
will also transmit all reports as required by TIA § 313(c).

A copy of each report at the time it is sent to the Holders of Notes of either
series will be sent by the Trustee to the Issuers and filed by the Trustee with
the SEC and each stock exchange on which the Notes of such series are listed in
accordance with TIA § 313(d). The Issuers will promptly notify the Trustee when
the Notes of either series are listed on any stock exchange.

Section 7.07 Compensation and Indemnity.

(a) The Issuers will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee’s compensation will not be limited by any law on compensation of a
trustee of an express trust. The Issuers will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee’s
agents and counsel.

(b) The Issuers and the Guarantors will indemnify the Trustee against any and
all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Issuers and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Issuers, the Guarantors, any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee will notify the Issuers promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so

 

78

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

notify the Issuers will not relieve the Issuers or any of the Guarantors of
their obligations hereunder except to the extent that the Issuers are materially
prejudiced by such failure to promptly provide notice. The Issuers or such
Guarantor will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Issuers will pay the reasonable
fees and expenses of such counsel. Neither the Issuers nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.

(c) The obligations of the Issuers and the Guarantors under this Section 7.07
will survive the satisfaction and discharge of this Indenture.

(d) To secure the Issuers’ and the Guarantors’ payment obligations in this
Section 7.07, the Trustee will have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal, premium, if any, Liquidated Damages, if any, and interest on
particular Notes. Such Lien will survive the satisfaction and discharge of this
Indenture.

(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent
applicable.

Section 7.08 Replacement of Trustee.

(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.

(b) The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Issuers; and any such notice shall set
forth the effective date of the Trustee’s resignation. The Holders of a majority
in aggregate principal amount of the then outstanding Notes of both series,
voting as a single class, may remove the Trustee by so notifying the Trustee and
the Issuers in writing. The Issuers may remove the Trustee if:

(1) the Trustee fails to satisfy the requirements of Section 7.10 hereof;

(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

(3) a custodian or public officer takes charge of the Trustee or its property;
or

(4) the Trustee becomes incapable of acting.

(c) If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Issuers will promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in aggregate principal amount of the then outstanding Notes of both
series, voting as a single class, may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuers.

(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes of both series, voting as a single class, may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

 

79

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

(e) If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to satisfy the requirements of Section 7.10
hereof, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

(f) A successor Trustee will deliver a written acceptance of its appointment to
the retiring Trustee and to the Issuers. Thereupon, the resignation or removal
of the retiring Trustee will become effective, and the successor Trustee will
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee will send a notice of its succession to Holders. The retiring
Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Issuers’ obligations under Section 7.07 hereof will continue for the benefit of
the retiring Trustee.

Section 7.09 Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or sells or otherwise
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act will be the
successor Trustee.

Section 7.10 Eligibility; Disqualification.

There will at all times be a Trustee hereunder that is a corporation organized
and doing business under the laws of the United States of America or of any
state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.

This Indenture will always have a Trustee who satisfies the requirements of TIA
§ 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

Section 7.11 Preferential Collection of Claims Against the Issuers.

The Trustee is subject to TIA § 311(a), excluding any creditor relationship
listed in TIA § 311(b). A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

The Issuers may, at their option and at any time, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Notes of either series
and the related Note Guarantees upon compliance with the conditions set forth
below in this Article 8.

 

80

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

Section 8.02 Legal Defeasance and Discharge.

Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to
this Section 8.02, the Issuers and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes of a series (including the related Note Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For
this purpose, Legal Defeasance means that the Issuers and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes of such series (including the related Note Guarantees), which
will thereafter be deemed to be “outstanding” only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in
clauses (1) and (2) below, and to have satisfied all their other obligations
under such Notes, the related Note Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which
will survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of outstanding Notes of such series to receive
payments in respect of the principal of, or interest or premium and Liquidated
Damages, if any, on, such Notes when such payments are due from the trust
referred to in Section 8.04 hereof;

(2) the Issuers’ obligations with respect to the Notes of such series concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Issuers’ and the Guarantors’ obligations in connection therewith; and

(4) this Article 8.

Subject to compliance with this Article 8, the Issuers may exercise their option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.

Section 8.03 Covenant Defeasance.

Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to
this Section 8.03, the Issuers and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 3.09,
4.03, 4.04 (except for paragraph (a) thereof to the extent required by the TIA),
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.15, 4.18 and 4.19 hereof and clause
(4) of Section 5.01 hereof with respect to the outstanding Notes of a series,
and the Guarantors will be released from their obligations with respect to the
related Note Guarantees, on and after the date the conditions set forth in
Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the
Notes of such series will thereafter be deemed not “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but will
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes to the extent permitted by GAAP). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Notes of such series and the related
Note Guarantees, the Issuers and the Guarantors may omit to comply with and will
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof with respect to such series, but,

 

81

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

except as specified above, the remainder of this Indenture and such Notes and
the related Note Guarantees will be unaffected thereby. In addition, upon the
Issuers’ exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(3) through 6.01(7) inclusive and
Section 6.01(10) will not constitute Events of Default with respect to the
applicable series of Notes.

For the avoidance of doubt, it is understood and agreed that the Issuers may
exercise their covenant defeasance option under this Section 8.03 with respect
to one series of Notes without affecting the obligations of the Issuers and the
Guarantors with respect to the other series of Notes.

Section 8.04 Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance under either
Section 8.02 or 8.03 hereof with respect to either series of the Notes:

(1) the Issuers must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes of such series, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized investment bank, appraisal firm or firm of
independent public accountants, to pay the principal of, or interest and premium
and Liquidated Damages, if any, on the outstanding Notes of such series on the
stated date for payment thereof or on the applicable Redemption Date, as the
case may be, and the Issuers must specify whether such Notes are being defeased
to such stated date for payment or to a particular Redemption Date;

(2) in the case of an election under Section 8.02 hereof, the Issuers must
deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that:

(A) the Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling; or

(B) since the date of this Indenture, there has been a change in the applicable
federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;

(3) in the case of an election under Section 8.03 hereof, the Issuers must
deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Notes of such series will
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default with respect to such series shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) (and any similar concurrent deposit relating to other Indebtedness) and
the granting of Liens to secure such Indebtedness);

 

82

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

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture and the agreements governing any other
Indebtedness being defeased, discharged or replaced) to which Targa Resources
Partners or any of its Subsidiaries is a party or by which Targa Resources
Partners or any of its Subsidiaries is bound;

(6) the Issuers must deliver to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Issuers with the intent of preferring the
Holders of Notes of such series over the other creditors of the Issuers with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Issuers or others; and

(7) the Issuers must deliver to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.

Section 8.05 Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant
to Section 8.04 hereof in respect of the applicable series of outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including either Issuer acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.

The Issuers will pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the applicable series
of outstanding Notes.

Notwithstanding anything in this Article 8 to the contrary, the Trustee will
deliver or pay to the Issuers from time to time upon the request of the Issuers
any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized investment
bank, appraisal firm or firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(1) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

Section 8.06 Repayment to the Issuers.

Any money deposited with the Trustee or any Paying Agent, or then held by the
Issuers, in trust for the payment of the principal of, premium or Liquidated
Damages, if any, or interest on, any defeased Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Issuers on their
request or (if then held by the Issuers) will be discharged from such trust; and
the Holder of such Note will thereafter be permitted to look only to the Issuers
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, will thereupon cease; provided, however, that, if any defeased Notes
then outstanding are in definitive form, the Trustee

 

83

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

or such Paying Agent, before being required to make any such repayment, may at
the expense of the Issuers cause to be published once, in The New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which will not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Issuers.

Section 8.07 Reinstatement.

If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers’ and the Guarantors’ obligations under this
Indenture and the defeased Notes and the related Note Guarantees will be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply
all such money in accordance with Section 8.02 or 8.03 hereof, as the case may
be; provided, however, that, if the Issuers make any payment of principal of,
premium or Liquidated Damages, if any, or interest on, any such Note following
the reinstatement of their obligations, the Issuers will be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes.

Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and
the Trustee may amend or supplement this Indenture or the Notes or the Note
Guarantees without the consent of any Holder of Notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;

(3) to provide for the assumption of the Issuers’ or a Guarantor’s obligations
to the Holders of the Notes and Note Guarantees in the case of a merger or
consolidation or sale of all or substantially all of the Issuers’ or such
Guarantors’ properties or assets, as applicable;

(4) to make any change that would provide any additional rights or benefits to
the Holders of the Notes of either series or that does not adversely affect the
legal rights hereunder of any such Holder;

(5) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;

(6) to conform the text of this Indenture or the Note Guarantees to any
provision of the “Description of Notes” section of the Issuers’ Offering
Memorandum to the extent that such text of this Indenture or the Note Guarantees
was intended to reflect such provision of the “Description of Notes”;

(7) to provide for the issuance of Additional Notes of either series in
accordance with the limitations set forth in this Indenture as of the date
hereof;

 

84

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

(8) to allow any Guarantor to execute a supplemental indenture and/or a notation
of Note Guarantee with respect to the Notes of either series or to reflect the
addition or release of a Note Guarantee in accordance with this Indenture;

(9) to secure the Notes of either series and/or the related Note Guarantees; or

(10) to provide for the reorganization of Targa Resources Partners as any other
form of entity, in accordance with Section 5.01(b).

