Document:

exv10w1

 

EXHIBIT 10.1

SECURITIES PURCHASE AGREEMENT

by and among

Ray C. Davis,

an individual person

Avatar Holdings, LLC,

a Texas limited liability company

Avatar Investments, LP,

a Texas limited partnership

Natural Gas Partners VI, L.P.,

a Delaware limited partnership

Lon Kile,

an individual person

MHT Properties, Ltd.,

a Texas limited partnership

and

P. Brian Smith Holdings LP,

a Texas limited partnership

collectively, as the Selling Parties,

LE GP, LLC,

a Delaware limited liability company

and

Enterprise GP Holdings L.P.,

a Delaware limited partnership,

as Buyer,

for the purchase and sale of

(i) an aggregate of 34.9% of the Equity Units representing membership interests of

LE GP, LLC,

a Delaware limited liability company,

and (ii) 38,976,090 Common Units representing limited partner interests of

Energy Transfer Equity, L.P.,

a Delaware limited partnership

dated as of May 7, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I. SALE AND PURCHASE
	 	 	2	 
	 
	 	 	 	 
	SECTION 1.1. Agreement to Sell and to Purchase
	 	 	2	 
	SECTION 1.2. Deliveries at Closing
	 	 	2	 
	SECTION 1.3. Purchase Price
	 	 	6	 
	 
	 	 	 	 
	ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
	 	 	6	 
	 
	 	 	 	 
	SECTION 2.1. Representations and Warranties with Respect to the Selling Parties and their
Interests
	 	 	6	 
	SECTION 2.2. Representations of the General Partner
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER
	 	 	13	 
	 
	 	 	 	 
	SECTION 3.1. Limited Partnership Organization
	 	 	13	 
	SECTION 3.2. Validity of Agreement; Authorization
	 	 	13	 
	SECTION 3.3. No Conflict or Violation
	 	 	13	 
	SECTION 3.4. Consents and Approvals
	 	 	14	 
	SECTION 3.5. Buyer Status
	 	 	14	 
	SECTION 3.6. Brokers
	 	 	14	 
	SECTION 3.7. Independent Investigation
	 	 	14	 
	SECTION 3.8. Investment Intent; Investment Experience; Restricted Securities
	 	 	14	 
	SECTION 3.9. Litigation
	 	 	15	 
	SECTION 3.10. Title to Redeemed Interests
	 	 	15	 
	 
	 	 	 	 
	ARTICLE IV. COVENANTS
	 	 	15	 
	 
	 	 	 	 
	SECTION 4.1. Further Assurances
	 	 	15	 
	SECTION 4.2. Commercially Reasonable Efforts
	 	 	15	 
	SECTION 4.3. Notice of Breach
	 	 	15	 
	SECTION 4.4. Tax Covenants
	 	 	16	 
	SECTION 4.5. No Control of the General Partner
	 	 	16	 
	 
	 	 	 	 
	ARTICLE V. CONDITIONS TO OBLIGATIONS OF BUYER
	 	 	16	 
	 
	 	 	 	 
	SECTION 5.1. Receipt of Documents
	 	 	16	 
	SECTION 5.2. Representations and Warranties of the Selling Parties
	 	 	16	 
	SECTION 5.3. Performance of Selling Parties’ Obligations
	 	 	17	 
	SECTION 5.4. No Violation of Orders
	 	 	17	 
	SECTION 5.5. Unitholder Rights and Restrictions Agreement
	 	 	17	 
	SECTION 5.6. Amended and Restated GP LLC Agreement
	 	 	17	 
	SECTION 5.7. 10b-5 Certificate of ETE
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VI. CONDITIONS TO OBLIGATIONS OF SELLING PARTIES
	 	 	17	 
	 
	 	 	 	 
	SECTION 6.1. Receipt of Documents
	 	 	17	 
	SECTION 6.2. Representations and Warranties of Buyer
	 	 	18	 
	SECTION 6.3. Performance of Buyer’s Obligations
	 	 	18	 
	SECTION 6.4. No Violation of Orders
	 	 	18	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 6.5. Unitholder Rights and Restrictions Agreement
	 	 	18	 
	SECTION 6.6. Amended and Restated GP LLC Agreement
	 	 	18	 
	 
