Document:

ex10_1.htm

EXHIBIT 10.1

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of September 24, 2009, is entered into by and among TARGA RESOURCES PARTNERS LP, a Delaware limited partnership (the “Partnership”),
TARGA GP INC., a Delaware corporation (“Targa GP”), TARGA LP INC., a Delaware corporation (“Targa LP”), TARGA RESOURCES OPERATING LP (“Targa Operating”), a Delaware limited partnership, and TARGA NORTH TEXAS GP LLC (“Targa
North Texas”), a Delaware limited liability company.  The parties to this agreement are collectively referred to herein as the “Parties.” Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Purchase Agreement (as defined below).

RECITALS

WHEREAS, Targa GP, Targa LP and the Partnership have heretofore entered into that certain Purchase and Sale Agreement dated as of July 27, 2009 (the “Purchase Agreement”), providing for the sale by Targa GP and Targa
LP to the Partnership of: (i) 100% of the limited liability company interests (the “Downstream LLC Interests”) in Targa Downstream GP LLC (“Targa Downstream GP”), a Delaware limited liability company which holds a general partner interest which constitutes all of the general partner interests of and a 50% ownership interest in Targa Downstream LP (“Targa
Downstream”), a Delaware limited partnership, (ii) a limited partner interest  (the “Downstream LP Interests”) which constitutes all of the limited partner interests of and a 50% ownership interest in Targa Downstream, (iii) 100% of the limited liability company interests (the “LSNG LLC Interests,” and together with the Downstream
LLC Interests, the “LLC Interests”) in Targa LSNG GP LLC (“Targa LSNG GP”), a Delaware limited liability company which holds a general partner interest which constitutes all of the general partner interests of and a 50% ownership interest in Targa LSNG LP (“Targa LSNG”), a Delaware
limited partnership, and (iv) a limited partner interest (the “LSNG LP Interests,” and together with the Downstream LP Interests, the “LP Interests”) which constitutes all of the limited partner interests of and a 50% ownership interest in Targa LSNG;

WHEREAS, pursuant to the terms of the Purchase Agreement, Targa Downstream and Targa LSNG are to collectively own the Downstream Business at the Closing;

WHEREAS, Targa GP and Targa LP directly and indirectly own all of the partnership interests in Targa Downstream and Targa LSNG;

WHEREAS, pursuant to the terms of the Purchase Agreement, Targa GP intends to sell, convey, transfer and assign the LLC Interests to the Partnership or a designated subsidiary of the Partnership;

WHEREAS, pursuant to the terms of the Purchase Agreement, Targa LP intends to sell, convey, transfer and assign the LP Interests to the Partnership or a designated subsidiary of the Partnership;

WHEREAS, pursuant to the terms of the Purchase Agreement, the Partnership desires to (i) assign its rights under the Purchase Agreement to purchase the LLC Interests to Targa North Texas and (ii) assign its rights under the Purchase Agreement to purchase the LP Interests to Targa Operating; and

WHEREAS, at the Closing, (A) Targa North Texas desires to accept the LLC Interests and become the sole owner of all interests in each of Targa Downstream GP and Targa LSNG GP and (B) Targa Operating desires to accept the LP Interests and become the owner of a 50% limited partner interest in each of Targa Downstream and Targa LSNG.

NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the Parties undertake and agree as follows:

ARTICLE 1

ASSIGNMENT AND ASSUMPTION

OF PURCHASE AGREEMENT

Section 1.1 Assignment of Purchase Agreement to Targa North Texas. The Partnership hereby assigns to Targa North Texas all of its rights under the Purchase Agreement to purchase the LLC Interests
from Targa GP, and Targa North Texas hereby assumes (without any release or novation of the Partnership) all of such obligations of the Partnership under the Purchase Agreement.

Section 1.2 Assignment of Purchase Agreement to Targa Operating. The Partnership hereby assigns to Targa Operating all of its rights under the Purchase Agreement to purchase the LP Interests from Targa LP, and Targa Operating hereby assumes (without any release or novation of
the Partnership) all of such obligations of the Partnership under the Purchase Agreement.

ARTICLE 2

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

RELATING TO THE DOWNSTREAM INTERESTS

Section 2.1 Contribution by Targa GP of the LLC Interests to Targa North Texas. Targa GP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Targa North Texas, its successors and assigns, for its and their own use forever, all right,
title and interest in and to the LLC Interests and Targa North Texas hereby accepts the LLC Interests and agrees to be the sole member of each of Targa Downstream GP and Targa LSNG GP.

