Exhibit 10.1

OMNIBUS

AGREEMENT

BY AND AMONG

CRESTWOOD MIDSTREAM PARTNERS LP,

CRESTWOOD GAS SERVICES GP LLC

AND

CRESTWOOD HOLDINGS PARTNERS LLC

 

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OMNIBUS AGREEMENT

THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of,
October 8, 2010 (the “Effective Date”), and is by and among Crestwood Midstream
Partners LP, a Delaware limited partnership (the “MLP”), Crestwood Gas Services
GP LLC, a Delaware limited liability company (“General Partner”), and Crestwood
Holdings Partners LLC, a Delaware limited liability company (“Crestwood
Holdings”). The above-named entities are sometimes referred to in this Agreement
each as a “Party” and collectively as the “Parties.”

R E C I T A L S:

The Parties desire by their execution of this Agreement to evidence their
understanding, as more fully set forth in Article II, Article III and Article IV
of this Agreement, with respect to certain non-competition and business
opportunity, indemnification and reimbursement obligations of the Parties.

In consideration of the premises and the covenants, conditions, and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

ARTICLE I

Definitions

1.1 Definitions. (a) Capitalized terms used herein but not defined shall have
the meanings given them in the MLP Agreement.

(b) As used in this Agreement, the following terms shall have the respective
meanings set forth below:

“Affiliate” of a Person means any other Person that directly or indirectly
Controls, is Controlled by or is under common Control with such Specified
Person; and in the case of First Reserve, includes any private equity fund
sponsored or managed by FRC Founders Corporation, First Reserve Management, L.P.
or their Affiliates.

“Agreement” means this Omnibus Agreement, as it may be amended, modified or
supplemented from time to time in accordance with the terms hereof.

“Change of Control” means, with respect to any Person (the “Applicable Person”),
any of the following events: (i) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
of the Applicable Person’s assets to any other Person, unless immediately
following such sale, lease, exchange or other transfer such assets are owned,
directly or indirectly, by the Applicable Person; (ii) the dissolution or
liquidation of the Applicable Person; (iii) the consolidation or merger of the
Applicable Person with or into another Person pursuant to a transaction in which
the outstanding Voting Securities of the Applicable Person are changed into or
exchanged for cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Securities of the Applicable Person
are changed into or exchanged for Voting Securities of the surviving Person or
its parent and (b) the holders

 

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of the Voting Securities of the Applicable Person immediately prior to such
transaction own, directly or indirectly, not less than a majority of the
outstanding Voting Securities of the surviving Person or its parent immediately
after such transaction; and (iv) a “person” or “group” (within the meaning of
Sections 13(d) or 14(d)(2) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of
all of the then outstanding Voting Securities of the Applicable Person, except
(a) Crestwood Holdings and any Affiliates of Crestwood Holdings, including First
Reserve and its Affiliates and (b) in a merger or consolidation which would not
constitute a Change of Control under clause (iii) above.

“Construction Costs” means all costs associated with developing, engineering,
designing, building, financing and conducting completion testing of Subject
Assets, including, without limitation, any costs to acquire related real
property or necessary rights of way and any internal costs incurred to
compensate employees for time spent on development, engineering, designing,
building, financing or testing Subject Assets.

“Construction Offer” is defined in Section 2.3(b)(i).

“Control” means the direct or indirect possession of the power to direct or
cause the direction of the management or policies of a Person, whether through
ownership of securities, by contract or otherwise.

“Crestwood Counties” means the following counties in the State of Texas: Hood,
Somervell, Johnson, Tarrant, Hill, Parker, Bosque and Erath.

“Crestwood Holdings” has the meaning given such term in the preamble to this
Agreement.

“Crestwood Holdings Entities” means Crestwood Holdings and any other Person
Controlled by Crestwood Holdings other than the Partnership Entities.

“Effective Date” has the meaning given such term in the preamble to this
Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“First Reserve” means FR XI CMP Holdings LLC, a Delaware limited liability
company, a member of Crestwood Holdings.

“General Partner” has the meaning given such term in the preamble to this
Agreement.

“Indemnified Party” means the party entitled to indemnification in accordance
with Article III.

“Indemnifying Party” means the party from whom indemnification may be required
in accordance with Article III.

 

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“Independent Expert” is defined in Section 2.3(b)(iv).

“Losses” means any losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs and expenses (including,
without limitation, court costs and reasonable attorney’s and experts’ fees) of
any and every kind or character.