	 	 	 	 
	ARTICLE VII. TERMINATION AND ABANDONMENT
	 	 	18	 
	 
	 	 	 	 
	SECTION 7.1. Methods of Termination; Upset Date
	 	 	18	 
	SECTION 7.2. Effect of Termination
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
	 	 	19	 
	 
	 	 	 	 
	SECTION 8.1. Survival
	 	 	19	 
	SECTION 8.2. Indemnification Coverage
	 	 	20	 
	SECTION 8.3. Procedures
	 	 	20	 
	SECTION 8.4. Tax Treatment of Indemnity Payments
	 	 	20	 
	SECTION 8.5. Remedies
	 	 	20	 
	 
	 	 	 	 
	ARTICLE IX. MISCELLANEOUS PROVISIONS
	 	 	20	 
	 
	 	 	 	 
	SECTION 9.1. Publicity
	 	 	20	 
	SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries
	 	 	20	 
	SECTION 9.3. Fees and Expenses
	 	 	20	 
	SECTION 9.4. Notices
	 	 	20	 
	SECTION 9.5. Entire Agreement
	 	 	20	 
	SECTION 9.6. Waivers and Amendments
	 	 	20	 
	SECTION 9.7. Severability
	 	 	20	 
	SECTION 9.8. Titles and Headings
	 	 	20	 
	SECTION 9.9. Signatures and Counterparts
	 	 	20	 
	SECTION 9.10. Enforcement of the Agreement; Damages
	 	 	20	 
	SECTION 9.11. Governing Law
	 	 	20	 
	SECTION 9.12. Disclosure
	 	 	20	 
	SECTION 9.13. Consent to Jurisdiction
	 	 	20	 
	SECTION 9.14. Certain Definitions
	 	 	20	 

	 	 	 
	Exhibits	 	 
	Exhibit 1.2(a)(i)(3)

	 	Amended and Restated GP LLC Agreement
	Exhibit 1.2(a)(i)

	 	Davis Assignment
	Exhibit 1.2(a)(iv)

	 	NGP Assignment
	Exhibit 1.2(c)

	 	ETE Assignment
	Exhibit 5.5

	 	Unitholder Rights and Restrictions Agreement
	Exhibit 5.7

	 	10b-5 Certificate of ETE

-ii-

 

	 	 	 
	Disclosure Schedules	 	 
	Schedule 1.3

	 	Purchase Price Allocation
	Schedule 2.1(c)

	 	Consents and Approvals
	Schedule 2.1(h)

	 	Contracts with General Partner and its Subsidiaries
	Schedule 2.2(c)

	 	Consents and Approvals
	Schedule 2.2(e)

	 	Subsidiaries; Equity Interests; Business of the General Partner
	Schedule 2.2(f)

	 	No Conflict or Violation
	Schedule 2.2(g)

	 	General Partner Financial Statements
	Schedule 2.2(h)(ii)

	 	Taxes
	Schedule 2.2(i)

	 	Absence of Undisclosed Liabilities
	Schedule 2.2(j)

	 	Litigation

-iii-

 