Upon the request of the Issuers, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee will join with the
Issuers and the Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Section 9.01 and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee will not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.

Section 9.02 With Consent of Holders of Notes.

Except as provided below in this Section 9.02, the Issuers, the Guarantors and
the Trustee may amend or supplement this Indenture (including Sections 3.09,
4.10 and 4.15 hereof) and the Notes of either series or the related Note
Guarantees with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes of each series affected thereby (including
Additional Notes, if any, of such series) voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes of such series), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or
compliance with any provision of this Indenture or the Notes of either series or
the Note Guarantees may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Notes of each series
affected thereby (including, without limitation, Additional Notes, if any, of
such series) voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes). Section 2.08 hereof shall determine which Notes are considered
to be “outstanding” for purposes of this Section 9.02.

Upon the request of the Issuers accompanied by resolutions of their Boards of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes of the applicable series as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee will join with the Issuers and the Guarantors
in the execution of such amended or supplemental indenture unless such amended
or supplemental indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.

It is not necessary for the consent of the Holders of Notes of either series
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it is sufficient if such consent approves
the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers will send to the Holders of Notes of each series affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to send such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.

 

85

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

However, without the consent of each Holder of Notes of the series affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect to
any Notes held by a non-consenting Holder):

(1) reduce the principal amount of Notes of such series whose Holders must
consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed maturity of any Note or alter
the provisions with respect to the redemption or repurchase of the Notes of such
series (other than provisions relating to minimum required notice of optional
redemption or those provisions relating to Sections 3.09, 4.10 or 4.15 hereof);

(3) reduce the rate of or change the time for payment of interest, including
default interest, on any Note;

(4) waive a Default or Event of Default in the payment of principal of, or
interest or premium or Liquidated Damages, if any, on the Notes of such series
(except a rescission of acceleration of the Notes of such series by the Holders
of a majority in aggregate principal amount of the then outstanding Notes of
such series and a waiver of the payment default that resulted from such
acceleration);

(5) make any Note payable in money other than that stated in the Notes of such
series;

(6) make any change in the provisions of this Indenture relating to waivers of
past Defaults or Events of Default or the rights of Holders of Notes of such
series to receive payments of, principal of, or interest or premium or
Liquidated Damages, if any, on, the Notes of such series (other than as
permitted by clause (7) below);

(7) waive a redemption or repurchase payment with respect to any Note of such
series (other than a payment required by Sections 4.10 or 4.15 hereof);

(8) release any Guarantor from any of its obligations under its Note Guarantee
or this Indenture, except in accordance with the terms of this Indenture; or

(9) make any change in the preceding amendment, supplement and waiver
provisions.

Section 9.03 Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Notes will be set forth
in an amended or supplemental indenture that complies with the TIA as then in
effect.

Section 9.04 Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder’s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder; except as provided in the last
paragraph of Section 9.02.

 

86

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

Section 9.05 Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note of the relevant series thereafter authenticated. The Issuers
in exchange for all Notes of the relevant series may issue and the Trustee
shall, upon receipt of a Company Order, authenticate new Notes of such series
that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note will not affect the
validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, etc.

The Trustee will sign any amended or supplemental indenture authorized pursuant
to this Article 9 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. The Issuers may not
sign an amended or supplemental indenture until the Boards of Directors of each
of the Issuers approves it. In executing any amended or supplemental indenture,
the Trustee will be entitled to receive and (subject to Section 7.01 hereof)
will be fully protected in relying upon, in addition to the documents required
by Section 12.04 hereof, an Officers’ Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture. In the case of any amendment or
supplement pursuant to Section 9.01(6) hereof, such Officers’ Certificate shall
include a certification that the conforming change being made to this Indenture
reflects the intent of the Issuers and the applicable Initial Purchasers.

ARTICLE 10

NOTE GUARANTEES

Section 10.01 Guarantee.

(a) Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Issuers hereunder or thereunder, that:

(1) the principal of, premium and Liquidated Damages, if any, and interest on,
the Notes will be promptly paid in full when due, whether at Stated Maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the
Issuers to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and

(2) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration or otherwise.

 

87

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

Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.

(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuers, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Issuers, any right to require a
proceeding first against the Issuers, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

(c) If any Holder or the Trustee is required by any court or otherwise to return
to the Issuers, the Guarantors or any custodian, trustee, liquidator or other
similar official acting in relation to either the Issuers or the Guarantors, any
amount paid by either to the Trustee or such Holder, this Note Guarantee, to the
extent theretofore discharged, will be reinstated in full force and effect.

(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.

Section 10.02 Limitation on Guarantor Liability.

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms
that it is the intention of all such parties that the Note Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 10, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.

Section 10.03 Execution and Delivery of Note Guarantee.

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its Officers.

 

88

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

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01
hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.

If an Officer whose signature is on this Indenture or on the notation of Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a notation of Note Guarantee is endorsed, the Note Guarantee will
be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.

In the event that the Issuers or any of Targa Resources Partners’ Restricted
Subsidiaries creates or acquires any Domestic Subsidiary after the date of this
Indenture, if required by Section 4.18 hereof, the Issuers will cause such
Domestic Subsidiary to comply with the provisions of Section 4.18 hereof and
this Article 10, to the extent applicable.

Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.

No Guarantor may sell or otherwise dispose of all or substantially all of its
properties or assets to, or consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person) another Person, other than Targa
Resources Partners or another Guarantor, unless:

(1) immediately after giving effect to such transaction, no Default or Event of
Default exists; and

(2) either:

(A) the Person acquiring the properties or assets in any such sale or other
disposition or the Person formed by or surviving any such consolidation or
merger (other than the Guarantor) unconditionally assumes all the obligations of
that Guarantor under this Indenture, its Note Guarantee and each Registration
Rights Agreement on the terms set forth herein or therein, pursuant to a
supplemental indenture substantially in the form of Exhibit F hereto; or

(B) such sale or other disposition does not violate the applicable provisions of
this Indenture, including without limitation, Section 4.10 hereof.

In case of any such consolidation, merger, sale or other disposition and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee, of such obligations, such successor Person will
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. Such successor Person thereupon may cause
to be signed any or all of the notations of Note Guarantees to be endorsed upon
all of the Notes issuable hereunder which theretofore shall not have been signed
by the Issuers and delivered to the Trustee. All the Note Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture
as the Note Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Note Guarantees had been issued at
the date of the execution hereof.

 

89

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

Section 10.05 Releases.

(a) In the event of any sale or other disposition of all or substantially all of
the properties or assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of Capital Stock of any Guarantor, in
each case to a Person that is not (either before or after giving effect to such
transactions) Targa Resources Partners or a Restricted Subsidiary of Targa
Resources Partners, then such Guarantor will be released and relieved of any
obligations under its Note Guarantee and all of its other obligations under this
Indenture; provided that such sale or other disposition does not violate the
provisions of Section 4.10 hereof, and such Guarantor ceases to be a Restricted
Subsidiary of Targa Resources Partners in the case of and as a result of the
sale or other disposition of its Capital Stock. Upon delivery by the Issuers to
the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect
that the Note Guarantee of such Guarantor has been released in accordance with
this Section 10.05, the Trustee will execute any documents reasonably required
in order to evidence the release of such Guarantor from its obligations under
its Note Guarantee and all of its other obligations under this Indenture.

(b) Upon designation of any Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, such Guarantor will be released and
relieved of any obligations under its Note Guarantee and all of its other
obligations under this Indenture.

(c) A Guarantor will be released and relieved of any obligations under its Note
Guarantee and all of its other obligations under this Indenture at such time as
that Guarantor ceases to guarantee any other Indebtedness of an Issuer or
another Guarantor, provided that, if it is also a Domestic Subsidiary, it is no
longer an obligor with respect to any Indebtedness under any Credit Facility;
provided, however, that if, at any time following such release, that Guarantor
incurs a Guarantee under a Credit Facility, then such Guarantor shall be
required to provide a Note Guarantee at such time.

(d) Upon Legal or Covenant Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 11
hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee and all of its other obligations under this Indenture.

Any Guarantor not released from its obligations under its Note Guarantee as
provided in this Section 10.05 will remain liable for the full amount of
principal of and interest and premium and Liquidated Damages, if any, on the
Notes and for the other obligations of such Guarantor under this Indenture as
provided in this Article 10.

ARTICLE 11

SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge.