“MLP” has the meaning given such term in the introduction to this Agreement.

“MLP Agreement” means the Second Amended and Restated Agreement of Limited
Partnership of the MLP, dated as of February 19, 2008, as such agreement is in
effect on the Effective Date, to which reference is hereby made for all purposes
of this Agreement. An amendment or modification to the MLP Agreement subsequent
to the Effective Date shall be given effect for the purposes of this Agreement
only if it has received the approval of the Conflicts Committee that would be
required, if any, pursuant to Section 5.6 hereof if such amendment or
modification were an amendment or modification of this Agreement, and if no such
approval is or would be required, upon execution of such amendment by each of
the Parties hereto.

“MLP Assets” means the pipelines, processing plants or related equipment or
assets, or portions thereof, owned by, leased by or necessary for the operation
of the business, properties or assets of any member of the Partnership Group.

“Offer” is defined in Section 2.3(a)(i).

“Operations Services” is defined in Section 4.3(a).

“Operations Personnel” is defined in Section 4.3(b).

“Organizational Documents” means certificates of incorporation, by-laws,
certificates of formation, limited liability company operating agreements,
certificates of limited partnership or limited partnership agreements or other
formation or governing documents of a particular entity.

“Other Construction Terms” is defined in Section 2.3(b)(i).

“Partnership Entities” means the General Partner and each member of the
Partnership Group.

“Partnership Group” means the MLP and any entity Controlled by the MLP.

“Partnership Group Member” means any member of the Partnership Group.

“Party” or “Parties” have the meaning given such terms in the introduction to
this Agreement.

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

 

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“Previous Omnibus Agreement” means that certain Omnibus Agreement, dated
August 10, 2007, by and among the MLP, Quicksilver Gas Services GP LLC and
Quicksilver Resources Inc.

“Purchase Agreement” is defined in Section 2.3(a)(i).

“Restricted Businesses” is defined in Section 2.1.

“Services” is defined in Section 4.1(a).

“Subject Assets” means any assets or group of related assets that are located in
the Crestwood Counties and that are related to the Restricted Businesses.

“Subject Assets Valuation Expert” is defined in Section 2.3(a)(iv).

“Voting Securities” means securities of any class of a Person entitling the
holders thereof to vote in the election of, or to appoint, members of the board
of directors or other similar governing body of the Person.

ARTICLE II

Non-competition and Business Opportunities

2.1 Restricted Businesses. Except as permitted by Section 2.2, each Crestwood
Holdings Entity shall be prohibited from engaging in, whether by acquisition,
construction or otherwise, any of the following businesses (the “Restricted
Businesses”): the gathering, treating, processing, fractionating, transportation
or storage of natural gas in the Crestwood Counties, or the transportation or
storage of natural gas liquids in the Crestwood Counties.

2.2 Permitted Exceptions. Notwithstanding any provisions of Section 2.1 to the
contrary, the Crestwood Holdings Entities may engage in the following activities
under the following circumstances:

(a) any business that (i) is primarily related to the exploration for and
production of oil or natural gas, the sale and marketing of oil and natural gas
derived from such exploration and production activities, or the sale and
marketing of natural gas liquids or (ii) is otherwise not a Restricted Business;

(b) the ownership and/or operation of any Subject Assets acquired by a Crestwood
Holdings Entity after the Effective Date; provided, that the MLP has been
offered the opportunity to purchase the Subject Assets in accordance with
Section 2.3(a) and the General Partner (with the concurrence of the Conflicts
Committee) has elected not to purchase the Subject Assets; provided, further,
that (i) prior to the offer being made to the MLP and (ii) during the pendency
of the procedures described in Section 2.3(a), the applicable Crestwood Holdings
Entity or Crestwood Holdings Entities shall be entitled to own and operate the
Subject Assets;

 

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(c) the construction, ownership and/or operation of any Subject Assets
constructed by a Crestwood Holdings Entity after the Effective Date; provided,
that the MLP has been offered the opportunity to purchase the Subject Assets in
accordance with Section 2.3(b) and the General Partner (with the concurrence of
the Conflicts Committee) has elected not to purchase the Subject Assets;
provided, further, that (i) prior to the offer being made to the MLP and
(ii) during the pendency of construction and the procedures described in
Section 2.3(b), the applicable Crestwood Holdings Entity or Crestwood Holdings
Entities shall be entitled to construct, own and operate the Subject Assets; and

(c) any Restricted Business conducted by a Crestwood Holdings Entity with the
approval of the Conflicts Committee.