Index of Defined Terms

	 	 	 
	Affiliate
	 	9.14
	Agreement
	 	Preamble
	Amended and Restated LLC
	 	 
	Agreement
	 	1.2(a)(i)
	Avatar LLC
	 	Preamble
	Avatar LP
	 	Preamble
	Buyer
	 	Preamble
	Closing
	 	1.1(b)
	Closing Date
	 	1.1(b)
	Code
	 	2.1(h)(ii)
	Common Units
	 	Recitals
	Confidentiality Agreement
	 	9.14
	Current GP Members
	 	Recitals
	Davis
	 	Preamble
	Davis Assignment
	 	1.2(a)(i)
	Encumbrances
	 	1.1(a)(i)
	EPE Assignment
	 	1.2(c)
	ETE
	 	Recitals
	ETE Unit Transfer Application(s)
	 	1.2(c)(ii)
	ETP
	 	Recitals
	GAAP
	 	2.2(g)
	General Partner
	 	Recitals
	General Partner Entities
	 	2.2(c)
	Governmental Authority
	 	2.1(d)
	GP Financial Statements
	 	2.2(g)
	GP Interest
	 	Recitals
	GP LLC Agreement
	 	2.2(b)
	GP LLC Interests
	 	Recitals
	GP Sellers
	 	Recitals
	IDRs
	 	Preamble
	Indemnifying Party
	 	8.2(a)
	Kile
	 	Preamble
	Legal Proceeding
	 	2.2(j)
	Loss
	 	8.2(a)
	Losses
	 	8.2(a)
	Material Adverse Effect
	 	9.14
	MHT Properties
	 	Preamble
	NGP VI
	 	Preamble
	NGP Assignment
	 	1.2(a)(iv)
	Offered Common Units
	 	Recitals
	Organizational Documents
	 	9.14
	Partnership Agreement
	 	9.14
	Partnership Entities
	 	2.1(c)
	Person
	 	9.14
	Purchase Price
	 	1.3
	Redeemed Interests
	 	1.1(a)
	Securities
	 	Recitals
	Securities Act
	 	3.8
	Selling Parties
	 	Preamble
	Smith Holdings
	 	Preamble
	Tax, or Taxes
	 	2.2(h)(i)
	Tax Returns
	 	2.2(h)(i)
	Transaction Documents
	 	9.14(h)
	Transfer Agent
	 	1.2(a)(i)
	Transfer Taxes
	 	4.4(a)
	Warren
	 	Preamble

-iv-

 

SECURITIES PURCHASE AGREEMENT

     THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this 7th
day of May, 2007, by and among Ray C. Davis, an individual person (“Davis”), Avatar Holdings,
L.L.C., a Texas limited liability company (“Avatar LLC”), Avatar Investments, L.P., a Texas limited
partnership (“Avatar LP”), Natural Gas Partners VI, L.P., a Delaware limited partnership (“NGP
VI”), Lon Kile, an individual person “Kile”), MHT Properties, Ltd., a Texas limited partnership
(“MHT Properties”), and P. Brian Smith Holdings LP, a Texas limited partnership (“Smith Holdings”
and, together with Davis, Avatar LLC, Avatar LP, NGP VI, Kile and MHT Properties the “Selling
Parties”), Enterprise GP Holdings L.P., a Delaware limited partnership (“Buyer”), and LE GP, LLC, a
Delaware limited liability company (the “General Partner”).

W I T N E S S E T H:

     WHEREAS, NGP VI, Davis and Kelcy L. Warren (“Warren”) are the current members (the “Current GP
Members” and such persons who are selling GP LLC Interests (as defined below) pursuant to this
Agreement, the “GP Sellers”) of the General Partner.

     WHEREAS, the General Partner is the sole general partner of Energy Transfer Equity, L.P.
(“ETE”), and owns a 0.30915% general partner interest in ETE (the “GP Interest”) and common units
representing limited partner interests in ETE (“Common
Units”) (an aggregate of 841,765 Common
Units as of the date hereof);

     WHEREAS, as of the date of this Agreement, ETE (i) owns 36,413,840 common units and 26,086,957
Class G Units, each representing limited partner interests in Energy Transfer Partners, L.P., a
Delaware limited partnership (“ETP”), is the sole member of Energy Transfer Partners, L.L.C., a
Delaware limited liability company, which is the 0.01% general partner of Energy Transfer Partners
GP, L.P. and the owner of 1% of the Class A limited partner interest of Energy Transfer Partners
GP, L.P., and (ii) owns 100% of the Class B limited partner interest and 99% of the Class A limited
Partner interests of Energy Transfer GP, L.P.;

     WHEREAS, Energy Transfer Partners GP, L.P. owns the 2.0% general partner interest and all the
incentive distribution rights in ETP;