This Indenture will be discharged and will cease to be of further effect as to
all Notes of either series issued hereunder (except as to surviving rights of
registration, transfer or exchange of such Notes and as otherwise specified in
this Indenture), when:

(1) either:

(A) all Notes of such series that have been authenticated, except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Issuers, have been delivered to the Trustee for cancellation; or

 

90

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

(B) all Notes of such series that have not been delivered to the Trustee for
cancellation have become due and payable or will become due and payable within
one year by reason of the giving of a notice of redemption or otherwise and the
Issuers or any Guarantor has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a combination of
cash in U.S. dollars and non-callable Government Securities, in amounts as will
be sufficient, without consideration of any reinvestment of interest, to pay and
discharge the entire Indebtedness on the Notes of such series not delivered to
the Trustee for cancellation for principal, premium and Liquidated Damages, if
any, and accrued interest to the date of fixed maturity or redemption;

(2) in the case of clause (1)(B) above, no Event of Default with respect to such
series of Notes has occurred and is continuing on the date of such deposit
(other than an Event of Default resulting from the borrowing of funds to be
applied to such deposit and any similar deposit relating to other Indebtedness
and, in each case, the granting of Liens to secure such borrowings) and the
deposit will not result in a breach or violation of, or constitute a default
under, any instrument (other than this Indenture with respect to such series of
Notes and the agreements governing any other Indebtedness that is being
defeased, discharged or replaced) to which Targa Resources Partners or any
Guarantor is a party or by which Targa Resources Partners or any Guarantor is
bound;

(3) the Issuers or any Guarantor has paid or caused to be paid all sums payable
by it under this Indenture; and

(4) the Issuers have delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the Notes of
such series at fixed maturity or on the Redemption Date, as the case may be.

In addition, the Issuers must deliver an Officers’ Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money has
been deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In
addition, nothing in this Section 11.01 will be deemed to discharge those
provisions of Section 7.07 hereof that, by their terms, survive the satisfaction
and discharge of this Indenture.

Section 11.02 Application of Trust Money.

Subject to the provisions of Section 8.06 hereof, all money deposited with the
Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the applicable series of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including either Issuer acting as Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal (and premium and Liquidated
Damages, if any) and interest for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds except
to the extent required by law.

 

91

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

If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuers’ and any Guarantor’s obligations under this Indenture and the applicable
series of the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 11.01 hereof, provided that if the Issuers have
made any payment of principal of, premium or Liquidated Damages, if any, or
interest on, any Notes of such series because of the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.

ARTICLE 12

MISCELLANEOUS

Section 12.01 Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA § 318(c) in relation to indentures qualified under the
TIA, the imposed duties will control, irrespective of whether or not this
Indenture is qualified under the TIA.

Section 12.02 Notices.

Any notice or communication by the Issuers, any Guarantor or the Trustee to the
others is duly given if in writing in the English language and delivered in
Person or by first class mail (registered or certified, return receipt
requested), facsimile transmission or overnight air courier guaranteeing next
day delivery, to the others’ address:

If to the Issuers and/or any Guarantor:

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

Facsimile No.: (713) 584-1110

Attention: Treasurer

With a copy to each of:

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

Facsimile No.: (713) 584-1110

Attention: General Counsel

and

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, Texas 77002

Facsimile No.: (713) 615-5883

Attention: Christopher S. Collins

 

92

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

If to the Trustee:

U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Facsimile No.: (713) 235-9213

Attention: Corporate Trust Services

The Issuers, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.

All notices and communications (other than those sent to Holders) will be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if transmitted by facsimile; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar; provided, that if the Depositary is the Holder, notice shall be given
by such means as the Depositary may specify. Any notice or communication will
also be so mailed to any Person described in TIA § 313(c), to the extent
required by the TIA. Failure to send a notice or communication to a Holder or
any defect in it will not affect its sufficiency with respect to other Holders.

If a notice or communication is given in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuers send a notice or communication to Holders, they will send a copy
to the Trustee and each Agent at the same time.

Section 12.03 Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect
to their rights under this Indenture or the Notes. The Issuers, the Trustee, the
Registrar and anyone else shall have the protection of TIA § 312(c).

Section 12.04 Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuers to the Trustee to take any action
under this Indenture, the Issuers shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to
the Trustee (which must include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 12.05 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

 

93

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

Section 12.05 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and
must include:

(1) a statement that the person making such certificate or opinion has read such
covenant or condition;

(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(3) a statement that, in the opinion of such person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been satisfied.

Section 12.06 Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.

Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.

Neither the General Partner nor any past, present or future director, officer,
partner, member, employee, incorporator, manager or unit holder or other owner
of Equity Interest of the Issuers or any Guarantor, as such, will have any
liability for any obligations of the Issuers or the Guarantors under the Notes,
this Indenture, the Note Guarantees or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes and the Note Guarantees.

Section 12.08 Governing Law.

THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

Section 12.09 No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt
agreement of Targa Resources Partners or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

Section 12.10 Successors.

All agreements of the Issuers in this Indenture and the Notes will bind their
successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 10.05 hereof.

 

94

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

Section 12.11 Severability.

In case any provision in this Indenture or in the Notes is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.

Section 12.12 Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy
will be an original, but all of them together represent the same agreement. The
exchange of copies of this Indenture and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Indenture
as to the parties hereto and may be used in lieu of the original Indenture for
all purposes. Signatures of the parties hereto transmitted by facsimile or PDF
shall be deemed to be their original signatures for all purposes.

Section 12.13 Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part of this Indenture and will in no way modify or
restrict any of the terms or provisions hereof.

Section 12.14 Payment Date Other Than a Business Day

If any payment with respect to any principal of, premium, if any, on, or
interest on any Note (including any payment to be made on any date fixed for
redemption or purchase of any Note) is due on a day which is not a Business Day,
then the payment need not be made on such date, but may be made on the next
Business Day with the same force and effect as if made on such date, and no
interest will accrue for the intervening period.

Section 12.15 Evidence of Action by Holders

Any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given, made or taken by the Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing,
and may be given, made or taken in connection with a purchase of, or tender
offer or exchange offer for, outstanding Notes; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Issuers. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“act” of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Issuers if made in the manner provided in this Section 12.15.

Without limiting the generality of this Section 12.15, unless otherwise provided
in or pursuant to this Indenture, (i) a Holder, including a Depositary or its
nominee that is a Holder of a Global Note, may give, make or take, by an agent
or agents duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other act provided in or pursuant to this
Indenture to be given, made or taken by the Holders, and a Depositary or its
nominee that is a Holder of a Global Note may duly appoint in writing as its
agent or agents members of, or participants in, such Depositary holding
interests in such Global Note in the records of such Depositary, and (ii) with
respect to any Global Note the Depositary for which is DTC, any consent or other
action given, made or taken by an “agent member”

 

95

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

of DTC by electronic means in accordance with the Automated Tender Offer
Procedures system or other customary procedures of, and pursuant to
authorization by, DTC shall be deemed to constitute the “act” of the Holder of
such Global Note, and such act shall be deemed to have been delivered to Targa
Resources Partners and the Trustee upon the delivery by DTC of an “agent’s
message” or other notice of such consent or other action having been so given,
made or taken in accordance with the customary procedures of DTC.

The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to such witness, notary or officer the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.

Notwithstanding anything to the contrary contained in this Section 12.15 or
elsewhere in this Indenture, the principal amount and serial numbers of Notes
held by any Holder, and the date of holding the same, shall be proved by the
register of the Notes maintained by the Registrar as provided in Section 2.03.

If the Issuers shall solicit from the Holders of the Notes any request, demand,
authorization, direction, notice, consent, waiver or other act, the Issuers may,
at their option, fix in advance a record date for the determination of the
Holders entitled to give, make or take such request, demand, authorization,
direction, notice, consent, waiver or other act, but the Issuers shall have no
obligation to do so. Such record date shall be a date not earlier than the date
30 days prior to the first solicitation of the Holders generally in connection
therewith or the date of the most recent list of the Holders forwarded to the
Trustee prior to such solicitation pursuant to Section 2.05 and not later than
the date such solicitation is completed. If such a record date is fixed, then
notwithstanding the second sentence of Section 9.04, any instrument embodying
and evidencing such request, demand, authorization, direction, notice, consent,
waiver or other act may be executed before or after such record date, but only
the Holders of record at the close of business on such record date (whether or
not such Persons were Holders before, or continue to be Holders after, such
record date) shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of the then outstanding Notes have
given, made or taken such request, demand, authorization, direction, notice,
consent, waiver or other act, and for that purpose the then outstanding Notes
shall be computed as of such record date; provided that no such act by the
Holders of record on any record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after such record date.

Subject to Section 9.04, any request, demand, authorization, direction, notice,
consent, waiver or other act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuers in reliance thereon, whether or not notation of such action is made upon
such Note.

Without limiting the foregoing, a Holder entitled hereunder to give, make or
take any action hereunder with regard to any particular Note may do so itself
with regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

 

96

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

For purposes of this Indenture, any action by the Holders that may be taken in
writing may be taken by electronic means or as otherwise reasonably acceptable
to the Trustee.

Section 12.16 U.S.A. Patriot Act.

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A.
Patriot Act, the Trustee, like all financial institutions and in order to help
fight the funding of terrorism and money laundering, is required to obtain,
verify and record information that identities each person or legal entity that
establishes a relationship or opens an account with the Trustee. The parties to
this Indenture agree that they will provide the Trustee with such information as
it may request in order for the Trustee to satisfy the requirements of the
U.S.A. Patriot Act.

Section 12.17 Force Majeure.

