Exhibit 10.2

 

BOARD REPRESENTATION AND STANDSTILL AGREEMENT

 

THIS BOARD REPRESENTATION AND STANDSTILL AGREEMENT (this “Agreement”) is made
and entered into as of September 30, 2015, by and among Crestwood Equity GP,
LLC, a Delaware limited liability company (the “General Partner”), Crestwood
Equity Partners LP, a Delaware limited partnership (the “Partnership” and,
together with the General Partner, the “Crestwood Entities”) and each of the
Persons set forth on Annex B to this Agreement (each, a “Purchaser” and
collectively, the “Purchasers”). The Crestwood Entities and the Purchasers are
herein referred to as the “Parties.” Capitalized terms used but not defined
herein shall have the meaning assigned to such term in the Class A Convertible
Preferred Unit Purchase Agreement, dated as of June 17, 2014 (the “Purchase
Agreement”), by and among Crestwood Midstream Partners LP, a Delaware limited
partnership (“Midstream”) and the Purchasers.

 

Recitals

 

WHEREAS, pursuant to the Purchase Agreement, Midstream issued and sold certain
Class A Preferred Units of Midstream (the “Midstream Preferred Units”) to the
Purchasers;

 

WHEREAS, to induce the Purchasers to enter into the transactions evidenced by
the Purchase Agreement, Midstream and the Purchasers entered into that certain
Board Representation and Standstill Agreement, dated as of June 17, 2014 (the
“Existing Standstill Agreement”);

 

WHEREAS, Midstream, the Partnership and certain other entities entered into an
Agreement and Plan of Merger dated as of May 5, 2015 (the “Merger Agreement”),
which provides, among other things, for the merger (the “Merger”) of certain
entities into Midstream, for each outstanding common unit representing common
limited partner interests of Midstream (the “Midstream Common Units”) other than
Midstream Common Units held by the Partnership and its Subsidiaries to be
converted into the right to receive 2.75 common units of the Partnership (the
“Common Units”), and for each outstanding Midstream Preferred Unit to be
converted into the right to receive 2.75 preferred units of the Partnership (the
“Preferred Units”), all on the terms specified therein; and

 

WHEREAS, in connection with their entry into the Merger Agreement, and as a
condition to the willingness of the parties to the Merger Agreement to enter
into the Merger Agreement, the parties to the Merger Agreement entered into a
Support Agreement of even date with the Merger Agreement (the “Support
Agreement”); and

 

WHEREAS, pursuant to the terms of the Support Agreement, but subject to the
conditions thereof, Midstream and the Purchasers have agreed to terminate the
Existing Standstill Agreement, and the Partnership and the Purchasers have
agreed to enter into this Agreement in replacement thereof.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the Parties hereto, the
Parties hereby agree as follows:

 

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Agreement

 

Section 1.                                      Board Observation Rights.

 

(a)                                 During the period commencing upon the
execution and delivery of this Agreement and ending on the Board Rights
Termination Date (defined below), the Crestwood Entities shall grant the
Purchasers, collectively, the option and right, exercisable, upon written
approval of a majority of the then outstanding Preferred Units held, directly or
indirectly, by the Purchasers (in the aggregate), by delivering a written notice
signed by such Purchasers of such appointment to the Crestwood Entities (the
“Observer Notice”), to appoint a single representative, who shall be employed by
one of the Purchasers (or their Affiliates) at the time of such appointment (the
“Board Observer”), to attend all meetings (including telephonic) of the full
board of directors of the General Partner (the “Board”) in an observer
capacity.  The Observer Notice shall be delivered to the Crestwood Entities
prior to the Board Observer’s attendance of any meeting of the full Board. The
Board Observer shall not constitute a member of the Board and shall not be
entitled to vote on, or consent to, any matters presented to the Board.  The
Board Observer shall have the right to attend any meeting of any committee of
the full Board (each, a “Committee”).

 

