exv10w4



 






Exhibit 10.4




EXECUTION COPY




 

 








OMNIBUS AGREEMENT




AMONG




DUKE ENERGY FIELD SERVICES, LLC




DCP MIDSTREAM GP, LLC




DCP MIDSTREAM GP, LP




DCP MIDSTREAM PARTNERS, LP




AND




DCP MIDSTREAM OPERATING, LP




 

 








 









 












OMNIBUS AGREEMENT




     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among Duke Energy Field Services, LLC, a Delaware limited
liability company (“DEFS”), DCP Midstream GP, LLC, a Delaware limited liability company (“DCP
LLC”), DCP Midstream GP, LP, a Delaware limited partnership (the “General Partner”), DCP Midstream
Partners, LP, a Delaware limited partnership (the “MLP”) and DCP Midstream Operating, LP (the
“OLP”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and
collectively as the “Parties.”



RECITALS:




     The Parties desire by their execution of this Agreement to evidence their understanding, (i)
as more fully set forth in Article II and Article III of this Agreement, with respect to certain
indemnification and reimbursement obligations of the Parties, and (ii) as more fully set forth in
Article IV of this Agreement, with respect to DEFS’ obligation to maintain certain specified credit
support for the Partnership Group (as defined herein).



     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:





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




     “Black Lake Holdings” means Black Lake Holdings, LLC, a Delaware limited liability
company.




     “Black Lake Pipeline” means the NGL pipeline located in Louisiana and Texas that is
owned by BLPLC.




     “BLPLC” means Black Lake Pipe Line Company, a Texas general partnership.




     “Cause” has the meaning ascribed thereto in the Partnership Agreement.




     “Cap” has the meaning given such term in Section 2.4(a).



DCP MIDSTREAM PARTNERS, LP

Omnibus Agreement




Omnibus Agreement




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     “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 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) being or becoming 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 in a
merger or consolidation which would not constitute a Change of Control under clause (iii)
above.




     “Closing Date” means the date of the closing of the initial public offering of common
units representing limited partner interests in the MLP.




     “Common Unit” has the meaning given such term in the MLP Agreement.




     “Conflicts Committee” has the meaning given such term in the MLP Agreement.




     “Covered Environmental Losses” means all environmental losses, damages, liabilities,
claims, demands, causes of action, judgments, settlements, fines, penalties, costs and
expenses (including, without limitation, costs and expenses of any Environmental Activity,
court costs and reasonable attorney’s and experts’ fees) of any and every kind or character,
by reason of or arising out of:




     (i) any violation or correction of violation, including without limitation performance
of any Environmental Activity, of Environmental Laws; or




     (ii) any event, omission or condition associated with ownership or operation of the MLP
Assets or the Black Lake Pipeline (including, without limitation, the exposure to or
presence of Hazardous Substances on, under, about or migrating to or from the MLP Assets or
the Black Lake Pipeline or the exposure to or Release of Hazardous Substances arising out of
operation of the MLP Assets or the Black Lake Pipeline at non-MLP Asset locations)
including, without limitation, (A) the cost and expense of any Environmental Activities, (B)
the cost or expense of the preparation and implementation of any closure, remedial or
corrective action or other plans required or necessary under Environmental Laws and (C) the
cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal or
litigation support work; provided, in the



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case of clauses (A) and (B), such cost and expense shall not include the costs of and
associated with project management and soil and ground water monitoring;




but only to the extent that such violation complained of under clause (i), or such events or
conditions included in clause (ii), occurred before the Closing Date.




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




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




     “Environmental Activities” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup or abatement that is required
or necessary under any applicable Environmental Law, including, but not limited to,
institutional or engineering controls or participation in a governmental voluntary cleanup
program to conduct voluntary investigatory and remedial actions for the clean-up, removal or
remediation of Hazardous Substances that exceed actionable levels established pursuant to
Environmental Laws, or participation in a supplemental environmental project in partial or
whole mitigation of a fine or penalty.