     WHEREAS, Buyer desires to purchase (i) an aggregate of 877,251 Equity Units of the General
Partner (the “GP LLC Interests”) from Davis and NGP VI, and (ii) an aggregate of 38,976,090 Common
Units from Davis, Avatar LLC, Avatar LP, NGP VI, Kile, MHT Properties, Smith Holdings and the
General Partner (the “Offered Common Units”, and collectively with the GP LLC Interests, the
"Securities”), and each of the Selling Parties and the General Partner desires to sell such
Securities to the Buyer, for the consideration and upon the terms and subject to the conditions set
forth in this Agreement;

     WHEREAS, effective immediately after the acquisition of the GP LLC Interests by Buyer, the
General Partner desires to redeem from Buyer 501,461 GP LLC Interests in exchange for 392,020 of
the Offered Common Units upon the terms and subject to the conditions set forth in this Agreement;

-1-

 

     NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set
forth herein, the parties hereto hereby agree as follows:

ARTICLE I.

SALE AND PURCHASE

     SECTION 1.1. Agreement to Sell and to Purchase.

     (a) On the Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement:

          (i) Each of the Selling Parties shall sell, assign, transfer, convey and deliver to Buyer, and
Buyer shall purchase and accept from each of the Selling Parties, the respective Securities owned
by it, in each case, free and clear of any pledges, restrictions on transfer, proxies and voting or
other agreements, liens, claims, charges, mortgages, security interests or other legal or equitable
encumbrances, limitations or restrictions of any nature whatsoever (“Encumbrances”), except, in the
case of the GP LLC Interests, as may be set forth in the GP LLC Agreement (as defined in
Section 2.2(a)) or, in the case of the Offered Common Units, as may be set forth in the
Partnership Agreement and the Unitholders Rights and Restrictions Agreement, (each as defined in
Section 9.14);

          (ii) The General Partner shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and accept from the General Partner, the Offered Common Units owned by it, in each
case, free and clear of any Encumbrances, except as may be set forth in the Partnership Agreement
and the Unitholders Rights and Restrictions Agreement;

          (iii) The Buyer shall sell, assign, transfer, convey and deliver to the General Partner, and
the General Partner shall purchase and accept from the Buyer, 501,461 GP LLC Interests (the
“Redeemed Interests”), free and clear of any Encumbrances, except, as may be set forth in the GP
LLC Agreement.

     (b) The closing of such sale and purchase (the “Closing”) shall take place at 10:00 a.m.
(Houston, Texas time), on the date of this agreement, or at such other time and date as the parties
hereto shall agree in writing (the “Closing Date”), at the offices of Andrews Kurth LLP. in
Houston, Texas or at such other place as the parties hereto shall agree in writing.

     SECTION 1.2. Deliveries at Closing.

     (a) At the Closing, each of the Selling Parties shall make the following deliveries to Buyer:

	 	(i)	 	Davis shall deliver to Buyer:

	 	(1)	 	a duly executed assignment of membership
interest, in substantially the form attached hereto as Exhibit
1.2(a)(i), transferring 201,252 Equity Units representing a 12.745%
GP LLC Interest (the “Davis Assignment”);

-2-

 

	 	(2)	 	(i) a duly executed certificate, countersigned
by the American Stock Transfer & Trust Company, as the transfer agent
and registrar with respect to the Common Units (the “Transfer Agent”),
representing 14,048,545 Common Units in the name of the Buyer (or an
Affiliate of the Buyer designated in writing by the Buyer), (ii) a copy
of a letter from the General Partner, addressed to and acknowledged by
the Transfer Agent, instructing the Transfer Agent to cancel the
certificate(s) representing such Common Units and to reissue a new
certificate representing 14,048,545 Common Units in the name of the
Buyer (or an Affiliate of the Buyer designated in writing by the Buyer)
and (iii) a copy of the cancelled certificate(s) representing such
Common Units previously owned by it; and
	 
	 	(3)	 	a duly executed copy of the Amended and
Restated Limited Liability Company Agreement of LE GP LLC, in
substantially the form attached hereto as Exhibit 1.2(a)(i)(3)
(the “Amended and Restated GP LLC Agreement”).