(b)                                 The Crestwood Entities shall (i) give the
Board Observer written notice of the applicable meeting or action taken by
written consent at the same time and in the same manner as notice is given to
the members of the Board or the members of any Committee, (ii) provide the Board
Observer with copies of all written materials and other information (including,
without limitation, copies of minutes of meetings or written consents of the
full Board) given to the members of the Board or the members of any Committee in
connection with such meetings or actions taken by written consent at the same
time such materials and information are furnished to such members of the Board
or such members of any Committee, and (iii) provide the Board Observer with all
rights to attend (whether in person or by telephone or other means of electronic
communication as solely determined by the Board Observer) such meetings as a
member of the Board or any Committee.  The Board Observer shall agree to
maintain the confidentiality of all non-public information and proceedings of
the Board or any Committee and to enter into, comply with, and be bound by, in
all respects, the terms and conditions of a confidentiality agreement,
substantially in the form attached hereto as Annex A (the “Confidentiality
Agreement”); provided, however, upon request from a Purchaser or such
Purchaser’s Affiliates, the Board Observer shall provide, on a confidential
basis, such non-public material and information to such Purchaser and their
Affiliates; provided that such Purchaser and their Affiliates have agreed to
comply with and be bound by, in all respects, the Confidentiality Agreement. 
For the avoidance of doubt, the recipient of such confidential information from
the Board Observer (whether a Purchaser or a Purchaser Affiliate) may further
provide such information to (i) any other Purchaser or Purchaser Affiliate and
(ii) any legal counsel that has been engaged by such recipient to discuss such
matters or information; provided, that any such recipient in clause (i) agrees
and acknowledges in writing that they are bound by the provisions of the
Confidentiality Agreement.  For purposes of this Agreement, “Affiliates” shall
have the same meaning ascribed therefor in the Purchase Agreement.
Notwithstanding any rights to be granted or provided to the Board Observer
hereunder, the Crestwood Entities reserve the right to exclude the Board
Observer from access to any material or meeting or portion thereof if the Board
reasonably determines, in good faith, that such access would (A) prevent the
members of the Board from engaging in attorney-client privileged

 

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communication or (B) result in a conflict of interest between one or more of the
Crestwood Entities and any Purchaser; provided, however, that (i) such exclusion
shall be limited to the portion of the material and/or meeting that is the basis
for such exclusion and shall not extend to any portion of the material and/or
meeting that does not involve or pertain to such exclusion and (ii) the
Crestwood Entities shall provide written notice, which such written notice may
be provided by e-mail, to a Board Observer at any time that the Board Observer
is to be excluded from access to any material or meeting or portion thereof and
the basis for such exclusion, which notice will be provided reasonably in
advance of such exclusion to the extent practicable, and if such exclusion is
based on a conflict of interest with one or more but less than all Purchasers
then the Crestwood Entities will use good faith efforts to provide such access
or information to those Purchasers (or a single alternative designee thereof)
with whom such conflict of interest does not exist. The Purchaser then employing
the Board Observer agrees to indemnify the Crestwood Entities from any and all
costs, losses, liabilities, damages, or expenses of any kind or nature
whatsoever arising from the breach by the Board Observer of the confidentiality
obligations under the Confidentiality Agreement or this Section 1.

 

(c)                                  The rights contained in this Section 1
shall immediately cease and terminate on the earlier of such date (such earlier
date, the “Board Rights Termination Date”) as the Purchasers and their
respective Affiliates no longer own (i) at least 75% of the Purchased Units (as
defined in the Purchase Agreement, and including any Preferred Units issued in
exchange for Purchased Units pursuant to the Merger) or (ii) a number of
Preferred Units, which, if they were converted into Common Units at the then
applicable Conversion Ratio (as defined in that certain First Amendment to Fifth
Amended and Restated Agreement of Limited Partnership (the “First Amendment”) to
the Fifth Amended and Restated Agreement of Limited Partnership of the
Partnership (as so amended, the “Partnership Agreement”)), subject to
appropriate adjustments for splits, combinations and other similar transactions,
would be equal to 3.5% or more of the total number of Common Units then
outstanding.  From and after the Board Rights Termination Date, the rights of
the Purchasers in Sections 1(a) and 1(b) shall cease.

 

Section 2.                                      Board Designation Rights.

 

(a)                                 If the Preferred Distribution Amount (as
such term is defined in the First Amendment) is not paid in full in cash to the
holders of outstanding Preferred Units (as such term is defined in the First
Amendment) for two consecutive calendar quarters that commence after the Initial
Distribution Period (as defined in the First Amendment) (such failure, the
“Designation Right Triggering Event”), then, until the Designation Right
Termination Event (defined below), the Purchasers shall have the option and
right, exercisable, upon written approval of a majority of the then outstanding
Preferred Units held, directly or indirectly, by the Purchasers (in the
aggregate), by delivering a written notice of such designation to the Crestwood
Entities, to designate one person to serve on the Board (the “Purchaser
Designated Director”) and the Crestwood Entities shall take all actions
necessary or advisable to effect the foregoing; provided, however, that such
Purchaser Designated Director shall, in the reasonable judgment of the General
Partner, (i) have the requisite skill and experience to serve as a director of a
public company, (ii) not be prohibited from serving as a director pursuant to
any rule or regulation of the Securities and Exchange Commission (the
“Commission”) or any national securities exchange on which the Partnership’s
Common Units are listed or admitted to trading, and (iii) not be an employee or
director of any Competitor (as defined below). For purposes of the immediately
preceding