Section 2.2 Contribution by Targa LP of the LP Interests to Targa Operating. Targa LP hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Targa Operating, its successors and assigns, for its and their own use forever, all right, title
and interest in and to the LP Interests and Targa Operating hereby accepts the LP Interests and agrees to be the limited partner of each of Targa Downstream and Targa LSNG.

ARTICLE 3

FURTHER ASSURANCES

Section 3.1  From time to time after the date first above written, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and will do all such other acts and
things, all in accordance with applicable law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, or (b) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended
so to be and to more fully and effectively carry out the purposes and intent of this Agreement.

ARTICLE 4

MISCELLANEOUS

Section 4.1 Headings; References; Interpretation. All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein”
and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement.  All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders,
and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall
be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

        Section 4.2 Successors and Assigns. The Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 4.3 No Third Party Rights. The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is
intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 4.4 Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.

Section 4.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts made and to be performed wholly within such state without giving effect to conflict of law principles thereof.

Section 4.6 Severability. If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall
not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

Section 4.7 Amendment or Modification. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties. Each such instrument shall be reduced to writing.

Section 4.8 Conflicts. Nothing in this Agreement shall be construed as an agreement to assign any asset, or any interest therein, that is subject to any agreement that, by its terms or pursuant to applicable law, is not capable of being sold, assigned, transferred, conveyed or delivered
without the consent or waiver of a third party or a governmental authority unless and until such consent or waiver shall be given.

Section 4.9 Integration. This Agreement and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to their subject matter. This document and such instruments contain the entire understanding
of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the parties hereto after the date of this Agreement.

Section 4.10 Deed; Bill of Sale; Assignment. To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.

[Signature Pages Follow]

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written.

TARGA RESOURCES PARTNERS LP

By:  Targa Resources GP LLC,

its general partner

By:           /s/ Rene R. Joyce                                                                        

Rene R. Joyce

Chief Executive Officer

TARGA GP INC.

By:           /s/ Rene R. Joyce                                                                        

Rene R. Joyce

Chief Executive Officer

TARGA LP INC.

By:          /s/ Rene R. Joyce                                                                        

Rene R. Joyce

Chief Executive Officer

TARGA RESOURCES OPERATING LP

By:  Targa Resources Operating GP LLC,

its general partner

By:           /s/ Rene R. Joyce                                                                        

Rene R. Joyce

Chief Executive Officer

TARGA NORTH TEXAS GP LLC

By:          /s/ Rene R. Joyce                                                                         

Rene R. Joyce

Chief Executive Officerex10_2.htm

EXHIBIT 10.2

	
 

 

SECOND AMENDED AND RESTATED

 

OMNIBUS AGREEMENT

among

TARGA RESOURCES, INC.

TARGA RESOURCES GP LLC

and

TARGA RESOURCES PARTNERS LP

 

 

	  

SECOND AMENDED AND RESTATED

 

OMNIBUS AGREEMENT

 

THIS SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, September 24, 2009, and is by and among Targa Resources, Inc., a Delaware corporation (“Targa”),
Targa Resources LLC, a Delaware limited liability company, Targa Resources GP LLC, a Delaware limited liability company (the “General Partner”) and Targa Resources Partners LP, a Delaware limited partnership (the “Partnership”).  The above-named entities are sometimes referred to in this Agreement each as a “Party”
and collectively as the “Parties.”

 

R E C I T A L S:

 

1.           The Parties entered into that certain Omnibus Agreement, dated and effective as of the Closing Date (as defined herein) (the "Original Agreement"), to (i) evidence their agreement with respect to the amount to be
paid by the Partnership for certain general and administrative services to be performed by Targa and its Affiliates as well as direct expenses, including operating expenses, incurred by Targa and its Affiliates for and on behalf of the Partnership Group (as defined herein) and (ii) evidence their agreement with respect to certain indemnification obligations of the Parties.

 

2.           The Parties entered into that certain Amended and Restated Omnibus Agreement dated and effective as of October 24, 2007 (the “Current Agreement”) in order to amend and restate the Original Agreement.

 

3.           The Parties desire to amend and restate the Current Agreement to, among other things, reflect the purchase of the Downstream Business (as defined herein) by the Partnership from certain Affiliates of Targa.