The Parties acknowledge and agree that First Reserve is an Affiliate of a
private equity fund sponsor specializing in investments in the energy sector
generally, including investments within the Restricted Business, and accordingly
may determine in its sole discretion whether to bring any opportunity to the MLP
or to another portfolio company or fund of which such sponsor is an Affiliate.
Notwithstanding anything in this Agreement to the contrary, none of First
Reserve or any representative of First Reserve, including any representative
serving on the management committee (or similar governing body) of Crestwood
Holdings, or any Affiliate of First Reserve or any representative thereof (other
than the Partnership Entities and the Crestwood Holdings Entities), shall have
any obligation to bring any such opportunity to the Partnership Group, to
refrain or cause any of its Affiliates (other than the Partnership Entities and
the Crestwood Holdings Entities) or any other Person to refrain from pursuing
such opportunity, or to otherwise refrain from engaging in or possessing an
interest in other business opportunities or ventures of every kind and
description, independently or with others, including, without limitation,
businesses that may compete with the Partnership Group.

2.3 Procedures.

(a) In the event that a Crestwood Holdings Entity becomes aware of an
opportunity to make an acquisition that includes Subject Assets, then the
applicable Crestwood Holdings Entity may make such acquisition without first
offering the opportunity to the MLP as long as it complies with the following
procedures:

(i) Within 120 days after the consummation of such an acquisition, the
applicable Crestwood Holdings Entity shall notify the General Partner in writing
of such acquisition. Such notice shall include an offer (the “Offer”) by the
applicable Crestwood Holdings Entity to sell the Subject Assets to the MLP,
accompanied by a proposed definitive agreement to effectuate the purchase and
sale of the Subject Assets (the “Purchase Agreement”). The Purchase Agreement
shall set forth the material terms of the Offer, including the proposed purchase
price, any liabilities to be assumed by the Partnership Group and the other
material terms of the Offer; provided that the representations and warranties
regarding the Subject Assets shall be substantially consistent with the terms
contained in the definitive purchase agreement pursuant to which the applicable
Crestwood Holdings Entity acquired the Subject Assets, subject to such
adjustments as the applicable Crestwood Holdings Entity reasonably determines
are necessary to reflect the

 

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differences in the transaction. In addition, if any Crestwood Holdings Entity
desires to utilize the Subject Assets, the Offer may include commercially
reasonable terms on which the Partnership Group will provide services to such
Crestwood Holdings Entity to enable it to utilize the Subject Assets.

(ii) As soon as practicable after the Offer is made, the applicable Crestwood
Holdings Entity will deliver to the MLP all information prepared by or on behalf
of or in the possession of any Crestwood Holdings Entity related to the Subject
Assets and reasonably requested by the MLP, except for such information
determined in good faith by such Crestwood Holdings Entity to be necessary to
preserve any applicable privilege (including the attorney-client privilege). As
soon as practicable, but in any event within 60 days after receipt of the Offer
accompanied by the form of Purchase Agreement, the General Partner shall notify
the Crestwood Holdings Entity in writing that either: (x) the General Partner,
on behalf of the Partnership Group, has elected (with the concurrence of the
Conflicts Committee) not to cause a Partnership Group Member to purchase the
Subject Assets, in which event the Crestwood Holdings Entities shall be forever
free to continue to own, operate dispose of or otherwise deal in such Subject
Assets, or (y) the General Partner, on behalf of the Partnership Group, has
elected (with the concurrence of the Conflicts Committee) to cause a Partnership
Group Member to purchase the Subject Assets, in which event sub-clauses
(iii) and (iv) shall apply.

(iii) In the event that the applicable Crestwood Holdings Entity and the General
Partner (with the concurrence of the Conflicts Committee) within 60 days after
receipt by the General Partner of the Offer are able to agree on the fair market
value of the Subject Assets that are subject to the Offer accompanied by the
form of Purchase Agreement and the other terms of the Offer including, without
limitation, the terms, if any, on which the Partnership Group will provide
services to any Crestwood Holdings Entity to enable it to utilize the Subject
Assets, a Partnership Group Member shall purchase the Subject Assets for the
agreed upon fair market value as soon as commercially practicable after such
agreement has been reached (and otherwise on the terms and conditions of the
agreed Purchase Agreement) and, if applicable, enter into an agreement with any
Crestwood Holdings Entity to provide services in a manner consistent with the
Offer (as modified based on the agreement of the Parties and the concurrence of
the Conflicts Committee).