 

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sentence the term “Competitor” shall mean any person or entity that (a) is an
operating company (and not a financial institution) and (b) engages in the
midstream energy business or otherwise provides similar services or engages in
similar business as the Partnership. The Purchasers agree upon the Partnership’s
request to timely provide the Partnership with accurate and complete information
relating to the Purchaser Designated Director as may be required to be disclosed
by the Partnership under the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”) and the rules and regulations promulgated thereunder. 
Prior to a Designation Right Termination Event (as defined below), the Purchaser
Designated Director may be removed or replaced by the Purchasers at any time and
by Crestwood Holdings LP, the sole member of the General Partner, for “cause”
(as defined below), but not by any other Party; and any vacancy occurring by
reason of the death, disability, resignation, removal or other cessation of a
person serving as Purchaser Designated Director, shall be filled solely by the
Purchasers. As used herein, “cause” means that the Purchaser Designated Director
(i) is prohibited from serving as a director under any rule or regulation of the
Commission or any national securities exchange on which the Partnership’s Common
Units are listed; (ii) while serving as the Purchaser Designated Director is
convicted by a court of competent jurisdiction of a felony; (iii) a court of
competent jurisdiction has entered, a final, non-appealable judgment finding the
Purchaser Designated Director liable for actual fraud or willful misconduct
against the Partnership (including, but not limited to, intentionally or
wilfully failing to observe the obligation of confidentiality contained in
Section 1(b) of this Agreement); (iv) is determined to have acted intentionally
or in bad faith in a manner that results in a material detriment to the assets,
business or prospects of the Partnership or (v) is terminated, removed or
resigns for any reason from his or her position, if any, with any such Purchaser
at which the Purchaser Designated Director is then employed. Any action by the
Purchasers to designate, remove or replace a Purchaser Designated Director shall
be evidenced in writing furnished to the Crestwood Entities, shall include a
statement that the action has been approved by the Purchasers and shall be
executed by or on behalf of the Purchasers.  While serving as a Purchaser
Designated Director, a Purchaser Designated Director (i) shall be entitled to
vote on any matter on which independent members of the Board are entitled to
vote on (unless prohibited by the rules and regulations of the Securities and
Exchange Commission or the New York Stock Exchange), provided, however, in
connection with any matter that could adversely affect the rights, powers,
privileges, preferences, duties or obligations of the Preferred Units, the
Purchaser Designated Director shall consult with all Purchasers that hold,
directly or indirectly, then outstanding Preferred Units, prior to such
Purchaser Designated Director approving such matter in his or her capacity as a
Board member; and (ii) shall be entitled to compensation commensurate with that
of an independent member of the Board and reimbursed for reasonable expenses.

 

(b)                                 Upon payment by the Partnership to the
Purchasers of all accrued but unpaid distributions on the Preferred Units then
outstanding (a “Designation Right Termination Event”), the right of the
Purchasers to designate a Purchaser Designated Director shall automatically
terminate and the Purchasers shall cause the Purchaser Designated Director then
serving as a member of the Board, promptly upon (and in any event within two
(2) Business Days following) receipt of a written request from the Partnership,
to resign as a member of the Board. If the Purchaser Designated Director does
not resign upon such request, then a majority of the other director(s) then
serving on the Board may remove the Purchaser Designated Director as a member of
the Board.

 

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Section 3.                                      Limitation of Liability;
Indemnification; Business Opportunities.

 

(a)                                 At all times while the Purchaser Designated
Director is serving as a member of the Board, and following any such Purchaser
Designated Director’s death, resignation, removal or other cessation as a
director in such former Purchaser Designated Director’s capacity as a former
director, the Purchaser Designated Director shall be entitled to (i) the same
modification and restriction of traditional fiduciary duties, (ii) the same safe
harbors for resolving conflicts of interest transactions and (iii) all rights to
indemnification and exculpation, in each case, as are then made available to any
other member of the Board.

 

(b)                                 For the avoidance of doubt, the Board
Observer shall have (i) no fiduciary duty to the Crestwood Entities or to any
Limited Partner (as defined in the Partnership Agreement) and (ii) no
obligations to the Crestwood Entities under this Agreement, except as described
in Section 1 of this Agreement, or to any Limited Partner.