In no event shall the Trustee be responsible or liable for any failure or delay
in the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Trustee shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

[Signatures on following pages]

 

97

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

SIGNATURES

Dated as of the date first written above.

 

ISSUERS:

 

TARGA RESOURCES PARTNERS LP

By:   Targa Resources GP LLC,   Its general partner By:               /s/
Matthew J. Meloy   Name:   Matthew J. Meloy   Title:   Executive Vice President
and Chief Financial Officer

 

TARGA RESOURCES PARTNERS FINANCE CORPORATION

By:               /s/ Matthew J. Meloy   Name:   Matthew J. Meloy   Title:  
Executive Vice President and Chief Financial Officer

[Indenture]

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

GUARANTORS:

 

TARGA BADLANDS LLC

TARGA CAPITAL LLC

TARGA COGEN LLC

TARGA DOWNSTREAM LLC

TARGA GAS MARKETING LLC

TARGA GAS PIPELINE LLC

TARGA GAS PROCESSING LLC

TARGA INTRASTATE PIPELINE LLC

TARGA LIQUIDS MARKETING AND TRADE LLC

TARGA LOUISIANA INTRASTATE LLC

TARGA MIDSTREAM SERVICES LLC

TARGA MLP CAPITAL LLC

TARGA NGL PIPELINE COMPANY LLC

TARGA RESOURCES OPERATING GP LLC

TARGA RESOURCES OPERATING LLC

TARGA SOUND TERMINAL LLC

TARGA TERMINALS LLC

TARGA TRANSPORT LLC

By:   /s/ Matthew J. Meloy   Name:   Matthew J. Meloy   Title:   Executive Vice
President and Chief Financial Officer

[Indenture]

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

TRUSTEE:

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:               /s/ Shazia Flores   Name:   Shazia Flores   Title:   Vice
President

[Indenture]

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

EXHIBIT A-1

[Face of Note]

CUSIP 87612BAZ51

5 1⁄8% Senior Notes due 2025

 

No.         $            

TARGA RESOURCES PARTNERS LP

and

TARGA RESOURCES PARTNERS FINANCE CORPORATION

promise to pay to                                         , or registered
assigns, the principal sum of              DOLLARS [or such other amount as may
be indicated on the attached Schedule of Exchanges of Interests in the Global
Note],2 on February 1, 2025.

Interest Payment Dates: February 1 and August 1

Record Dates: January 15 and July 15

Dated:                     , 20    

 

TARGA RESOURCES PARTNERS LP By:   Targa Resources GP LLC,   Its General Partner
By:       Name:     Title:  

 

TARGA RESOURCES PARTNERS FINANCE CORPORATION

By:       Name:     Title:  

 

1  The CUSIP No. is U87571 AM4 for the Regulation S Notes and 87612B BB7for the
Unrestricted Notes.

2  For Global Notes only.

 

A-1-1

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

This is one of the 2025 Notes referred to in the within-mentioned Indenture:

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:       Authorized Signatory

 

A-1-2

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

[Back of Note]

5 1⁄8% Senior Notes due 2025

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

[Insert the OID Legend, if applicable pursuant to the provisions of the
Indenture]

Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

(1) Interest. Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation,
a Delaware corporation (“Finance Corp.” and, together with Targa Resources
Partners, the “Issuers”), promise to pay interest on the principal amount of
this Note at 5.125% per annum from October 6, 2016 until maturity and shall pay
the Liquidated Damages, if any, payable pursuant to Section 4 of the
Registration Rights Agreement referred to below. The Issuers will pay interest
and Liquidated Damages, if any, semi-annually in arrears on February 1 and
August 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an “Interest Payment Date”). Interest on this
Note will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be February 1, 2017. The Issuers will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate then in
effect to the extent lawful; and they will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any (without regard to any applicable grace
periods), from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

(2) Method of Payment. The Issuers will pay interest on this Note (except
defaulted interest) and Liquidated Damages, if any, to the Person who is the
registered Holder of this Note at the close of business on the January 15 and
July 15 next preceding the Interest Payment Date, even if such Note is canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest. If
this Note is a Definitive Note, the Holder must surrender such Note to the
Paying Agent to collect payments of principal and premium, if any, due at
maturity. This Note will be payable as to principal, premium, if any, and
Liquidated Damages, if any, and interest at the office or agency of the Issuers
maintained for such purpose in New York, New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages, if any, may be made by
check mailed to the Holder at its address set forth in the register of Holders;
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages, if any, on, all Global Notes and all other Notes the Holders of which
will have provided wire transfer instructions to the Issuers or the Paying
Agent. Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

(3) Paying Agent and Registrar. Initially, U.S. Bank National Association, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers
may change any Paying Agent or Registrar without notice to any Holder. Targa
Resources Partners or any of its Subsidiaries may act in any such capacity.

 

A-1-3

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

(4) Indenture. The Issuers issued this Note under an Indenture dated as of
October 6, 2016 (the “Indenture”) among the Issuers, the Guarantors and the
Trustee. This Note is one of a series of Notes issued under the Indenture
denominated as the 5 1⁄8% Senior Notes due 2025. The terms of this Note include
those stated in the Indenture and those made part of the Indenture by reference
to the TIA. This Note is subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes of
each series are unsecured obligations of the Issuers. The Indenture does not
limit the aggregate principal amount of Notes of either series that may be
issued thereunder.

(5) Optional Redemption.

(a) On or after February 1, 2020, the Issuers may redeem all or a part of this
series of Notes upon giving notice as provided in the Indenture, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on this series
of Notes redeemed, to the applicable Redemption Date, if redeemed during the
twelve-month period beginning on February 1 of each year indicated below,
subject to the rights of Holders of this series of Notes on the relevant record
date to receive interest on an Interest Payment Date that is on or prior to the
Redemption Date:

 

Year

   Percentage  

2020

     103.844 % 

2021

     102.563 % 

2022

     101.281 % 

2023 and thereafter

     100.000 % 

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at
any time prior to February 1, 2020, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of this series of Notes
(including any Additional Notes of this series) issued under the Indenture upon
giving notice as provided in the Indenture, at a redemption price of 105.125% of
the principal amount, plus accrued and unpaid interest and Liquidated Damages,
if any, to the Redemption Date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), in an amount not greater than the net cash
proceeds of one or more Equity Offerings by Targa Resources Partners; provided
that at least 65% of the aggregate principal amount of this series of Notes
(including any Additional Notes of this series) issued under the Indenture
(excluding Notes of this series held by Targa Resources Partners and its
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption and the redemption occurs within 180 days of the date of the closing
of such Equity Offering.

(c) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at
any time prior to February 1, 2020, the Issuers may also redeem all or a part of
the Notes of this series, upon giving notice as provided in the Indenture, at a
redemption price equal to 100% of the principal amount of the Notes of this
series redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date, subject to the
rights of Holders on the relevant record date to receive interest due on an
Interest Payment Date that is prior to the Redemption Date.

For purposes of subparagraph (c) of this Paragraph 5, “Applicable Premium”
means, with respect to any Note of this series at the time of computation, the
greater of (1) 1.0% of the principal

 

A-1-4

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

amount of the Note or (2) the excess of: (a) the present value at such time of
(i) the redemption price of the Note at February 1, 2020 (such redemption price
being set forth in the table appearing in subparagraph (a)) plus (ii) all
required interest payments due on the Note through February 1, 2020 (excluding
accrued but unpaid interest to the Redemption Date), computed using a discount
rate equal to the Treasury Rate as of such time plus 50 basis points, discounted
to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) over (b) the principal amount of the Note,
if greater. In addition, for purposes of subparagraph (c) of this Paragraph 5,
“Treasury Rate” means, with respect to any Redemption Date, the yield to
maturity as of the time of computation of United States Treasury securities with
a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at
least two Business Days prior to such time (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to February 1, 2020;
provided, however, that if such period is not equal to the constant maturity of
a United States Treasury security for which a weekly average yield is given,
Targa Resources Partners shall obtain the Treasury Rate by linear interpolation
(calculated to the nearest one twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the Redemption Date to February 1, 2020, is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used.

(d) Unless the Issuers default in the payment of the redemption price, interest
and Liquidated Damages, if any, will cease to accrue on the Notes of this series
or portions thereof called for redemption on the applicable Redemption Date.

(6) Mandatory Redemption.

Except as set forth below, the Issuers are not required to make mandatory
redemption or sinking fund payments with respect to this Note or to repurchase
this Note at the option of the Holders.

(7) Repurchase at the Option of Holder.

(a) If there is a Change of Control with respect to this series of Notes, the
Issuers will be required to make an offer (a “Change of Control Offer”) to each
Holder of this series of Notes to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes of this
series at a purchase price in cash equal to at least 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the relevant
Interest Payment Date (the “Change of Control Payment”). Within 30 days
following any Change of Control, the Issuers will send a notice to each Holder
of Notes of this series setting forth the procedures governing the Change of
Control Offer as required by the Indenture. In the event that Holders of not
less than 90% of the aggregate principal amount of the outstanding Notes of this
series accept a Change of Control Offer and Targa Resources Partners (or the
third party making the Change of Control Offer as provided in Section 4.15(c) of
the Indenture) purchases all of the Notes of this series held by such Holders,
Targa Resources Partners will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following the purchase
pursuant to the Change of Control Offer described above, to redeem all of the
Notes of this series that remain outstanding following such purchase at a
redemption price equal to the Change of Control Payment plus, to the extent not
included in the Change of Control Payment, accrued and unpaid interest and
Liquidated Damages, if any, on the Notes of this series that remain outstanding,
to, but excluding, the date of redemption (subject to the right of Holders on
the relevant record date to receive interest due on an interest payment date
that is on or prior to the redemption date).