(iv) In the event that the applicable Crestwood Holdings Entity and the General
Partner (with the concurrence of the Conflicts Committee) are unable to agree
within 60 days after receipt by the General Partner of the Offer on the fair
market value of the Subject Assets that are subject to the Offer or the other
terms of the Offer including, if applicable, the terms on which the Partnership
Group will provide services to any Crestwood Holdings Entity to enable it to
utilize the Subject Assets, the applicable Crestwood Holdings Entity and the
General Partner will engage a mutually agreed upon independent investment
banking firm or other independent Person that is an expert in valuing midstream
assets like the Subject Assets (such firm or Person, the “Subject Assets
Valuation Expert”) to determine the fair market value of the Subject Assets
and/or the other terms on which the General Partner and the Crestwood Holdings
Entity are unable to agree. Such Subject Assets Valuation Expert will determine
the fair market value of the Subject Assets and/or the other terms on which the
General Partner and the applicable Crestwood Holdings Entity are unable to agree
within 30 days of its engagement and furnish the applicable

 

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Crestwood Holdings Entity and the General Partner its determination. The fees of
the Subject Assets Valuation Expert will be split equally between Crestwood
Holdings and the MLP. Once the Subject Assets Valuation Expert has submitted its
determination of the fair market value of the Subject Assets and/or the other
terms on which the Partnership Group and the applicable Crestwood Holdings
Entity are unable to agree, the General Partner will have the right, but not the
obligation, subject to the concurrence of the Conflicts Committee, to cause a
Partnership Group Member to purchase the Subject Assets pursuant to the Offer as
modified by the determination of the Subject Assets Valuation Expert. The
Partnership Group Member will provide written notice of its decision to the
Crestwood Holdings Entity within 30 days after the Subject Assets Valuation
Expert has submitted its determination. Failure to provide such notice within
such 30-day period shall be deemed to constitute a decision not to purchase the
Subject Assets. If the General Partner elects to cause a Partnership Group
Member to purchase the Subject Assets, then the Partnership Group Member shall
purchase the Subject Assets pursuant to the Offer as modified by the
determination of the Valuation Expert as soon as commercially practicable after
such determination and, if applicable, enter into an agreement with the
applicable Crestwood Holdings Entity to provide services in a manner consistent
with the Offer, as modified by the determination of the Subject Assets Valuation
Expert, if applicable.

(b) In the event that a Crestwood Holdings Entity determines to construct
Subject Assets, then the applicable Crestwood Holdings Entity may construct or
cause to be constructed such Subject Assets without first offering the
opportunity to construct and own same to the MLP if such Crestwood Holdings
Entity complies with the following procedures:

(i) Within 120 days after the completion of construction and the commencement of
commercial service of such Subject Assets by a Crestwood Holdings Entity, the
applicable Crestwood Holdings Entity shall notify the General Partner in writing
of such construction and offer the Partnership Group the opportunity to purchase
such Subject Assets in accordance with this Section 2.3(b) (the “Construction
Offer”). The Construction Offer shall set forth the Crestwood Holdings Entity’s
good faith estimate of (A) the actual Construction Costs for the Subject Assets
incurred by the applicable Crestwood Holdings Entity, and (B) the fair market
value of such Subject Assets, which fair market value shall constitute the
proposed purchase price for the Subject Assets, together with the other proposed
terms relating to the purchase of the Subject Assets, and, if any Crestwood
Holdings Entity desires to utilize the Subject Assets, the Construction Offer
may also include commercially reasonable terms on which the Partnership Group
will provide services to such Crestwood Holdings Entity to enable it to utilize
the Subject Assets (collectively, the “Other Construction Terms”).