 

(c)                                  At all times while the Purchaser Designated
Director is serving as a member of the Board or the Board Observer is serving in
such capacity in accordance with Section 1 of this Agreement, such Purchaser
Designated Director or Board Observer, the Purchasers and their respective
Affiliates may engage in, possess an interest in, or trade in the securities of,
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Crestwood Entities, and the
Crestwood Entities, the Board and their Affiliates shall have no rights by
virtue of this Agreement in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Crestwood Entities, shall not be deemed
wrongful or improper. None of the Purchaser Designated Director, the Board
Observer, the Purchasers or their respective Affiliates shall be obligated to
present any investment opportunity to the Crestwood Entities even if such
opportunity is of a character that the Crestwood Entities or any of their
respective subsidiaries might reasonably be deemed to have pursued or had the
ability or desire to pursue if granted the opportunity to do so, and each of the
Purchaser Designated Director, the Board Observer, the Purchasers or their
respective Affiliates shall have the right to take for such person’s own account
(individually or as a partner or fiduciary) or to recommend to others any such
investment opportunity. Notwithstanding the foregoing, the Purchaser Designated
Director and the Board Observer shall be subject to, and comply with, the
requirement to maintain confidential information pursuant to this Agreement.

 

(d)                                 The Crestwood Entities shall purchase and
maintain (or reimburse the Purchaser Designated Director for the cost of)
insurance (“D&O Insurance”), on behalf of the Purchaser Designated Director,
against any liability that may be asserted against, or expense that may be
incurred by, such Purchaser Designated Director in connection with Crestwood
Entities’ activities or such Purchaser Designated Director’s activities on
behalf of the Crestwood Entities, regardless of whether the Crestwood Entities
would have the power to indemnify such Purchaser Designated Director against
such liability under the provisions of the Partnership Agreement or the First
Amended and Restated Limited Liability Company Agreement, as amended by
Amendment No. 1 thereto, of the General Partner (the “GP LLC Agreement”).  Such
D&O Insurance shall provide coverage commensurate with that of an independent
member of the Board.

 

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(e)                                  For the avoidance of doubt, the Purchaser
Designated Director shall constitute an “Indemnitee,” as such term is defined
under the Partnership Agreement and the GP LLC Agreement.

 

Section 4.                                      Standstill.

 

(a)                                 Until June 17, 2017, without the prior
written consent of the Partnership (provided that such consent shall not be
required in the event of fraud or gross negligence on the part of the
Partnership or the General Partner), the holders of Preferred Units and their
Affiliates will not, directly or indirectly:

 

(i)                                     Enter into any transaction the effect of
which would be to “short” any securities of the Partnership;

 

(ii)                                  Call (or participate in a group calling) a
meeting of the limited partners of the Partnership for the purpose of removing
(or approving the removal of) the General Partner as the general partner of the
Partnership and/or electing a successor general partner of the Partnership;

 

(iii)                               “Solicit” any “proxies” (as such terms are
used in the rules and regulations of the Commission) or votes for or in support
of (A) the removal of the General Partner as the general partner of the
Partnership or (B) the election of any successor general partner of the
Partnership, or take any action the direct effect or purpose of which would be
to induce limited partners of the Partnership to vote or provide proxies that
may be voted in favor of any action contemplated by either of sub-clauses (A) or
(B) of this Section 4(a)(iii);

 

(iv)                              Seek to advise or influence any person (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect to the voting
of any limited partner interests of the Partnership in connection with the
removal (or approving the removal) of the General Partner as the general partner
of the Partnership and/or the election of a successor general partner of the
Partnership;

 

(v)                                 Issue, induce or assist in the publication
of any press release, media report or other publication in connection with the
potential or proposed removal of the General Partner as the general partner of
the Partnership and/or the election of a successor general partner of the
Partnership;

 

(vi)                              Instigate or encourage any third party to do
any of the foregoing; or

 

(vii)                           If the General Partner is removed as the general
partner of the Partnership, participate in any way in the management, ownership
and/or control of the managing general partner or the successor general
partner’s operation of the Partnership, other than participation by a Purchaser
Designated Director or Board Observer, as described in Sections 1 and 2 of this
Agreement.

 

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(b)                                 Notwithstanding anything to the contrary in
this Agreement, (i) the foregoing shall not in any way limit the right of the
Purchasers or their Affiliates to vote their limited partner interests in the
Partnership at any meeting of limited partners of the Partnership so long as
there has been no breach of Section 4(a) of this Agreement; and (ii) for
purposes of Section 4(a) of this Agreement, “Affiliates” of GSO COF II Holdings
Partners LP shall include any fund managed, sub-advised or advised by GSO
Capital Partners LP or its Affiliates; provided, however, that, in each such
case, such fund falls within the credit business of The Blackstone Group LP.