     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental
Permits and other legally enforceable requirements and rules of common law relating to (a)
pollution or protection of the environment or natural resources including, without
limitation, the federal Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Hazardous Materials
Transportation Act, the Marine Mammal Protection Act, the Endangered Species Act, the
National Environmental Policy Act and other environmental conservation and protection laws,
each as amended through the Closing Date, (b) any Release or threatened Release of, or any
exposure of any Person or property to, any Hazardous Substances and (c) the generation,
manufacture, processing, distribution, use, treatment, storage, transport or handling of any
Hazardous Substances.




     “Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance or other authorization required under or issued
pursuant to any applicable Environmental Law.




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




     “G&A Expenses Limit” has the meaning given such term in Section 3.3.




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



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     “Hazardous Substance” means (a) any substance that is designated, defined or classified
as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or
hazardous substance, or terms of similar meaning, or that is otherwise regulated under any
Environmental Law, including, without limitation, any hazardous substance as defined under
the Comprehensive Environmental Response, Compensation and Liability Act, as amended, (b)
oil as defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined
petroleum hydrocarbons and petroleum products and (c) radioactive materials, asbestos
containing materials or polychlorinated biphenyls.




     “Indemnified Party” means either the Partnership Group or DEFS, as the case may be, in
their capacity as the parties entitled to indemnification in accordance with Article II.




     “Indemnifying Party” means either the Partnership Group or DEFS, as the case may be, in
their capacity as the parties from whom indemnification may be required in accordance with
Article II.




     “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 Amended and Restated Agreement of Limited Partnership of the
MLP, dated as of the Closing Date, as such agreement is in effect on the Closing Date, to
which reference is hereby made for all purposes of this Agreement. An amendment or
modification to the MLP Agreement subsequent to the Closing 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 6.6 hereof if such amendment
or modification were an amendment or modification of this Agreement.




     “MLP Assets” means the pipelines, processing plants or related equipment or assets, or
portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed,
contributed or otherwise transferred to any member of the Partnership Group, or owned by or
necessary for the operation of the business, properties or assets or any member of the
Partnership Group, prior to or as of the Closing Date; provided, the MLP Assets do not
include the Partnership Group’s direct or indirect ownership interest in Black Lake
Holdings, BLPLC or the Black Lake Pipeline.




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




     “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.



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




     “Partnership Group” means the MLP, the OLP and any Subsidiary of the MLP or the OLP.




     “Partnership Indemnitee” means any Person who is an Indemnitee (as defined in the
Partnership Agreement); provided, that the term “Partnership Indemnitee” shall exclude DEFS
and any Affiliate of DEFS (as defined in the Partnership Agreement) which is not a 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.




     “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping or disposing into the environment.




     “Seabreeze Pipeline” the NGL pipeline located in Texas that is owned, directly or
indirectly, by the OLP.




     “Subsidiary” has the meaning given such term in the MLP Agreement.




     “Voting Securities” means securities of any class of 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

Indemnification




     2.1 Environmental Indemnification.



          (a) Subject to the provisions of Section 2.4 and Section 2.5, DEFS shall indemnify, defend and
hold harmless the Partnership Group and the Partnership Indemnitees from and against any Covered
Environmental Losses suffered or incurred by the Partnership Group or any Partnership Indemnitee
relating to the MLP Assets or the Black Lake Pipeline for a period of three (3) years from the
Closing Date; provided that, for purposes of determining the amount of any Covered Environmental
Loss suffered or incurred by the Partnership Group or any Partnership Indemnitee with respect to
the Black Lake Pipeline, the Partnership Group’s indirect ownership of only 45% of the partnership
interests in BLPLC shall be taken into account such that any Covered Environmental Loss suffered or
incurred by the Partnership Group or any Partnership Indemnitee with respect to the Black Lake
Pipeline would be determined in a proportionate manner to the Covered Environmental Loss suffered
or incurred by BLPLC with respect to the same matter.




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          (b) The Partnership Group shall indemnify, defend and hold harmless DEFS and its Subsidiaries,
other than any Subsidiary constituting part of the Partnership Group, from and against any Covered
Environmental Losses suffered or incurred by DEFS and its Subsidiaries, other than any Subsidiary
constituting part of the Partnership Group, relating to the MLP Assets and the Black Lake Pipeline
occurring after the Closing Date, except to the extent that the Partnership Group is indemnified
with respect to any of such Covered Environmental Losses under Section 2.1(a), provided that in no
event shall the Partnership Group indemnify, defend or hold harmless DEFS and its Subsidiaries from
and against any Covered Environmental Losses relating to the Black Lake Pipeline arising from or
attributable to the 5% interest in BLPLC owned by DEFS and its Subsidiaries from and after the
Closing Date.