 

A-1-5

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

(b) If the Issuers or a Restricted Subsidiary of Targa Resources Partners
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $50.0 million, Targa Resources
Partners will commence an offer to all Holders of Notes of each series and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”)
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes and other pari passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Targa Resources Partners (or such Restricted Subsidiary) may use
such deficiency for any purpose not otherwise prohibited by the Indenture. If
the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, then
the Notes and such other pari passu Indebtedness shall be purchased on a pro
rata basis. Holders of Definitive Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer and may elect to have such Notes
purchased by completing the form entitled “Option of Holder to Elect Purchase”
attached to the Notes.

(8) Notice of Redemption. Notice of redemption will be given in the manner
provided in the Indenture at least 30 days but not more than 60 days before the
Redemption Date to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be given more than 60 days prior to
a Redemption Date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction or discharge of the Indenture. Notes in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed.

(9) Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in de-nominations of $2,000 and integral multiples of $1,000 in excess
thereof. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

(10) Persons Deemed Owners. The registered Holder of a Note may be treated as
its owner for all purposes.

(11) Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes or the related Note Guarantees may be amended or
supplemented with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes of each series affected thereby
including Additional Notes of such series, if any, voting as a single class, and
any existing Default or Event of Default or compliance with any provision of the
Indenture or the Notes of either series or the Note Guarantees may be waived
with the consent of the Holders of a majority in aggregate principal amount of
the then outstanding Notes of each series affected thereby including Additional
Notes of such series, if any, voting as a single class. Without the consent of
any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuers’ or a Guarantor’s
obligations to Holders of the Notes and Note

 

A-1-6

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

Guarantees in the case of a merger or consolidation or sale of all or
substantially all of the Issuers’ or such Guarantor’s properties or assets, as
applicable, to make any change that would provide any additional rights or
benefits to the Holders of Notes of either series or that does not adversely
affect the legal rights under the Indenture of any such Holder, to comply with
the requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA, to conform the text of the Indenture or the Note
Guarantees to any provision of the “Description of Notes” section of the
Issuers’ Offering Memorandum to the extent that such text of the Indenture or
the Notes Guarantees was intended to reflect such provision of the “Description
of Notes”, to provide for the issuance of Additional Notes of either series in
accordance with the limitations set forth in the Indenture as of the date of the
Indenture, to allow any Guarantor to execute a supplemental indenture, to secure
the Notes of either series and/or the Note Guarantees, or to provide for the
reorganization of Targa Resources Partners as any other form of entity, in
accordance with Section 5.01 of the Indenture.

(12) Defaults and Remedies. Events of Default include: (i) default for 30 days
in the payment when due of interest on, or Liquidated Damages, if any, with
respect to the Notes of this series; (ii) default in the payment when due (at
fixed maturity, upon redemption or otherwise) of the principal of, or premium,
if any, on the Notes of this series; (iii) failure by Targa Resources Partners
or any of its Restricted Subsidiaries to timely consummate repurchase offers of
Notes of this series under Section 4.10 or 4.15 of the Indenture or to comply
with Section 5.01 of the Indenture; (iv) failure by Targa Resources Partners for
90 days after notice to comply with Section 4.03 of the Indenture; (v) failure
by Targa Resources or any of its Restricted Subsidiaries for 60 days after
written notice to comply with any of the other agreements applicable to this
series in the Indenture; (vi) default under certain other agreements relating to
Indebtedness of Targa Resources Partners or any of its Restricted Subsidiaries,
which default results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (viii) certain events of bankruptcy
or insolvency with respect to the Issuers or any of Targa Resources Partners’
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is
held in any judicial proceeding to be unenforceable or invalid or ceases for any
reason to be in full force and effect or any Guarantor or any Person acting on
its behalf denies or disaffirms its obligations under such Guarantor’s Note
Guarantee. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Notes of this series may declare all the Notes of this series to be due and
payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
Finance Corp., Targa Resources Partners or any Restricted Subsidiary of Targa
Resources Partners that is a Significant Subsidiary or any group of Restricted
Subsidiaries of Targa Resources Partners that, taken together, would constitute
a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture or the Notes of this series except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Notes of this series may direct the Trustee in
its exercise of any trust or power with respect to such series of Notes. The
Trustee may withhold from Holders of the Notes of this series notice of any
continuing Default or Event of Default with respect to such series if it
determines that withholding notice is in their interest, except a Default or
Event of Default relating to the payment of principal, interest or premium or
Liquidated Damages, if any, with respect to such series. The Holders of a
majority in aggregate principal amount of the then outstanding Notes of this
series by notice to the Trustee may, on behalf of the Holders of all of the
Notes of this series, rescind an acceleration or waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium or Liquidated
Damages, if any, on, or the principal of, the Notes of this series. The Issuers
and the Guarantors are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers and the Guarantors are
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.

 

A-1-7

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

(13) Trustee Dealings with the Issuers. The Trustee is the trustee under the
2011 Indenture, the 2012 (January) Indenture, the 2012 (October) Indenture, the
2013 Indenture, the 2014 Indenture, the 2015 (January) Indenture, the 2015 (May)
Indenture and the 2015 (September) Indenture and, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their Affiliates, and may otherwise deal with the Issuers or their
Affiliates, as if it were not the Trustee.

(14) No Recourse Against Others. Neither the General Partner nor any director,
officer, partner, member, employee, incorporator, manager or unit holder or
other owner of Equity Interest of the Issuers or any Guarantor, as such, will
have any liability for any obligations of the Issuers or the Guarantors under
the Notes, the Indenture, the Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the Note
Guarantees.

(15) Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

(16) Abbreviations. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

(17) Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes of this
series under the Indenture, if on the 370th day after the Issue Date (as defined
in the initial Registration Rights Agreement (as defined below)), the Notes of
this series are not Freely Tradable (as defined in the Registration Rights
Agreement), Holders of Restricted Global Notes and Restricted Definitive Notes
that are Initial 2025 Notes will have all the rights set forth in the
Registration Rights Agreement dated as of October 6, 2016, among the Issuers,
the Guarantors and the applicable Initial Purchasers relating to such Notes or,
in the case of Additional Notes of this series, Holders of Restricted Global
Notes and Restricted Definitive Notes will have the rights set forth in one or
more registration rights agreements, if any, among the Issuers, the Guarantors
and the other parties thereto, relating to rights given by the Issuers and the
Guarantors to the purchasers of any Additional Notes of this series
(collectively, the “Registration Rights Agreement”).

(18) CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption, and reliance may be placed only on the other
identification numbers placed thereon.

(19) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.

 

A-1-8

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

The Issuers will furnish to any Holder upon written request and without charge a
copy of the Indenture and/or the Registration Rights Agreement. Requests may be
made to:

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

Facsimile No.: (713) 584-1110

Attention: Chief Financial Officer

 

A-1-9

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

Assignment Form

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: (Insert assignee’s legal name)

 

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint  

 

to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.

Date:                     

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:                                         

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

 

A-1-10

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

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

☐ Section 4.10            ☐ Section 4.15

If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:

$            

Date:                     

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:    

Signature Guarantee*:                                         

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

 

A-1-11

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

Schedule of Exchanges of Interests in the Global Note*

The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

 

Amount of decrease in
Principal Amount of

this Global Note

 

Amount of increase in

Principal Amount of

this Global Note

 

Principal Amount of

this Global Note

following such

decrease (or increase)

 

Signature of

authorized officer of

Trustee or Custodian

 

* This schedule should be included only if the Note is issued in global form.

 

A-1-12

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

EXHIBIT A-2

[Face of Note]

CUSIP 87612B BC53

5 3⁄8% Senior Notes due 2027

 

No.         $            

TARGA RESOURCES PARTNERS LP

and

TARGA RESOURCES PARTNERS FINANCE CORPORATION

promise to pay to                                         , or registered
assigns, the principal sum of              DOLLARS [or such other amount as may
be indicated on the attached Schedule of Exchanges of Interests in the Global
Note],4 on February 1, 2027.