	 	(ii)	 	Avatar LLC shall deliver to Buyer:

	 	(1)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 12,925 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 12,925 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it.

	 	(iii)	 	Avatar LP shall deliver to Buyer:

	 	(1)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 6,801,489 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed
to and acknowledged by the Transfer Agent, instructing the Transfer
Agent to cancel the certificate(s) representing such Common Units and
to reissue a new certificate representing 6,801,489 Common Units in
the name of the Buyer (or an Affiliate of the Buyer designated in
writing by the Buyer) and (iii) a copy of the cancelled
certificate(s) representing such Common Units previously owned by it.

-3-

 

	 	(iv)	 	NGP VI shall deliver to Buyer:

	 	(1)	 	a duly executed assignment of membership
interests, in substantially the form attached hereto as Exhibit
1.2(a)(iv), transferring 675,999 Equity Units representing a
42.813% GP LLC Interest (the “NGP Assignment”);
	 
	 	(2)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent (as defined below), representing 17,202,745
Common Units in the name of the Buyer (or an Affiliate of the Buyer
designated in writing by the Buyer), (ii) a copy of a letter from the
General Partner, addressed to and acknowledged by the Transfer Agent,
instructing the Transfer Agent to cancel the certificate(s)
representing such Common Units and to reissue a new certificate
representing 17,202,745 Common Units in the name of the Buyer (or an
Affiliate of the Buyer designated in writing by the Buyer) and (iii) a
copy of the cancelled certificate(s) representing such Common Units
previously owned by it; and
	 
	 	(3)	 	a duly executed copy of the Amended and
Restated GP LLC Agreement.

	 	(v)	 	Kile shall deliver to Buyer:

	 	(1)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 129,592 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 129,592 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it.

	 	(vi)	 	MHT Properties shall deliver to Buyer:

	 	(1)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 129,592 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 129,592 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of

-4-

 

	 	 	 	the cancelled certificate(s) representing
such Common Units previously owned by it.

	 	(vii)	 	Smith Holdings shall deliver to Buyer:

	 	(1)	 	(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 259,182 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 259,182 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it.

     (b) At the Closing, each of the Selling Parties shall provide Buyer with a FIRPTA certificate
certifying that it (or the applicable transferor for federal income tax purposes) is not a “foreign
person” within the meaning of Treasury Regulation 1.1445-2(b).

     (c) At the Closing, Buyer shall make the following deliveries to each of the Selling Parties
and the General Partner, as applicable:

          (i) the Purchase Price payable to it, as provided in Section 1.3 below;

          (ii) one or more transfer applications in respect of the Offered Common Units to be acquired
by it, in the form specified in the Partnership Agreement, seeking admission to ETE as a substitute
limited partner (the “ETE Unit Transfer Application(s)”);

          (iii) a duly executed copy of the Amended and Restated GP LLC Agreement;

          (iv) a duly executed assignment of membership interest, in substantially the form attached
hereto as Exhibit 1.2(a)(i), transferring 501,461 Equity Units (the “EPE Assignment”) to the
General Partner.

     (d) At the Closing, the General Partner shall make the following deliveries to the Buyer:

          (i) (A) a duly executed certificate, countersigned by the Transfer Agent, representing 392,020
Common Units in the name of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (B) a copy of a letter from the General Partner, addressed to and acknowledged by the
Transfer Agent, instructing the Transfer Agent to cancel the certificate(s) representing such
Common Units and to reissue a new certificate representing 392,020 Common Units in the name of the
Buyer (or an Affiliate of the Buyer designated in writing by the Buyer) and (C) a copy of the
cancelled certificate(s) representing such Common Units previously owned by it.

-5-

 

     SECTION 1.3. Purchase Price. The aggregate purchase price for the Securities (the “Purchase
Price”) shall be paid to the applicable Selling Parties on the Closing Date in the allocations set
forth on Schedule 1.3 and shall be allocated among the Selling Parties and between the
Securities in accordance with Schedule 1.3.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES

     SECTION 2.1. Representations and Warranties with Respect to the Selling Parties and their
Interests. As of the date hereof, each of the Selling Parties hereby severally, but not jointly,
represents and warrants to Buyer, as follows:

     (a) Organization.