 

Section 5.                                      Miscellaneous.

 

(a)                                 Entire Agreement.  This Agreement is
intended by the Parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
Parties hereto in respect of the subject matter contained herein.  There are no
restrictions, promises, warranties or undertakings other than those set forth or
referred to herein with respect to the rights granted by Crestwood Entities or
any of their Affiliates or the Purchasers or any of their Affiliates set forth
herein. This Agreement supersedes all prior agreements and understandings
between the Parties with respect to the subject matter hereof.

 

(b)                                 Notices.  All notices and demands provided
for in this Agreement shall be in writing and shall be given as provided in
Section 6.07 of the Purchase Agreement, provided that the initial address for
notice for the Partnership shall be:

 

Crestwood Equity Partners LP

700 Louisiana Street

Suite 2550

Houston, TX 77002-6760

Attention: Joel C. Lambert

Email: joel.lambert@crestwoodlp.com

 

with a copy to (which shall not constitute notice):

 

Andrews Kurth LLP

600 Travis St., Suite 4200

Houston, Texas 77002

Attention: G. Michael O’Leary and W. Mark Young

Facsimile: (713) 238-7130

Email: moleary@andrewskurth.com and markyoung@andrewskurth.com

 

(c)                                  Interpretation.  Section references in this
Agreement are references to the corresponding Section to this Agreement, unless
otherwise specified. All references to instruments, documents, contracts and
agreements are references to such instruments, documents, contracts and
agreements as the same may be amended, supplemented and otherwise modified from
time to time, unless otherwise specified.  The word “including” shall mean
“including but not limited to” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it. Whenever any determination, consent or approval is to
be made or given by a Party, such action shall be in such Party’s sole
discretion, unless otherwise specified in this Agreement.  If any provision in
this Agreement is held to be illegal, invalid, not

 

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binding or unenforceable, (i) such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, not
binding or unenforceable provision had never comprised a part of this Agreement,
and the remaining provisions shall remain in full force and effect and (ii) the
Parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible. When
calculating the period of time before which, within which or following which any
act is to be done or step taken pursuant to this Agreement, the date that is the
reference date in calculating such period shall be excluded, and if the last day
of such period is a non-Business Day, the period in question shall end on the
next succeeding Business Day.  Any words imparting the singular number only
shall include the plural and vice versa.  The words such as “herein,”
“hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and
not merely to a subdivision in which such words appear unless the context
otherwise requires.  The division of this Agreement into Sections and other
subdivisions and the insertion of headings are for convenience of reference only
and shall not affect or be utilized in construing or interpreting this
Agreement.

 

(d)                                 Governing Law; Submission to Jurisdiction. 
This Agreement, and all claims or causes of action (whether in contract or tort)
that may be based upon, arise out of or relate to this Agreement or the
negotiation, execution or performance of this Agreement (including any claim or
cause of action based upon, arising out of or related to any representation or
warranty made in or in connection with this Agreement), will be construed in
accordance with and governed by the Laws of the State of Delaware without regard
to principles of conflicts of Laws.  Any action against any Party relating to
the foregoing shall be brought in any federal or state court of competent
jurisdiction located within the State of Delaware, and the Parties hereto hereby
irrevocably submit to the non-exclusive jurisdiction of any federal or state
court located within the State of Delaware over any such action.  Each of the
Parties hereby irrevocably waives, to the fullest extent permitted by applicable
Law, any objection that it may now or hereafter have to the laying of venue of
any such dispute brought in such court or any defense of inconvenient forum for
the maintenance of such dispute.  Each of the Parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by Law.

 

(e)                                  Waiver of Jury Trial.  EACH OF THE PARTIES
TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE.  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.

 

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(f)                                   No Waiver; Modifications in Writing.

 

(i)                                     Delay.  No failure or delay on the part
of any Party in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.  The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to a
Party at law or in equity or otherwise.

 

(ii)                                  Specific Waiver.  Except as otherwise
provided herein, no amendment, waiver, consent, modification or termination of
any provision of this Agreement shall be effective unless signed by each of the
Parties hereto affected by such amendment, waiver, consent, modification or
termination.  Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement and any consent
to any departure by a Party from the terms of any provision of this Agreement
shall be effective only in the specific instance and for the specific purpose
for which made or given.  Except where notice is specifically required by this
Agreement, no notice to or demand on a Party in any case shall entitle such
Party to any other or further notice or demand in similar or other
circumstances.  Any investigation by or on behalf of any Party shall not be
deemed to constitute a waiver by the Party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein.