Interest Payment Dates: February 1 and August 1

Record Dates: January 15 and July 15

Dated:                     , 20    

 

TARGA RESOURCES PARTNERS LP By:   Targa Resources GP LLC,   Its General Partner
By:       Name:     Title:  

 

TARGA RESOURCES PARTNERS FINANCE CORPORATION

By:       Name:     Title:  

 

3  The CUSIP No. is U87571 AN2 for the Regulation S Notes and 87612B BE1 for the
Unrestricted Notes.

4  For Global Notes only.

 

A-2-1

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

This is one of the 2027 Notes referred to in the within-mentioned Indenture:

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:       Authorized Signatory

 

A-2-2

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

[Back of Note]

5 3⁄8% Senior Notes due 2027

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

[Insert the OID Legend, if applicable pursuant to the provisions of the
Indenture]

Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

(1) Interest. Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation,
a Delaware corporation (“Finance Corp.” and, together with Targa Resources
Partners, the “Issuers”), promise to pay interest on the principal amount of
this Note at 5.375% per annum from October 6, 2016 until maturity and shall pay
the Liquidated Damages, if any, payable pursuant to Section 4 of the
Registration Rights Agreement referred to below. The Issuers will pay interest
and Liquidated Damages, if any, semi-annually in arrears on February 1 and
August 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an “Interest Payment Date”). Interest on this
Note will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be February 1, 2017. The Issuers will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate then in
effect to the extent lawful; and they will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any (without regard to any applicable grace
periods), from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

(2) Method of Payment. The Issuers will pay interest on this Note (except
defaulted interest) and Liquidated Damages, if any, to the Person who is the
registered Holder of this Note at the close of business on the January 15 and
July 15 next preceding the Interest Payment Date, even if such Note is canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest. If
this Note is a Definitive Note, the Holder must surrender such Note to the
Paying Agent to collect payments of principal and premium, if any, due at
maturity. This Note will be payable as to principal, premium, if any, and
Liquidated Damages, if any, and interest at the office or agency of the Issuers
maintained for such purpose in New York, New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages, if any, may be made by
check mailed to the Holder at its address set forth in the register of Holders;
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages, if any, on, all Global Notes and all other Notes the Holders of which
will have provided wire transfer instructions to the Issuers or the Paying
Agent. Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

(3) Paying Agent and Registrar. Initially, U.S. Bank National Association, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers
may change any Paying Agent or Registrar without notice to any Holder. Targa
Resources Partners or any of its Subsidiaries may act in any such capacity.

 

A-2-3

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

(4) Indenture. The Issuers issued this Note under an Indenture dated as of
October 6, 2016 (the “Indenture”) among the Issuers, the Guarantors and the
Trustee. This Note is one of a series of Notes issued under the Indenture
denominated as the 5 3⁄8% Senior Notes due 2027. The terms of this Note include
those stated in the Indenture and those made part of the Indenture by reference
to the TIA. This Note is subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes of
each series are unsecured obligations of the Issuers. The Indenture does not
limit the aggregate principal amount of Notes of either series that may be
issued thereunder.

(5) Optional Redemption.

(a) On or after February 1, 2022, the Issuers may redeem all or a part of the
Notes of this series upon giving notice as provided in the Indenture, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes of
this series redeemed, to the applicable Redemption Date, if redeemed during the
twelve-month period beginning on February 1 of each year indicated below,
subject to the rights of Holders of the Notes of this series on the relevant
record date to receive interest on an Interest Payment Date that is on or prior
to the Redemption Date:

 

Year

   Percentage  

2022

     102.688 % 

2023

     101.792 % 

2024

     100.896 % 

2025 and thereafter

     100.000 % 

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at
any time prior to February 1, 2020, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of this series of Notes
(including any Additional Notes of this series) issued under the Indenture upon
giving notice as provided in the Indenture, at a redemption price of 105.375% of
the principal amount, plus accrued and unpaid interest and Liquidated Damages,
if any, to the Redemption Date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), in an amount not greater than the net cash
proceeds of one or more Equity Offerings by Targa Resources Partners; provided
that at least 65% of the aggregate principal amount of this series of Notes
(including any Additional Notes of this series) issued under the Indenture
(excluding Notes of this series held by Targa Resources Partners and its
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption and the redemption occurs within 180 days of the date of the closing
of such Equity Offering.

(c) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at
any time prior to February 1, 2022, the Issuers may also redeem all or a part of
the Notes of this series, upon giving notice as provided in the Indenture, at a
redemption price equal to 100% of the principal amount of Notes of this series
redeemed plus the Applicable Premium as of, and accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, subject to the rights of
Holders on the relevant record date to receive interest due on an Interest
Payment Date that is prior to the Redemption Date.

For purposes of subparagraph (c) of this Paragraph 5, “Applicable Premium”
means, with respect to any Note of this series at the time of computation, the
greater of (1) 1.0% of the principal

 

A-2-4

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

amount of the Note or (2) the excess of: (a) the present value at such time of
(i) the redemption price of the Note at February 1, 2022 (such redemption price
being set forth in the table appearing in subparagraph (a)) plus (ii) all
required interest payments due on the Note through February 1, 2022 (excluding
accrued but unpaid interest to the Redemption Date), computed using a discount
rate equal to the Treasury Rate with respect to such time plus 50 basis points,
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) over (b) the principal amount of the
Note, if greater. In addition, for purposes of subparagraph (c) of this
Paragraph 5, “Treasury Rate” means, as of any Redemption Date, the yield to
maturity as of the time of computation of United States Treasury securities with
a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at
least two Business Days prior to such time (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to February 1, 2022;
provided, however, that if such period is not equal to the constant maturity of
a United States Treasury security for which a weekly average yield is given,
Targa Resources Partners shall obtain the Treasury Rate by linear interpolation
(calculated to the nearest one twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the Redemption Date to February 1, 2022, is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used.

(d) Unless the Issuers default in the payment of the redemption price, interest
and Liquidated Damages, if any, will cease to accrue on the Notes of this series
or portions thereof called for redemption on the applicable Redemption Date.

(6) Mandatory Redemption.

Except as set forth below, the Issuers are not required to make mandatory
redemption or sinking fund payments with respect to this Note or to repurchase
this Note at the option of the Holders.

(7) Repurchase at the Option of Holder.

(a) If there is a Change of Control with respect to this series of Notes, the
Issuers will be required to make an offer (a “Change of Control Offer”) to each
Holder of this series of Notes to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes of this
series at a purchase price in cash equal to at least 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the relevant
Interest Payment Date (the “Change of Control Payment”). Within 30 days
following any Change of Control, the Issuers will send a notice to each Holder
of Notes of this series setting forth the procedures governing the Change of
Control Offer as required by the Indenture. In the event that Holders of not
less than 90% of the aggregate principal amount of the outstanding Notes of this
series accept a Change of Control Offer and Targa Resources Partners (or the
third party making the Change of Control Offer as provided in Section 4.15(c) of
the Indenture) purchases all of the Notes of this series held by such Holders,
Targa Resources Partners will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following the purchase
pursuant to the Change of Control Offer described above, to redeem all of the
Notes of this series that remain outstanding following such purchase at a
redemption price equal to the Change of Control Payment plus, to the extent not
included in the Change of Control Payment, accrued and unpaid interest and
Liquidated Damages, if any, on the Notes of this series that remain outstanding,
to, but excluding, the date of redemption (subject to the right of Holders on
the relevant record date to receive interest due on an interest payment date
that is on or prior to the redemption date).

 

A-2-5

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

(b) If the Issuers or a Restricted Subsidiary of Targa Resources Partners
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $50.0 million, Targa Resources
Partners will commence an offer to all Holders of Notes of each series and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”)
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes and other pari passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Targa Resources Partners (or such Restricted Subsidiary) may use
such deficiency for any purpose not otherwise prohibited by the Indenture. If
the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, then
the Notes and such other pari passu Indebtedness shall be purchased on a pro
rata basis. Holders of Definitive Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer and may elect to have such Notes
purchased by completing the form entitled “Option of Holder to Elect Purchase”
attached to the Notes.

(8) Notice of Redemption. Notice of redemption will be given in the manner
provided in the Indenture at least 30 days but not more than 60 days before the
Redemption Date to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be given more than 60 days prior to
a Redemption Date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction or discharge of the Indenture. Notes in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed.

(9) Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in de-nominations of $2,000 and integral multiples of $1,000 in excess
thereof. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

(10) Persons Deemed Owners. The registered Holder of a Note may be treated as
its owner for all purposes.

(11) Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes or the related Note Guarantees may be amended or
supplemented with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes of each series affected thereby
including Additional Notes of such series, if any, voting as a single class, and
any existing Default or Event of Default or compliance with any provision of the
Indenture or the Notes of either series or the Note Guarantees may be waived
with the consent of the Holders of a majority in aggregate principal amount of
the then outstanding Notes of each series affected thereby including Additional
Notes of such series, if any, voting as a single class. Without the consent of
any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuers’ or a Guarantor’s
obligations to Holders of the Notes and Note

 

A-2-6

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

Guarantees in the case of a merger or consolidation or sale of all or
substantially all of the Issuers’ or such Guarantor’s properties or assets, as
applicable, to make any change that would provide any additional rights or
benefits to the Holders of Notes of either series or that does not adversely
affect the legal rights under the Indenture of any such Holder, to comply with
the requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA, to conform the text of the Indenture or the Note
Guarantees to any provision of the “Description of Notes” section of the
Issuers’ Offering Memorandum to the extent that such text of the Indenture or
the Notes Guarantees was intended to reflect such provision of the “Description
of Notes”, to provide for the issuance of Additional Notes of either series in
accordance with the limitations set forth in the Indenture as of the date of the
Indenture, to allow any Guarantor to execute a supplemental indenture, to secure
the Notes of either series and/or the Note Guarantees, or to provide for the
reorganization of Targa Resources Partners as any other form of entity, in
accordance with Section 5.01 of the Indenture.