(ii) As soon as practicable, but in any event within 60 days after receipt of
such written notification, the General Partner shall notify the applicable
Crestwood Holdings Entity in writing that either (x) the General Partner, on
behalf of the Partnership Group, has elected (with the concurrence of the
Conflicts Committee) not to cause a Partnership Group Member to purchase the
Subject Assets, in which event the Crestwood Holdings Entities shall be forever
free to continue to own, operate dispose of or otherwise deal in such Subject
Assets, or (y) the General Partner, on behalf of the Partnership Group, has
elected (with the concurrence of the Conflicts Committee) to cause a Partnership
Group Member to purchase the Subject Assets, in which event the following
procedures shall apply:

 

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(iii) In the event that the applicable Crestwood Holdings Entity and the General
Partner (with the concurrence of the Conflicts Committee) within 60 days after
receipt by the General Partner of the Construction Offer are able to agree on
the fair market value of the Subject Assets that are subject to the Construction
Offer and the Other Construction Terms of the Construction Offer, a Partnership
Group Member shall purchase the Subject Assets for the agreed upon fair market
value as soon as commercially practicable after such agreement has been reached
and, if applicable, enter into an agreement with the Crestwood Holdings Entity
to provide services in a manner consistent with the Construction Offer (as
modified based on the agreement of the Parties and the concurrence of the
Conflicts Committee).

(iv) In the event that the applicable Crestwood Holdings Entity and the General
Partner (with the concurrence of the Conflicts Committee) are unable to agree
within 60 days after receipt by the General Partner of the Construction Offer on
the fair market value of the Subject Assets that are subject to the Construction
Offer, the applicable Crestwood Holdings Entity and the General Partner will
engage a mutually agreed upon independent investment banking firm or other
independent Person that is an expert in valuing midstream assets such as the
Subject Assets that are the subject of the Construction Offer (the “Independent
Expert”), to determine the fair market value of the Subject Assets. Such
Independent Expert will determine the fair market value of the Subject Assets
within 30 days of its engagement and furnish the applicable Crestwood Holdings
Entity and the General Partner its determination, which determination shall be a
final and binding determination of the fair market value. The fees of the
Independent Expert will be split equally between Crestwood Holdings and the MLP.

(v) If the applicable Crestwood Holdings Entity and the General Partner are
unable to agree within 60 days after receipt by the General Partner of the
Construction Offer on all of the Other Construction Terms, the applicable
Crestwood Holdings Entity and the General Partner will obtain a good faith
proposal from a mutually agreed upon third party engaged in the business to
which such Other Construction Terms relate in order to determine the Other
Construction Terms on which the General Partner and the applicable Crestwood
Holdings Entity are unable to agree. Such third party will submit a good faith
proposal regarding the Other Construction Terms on which the General Partner and
the applicable Crestwood Holdings Entity are unable to agree within 30 days of
its engagement to the applicable Crestwood Holdings Entity and the General
Partner, which proposal shall be a final and binding determination of the Other
Construction Terms. The fees of the third party will be split equally between
the applicable Crestwood Holdings Entity and the Partnership Group.

(vi) Once the fair market value and the Other Construction Terms have been
finally determined pursuant to sub-clauses (iv) or (v) above, the General
Partner will have the right, but not the obligation, subject to the concurrence
of the Conflicts Committee, to cause a Partnership Group Member to purchase the
Subject Assets pursuant to the Construction Offer as modified by the
determination of the Independent Expert and/or the third party submitting a
proposal, as applicable. The Partnership Group Member will provide written
notice of its decision to the applicable Crestwood Holdings Entity within
30 days after the later of the date on which the Independent Expert and/or the
third party submitting a proposal, as applicable, has submitted its
determination. Failure to provide such notice within such 30-day period shall be
deemed to

 

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constitute a decision not to purchase the Subject Assets. If the General Partner
elects to cause a Partnership Group Member to purchase the Subject Assets, then
the Partnership Group Member shall purchase the Subject Assets pursuant to the
Construction Offer as modified by the agreement of the Parties, the
determination of the Independent Expert and/or the third party submitting a
proposal, as applicable, as soon as commercially practicable after such
determination and, if applicable, enter into an agreement with the applicable
Crestwood Holdings Entity to provide services in a manner consistent with the
Construction Offer, as modified by the determination of the third party
submitting a proposal, if applicable.

2.4 Scope of Prohibition. Except as provided in this Article II and the MLP
Agreement, each Crestwood Holdings Entity shall be free to engage in any
business activity, including those that may be in direct competition with any
Partnership Group Member.

2.5 Enforcement. Each Crestwood Holdings Entity agrees and acknowledges that the
Partnership Group does not have any adequate remedy at law for the breach by the
Crestwood Holdings Entities of the covenants and agreements set forth in this
Article II would result in irreparable injury to the Partnership Group. Each
Crestwood Holdings Entity further agrees and acknowledges that any Partnership
Group Member may, in addition to the other remedies which may be available to
the Partnership Group, file a suit in equity to enjoin any of the Crestwood
Holdings Entities from such breach, and consents to the issuance of injunctive
relief under this Agreement.