          (i) Avatar LLC represents and warrants that it is a limited liability company duly formed,
validly existing and in good standing under the laws of Texas.

          (ii) Avatar LP represents and warrants that it is a limited partnership duly formed, validly
existing and in good standing under the laws of Texas.

          (iii) NGP VI represents and warrants that it is a limited partnership duly formed, validly
existing and in good standing under the laws of Delaware.

          (iv) MHT Properties represents and warrants that it is a limited partnership duly formed,
validly existing and in good standing under the laws of Texas.

          (v) Smith Holdings represents and warrants that it is a limited partnership duly formed,
validly existing and in good standing under the laws of Texas.

     (b) Validity of Agreement; Authorization. Such Selling Party has the power and
authority to enter into this Agreement and the Transaction Documents to which it is party and to
carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
and such Transaction Documents and the performance of the Selling Party’s obligations hereunder
and thereunder have been duly authorized by the Board of Directors of the Selling Party or the
general partner of the Selling Party, as applicable, and no other proceedings on the part of any
of the Selling Party are necessary to authorize such execution, delivery and performance. This
Agreement and the Transaction Documents to which any of the Selling Party is party have been (in
the case of this Agreement), or will be at the Closing (in the case of such other Transaction
Documents), duly executed and delivered by the Selling Party, as applicable, and constitute, or
will constitute at the Closing, as applicable, each such party’s valid and binding obligation
enforceable against each such party in accordance with its terms (except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other
similar law affecting the enforcement of creditors’ rights generally or by general equitable
principles).

-6-

 

     (c) Consents and Approvals. Except as disclosed on Schedule 2.1(c), no
material consent, approval, waiver or authorization of, or filing, registration or qualification
with, any Governmental Authority or any other Person (on the part of such Selling Party) is
required for the Selling Party to execute and deliver this Agreement or the Transaction Documents
to which the Selling Party is party or to perform its respective obligations hereunder or
thereunder. The General Partner, any subsidiaries of the General Partner set forth on
Schedule 2.2(e), ETE and each of the subsidiaries of ETE set forth on Schedule
2.2(e) are collectively referred to herein as the “Partnership Entities.”

     (d) No Conflict or Violation. The execution, delivery and performance of this
Agreement and the Transaction Documents by the Selling Party does not and will not: (i) with
respect to any Selling Party who is not an individual person, violate or conflict with any
provision of the Organizational Documents (as defined in Section 9.14) of the Selling
Party; (ii) violate any applicable provision of law, statute, judgment, order, writ, injunction,
decree, award, rule, or regulation of any foreign, federal, state or local government, court,
arbitrator, agency or commission or other governmental or regulatory body or authority
(“Governmental Authority”); (iii) violate, result in a breach of, constitute (with due notice or
lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue
under any material contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which the Selling Party is a party or by which it is bound or
to which its properties or assets is subject; or (iv) result in the creation or imposition of any
Encumbrance upon any of the properties or assets of such Selling Party, except in the cases of
clauses (ii) and (iv) above, as would not have a Material Adverse Effect and, in the case of
clauses (iii) and (iv) above, as set forth on Schedule 2.2(d).

     (e) Title. The GP LLC Interests or Offered Common Units, as applicable, being sold to Buyer by such
Selling Party are owned by such Selling Party of record and beneficially solely by such person.
Upon delivery of the Purchase Price to such Selling Party, Buyer will acquire such Securities free
and clear of any Encumbrances other than as set forth in the Amended and Restated LLC Agreement,
the Unitholders Rights and Restrictions Agreement or the Partnership Agreement.

     (f) Litigation. No Action by or against such Selling Party is pending or, to the best
knowledge of such Selling Party, threatened, which could affect the legality, validity or
enforceability of this Agreement or the consummation of the transactions contemplated hereby or
thereby.

     (g) Brokers. The Selling Party has not employed the services of an investment banker,
financial advisor, broker or finder in connection with this Agreement or any of the transactions
contemplated hereby.