(12) Defaults and Remedies. Events of Default include: (i) default for 30 days
in the payment when due of interest on, or Liquidated Damages, if any, with
respect to the Notes of this series; (ii) default in the payment when due (at
fixed maturity, upon redemption or otherwise) of the principal of, or premium,
if any, on the Notes of this series; (iii) failure by Targa Resources Partners
or any of its Restricted Subsidiaries to timely consummate repurchase offers
under Section 4.10 or 4.15 of the Indenture or to comply with Section 5.01 of
the Indenture; (iv) failure by Targa Resources Partners for 90 days after notice
to comply with Section 4.03 of the Indenture; (v) failure by Targa Resources or
any of its Restricted Subsidiaries for 60 days after written notice to comply
with any of the other agreements applicable to this series in the Indenture;
(vi) default under certain other agreements relating to Indebtedness of Targa
Resources Partners or any of its Restricted Subsidiaries, which default results
in the acceleration of such Indebtedness prior to its express maturity;
(vii) certain final judgments for the payment of money that remain undischarged
for a period of 60 days; (viii) certain events of bankruptcy or insolvency with
respect to the Issuers or any of Targa Resources Partners’ Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary;
and (ix) except as permitted by the Indenture, any Note Guarantee is held in any
judicial proceeding to be unenforceable or invalid or ceases for any reason to
be in full force and effect or any Guarantor or any Person acting on its behalf
denies or disaffirms its obligations under such Guarantor’s Note Guarantee. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes of this
series may declare all the Notes of this series to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to Finance
Corp., Targa Resources Partners or any Restricted Subsidiary of Targa Resources
Partners that is a Significant Subsidiary or any group of Restricted
Subsidiaries of Targa Resources Partners that, taken together, would constitute
a Significant Subsidiary, all outstanding Notes of this series will become due
and payable immediately without further action or notice. Holders may not
enforce the Indenture or the Notes of this series except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Notes of this series may direct the
Trustee in its exercise of any trust or power with respect to such series of
Notes. The Trustee may withhold from Holders of the Notes of this series notice
of any continuing Default or Event of Default with respect to such series if it
determines that withholding notice is in their interest, except a Default or
Event of Default relating to the payment of principal, interest or premium or
Liquidated Damages, if any, with respect to such series. The Holders of a
majority in aggregate principal amount of the then outstanding Notes of this
series by notice to the Trustee may, on behalf of the Holders of all of the
Notes of this series, rescind an acceleration or waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium or Liquidated
Damages, if any, on, or the principal of, the Notes of this series. The Issuers
and the Guarantors are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers and the Guarantors are
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.

 

A-2-7

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

(13) Trustee Dealings with the Issuers. The Trustee is the trustee under the
2011 Indenture, the 2012 (January) Indenture, the 2012 (October) Indenture, the
2013 Indenture, the 2014 Indenture, the 2015 (January) Indenture, the 2015 (May)
Indenture and the 2015 (September) Indenture and, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their Affiliates, and may otherwise deal with the Issuers or their
Affiliates, as if it were not the Trustee.

(14) No Recourse Against Others. Neither the General Partner nor any director,
officer, partner, member, employee, incorporator, manager or unit holder or
other owner of Equity Interest of the Issuers or any Guarantor, as such, will
have any liability for any obligations of the Issuers or the Guarantors under
the Notes, the Indenture, the Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the Note
Guarantees.

(15) Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

(16) Abbreviations. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

(17) Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes of this
series under the Indenture, if on the 370th day after the Issue Date (as defined
in the initial Registration Rights Agreement (as defined below)), the Notes of
this series are not Freely Tradable (as defined in the Registration Rights
Agreement), Holders of Restricted Global Notes and Restricted Definitive Notes
that are Initial 2027 Notes will have all the rights set forth in the
Registration Rights Agreement dated as of October 6, 2016, among the Issuers,
the Guarantors and the applicable Initial Purchasers relating to such Notes or,
in the case of Additional Notes of this series, Holders of Restricted Global
Notes and Restricted Definitive Notes will have the rights set forth in one or
more registration rights agreements, if any, among the Issuers, the Guarantors
and the other parties thereto, relating to rights given by the Issuers and the
Guarantors to the purchasers of any Additional Notes of this series
(collectively, the “Registration Rights Agreement”).

(18) CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption, and reliance may be placed only on the other
identification numbers placed thereon.

(19) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.

 

A-2-8

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

The Issuers will furnish to any Holder upon written request and without charge a
copy of the Indenture and/or the Registration Rights Agreement. Requests may be
made to:

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

Facsimile No.: (713) 584-1110

Attention: Chief Financial Officer

 

A-2-9

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

Assignment Form

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: (Insert assignee’s legal name)

 

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint  

 

to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.

Date:                     

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:                                         

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

 

A-2-10

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

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

☐ Section 4.10            ☐ Section 4.15

If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:

$            

Date:                     

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:    

Signature Guarantee*:                                         

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

 

A-2-11

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

Schedule of Exchanges of Interests in the Global Note*

The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

 

Amount of decrease in
Principal Amount of

this Global Note

 

Amount of increase in

Principal Amount of

this Global Note

 

Principal Amount of

this Global Note

following such

decrease (or increase)

 

Signature of

authorized officer of

Trustee or Custodian

 

* This schedule should be included only if the Note is issued in global form.

 

A-2-12

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

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Re: [5 1⁄8% Senior Notes due 2025] / [5 3⁄8% Senior Notes due 2027]

Reference is hereby made to the Indenture, dated as of October 6, 2016 (the
“Indenture”), among Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation,
a Delaware corporation (“Finance Corp.” and, together with Targa Resource
Partners, the “Issuers”), the Guarantors party thereto and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

                     (the “Transferor”) owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $         in such Note[s] or interests (the “Transfer”), to
             (the “Transferee”), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ☐ Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believes is
purchasing the beneficial interest or Definitive Note for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A, and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

2. ☐ Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation
S. The Transfer is being effected pursuant to and in accordance with Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated

 

B-1

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

offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S under the Securities Act, (iii) if
the Transfer is being made prior to the expiration of the Restricted Period, the
Transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser) and (iv) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.

3. ☐ Check and complete if Transferee will take delivery of a beneficial
interest in a Restricted Global Note or a Restricted Definitive Note pursuant to
any provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;

or

(b) ☐ such Transfer is being effected to the Issuers or a subsidiary thereof;

or

(c) ☐ such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;

or

(d) ☐ such Transfer is being effected to an Institutional Accredited Investor
and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on a Restricted Global Note and/or the Restricted
Definitive Notes and in the Indenture and the Securities Act.

 

B-2

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

4. ☐ Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.

(a) ☐ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

(b) ☐ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being
effected pursuant to and in accordance with Rule 904 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

(c) ☐ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit.

 

 

 

[Insert Name of Transferor] By:       Name:     Title:  

 

Dated:    

 

B-3

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

ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

  (a) ☐ a beneficial interest in the:

 

  (i) ☐ 144A Global Note (CUSIP 87612B AZ5 / 87612B BC5), or

 

  (ii) ☐ Regulation S Global Note (CUSIP U87571 AM4 / U87571 AN2), or

 

  (b) ☐ a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE OF]

 

  (a) ☐ a beneficial interest in the:

 

  (i) ☐ 144A Global Note (CUSIP 87612B AZ5 / 87612B BC5), or

 

  (ii) ☐ Regulation S Global Note (CUSIP U87571 AM4 / U87571 AN2), or

 

  (iii) ☐ Unrestricted Global Note (CUSIP 87612B BB7 / 87612B BE1); or

 

  (b) ☐ a Restricted Definitive Note; or

 

  (c) ☐ an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

 

B-4

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

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Re: [5 1⁄8% Senior Notes due 2025] / [5 3⁄8% Senior Notes due 2027]

(CUSIP                     )

Reference is hereby made to the Indenture, dated as of October 6, 2016 (the
“Indenture”), among Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation,
a Delaware corporation (“Finance Corp.” and, together with Targa Resources
Partners, the “Issuers”), the Guarantors party thereto and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

                     (the “Owner”) owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of $        
in such Note[s] or interests (the “Exchange”). In connection with the Exchange,
the Owner hereby certifies that:

1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note

(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note
to beneficial interest in an Unrestricted Global Note. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a
beneficial interest in an Unrestricted Global Note in an equal principal amount,
the Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the Securities Act of 1933, as amended (the
“Securities Act”), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

(b) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note
to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Definitive Note is being acquired for
the Owner’s own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

C-1

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

(c) ☐ Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner’s Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

(d) ☐ Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner’s Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes

(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note
to Restricted Definitive Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive Note
with an equal principal amount, the Owner hereby certifies that the Restricted
Definitive Note is being acquired for the Owner’s own account without transfer.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.