     2.2 Indemnification for Certain Repair Costs. Subject to the provisions of Section 2.4 and
Section 2.5, DEFS shall also indemnify, defend and hold harmless the Partnership Group and the
Partnership Indemnitees from and against:



          (a) any capital contributions required to be made by the Partnership Group to fund any repair
and/or replacement costs associated with, resulting from or identified during the 2006 pipeline
integrity testing of the Black Lake Pipeline that is ongoing as of the Closing Date and expected to
be completed in 2006 as required under the Pipeline Safety Improvement Act of 2002; provided that
the maximum amount that DEFS shall be required to contribute to the Partnership Group and the
Partnership Indemnitees pursuant to this Section 2.2(a) shall be $5.3 million; and




          (b) any repair and/or replacement costs suffered or incurred by the Partnership Group or
Partnership Indemnitees associated with, resulting from or identified during the 2006 pipeline
integrity testing of the Seabreeze Pipeline scheduled for 2006 as required under the Pipeline
Safety Improvement Act of 2002; provided that, for purposes of this subsection (a), DEFS shall not
be obligated to indemnify the Partnership Group or any Partnership Indemnitee for any incremental
operating costs suffered or incurred by the Partnership Group associated with or resulting from any
of the repair or replacement of all or any portion of the Seabreeze Pipeline, provided further
that, the maximum amount that DEFS shall be required to contribute to the Partnership Group and the
Partnership Indemnitees pursuant to this Section 2.2(b) shall be $4.0 million.




     2.3 Additional Indemnification



          (a) Subject to the provisions of Section 2.4 and Section 2.5, DEFS shall indemnify, defend and
hold harmless the Partnership Group and the Partnership Indemnitees from and against any Losses
suffered or incurred by the Partnership Group or any Partnership Indemnitee by reason of or arising
out of:





     (i) the failure of the Partnership Group to be the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests in and to the
lands on which are located any MLP Assets or the Black Lake Pipeline, or to have
valid and indefeasible ownership of a 45% partnership interest in BLPLC,



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and such failure renders the Partnership Group liable or unable to use or
operate the MLP Assets or the Black Lake Pipeline in substantially the same manner
that the MLP Assets or the Black Lake Pipeline were used and operated by DEFS and
its Subsidiaries (and BLPLC, with respect to the Black Lake Pipeline) immediately
prior to the Closing Date as described in the Registration Statement; provided that,
for purposes of determining the amount of any Loss suffered or incurred by the
Partnership Group or any Partnership Indemnitee with respect to the Black Lake
Pipeline, the Partnership Group’s ownership of only 45% of the partnership interests
in BLPLC shall be taken into account such that any Loss suffered or incurred by the
Partnership Group or any Partnership Indemnitee with respect to the Black Lake
Pipeline would be determined in a proportionate manner to the Loss suffered or
incurred by BLPLC with respect to the same matter;




     (ii) the failure of the Partnership Group to have on the Closing Date any
consent or governmental permit necessary to allow (i) the transfer of any of the MLP
Assets or a 45% partnership interest in BLPLC to the Partnership Group on the
Closing Date or (ii) any such MLP Assets or the Black Lake Pipeline to cross the
roads, waterways, railroads and other areas upon which any such MLP Assets or the
Black Lake Pipeline are located as of the Closing Date, and any such failure
specified in such clause (ii) renders the Partnership Group unable to use or operate
the MLP Assets or the Black Lake Pipeline in substantially the same manner that the
MLP Assets or the Black Lake Pipeline were owned and operated by DEFS and its
Subsidiaries (and BLPLC, with respect to the Black Lake Pipeline) immediately prior
to the Closing Date as described in the Registration Statement; provided, that, for
purposes of determining the amount of any Loss suffered or incurred by the
Partnership Group or any Partnership Indemnitee with respect to the Black Lake
Pipeline, the Partnership Group’s ownership of only 45% of the partnership interests
in BLPLC shall be taken into account such that any Loss suffered or incurred by the
Partnership Group or any Partnership Indemnitee with respect to the Black Lake
Pipeline would be determined in a proportionate manner to the Loss suffered or
incurred by BLPLC with respect to the same matter;