2.6 Termination. This Article II shall terminate on the first to occur of the
following: (a) August 10, 2017 and (b) at such time as a Crestwood Holdings
Entity ceases to own or control a majority of the issued and outstanding voting
securities of the General Partner.

ARTICLE III

Indemnification

3.1 Indemnification by the Partnership Group. In addition to and not in
limitation of the indemnification provided under the MLP Agreement, the
Partnership Group shall indemnify, defend and hold harmless the Crestwood
Holdings Entities and each of their officers, members, managers, partners,
directors, employees and Affiliates from and against any Losses suffered or
incurred by the Crestwood Holdings Entities by reason of or arising out of
events and conditions associated with the operation of the MLP Assets and
occurring on or after the Closing Date (as defined in the Previous Omnibus
Agreement), unless in any such case indemnification would not be permitted under
the MLP Agreement by reason of one of the provisos contained in Section 7.7 of
the MLP Agreement.

3.2 Indemnification Procedures.

(a) The Indemnified Party agrees that within thirty (30) days after it becomes
aware of facts giving rise to a claim for indemnification pursuant to this
Article III, it will provide notice thereof in writing to the Indemnifying Party
specifying the nature of and specific basis for such claim. Notwithstanding the
foregoing, the Indemnified Party’s failure to provide notice under this
Section 3.2 will not relieve the Indemnifying Party from liability hereunder
with respect to

 

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such matter except in the event and only to the extent that the Indemnifying
Party is materially prejudiced by such failure or delay.

(b) The Indemnifying Party shall have the right to control all aspects of the
defense of (and any counterclaims with respect to) any claims brought against
the Indemnified Party that are covered by the indemnification set forth in this
Article III, including, without limitation, the selection of counsel,
determination of whether to appeal any decision of any court and the settling of
any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent (which consent shall not be
unreasonably withheld, conditioned or delayed) of the Indemnified Party unless
it includes a full release of the Indemnified Party from such matter or issues,
as the case may be.

(c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party
with respect to all aspects of the defense of any claims covered by the
indemnification set forth in Article III, including, without limitation, the
prompt furnishing to the Indemnifying Party of any correspondence or other
notice relating thereto that the Indemnified Party may receive, permitting the
names of the Indemnified Party to be utilized in connection with such defense,
the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers
relevant to such defense and the making available to the Indemnifying Party of
any employees of the Indemnified Party; provided, however, that in connection
therewith the Indemnifying Party agrees to use reasonable efforts to minimize
the impact thereof on the operations of the Indemnified Party and further agrees
to maintain the confidentiality of all files, records and other information
furnished by the Indemnified Party pursuant to this Section 3.2. In no event
shall the obligation of the Indemnified Party to cooperate with the Indemnifying
Party as set forth in the immediately preceding sentence be construed as
imposing upon the Indemnified Party an obligation to hire and pay for counsel in
connection with the defense of any claims covered by the indemnification set
forth in this Article III; provided, however, that the Indemnified Party may, at
its own option, cost and expense, hire and pay for counsel in connection with
any such defense. The Indemnifying Party agrees to keep any such counsel hired
by the Indemnified Party reasonably informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole control
over such defense.

(d) The indemnification obligations under this Article III shall continue with
respect to any claim for indemnification pursuant to this Article III that is
pending as of the end of the applicable survival period notwithstanding the
expiration of such survival period.

ARTICLE IV

Reimbursement Obligations

4.1 Reimbursement for Operating and General and Administrative Expenses.

(a) Crestwood Holdings hereby agrees to continue to provide, or cause to be
provided, the Partnership Group with general and administrative services, such
as legal, accounting, treasury, cash management, insurance administration and
claims processing, risk management, health, safety and environmental,
information technology, human resources, credit, payroll, internal

 

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audit, taxes and engineering (collectively, the “Services”).

(b) The Partnership Group hereby agrees to reimburse the Crestwood Holdings
Entities for all expenses incurred by or on its behalf in conjunction with the
performance of the Services, including expenditures it incurs or payments it
makes on behalf of the Partnership Group in connection with the business and
operations of the Partnership Group, including, but not limited to, (i) salaries
of all Crestwood Holdings personnel performing services on the Partnership
Group’s behalf and the cost of employee benefits for such personnel, (ii) public
company expenses of the MLP, such as K–1 preparation, external audit, internal
audit, transfer agent and registrar, legal, printing, unitholder reports and
other costs and expenses, (iii) general and administrative expenses and
(iv) salaries and benefits of executive management of the General Partner who
are employees of Crestwood Holdings.