(b) ☐ Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
☐ 144A Global Note, ☐ Regulation S Global Note with an equal principal amount,
the Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer and (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

C-2

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

This certificate and the statements contained herein are made for your benefit.

 

[Insert Name of Transferor] By:       Name:     Title:  

Dated:                     

 

C-3

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

EXHIBIT D

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Targa Resources Partners LP

Targa Resources Partners Finance Corporation

1000 Louisiana, Suite 4300

Houston, Texas 77002

U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Re: [5 1⁄8% Senior Notes due 2025] / [5 3⁄8% Senior Notes due 2027]

Reference is hereby made to the Indenture, dated as of October 6, 2016 (the
“Indenture”), among Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation,
a Delaware corporation (“Finance Corp.” and, together with Targa Resources
Partners, the “Issuers”), the Guarantors party thereto and U.S. Bank National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

In connection with our proposed purchase of $             aggregate principal
amount of:

(a) ☐ a beneficial interest in a Global Note, or

(b) ☐ a Definitive Note,

we confirm that:

1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the “Securities Act”).

2. We understand that the offer and sale of the Notes have not been registered
under the Securities Act, and that the Notes and any interest therein may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to Targa Resources Partners or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a “qualified institutional
buyer” (as defined therein), (C) to an institutional “accredited investor” (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you a signed letter substantially in the form
of this letter and, if such transfer is in respect of a principal amount of
Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in
form reasonably acceptable to the Issuers to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144 under the Securities Act or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to

 

D-1

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

provide to any Person purchasing the Definitive Note or beneficial interest in a
Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.

3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to each of you such
certifications, legal opinions and other information as each of you may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.

5. We are acquiring the Notes or beneficial interest therein purchased by us for
our own account or for one or more accounts (each of which is an institutional
“accredited investor”) as to each of which we exercise sole investment
discretion.

You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

[Insert Name of Accredited Investor] By:       Name:   Title:

Dated:                     

 

D-2

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

EXHIBIT E

[FORM OF NOTATION OF GUARANTEE]

For value received, each Guarantor (which term includes any successor Person
under the Indenture) has, jointly and severally, unconditionally guaranteed, to
the extent set forth in the Indenture and subject to the provisions in the
Indenture, dated as of October 6, 2016 (the “Indenture”), among Targa Resources
Partners LP, a Delaware limited partnership (“Targa Resources Partners”), and
Targa Resources Partners Finance Corporation, a Delaware corporation (“Finance
Corp.” and, together with Targa Resources Partners, the “Issuers”), the
Guarantors party thereto and U.S. Bank National Association, as trustee (the
“Trustee”), (a) the due and punctual payment of the principal of, premium, if
any, and Liquidated Damages, if any, and interest on, the Notes, whether at
Stated Maturity, by acceleration, redemption or otherwise, the due and punctual
payment of interest on overdue principal of, premium if any, interest and
Liquidated Damages, if any, on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Issuers to the Holders or
the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Each Holder of a Note, by accepting the same, agrees to and shall be bound by
such provisions.

Capitalized terms used but not defined herein have the meanings given to them in
the Indenture.

 

[Name of Guarantor(s)] By:       Name:   Title:

Dated:                     

 

E-1

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

EXHIBIT F

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “Supplemental Indenture”), dated as of
                    , 201        , among                      (the “Guaranteeing
Subsidiary”), Targa Resources Partners LP, a Delaware limited partnership
(“Targa Resources Partners”), and Targa Resources Partners Finance Corporation
(“Finance Corp.” and, together with Targa Resources Partners, the “Issuers”),
the other Guarantors (as defined in the Indenture referred to herein) and U.S.
Bank National Association, as trustee under the Indenture referred to below (the
“Trustee”).

W I T N E S S E T H

WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an
indenture (the “Indenture”), dated as of October 6, 2016 providing for the
issuance of 5 1⁄8% Senior Notes due 2025 and 5 3⁄8% Senior Notes due 2027
(collectively, the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Issuers’ Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the “Note Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture.

2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide
an unconditional Guarantee on the terms and subject to the conditions set forth
in the Note Guarantee and in the Indenture including but not limited to Article
10 thereof.

3. No Recourse Against Others. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Issuers or any
Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.

4. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

5. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

 

F-1

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

6. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.

7. The Trustee. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are
made solely by the Guaranteeing Subsidiary and the Issuers.

 

F-2

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

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.

Dated:                                         , 20        

 

[Guaranteeing Subsidiary] By:       Name:     Title:  

 

TARGA RESOURCES PARTNERS LP By:  

Targa Resources GP LLC,

Its General Partner

By:       Name:     Title:  

 

TARGA RESOURCES PARTNERS FINANCE CORPORATION By:       Name:     Title:  

 

[GUARANTORS] By:       Name:     Title:  

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

By:       Authorized Signatory

 

F-3

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

SCHEDULE 4.11

AFFILIATE TRANSACTIONS

 

1. Agreement of Limited Partnership of Targa Resources Partners LP

 

2. Second Amended and Restated Agreement of Limited Partnership of Targa
Resources Partners LP

 

3. Amendment No. 1 to the First Amended and Restated Agreement of Limited
Partnership of Targa Resources Partners LP

 

4. Amendment No. 2 to the First Amended and Restated Agreement of Limited
Partnership of Targa Resources Partners LP

 

5. Contribution Agreement dated as of December 1, 2005 among Targa Midstream
Services Limited Partnership, Targa GP Inc., Targa LP Inc., Targa Downstream GP
LLC, Targa North Texas GP LLC, Targa Straddle GP LLC, Targa Permian GP LLC,
Targa Versado GP LLC, Targa Downstream LP, Targa North Texas LP, Targa Straddle
LP, Targa Permian LP and Targa Versado LP (the “2005 Contribution Agreement”)

 

6. Amendment to 2005 Contribution Agreement dated as of January 1, 2007

 

7. Amendment to 2005 Contribution Agreement dated as of January 1, 2009

 

8. Contribution, Conveyance and Assumption Agreement, dated February 14, 2007,
by and among Targa Resources Partners LP, Targa Resources Operating LP, Targa
Resources GP LLC, Targa Resources Operating GP LLC, Targa GP Inc., Targa LP
Inc., Targa Regulated Holdings LLC, Targa North Texas GP LLC and Targa North
Texas LP

 

9. Purchase and Sale Agreement, dated as of September 18, 2007, by and between
Targa Resources Holdings LP and Targa Resources Partners LP

 

10. Amendment to Purchase and Sale Agreement, dated October 1, 2007, by and
between Targa Resources Holdings LP and Targa Resources Partners LP

 

11. Contribution, Conveyance and Assumption Agreement, dated October 24, 2007,
by and among Targa Resources Partners LP, Targa Resources Holdings LP, Targa TX
LLC, Targa TX PS LP, Targa LA LLC, Targa LA PS LP and Targa North Texas GP LLC

 

12. Purchase and Sale Agreement dated July 27, 2009, by and between Targa
Resources Partners LP, Targa GP Inc. and Targa LP Inc.

 

13. Contribution, Conveyance and Assumption Agreement, dated September 24, 2009,
by and among Targa Resources Partners LP, Targa GP Inc., Targa LP Inc., Targa
Resources Operating LP and Targa North Texas GP LLC

 

14. Purchase and Sale Agreement, dated as of March 31, 2010, by and among Targa
Resources Partners LP, Targa LP Inc., Targa Permian GP LLC and Targa Midstream
Holdings LLC

 

15. Contribution, Conveyance and Assumption Agreement, dated April 27, 2010, by
and among Targa Resources Partners LP, Targa LP Inc., Targa Permian GP LLC,
Targa Midstream Holdings LLC, Targa Resources Operating LP, Targa North Texas GP
LLC and Targa Resources Texas GP LLC

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

16. Purchase and Sale Agreement, dated as of August 6, 2010, by and between
Targa Resources Partners LP and Targa Versado Holdings LP

 

17. Second Amended and Restated Omnibus Agreement, dated September 24, 2009, by
and among Targa Resources Partners LP, Targa Resources, Inc., Targa Resources
LLC and Targa Resources GP LLC

 

18. First Amendment to Second Amended and Restated Omnibus Agreement, dated
April 27, 2010, by and among Targa Resources Partners LP, Targa Resources, Inc.,
Targa Resources LLC and Targa Resources GP LLC

 

19. Contribution, Conveyance and Assumption Agreement, dated as of August 25,
2010, by and among Targa Versado Holdings LP, Targa Resources Partners LP and
Targa North Texas GP LLC

 

20. Purchase and Sale Agreement, dated as of September 13, 2010, by and between
Targa Versado Holdings LP and Targa Resources Partners LP

 

21. Contribution, Conveyance and Assumption Agreement, dated as of September 28,
2010, by and among Targa Versado Holdings LP, Targa Resources Partners LP and
Targa North Texas GP LLC

 

22. Agreement and Plan of Merger, by and among Targa Resources Corp., Targa
Resources Partners LP, Targa Resources GP LLC, Trident MLP Merger Sub LLC, Atlas
Energy, L.P., Atlas Pipeline Partners, L.P. and Atlas Pipeline Partners GP, LLC,
dated October 13, 2014

 

2