     (h) Contracts with General Partner and its Subsidiaries. The Selling Party and its
Affiliates are not party to any contract or agreement with the General Partner or any of its
Subsidiaries (excluding ETE and its Subsidiaries to the extent such contracts and agreements are
required to be disclosed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and have been so disclosed in filings made by ETE and its Subsidiaries)
except as disclosed on Schedule 2.1(h); provided, however, that the

-7-

 

representation
contained in this Section 2.1(h) relating to NGP and its Affiliates, includes only NGP,
its general partner and the partners, managers and employees of such general partner and related
investment funds, but does not include any portfolio company of NGP or its related investment
funds.

     SECTION 2.2. Representations of the General Partner. As of the date hereof, the General
Partner hereby represents and warrants to Buyer as follows:

     (a) Organization. The General Partner is a limited liability company duly formed,
validly existing and in good standing under the laws of Delaware, and has all requisite limited
liability company power and authority, as the case may be, and all governmental licenses,
authorizations, permits, consents and approvals to own its respective properties and assets and to
conduct its business as now conducted, except where the failure to have such governmental
licenses, authorizations, permits, consents and approvals would not have a Material Adverse Effect
(as defined in Section 9.14). The General Partner is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction where the character of the properties
owned or leased by it or the nature of the business conducted by it makes such qualification
necessary,
except where the failure to be so qualified or in good standing would not individually or in
the aggregate have a Material Adverse Effect.

     (b) Validity of Agreement; Authorization. The General Partner has the power and
authority to enter into this Agreement and the Transaction Documents to which it is party and to
carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
and such Transaction Documents and the performance of the General Partner’s obligations hereunder
and thereunder have been duly authorized by the Board of Directors of the General Partner, and no
other proceedings on the part of the General Partner are necessary to authorize such execution,
delivery and performance. This Agreement and the Transaction Documents to which General Partner is
party have been (in the case of this Agreement), or will be at the Closing (in the case of such
other Transaction Documents), duly executed and delivered by the General Partner, and constitute,
or will constitute at the Closing, as applicable, the General Partner’s valid and binding
obligation enforceable against the General Partner in accordance with its terms (except to the
extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization
or other similar law affecting the enforcement of creditors’ rights generally or by general
equitable principles).

     (c) Consents and Approvals; No Prohibition on Distributions. Except as disclosed on
Schedule 2.2(c), no material consent, approval, waiver or authorization of, or filing,
registration or qualification with, any Governmental Authority or any other Person (on the part of
the General Partner) is required for the General Partner to execute and deliver this Agreement or
the Transaction Documents to which the General Partner is party or to perform its obligations
hereunder or thereunder. The General Partner is not currently prohibited, directly or indirectly,
from making distributions in respect of its equity securities, except as set forth in the GP LLC
Agreement (defined below).

-8-

 

     (d) Capitalization of the General Partner; Title.

          (i) NGP VI, Davis and Warren are the sole members of the General Partner. All of the
outstanding GP LLC Interests have been duly authorized and validly issued in accordance with the
Limited Liability Company Agreement of LE GP LLC, dated as of February 8, 2006 (the “GP LLC
Agreement”), are fully paid (to the extent required by the GP LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Section 18-607 of the Delaware Limited
Liability Company Act). Except for the GP LLC Interests, there are no outstanding securities of LE
GP. There are no preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any interest in the General Partner pursuant to any agreement to
which LE GP or the Selling Party is a party or to which either of them may be bound. There are no
outstanding options, warrants or similar rights to purchase or acquire any equity interests in the
General Partner. A true and correct copy of the GP LLC Agreement, with any and all amendments
thereto to the date hereof, has been made available by the Current GP Members to the Buyer or its
representatives.

          (ii) Except for any Encumbrances provided in the Partnership Agreement, the General Partner is
the sole general partner and owns the GP Interest, free and clear of any Encumbrances.