(c) To the extent Crestwood Holdings shall have charge or possession of any of
the MLP Assets in connection with the provision of the Services, Crestwood
Holdings shall separately maintain, and not commingle, the MLP Assets with those
of Crestwood Holdings or any other Person.

4.2 Reimbursement for Insurance. The Partnership Group hereby agrees to
reimburse the Crestwood Holdings Entities for all expenses they incur or
payments they make on behalf of the Partnership Group for insurance coverage
with respect to the MLP Assets.

4.3 Reimbursement for Operations Services Expenses.

(a) Crestwood Holdings hereby agrees to continue to provide, or cause to be
provided, the Partnership Group with those services necessary to operate, manage
and maintain the MLP Assets (the “Operations Services”).

(b) The Partnership Group hereby agrees to reimburse the Crestwood Holdings
Entities for all expenses incurred by or on its behalf in conjunction with the
Operations Services, including, but not limited to, (i) salaries and other wages
(including payroll and withholding taxes associated therewith) of Crestwood
Holdings personnel performing the Operations Services (the “Operations
Personnel”), (ii) bonus amounts (including payroll and withholding taxes
associated therewith) paid to Operations Personnel, (iii) paid time off benefits
granted to Operations Personnel, (iv) employee benefits for Operations
Personnel, including costs related to medical and prescription drug plan
benefits, dental plan benefits, vision plan benefits, Flexible Spending
Accounts, life and accidental death and dismemberment insurance coverage,
long-term disability coverage and long-term care plan benefits, and 401k
retirement plans and any matching 401(k) contributions, (v) grants of cash
settled phantom units, if any, (vi) severance payments, if any, (vii) workers
compensation insurance for Operations Personnel, and (viii) any other employee
cost or benefit relating to Operations Personnel for which the Crestwood
Holdings Entities incur costs.

(c) The Operations Personnel will remain employees of Crestwood Holdings, and
Crestwood Holdings shall retain the right to hire or discharge the Operations
Personnel.

 

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(d) Crestwood Holdings will maintain workers’ compensation insurance (either
through an insurance company or qualified self-insured program) which shall
include and afford coverage to the Operations Personnel, and will name the
General Partner and the MLP as additional named insureds under such insurance
policy or qualified self-insured program. Prior to performing the Operations
Services, each member of the Operations Personnel must sign an acknowledgment
that for any work place injury, the individual’s sole remedy shall be under
Crestwood Holdings’ workers’ compensation insurance policy.

4.4 Reimbursement under MLP Agreement. Nothing in this Article IV shall prohibit
or otherwise limit or reduce the rights of the General Partner and/or its
Affiliates (including, without limitation, the Crestwood Holdings Entities) from
seeking reimbursement pursuant to Section 7.4 of the MLP Agreement.

ARTICLE V

Miscellaneous

5.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject
to and governed by the laws of the State of Texas. Each Party hereby submits to
the jurisdiction of the state and federal courts in the State of Texas and to
venue in Ft. Worth, Texas.

5.2 Notice. All notices, requests or consents provided for or permitted to be
given pursuant to this Agreement must be in writing and must be given by
depositing same in the United States mail, addressed to the Person to be
notified, postpaid, and registered or certified with return receipt requested or
by delivering such notice in person or by fax to such Party. Notice given by
personal delivery or mail shall be effective upon actual receipt. Notice given
by fax shall be effective upon actual receipt if received during the recipient’s
normal business hours, or at the beginning of the recipient’s next business day
after receipt if not received during the recipient’s normal business hours. All
notices to be sent to a Party pursuant to this Agreement shall be sent to or
made at the address set forth below or at such other address as such Party may
stipulate to the other Parties in the manner provided in this Section 5.2.