 

(g)                                  Execution in Counterparts.  This Agreement
may be executed in any number of counterparts and by different Parties hereto in
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same agreement.

 

(h)                                 Binding Effect; Assignment.  This Agreement
will be binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns, but will not be assignable or
delegable by any Party hereto without the prior written consent of each of the
other Parties; provided, that the terms and provisions of this Agreement shall
not be effective or binding upon a Purchaser that has transferred all of its
Preferred Units to a third-party and, upon such transfer, the rights of such
Purchaser under this Agreement shall terminate and cease.

 

(i)                                     Independent Counsel.  Each of the
Parties acknowledges that it has been represented by independent counsel of its
choice throughout all negotiations that have preceded the execution of this
Agreement and that it has executed the same with consent and upon the advice of
said independent counsel. Each Party and its counsel cooperated in the drafting
and preparation of this Agreement and the documents referred to herein, and any
and all drafts relating thereto will be deemed the work product of the Parties
and may not be construed against any Party by reason of its preparation.
Accordingly, any rule of Law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the Party that
drafted it is of no application and is hereby expressly waived.

 

(j)                                    Specific Enforcement.  Each of the
Parties acknowledges and agrees that monetary damages would not adequately
compensate an injured Party for the breach of this

 

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Agreement by any Party, that this Agreement shall be specifically enforceable
and that any breach or threatened breach of this Agreement shall be the proper
subject of a temporary or permanent injunction or restraining order without a
requirement of posting bond.  Further, each Party hereto waives any claim or
defense that there is an adequate remedy at law for such breach or threatened
breach.

 

(k)                                 Transfer of Board Rights; Aggregation. The
option and right to appoint a Board Observer or Purchaser Designated Director
granted to the Purchasers by the Partnership under Sections 1 and 2,
respectively, of this Agreement, may be transferred or assigned by any Purchaser
to one or more of its Affiliates, subject to the transfer restrictions provided
in Section 4.7(d) of the Partnership Agreement, provided, however, that (a) the
Partnership is given written notice prior to any said transfer or assignment,
stating the name and address of each of the transferee or assignee and
identifying the securities with respect to which such rights are being
transferred or assigned and (b) each such transferee or assignee assumes in
writing responsibility for its portion of the obligations of such Purchaser
under this Agreement.  All Preferred Units held or acquired by Persons (as
defined in the Partnership Agreement) who are Affiliates of one another shall be
aggregated together for the purpose of determining the availability of any
rights and applicability of any obligations under this Agreement.

 

(l)                                     Further Assurances.  Each of the Parties
hereto shall, from time to time and without further consideration, execute such
further instruments and take such other actions as any other Party hereto shall
reasonably request in order to fulfill its obligations under this Agreement to
effectuate the purposes of this Agreement.

 

[Signature Page Follows]

 

10

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IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of
the date first above written.

 

 

CRESTWOOD EQUITY GP LLC

 

 

 

 

By:

/s/ Robert T. Halpin

 

Name:

Robert T. Halpin

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

 

 

CRESTWOOD EQUITY PARTNERS LP

 

 

 

CRESTWOOD EQUITY PARTNERS LP

 

By: Crestwood Equity GP LLC, its general partner

 

 

 

 

By:

/s/ Robert T. Halpin

 

Name:

Robert T. Halpin

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

PURCHASERS:

 

 

 

MTP ENERGY MASTER FUND LTD

 

 

 

By: MTP ENERGY MANAGEMENT LLC, its investment manager

 

By: MAGNETAR FINANCIAL LLC, its sole member

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MTP ENERGY OPPORTUNITIES FUND LLC

 

 

 

By: MTP ENERGY MANAGEMENT LLC, its managing member

 

By: MAGNETAR FINANCIAL LLC, its sole member

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MTP ENERGY CM LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

[Signature Page to Board Representation Agreement]

 

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HIPPARCHUS FUND LP

 

 

 

By: MAGNETAR FINANCIAL LLC, its general partner

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MAGNETAR CAPITAL FUND II LP

 

 

 

By: MAGNETAR FINANCIAL LLC, its general partner

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MAGNETAR STRUCTURED CREDIT FUND, LP

 

 

 

By: MAGNETAR FINANCIAL LLC, its general partner

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MAGNETAR GLOBAL EVENT DRIVEN FUND LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

BLACKWELL PARTNERS LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its investment manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

SPECTRUM OPPORTUNITIES FUND LP

 

 

 