     (iii) all federal, state and local income tax liabilities attributable to the
ownership or operation of the MLP Assets or the Black Lake Pipeline prior to the
Closing Date, including any such income tax liabilities of DEFS and its Subsidiaries
that may result from the consummation of the formation transactions for the
Partnership Group occurring on or prior to the Closing Date, but excluding any
federal, state and local income taxes reserved on the books of the Partnership Group
as of the Closing Date;




     (iv) the assets, liabilities, business or operations of any of (a) Discovery
Producer Services, LLC, a Delaware limited liability company (“Discovery”), (b)
PanEnergy Dauphin Island LLC, a Delaware limited liability company (“PanEnergy”),
(c) Gulf Coast NGL Pipeline, LLC, a Delaware limited liability company (“Gulf
Coast”), (d) Centana Gathering LLC, a Delaware limited liability company
(“Centana”), (e) DEFS Industrial Gas Co., LLC, a Delaware limited
liability company (“DIGC”), and (f) Centana Intrastate Pipeline LLC, a Delaware
limited liability company (“CIP”); and



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     (v) all currently pending legal actions against one or more members of the
Partnership Group or involving or otherwise relating to the MLP Assets, BLPLC or the
Black Lake Pipeline;


provided, however, that, in the case of clauses (i) and (ii) above, such indemnification
obligations shall survive for three (3) years from the Closing Date; and that in the case of clause
(iii) above, such indemnification obligations shall survive until sixty (60) days after the
expiration of any applicable statute of limitations.




          (b) In addition to and not in limitation of the indemnification provided under this Article
II, the Partnership Group shall indemnify, defend, and hold harmless DEFS and its Subsidiaries,
other than any Subsidiary constituting part of the Partnership Group, from and against any Losses
suffered or incurred by DEFS and its Subsidiaries, other than any Subsidiary constituting part of
the Partnership Group, by reason of or arising out of events and conditions associated with the
operation of the MLP Assets or Black Lake Pipeline that occurs on or after the Closing Date;
provided that in no event shall the Partnership Group indemnify, defend or hold harmless DEFS and
its Subsidiaries pursuant to this Section 2.3(b) from and against any Losses relating to the Black
Lake Pipeline arising from or attributable to the 5% interest in BLPLC owned by DEFS and its
Subsidiaries from and after the Closing Date.




     2.4 Limitations Regarding Indemnification.



          (a) The aggregate liability of DEFS under Sections 2.1(a) shall not exceed $15.0 million (the
“Cap”).




          (b) No claims may be made against DEFS for indemnification pursuant to Sections 2.1(a) unless
the aggregate dollar amount of the Losses suffered or incurred by the Partnership Group or
Partnership Indemnitees exceed $250,000, after such time DEFS shall be liable for the full amount
of such claims, subject to the limitations of Section 2.4(a).




          (c) Notwithstanding anything herein to the contrary, in no event shall DEFS have any
indemnification obligations under this Agreement for claims made as a result of additions to or
modifications of Environmental Laws promulgated after the Closing Date.




     2.5 Indemnification Procedures.



          (a) The Indemnified Party agrees that within a reasonable period of time after it becomes
aware of facts giving rise to a claim for indemnification pursuant to this Article II, they will
provide notice thereof in writing to the Indemnifying Party specifying the nature of and specific
basis for such claim; provided, however, that the Indemnified Party shall not submit claims more
frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to
the expiration of the applicable indemnity coverage under this Agreement).