 

In consideration of the agreements contained herein, and for other good and valuable consideration, the Parties hereby amend and restate the Current Agreement as follows:

 

ARTICLE I

 

Definitions

 

1.1 Definitions.

 

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

 

“Affiliate” is defined in the Partnership Agreement.

 

“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 Securities Exchange Act of 1934, as amended), other than Warburg Pincus LLC or its Affiliates, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) 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 Partnership’s initial public offering of Common Units.

 

“Common Units” is defined in the Partnership Agreement.

 

“Conflicts Committee” is defined in the Partnership 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 of Environmental Laws, including without limitation performance of any Environmental Activity; or

 

(ii)           any event, omission or condition associated with ownership or operation of the North Texas Assets relating to Environmental Activities (including, without limitation, the exposure to or presence of Hazardous Substances on, under, about or migrating to or from the North
Texas Assets or the exposure to or release of Hazardous Substances arising out of operation of the North Texas Assets) 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 case of clauses (A) and (B), such cost and expense shall not include the costs associated with project management and soil and ground water monitoring.

 

“CPI Index” is defined in Section 2.1(c) of this Agreement.

 

“Distribution Coverage” means the ratio determined by dividing Distributable Cash Flow of the Partnership for the quarter by Total Distributions of the Partnership for the quarter.  In such calculation, (i) “Distributable
Cash Flow” is net income plus depreciation and amortization, other non cash items and deferred taxes, adjusted for non-cash losses/(gains) on mark-to-market derivative contracts and early extinguishment of debt, less maintenance capital expenditures; and (ii) “Total Distributions” equal all cash distributions paid to all equity holders including incentive distributions for the period for which the distributions are declared.  By
way of example, if Distributable Cash Flow for a quarter (i.e. Q1) equaled X and Total Distributions for the quarter equaled Y, Distribution Coverage for the quarter would be X/Y.  The Total Distributions of Y would not be paid until the following quarter (i.e. Q2).

 

“Downstream Business” means the business and operations currently conducted by Targa and its affiliates described in the Targa Resources, Inc. Annual Report on Form 10-K for the year ended December 31, 2008, as the NGL Logistics and Marketing Division, consisting of
three segments: Logistics Assets, NGL Distribution and Marketing and Wholesale Marketing.

 

“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.

 

“Excess Amount” means the difference between the Support Amount and the Subsequent Payment Amount.

 

“G&A Expenses Limit” is defined in Section 2.1(c) of this Agreement.

 

“General Partner” is defined in the introduction to this Agreement.

 

“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 each Partnership Group Member and Targa in their capacities as parties entitled to indemnification in accordance with Article III.

 

“Indemnifying Party” means each of Targa and the Partnership Group, as the case may be, in their capacity as the parties from whom indemnification may be required in accordance with Article III.

 

 “Limited Partner” is defined in the Partnership Agreement.

 

“Losses” means all 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.

 

“Minimum Coverage Threshold” shall mean a distribution coverage of 1.0x.

 

“North Texas Assets” means the gathering and processing assets contributed to the Partnership in connection with its initial public offering and as more completely described in the Registration Statement and includes 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 of any member of the Partnership Group, prior to or as of the Closing Date.

 

“Partnership” is defined in the introduction to this Agreement.

 

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of Targa Resources Partners LP, dated as of February 14, 2007, as amended by Amendment No. 1 thereto, dated May 13, 2008, as such agreement is in effect on the date hereof,
to which reference is hereby made for all purposes of this 

Agreement.  No amendment or modification to the Partnership Agreement subsequent to the date hereof shall be given effect for the purposes of this Agreement unless such amendment receives the approval required pursuant to Section 4.6 hereof.

 

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

 

“Partnership Group” means the Partnership and its Subsidiaries treated as a single consolidated entity.

 

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

 

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

 

 “Party” and “Parties” are defined in the introduction to this Agreement.

 

“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, business trust, employee benefit plan, unincorporated organization, association, government agency or political subdivision thereof or other entity.

 

“PSA” means the Purchase and Sale Agreement, dated July 27, 2009, by and between Targa GP Inc., Targa LP Inc and the Partnership

 

“Registration Statement” means the Registration Statement on Form S-1 (Registration No. 333-138747), as amended, filed with the Securities and Exchange Commission with respect to the proposed initial public offering of Common Units by the Partnership.

 

“SAOU/LOU Business” means the business conducted by Targa Texas Field Services LP and Targa Louisiana Field Services, LLC.