By: MAGNETAR FINANCIAL LLC, its general partner

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

MAGNETAR ANDROMEDA SELECT FUND LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

[Signature Page to Board Representation Agreement]

 

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MAGNETAR CONSTELLATION FUND IV LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

COMPASS HTV LLC

 

 

 

By: MAGNETAR FINANCIAL LLC, its investment manager

 

 

 

 

By:

/s/ Michael Turro

 

Name:

Michael Turro

 

Title:

Chief Compliance Officer

 

 

 

GSO COF II HOLDINGS PARTNERS LP

 

 

 

By: GSO Capital Opportunities Associates II LLC, its General Partner

 

 

 

 

By:

/s/ Marisa Beeney

 

Name:

Marisa Beeney

 

Title:

Authorized Signatory

 

 

 

GE STRUCTURED FINANCE, INC.

 

 

 

 

By:

/s/ Gerald J. Friel

 

Name:

Gerald J. Friel

 

Title:

Authorized Signatory

 

[Signature Page to Board Representation Agreement]

 

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ANNEX A

 

FORM OF CONFIDENTIALITY AGREEMENT

 

                , 20   

 

Crestwood Equity GP LLC

Crestwood Equity Partners LP

700 Louisiana Street, Suite 2060

Houston, Texas 77002

 

Attn:

 

Dear Ladies and Gentlemen:

 

Pursuant to Section 1(b) of that certain Board Representation and Standstill
Agreement (the “Board Representation and Standstill Agreement”), dated as of
[·], 2015, by and among Crestwood Equity GP, LLC, a Delaware limited liability
company (the “General Partner”),Crestwood Equity Partners LP, a Delaware limited
partnership (the “Partnership” and, together with the General Partner, the
“Crestwood Entities”), Magnetar Financial LLC, a Delaware limited liability
company (“Magnetar”), GSO COF II Holdings Partners LP, a Delaware limited
partnership (“GSO”) and GE Structured Finance, Inc., a Delaware corporation
(“GE” and, together with Magnetar and GSO, the “Purchasers”), the Purchasers
have exercised their right to appoint the undersigned as an observer (the “Board
Observer”) to the board of directors of the General Partner (the “Board”),
although the individual serving as the Board Observer may be changed from time
to pursuant to the terms of the Board Representation and Standstill Agreement
and upon such other individual signing a confidentiality agreement in
substantially the form hereof.  The Board Observer acknowledges that at the
meetings of the Board and at other times the Board Observer may be provided with
and otherwise have access to non-public information concerning the Crestwood
Entities and their Affiliates.  Capitalized terms used but not otherwise defined
herein, shall have the respective meanings ascribed therefor in the Board
Representation and Standstill Agreement. In consideration for and as a condition
to the Crestwood Entities furnishing access to such information, the Board
Observer hereby agrees to the terms and conditions set forth in this letter
agreement (the “Agreement”):

 

1.                                      As used in this Agreement, subject to
Paragraph 3 below, “Confidential Information” means any and all non-public
financial or other non-public information concerning the Crestwood Entities and
their Affiliates that may hereafter be disclosed at or in connection with a
Board or Committee meeting to the Board Observer by the Crestwood Entities,
their Affiliates or by any of their directors, officers, employees, agents,
consultants, advisors or other representatives (including financial advisors,
accountants or legal counsel) (the “Representatives”) of the Crestwood Entities,
including, without limitation, all notices, minutes, consents, or other
information, materials, and ideas provided to the Board Observer, to the extent
constituting non-public financial or other non-public information concerning the
Crestwood Entities and their Affiliates.

 

A-1

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2.                                      Except to the extent permitted by this
Paragraph 2 or by Paragraph 3 or 4, the Board Observer shall keep such
Confidential Information strictly confidential; provided, that the Board
Observer may, upon request from a Purchaser or such Purchaser’s Affiliates,
share Confidential Information with such Purchaser or such Purchaser’s
Affiliates so long as such individuals or entities agree to comply with, and be
bound by, in all respects, the terms of this Agreement. For the avoidance of
doubt, the recipient of such Confidential Information from the Board Observer
may further provide such Confidential Information to (i) any other Purchaser or
Purchaser Affiliate and (ii) any legal counsel that has been engaged by such
recipient to discuss such matters or Confidential Information; provided, that
any such recipient in clause (i) above agrees and acknowledges in writing to be
bound by the terms of this Agreement.  The Board Observer may not record the
proceedings of any meeting of the Board by means of an electronic recording
device.