          (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 II, 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




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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 II,
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 2.5. 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
II; 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) In determining the amount of any loss, cost, damage or expense for which the Indemnified
Party is entitled to indemnification under this Agreement, the gross amount of the indemnification
will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such
correlative insurance benefit shall be net of any incremental insurance premium that becomes due
and payable by the Indemnified Party as a result of such claim, (ii) all amounts recovered by the
Indemnified Party under contractual indemnities from third Persons and (iii) any proceeds realized
by the Indemnified Party from rate increases associated with the repair costs set forth in Section
2.2. The Partnership hereby agrees to use commercially reasonable efforts to realize any applicable
insurance proceeds, amounts recoverable under such contractual indemnities or recover any repair
costs incurred to comply with the Pipeline Safety Improvement Act of 2002 through the rates on the
Black Lake Pipeline or the SeaBreeze Pipeline.




ARTICLE III

Reimbursement Obligations




     3.1 Reimbursement for Operating and General and Administrative Expenses.



          (a) DEFS hereby agrees to continue to provide the Partnership Group with certain general and
administrative services, such as legal, accounting, treasury, insurance administration and claims
processing, risk management, health, safety and environmental, information technology, human
resources, credit, payroll, internal audit, taxes and engineering. These general and
administrative services shall be substantially identical in nature and quality to




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the services of
such type previously provided by DEFS in connection with their management and operation of the MLP
Assets during the one-year period prior to the Closing Date.




          (b) Subject to the provisions of Section 3.3, the Partnership Group hereby agrees to reimburse
DEFS for all expenses and expenditures it incurs or payments it makes on behalf of the Partnership
Group for these general and administrative services.




          (c) The Partnership Group hereby agrees to reimburse DEFS for all other expenses and
expenditures it incurs or payments it makes on behalf of the Partnership Group, including, but not
limited to, (i) salaries of operational personnel performing services on the Partnership Group’s
behalf and the cost of employee benefits for such personnel, (ii) capital expenditures, (iii)
maintenance and repair costs and (iv) taxes.




          (d) The General Partner shall be entitled to allocate any such expenses and expenditures
between the Partnership Group, on the one hand, and DEFS, on the other hand, in accordance with the
foregoing provision on any reasonable basis.




     3.2 Reimbursement for Insurance. The Partnership Group hereby agrees to reimburse DEFS and
its Subsidiaries other than any Subsidiary constituting part of the Partnership Group for all
expenses it incurs or payments it makes on behalf of the Partnership Group and the Partnership
Indemnitees for (i) insurance coverage with respect to the MLP Assets and the Black Lake Pipeline
(excluding any insurance coverage relating to the 5% interest in BLPLC owned by DEFS and its
Subsidiaries from and after the Closing Date), (ii) insurance coverage with respect to claims
related to fiduciary obligations of officers, directors and control persons of the Partnership
Group and (iii) insurance coverage with respect to claims under federal and state securities laws.



     3.3 Limitations on Reimbursement.



          (a) The amount for which DEFS shall be entitled to reimbursement from the Partnership Group
pursuant to Section 3.1(b) for general and administrative expenses shall not exceed $4.8 million in
the aggregate in the first year following the date of this Agreement (the “G&A Expenses Limit”).
Thereafter, the G&A Expenses Limit shall be increased annually over the next two years by the
percentage increase in the Consumer Price Index – All Urban Consumers, U.S. City Average, Not
Seasonally Adjusted for the applicable year. In the event that the Partnership Group makes any
acquisitions of assets or businesses or the business of the Partnership Group otherwise expands
during the first three years following the date of this Agreement, then the G&A Expenses Limit
shall be appropriately increased in order to account for adjustments in the nature and extent of
the general and administrative services by DEFS to the Partnership Group, with any such increase in
the G&A Expense Limit subject to the approval of the Conflicts Committee. After the third anniversary of the date of this Agreement, the
General Partner will determine the amount of general and administrative expenses that will be
properly allocated to the Partnership in accordance with the terms of the Partnership Agreement.




          (b) The obligation of the Partnership Group to reimburse DEFS and its Subsidiaries pursuant to
Section 3.2 shall not be subject to any monetary limitation.