 

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned,
directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly,
at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority
of the directors or other governing body of such Person.

 

“Targa” is defined in the introduction to this Agreement.

 

“Term of Support” means the fourth quarter of 2009 through and including the fourth quarter of 2011.

 

“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

 

Reimbursement Obligations

 

2.1 Reimbursement for Allocated General and Administrative Expenses; Limitations on Reimbursement.

 

(a)           Targa hereby agrees to continue to provide the Partnership Group with certain general and administrative services, such as legal, accounting, treasury, insurance, risk management, health, safety and environmental, information technology, human resources, credit, payroll,
internal audit, taxes, engineering and marketing.  These general and administrative services shall be substantially identical in nature and quality to the services of such type previously provided by Targa in connection with their management and operation of the North Texas Assets prior to their acquisition by the Partnership.  In the event that the Partnership Group makes any acquisitions of assets or businesses from Targa
or its Affiliates during the first three years following the Closing Date, Targa will similarly provide general and administrative services that are substantially identical in nature and quality to the services of such type previously provided by Targa in connection with their management and operation of such assets or businesses prior to their acquisition by the Partnership.

 

(b)           Subject to the provisions of Section 2.1(c) and 2.1(d) below, the Partnership Group hereby agrees to reimburse Targa for all expenses and expenditures Targa or its Affiliates incur or payments they make on behalf of the Partnership Group for these general and administrative
services.

 

(c)           The amount for which Targa shall be entitled to reimbursement from the Partnership Group pursuant to Section 2.1(b) for general and administrative expenses shall not exceed $5.0 million annually for a period of three (3) years following the Closing Date (the “G&A
Expenses Limit”).  Following the first anniversary of the Closing Date, 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 (the “CPI Index”) for the applicable year.  In making such adjustment, the G&A
Expenses Limit shall be increased on the first anniversary of the Closing Date by the CPI Index for the prior year period based on the most recent information available from the U.S. Department of Labor and similarly increased on the second anniversary of the Closing Date by the CPI Index for the prior year period.  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 Closing Date, 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 Targa to the Partnership Group, with any such increase in the G&A Expenses Limit subject to the approval of the Conflicts Committee.  From and after October 24, 2007, the G&A Expenses Limit is increased by the actual amount of general and administrative expenses allocated by Targa for the services
provided to the SAOU/LOU Business, according to the allocation methodology utilized by Targa.  From and after the date hereof, the G&A Expenses Limit is increased by the actual amount of general and administrative expenses allocated by Targa for the services provided to the Downstream Business, according to the allocation methodology utilized by Targa.  After the third anniversary of the Closing Date, the G&A Expenses Limit will no longer apply and 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.  The G&A Expenses Limit shall not apply to reimbursement for direct expenses of the Partnership as provided in Section 2.2.

 

(d)           Notwithstanding the obligations of the Partnership Group set forth in Sections 2.1(b) and 2.1(c) above and subject to Section 4.1(c), for any fiscal quarter during the Term of Support for which the Partnership’s Distribution Coverage for such quarter is less than
the Minimum Coverage Threshold (before giving effect to any reduction in the reimbursement of general and administrative expenses contemplated in this clause (d) for such quarter), the general and administrative expenses for such quarter relating to the matters for which Targa would otherwise be entitled to reimbursement will be reduced by the amount (the “Support Amount”) required for
the Partnership to meet the Minimum Coverage Threshold for such quarter; provided, however, that in no event will the Support Amount exceed $8 million for any quarter.  During the Term of Support, the Distribution Coverage for each applicable quarter is to be calculated assuming that Total Distributions for such quarter equal an amount in cash sufficient to pay all equity holders including incentive distributions for the period for which distributions
are declared a distribution of $0.5175 per unit. The Support Amount (i) is to be calculated by the Partnership in conjunction with closing the financial statements for the applicable quarter; (ii) will be accrued for the applicable quarter and reflected in distributable cash flow for such quarter; and (iii) will be settled by the Partnership in conjunction with the next regularly scheduled monthly payment (the “Subsequent Payment”) for allocated
expenses to be settled by the Partnership pursuant to this Agreement (the amount of the Subsequent Payment before giving effect to any Support Amount is the “Subsequent Payment Amount”). The Subsequent Payment will be settled as follows: (i) if the Support Amount is less than the Subsequent Payment Amount, then the Partnership will pay to Targa the Excess Amount; (ii) if the Support Amount is greater than the Subsequent Payment Amount, then
Targa will pay to the Partnership the Excess Amount; and (iii) if the Support Amount is equal to the Subsequent Payment Amount, then no payment will be made by either the Partnership or Targa.