 

3.                                      The term “Confidential Information” does
not include information that (i) is or becomes generally available to the public
other than (a) as a result of a disclosure by the Board Observer in violation of
this Agreement or (b) in violation of a confidentiality obligation to the
Crestwood Entities known to the Board Observer, (ii) is or becomes available to
the Board Observer on a non-confidential basis from a source not known to have
an obligation of confidentiality to the Crestwood Entities, (iii) was already
known to the Board Observer at the time of disclosure, or (iv) is independently
developed by the Board Observer without reference to any Confidential
Information disclosed to the Board Observer.

 

4.                                      In the event that the Board Observer is
legally required or compelled to disclose the Confidential Information, the
Board Observer shall use reasonable efforts, to the extent permitted and
practicable, to provide the Crestwood Entities with prompt prior written notice
of such requirement so that the Crestwood Entities may seek, at such entities
sole expense and cost, an appropriate protective order.  If in the absence of a
protective order, the Board Observer is nonetheless legally required or
compelled to disclose Confidential Information, the Board Observer may disclose
only the portion of the Confidential Information or other information that it is
so legally required or compelled to disclose.

 

5.                                      All Confidential Information disclosed
by the Crestwood Entities or their Representatives to the Board Observer is and
will remain the property of the Crestwood Entities, so long as such information
remains Confidential Information.

 

6.                                      It is understood and acknowledged that
neither the Crestwood Entities nor any Representative makes any representation
or warranty as to the accuracy or completeness of the Confidential Information
or any component thereof.

 

7.                                      It is further understood and agreed that
money damages would not be a sufficient remedy for any breach of this Agreement
by the Board Observer and that the Crestwood Entities shall be entitled to seek
specific performance or any other appropriate form of equitable relief as a
remedy for any such breach in addition to the remedies available to the
Crestwood Entities at law.

 

A-2

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8.                                      This Agreement is personal to the Board
Observer, is not assignable by the Board Observer and may be modified or waived
only in writing.  This Agreement is binding upon the parties hereto and their
respective successors and assigns and inures to the benefit of the parties
hereto and their respective successors and assigns.

 

9.                                      If any provision of this Agreement is
not enforceable in whole or in part, the remaining provisions of this Agreement
will not be affected thereby.  No failure or delay in exercising any right,
power or privilege hereunder operates as a waiver thereof, nor does any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

 

10.                               THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION (WHETHER OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

11.                               This Agreement and all obligations herein will
automatically expire one (1) year from the date the Board Observer ceases to act
as Board Observer.

 

12.                               This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement, and all of which, when taken together, will constitute one and the
same agreement. The exchange of copies of this Agreement and of signature
pages by facsimile or electronic transmission constitutes effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement. Signatures of the parties transmitted by facsimile or
electronic transmission will be deemed to be their original signatures for any
purpose whatsoever.

 

[SIGNATURE PAGE FOLLOWS]

 

A-3

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Very truly yours,

 

 

 

 

 

 

 

[                                   ]

 

 

Agreed to and Accepted, effective as of the

 

     day of           , 20  :

 

 

 

 

 

[NAME OF OBSERVER]

 

 

A-4

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ANNEX B

 

PURCHASER NAME; NOTICE AND CONTACT INFORMATION

 

Purchaser

 

Contact Information

 

 

 

GSO COF II Holdings Partners LP

 

345 Park Avenue, 31st Floor

New York, NY 10154

Attention: Dwight Scott

Facsimile: (212) 503-6930

Email: Dwight.Scott@gsocap.com

with copies to:

Attention: Michael Zawadzki and Marisa Beeney

Email: Michael.Zawadzki@gsocap.com and Marisa.Beeney@gsocap.com

 

 

 

 

MTP Energy Master Fund Ltd

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

MTP Energy Opportunities Fund LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

MTP Energy CM LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Hipparchus Fund LP

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Magnetar Capital Fund II LP

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Magnetar Structured Credit Fund, LP

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

B-1

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Magnetar Global Event Driven Fund LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Blackwell Partners LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Spectrum Opportunities Fund LP

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Magnetar Andromeda Select Fund LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Magnetar Constellation Fund IV LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

Compass HTV LLC

 

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Attention: Chief Legal Officer

Telephone: (847) 905-4400

Facsimile: (847) 869-2064

Email: notices@magnetar.com

 

 

 

GE Structured Finance, Inc.

 

GE Structured Finance, Inc.

800 Long Ridge Road

Stamfor, CT 06927

Attention: General Counsel

with a copy to:

Attention: Seth Barlam

Facsimile: (203) 357-6632

Email: seth.barlam@ge.com

 

B-2

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