For notices to the Crestwood Holdings Entities:

Crestwood Holdings Partners LLC

717 Texas Avenue

Suite 3150

Houston, Texas 77002

Fax: 832-519-2250

Attention: Robert G. Phillips

For notices to the Partnership Entities:

Crestwood Midstream Partners LP

717 Texas Avenue

Suite 3150

Houston, Texas 77002

 

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Fax: 832-519-2250

Attention: Robert G. Phillips

5.3 Entire Agreement. This Agreement (together with the MLP Agreement)
constitutes the entire agreement of the Parties relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

5.4 Termination. This Agreement, other than the provisions set forth in
Article III hereof, shall terminate upon a Change of Control of the General
Partner or the MLP, other than any Change of Control of the General Partner or
the MLP that may be deemed to have occurred pursuant to clause (iv) of the
definition of Change of Control solely as a result of a Change of Control of
Crestwood Holdings. Notwithstanding any other provision of this Agreement, if
the General Partner is removed as general partner of the MLP under circumstances
where Cause does not exist and Common Units held by the General Partner and its
Affiliates are not voted in favor of such removal, this Agreement may
immediately thereupon be terminated by Crestwood Holdings.

5.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by
any Party to or of any breach or default by any Person in the performance by
such Person of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such Person of the same or any other obligations of such Person hereunder.
Failure on the part of a Party to complain of any act of any Person or to
declare any Person in default, irrespective of how long such failure continues,
shall not constitute a waiver by such Party of its rights hereunder until the
applicable statute of limitations period has run.

5.6 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties; provided,
however, that the MLP may not, without the prior approval of the Conflicts
Committee, agree to any amendment or modification of this Agreement that, in the
reasonable discretion of the General Partner, will have an adverse effect on the
holders of Common Units. Each such instrument shall be reduced to writing and
shall be designated on its face an “Amendment” or an “Addendum” to this
Agreement.

5.7 Assignment; Third Party Beneficiaries. No Party shall have the right to
assign its rights or obligations under this Agreement without the prior written
consent of the other Parties. Each of the Parties hereto specifically intends
that each entity comprising the Crestwood Holdings Entities and the Partnership
Entities, as applicable, whether or not a Party to this Agreement, shall be
entitled to assert rights and remedies hereunder as third-party beneficiaries
hereto with respect to those provisions of this Agreement affording a right,
benefit or privilege to any such entity.

5.8 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all signatory Parties had signed the same document.
All counterparts shall be construed together and shall constitute one and the
same instrument.

5.9 Severability. If any provision of this Agreement or the application thereof
to any Person or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this

 

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Agreement and the application of such provision to other Persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.

5.10 Gender, Parts, Articles and Sections. Whenever the context requires, the
gender of all words used in this Agreement shall include the masculine, feminine
and neuter, and the number of all words shall include the singular and plural.
All references to Article numbers and Section numbers refer to Articles and
Sections of this Agreement.

5.11 Further Assurances. In connection with this Agreement and all transactions
contemplated by this Agreement, each Party agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may
be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement and all such transactions.

5.12 Withholding or Granting of Consent. Each Party may, with respect to any
consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall
deem appropriate.

5.13 Laws and Regulations. Notwithstanding any provision of this Agreement to
the contrary, no Party shall be required to take any act, or fail to take any
act, under this Agreement if the effect thereof would be to cause such Party to
be in violation of any applicable law, statute, rule or regulation.

5.14 Negation of Rights of Limited Partners, Assignees and Third Parties. Except
as set forth in Section 5.7, the provisions of this Agreement are enforceable
solely by the Parties, and no limited partner, member, or assignee of Crestwood
Holdings or the MLP or other Person shall have the right, separate and apart
from Crestwood Holdings or the MLP, to enforce any provision of this Agreement
or to compel any Party to comply with the terms of this Agreement.

5.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the
provisions of this Agreement shall not give rise to any right of recourse
against any officer or director of any Crestwood Holdings Entity or any
Partnership Entity.

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective
as of, the Effective Date.

 

CRESTWOOD MIDSTREAM PARTNERS LP

By:

 

CRESTWOOD GAS SERVICES GP LLC,

its general partner

 

By:

  /s/ Robert G. Phillips   Name: Robert G. Phillips   Title:   President and
Chief Executive Officer

 

 

CRESTWOOD GAS SERVICES GP LLC By:   /s/ Robert G. Phillips   Name: Robert G.
Phillips   Title:   President and Chief Executive Officer

 

 

CRESTWOOD HOLDINGS PARTNERS LLC By:   /s/ Robert G. Phillips   Name: Robert G.
Phillips   Title:   President and Chief Executive Officer

 

[Signature Page to Omnibus Agreement]