 

2.2 Reimbursement for Direct Expenses.

 

(a)           The Partnership Group hereby agrees to reimburse Targa and its Affiliates for all direct expenses and expenditures they incur or payments they make on behalf of the Partnership Group, including, but not limited to, (i) salaries of operational personnel performing services
on the Partnership Group’s behalf, the cost of employee benefits for such personnel and general and administrative expense associated with such personnel, (ii) capital expenditures, (iii) maintenance and repair costs, (iv) taxes and (v) direct expenses, including operating expenses and certain allocated operating expenses, associated with the ownership and operation of the North Texas Assets, the SAOU/LOU Business and the
Downstream Business.

 

(b)           The Partnership Group hereby agrees to reimburse Targa and its Affiliates for all expenses and expenditures they incur or payments they make as a result of the Partnership becoming a publicly traded entity, including costs associated with annual and quarterly reports,
tax return and Schedule K-1 preparation and distribution, independent auditor fees, registrar and transfer agent fees, legal fees and independent director compensation.

 

(c)           The obligation of the Partnership Group to reimburse Targa and its Subsidiaries pursuant to this Section 2.2 shall not be subject to any monetary limitation, including the G&A Expenses Limit contained in Section 2.1.

 

ARTICLE III

 

Indemnification

 

3.1 Environmental Indemnification.

 

(a)           Subject to the provisions of Section 3.3, Targa 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 North Texas Assets for a period of three (3) years from the Closing Date but only to the extent such violations, corrections, events or conditions occurred on or before the Closing Date; provided, however, that such indemnity shall not apply to any Covered Environmental Losses reserved on the books of the Partnership Group as of the Closing Date.

 

(b)           The Partnership Group shall indemnify, defend and hold harmless Targa and its Affiliates, other than any Partnership Group Member, from and against any Covered Environmental Losses suffered or incurred by Targa and its Affiliates, other than any Partnership Group Member,
relating to the North Texas Assets 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 3.1(a).

 

(c)           The aggregate liability of Targa under Section 3.1(a) shall not exceed $10.0 million.

 

(d)           No claims may be made against Targa for indemnification pursuant to Section 3.1(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 Targa shall be liable for the
full amount of such claims, subject to the limitations of Section 3.1(c).

 

(e)           Notwithstanding anything herein to the contrary, in no event shall Targa 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.

 

3.2 Additional Indemnification

       (a)           Subject to the provisions of Section 3.3, Targa 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 North Texas Assets, and such failure renders the Partnership Group liable or unable to
use or operate the North Texas Assets in substantially the same manner that the North Texas Assets were used and operated by Targa and its Affiliates immediately prior to the Closing Date as described in the Registration Statement;

 

(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 North Texas Assets to the Partnership Group on the Closing Date or (ii) any such North Texas Assets to cross the roads,
waterways, railroads and other areas upon which any such North Texas Assets 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 North Texas Assets in substantially the same manner that the North Texas Assets were owned and operated by Targa and its Affiliates immediately prior to the Closing Date as described in the Registration Statement;

 

(iii)           all federal, state and local income tax liabilities attributable to the ownership or operation of the North Texas Assets prior to the Closing Date, including any such income tax liabilities of Targa and its Affiliates that may result from the consummation of the formation
transactions for the Partnership Group occurring on or prior to the Closing Date; and

 

(iv)           all pending legal actions as of the Closing Date against one or more Partnership Group Members involving or otherwise relating to the North Texas Assets;

 

provided, however, that, in the case of clauses (i), (ii) and (iv) 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 after the expiration of any applicable statute of limitations;

 

provided, further, that in the case of clauses (i), (ii), (iii) and (iv) above, such indemnification shall not include indemnity for Losses reserved on the books of the Partnership Group as of the Closing Date;

 

provided, further, no claims may be made against Targa for indemnification pursuant to Section 3.2 unless the aggregate dollar amount of the Losses suffered or incurred by the Partnership Group or Partnership Indemnitees exceed $250,000, after such time Targa shall be liable for the
full amount of such claims.