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ARTICLE IV

Continuance of Credit Support




     4.1 Credit Support. DEFS shall maintain in full force and effect any and all credit support
arrangements, including without limitation guarantees and letters of credit, in effect as of the
Closing Date with respect to (i) any derivative financial instruments, including swap contracts
relating to the price of natural gas, crude oil or natural gas liquids and other hedging contracts,
related to the business or operations of the Partnership Group until the earlier to occur of (A)
the fifth anniversary of the Closing Date or (B) such time as the MLP obtains a credit rating of at
least B1 by Moody’s Investors Services, Inc. or B+ by Standard & Poor’s Ratings Groups, a division
of The McGraw Hill Companies, with respect to any of its unsecured indebtedness and (ii) any
commercial contract related to the business or operations of the Partnership Group until the
expiration of such commercial contract, without giving effect to any renewal thereof beyond the
stated termination date of such contract.



ARTICLE V

Voting of DEFS’ Interest in BLPLC




     5.1 Voting of DEFS’ Interest in BLPLC. From and after the Closing Date and so long as DEFS
and its Subsidiaries own any interest in BLPLC, DEFS will, and will cause its Subsidiaries to,
vote, take action by written consent or take any other action pursuant to the terms of the
partnership agreement of BLPLC or otherwise with respect to any such interest in BLPLC as directed
in writing by the Partnership Group to DEFS.



ARTICLE VI

Miscellaneous




     6.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed
by the laws of the State of Colorado, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each Party
hereby submits to the jurisdiction of the state and federal courts in the State of Colorado and to
venue in Colorado.



     6.2 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 telecopier or telegram to such Party.
Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by
telegram or telecopier 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
6.2.


For notices to DEFS:


370 17th Street, Suite 2500



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Denver, Colorado 80202

Phone: (303) 595-3331

Fax: (303) 605-2226

Attention: General Counsel


For notices to DCP LLC, the General Partner, the MLP or the OLP:


370 17th Street, Suite 2775

Denver, Colorado 80202

Phone: (303) 633-2900

Fax: (303) 633-2921


Attention: General Counsel



     6.3 Entire Agreement. This 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.



     6.4 Termination. Notwithstanding any other provision of this Agreement, if the General Partner is
removed as general partner of the Partnership under circumstances where Cause does not exist and
Units held by the General Partner and its Affiliates are not voted in favor of such removal, this
Agreement, other than the provisions set forth in Article II hereof, may immediately thereupon be
terminated by DEFS. The provisions of Article III of this Agreement shall also terminate upon a
Change of Control of DCP LLC, the General Partner or the MLP.



     6.5 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.



     6.6 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 and the OLP 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 adversely affect
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.



     6.7 Assignment; Third Party Beneficiaries. No Party shall have the right to assign its rights
or obligations under this Agreement without the consent of the other Parties. Each of the Parties
hereto specifically intends that DEFS and each entity comprising the Partnership Entities, as
applicable, whether or not a Party to this Agreement, shall be entitled to assert rights and



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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.




     6.8 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.



     6.9 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
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.



     6.10 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.



     6.11 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.



     6.12 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.



     6.13 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.



     6.14 Negation of Rights of Limited Partners, Assignees and Third Parties. The provisions of
this Agreement are enforceable solely by the Parties, and no limited partner, member, or assignee
of DEFS, the MLP or the OLP or other Person shall have the right, separate and apart from DEFS, the
MLP or the OLP, to enforce any provision of this Agreement or to compel any Party to comply with
the terms of this Agreement.



     6.15 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 DEFS
or any Partnership Entity.



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



	 	 	 	 	 	 	 
	 	 	DUKE ENERGY FIELD SERVICES, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brent L. Backes	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Brent L. Backes	 	 
	 

	 	Title:
	 	Vice President, General Counsel and
Secretary	 	 






	 	 	 	 	 	 	 
	 	 	DCP MIDSTREAM GP, LLC
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Bradley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Bradley	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM GP, LP
	 
	 	 	 	 	 	 
	 	 	By: DCP MIDSTREAM GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Bradley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Bradley	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM PARTNERS, LP
	 
	 	 	 	 	 	 
	 	 	By: DCP MIDSTREAM GP, LP, its general partner
	 
	 	 	 	 	 	 
	 	 	By: DCP MIDSTREAM GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Bradley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Bradley	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 






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	 	 	DCP MIDSTREAM OPERATING, LP
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Bradley	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Bradley	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 






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