 

         (b)           In addition to and not in limitation of the indemnification provided
under this Article III, the Partnership Group shall indemnify, defend, and hold harmless Targa and its Affiliates, other than any Partnership Group Member, from and against any Losses suffered or incurred by Targa and its Affiliates, other than any Partnership Group Member, by reason of or arising out of events and conditions associated with the operation of the North Texas Assets that occurs on or after the Closing Date except to the extent that the Partnership Group is indemnified with respect to any such Losses
under Section 3.2(a).

 

3.3 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 III, 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 III, including, without limitation,
the selection of counsel, determination of whether to appeal any decision of any court or similar authority and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (which consent shall not be unreasonably withheld, conditioned or delayed) of the Indemnified Party unless it includes a full release of the
Indemnified Party from such matter or issues, as the case may be.

 

(c)           The Indemnified Party agrees to cooperate fully with the Indemnifying Party with respect to all aspects of the defense of any claims covered by the indemnification set forth in this Article III, including, without limitation, the prompt furnishing to the Indemnifying
Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the names of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided, however,
that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records and other information furnished by the Indemnified Party pursuant to this Section 3.3. In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified
Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article III; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party reasonably
informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

 

(d)           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 and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.

 

ARTICLE IV

 

Miscellaneous

 

4.1 Special Termination Rights.

 

(a)           Notwithstanding any other provision of this Agreement, if the General Partner is removed as general partner of the Partnership under circumstances where Cause (as defined in the Partnership Agreement) does not exist and the Units (as defined in the Partnership Agreement)
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 III hereof, may immediately thereupon be terminated by Targa upon giving notice of termination to the other parties hereto.

 

(b)           This Agreement shall also terminate upon a Change of Control of the General Partner.

 

(c)           If and to the extent that the Partnership hereafter transfers or disposes of (i) the Companies (as defined in the PSA), (ii) the business conducted by the Companies, (iii) all or substantially all of the Company Assets (as defined in the PSA), (iv) all or substantially
all of the Downstream Business or (v) all or substantially all of the Houston Area Assets (as defined in the PSA) to a Person that is not an Affiliate of the Partnership, then the obligations of Targa under Section 2.1(d) shall terminate and lapse and Targa would from and after the consummation of such transfer or disposition no longer be obligated to provide the support referenced in Section 2.1(d).

 

4.2 Choice of Law; Submission to Jurisdiction.  This Agreement shall be subject to and governed
by the laws of the State of Texas, 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 Texas and to venue in Houston, Texas.

 

4.3 Notice.  All notices or requests or consents provided for by, 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 4.3.

 

if to Targa:

 

Targa Resources, Inc.

1000 Louisiana, Suite 4300

Houston, Texas 77002

Attention: General Counsel

if to the Partnership Entities:

 

Targa Resources Partners LP

1000 Louisiana, Suite 4300

Houston, Texas 77002

Attention:   General Counsel

4.4 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.

 

4.5 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.

 

4.6 Amendment or Modification.  This Agreement may be amended or modified from time to time only
by the written agreement of all the Parties hereto; provided, however, that the Partnership 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.

 

4.7 Assignment.  No Party shall have the right to assign any of its rights or obligations under
this Agreement without the consent of the other Parties hereto.

 

4.8 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.

 

4.9 Severability.  If any provision of this Agreement shall be held invalid or unenforceable by
a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

 

4.10 Further Assurances.  In connection with this Agreement and all transactions contemplated by
this Agreement, each signatory party hereto 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.

 

4.11 Rights of Limited Partners.  The provisions of this Agreement are enforceable solely by the
Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

 

4.12 Successors.  This Agreement shall bind and inure to the benefit of the Parties and to their
respective successors and assigns.

 

 

[SIGNATURE PAGES FOLLOW]

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the date first set forth above.

 

TARGA RESOURCES, INC.

By:       /s/ Rene R. Joyce                                                                                                                                          

Rene R. Joyce

Chief Executive Officer

TARGA RESOURCES LLC

By:       /s/ Rene R. Joyce                                                                                                                                         

Rene R. Joyce

Chief Executive Officer

TARGA RESOURCES GP LLC

By:       /s/ Rene R. Joyce                                                                                                                                        

Rene R. Joyce

Chief Executive Officer

TARGA RESOURCES PARTNERS LP

By:     Targa Resources GP LLC,

its general partner

By:       /s/ Rene R. Joyce                                                                                                                                        

Rene R. Joyce

Chief Executive Officer

[Signature Page to the Second Amended and Restated Omnibus Agreement]

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