          (iii) The Offered Common Units being sold to Buyer by the General Partner are owned solely by
the General Partner of record and beneficially. Upon delivery of the Redeemed Interests to the
General Partner, Buyer will acquire such Offered Common Units free and clear of any Encumbrances
other than as set forth in the Amended and Restated LLC Agreement, the Unitholders Rights and
Restrictions Agreement or the Partnership Agreement.

     (e) Subsidiaries; Equity Interests; Business of the General Partner Entities.

          (i) Except as set forth on Schedule 2.2(e), the General Partner does not have any
Non-ETE Subsidiary, and does not own, directly or indirectly, any shares of capital stock, voting
rights or other equity interests or investments in any other Person, other than ETE and its direct
and indirect subsidiaries. Except as set forth in the Partnership Agreement or on Schedule
2.2(e), the General Partner has no obligation or rights to acquire by any means, directly or
indirectly, any capital stock, voting rights, equity interests or investments in another Person.
The General Partner and ETI GP, LLC, which has been dissolved, are referred to herein collectively
as the “General Partner Entities.”

          (ii) The General Partner was formed as a limited liability company under the laws of the State
of Texas on September 5, 2002, and effective August 23, 2005 was converted from a Texas limited
liability company to a Delaware limited liability company. Since its date of formation, the
General Partner has not engaged in or conducted, directly or indirectly, any business or other
activities other than (i) serving as the general partner of ETE and owning the GP Interest and
Common Units, and (ii) owning all of the member interests in ETI GP and the limited partner
interests in ETI.

     (f) No Conflict or Violation. The execution, delivery and performance of this
Agreement and the Transaction Documents by the General Partner do not and will not:

-9-

 

(a) violate or
conflict with any provision of the Organizational Documents (as defined in Section 9.14)
of the General Partner; (b) violate any applicable provision of law, statute, judgment, order,
writ, injunction, decree, award, rule, or regulation of any foreign, federal, state or local
Governmental Authority; (c) violate, result in a breach of, constitute (with due notice or lapse
of time or both) a default or cause any obligation, penalty or premium to arise or accrue under
any material contract, lease, loan agreement, mortgage, security agreement, trust indenture or
other agreement or instrument to which the General Partner is a party or by which it is bound or
to which its properties or assets is subject; (d) result in the creation or imposition of any
Encumbrance upon any of the properties or assets of any of the General Partner; or (e) result in
the cancellation, modification, revocation or suspension of any license or permit of the General
Partner, except in the cases of clauses (b), (d) and (e) above, as would not have a Material
Adverse Effect and, in the case of clauses (c) and (d) above, as set forth on Schedule
2.2(f).

     (g) General Partner Financial Statements. Attached as Schedule 2.2(g) are
copies of the audited balance sheet, as of August 31, 2006, and the unaudited income statements
and statement of partners’ equity at, or for the 12-
month period, or portion thereof, ended August 31, 2006, of the General Partner and the
unaudited balance sheet and income statement for the six month period ended February 28, 2007, of
the General Partner (collectively, the “GP Financial Statements”). The GP Financial Statements
were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applied on
a consistent basis throughout the periods involved and fairly present in all material respects the
financial condition of the General Partner as of their respective dates and the results of its
operations for the periods covered thereby.

     (h) Tax Matters.

          (i) For purposes of this Agreement, “Tax Returns” shall mean returns, reports, exhibits,
schedules, information statements and other documentation (including any additional or supporting
material) filed or maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment or collection of any Tax and shall include any amended
returns required as a result of examination adjustments made by the Internal Revenue Service or
other Tax authority. For purposes of this Agreement, “Tax” or “Taxes” shall mean any and all
federal, state, local, foreign and other taxes, levies, fees, imposts and duties of whatever kind
(including any interest, penalties or additions to the tax imposed in connection therewith or with
respect thereto), including, without limitation, taxes imposed on, or measured by, income,
franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real
or personal property, capital stock, license, payroll, withholding, employment, social security,
workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp,
occupation, premium, windfall profits, transfer and gains taxes and customs duties.

          (ii) Except as disclosed on Schedule 2.2(h)(ii), (A) each of the General Partner
Entities has filed (or joined in the filing of) when due all Tax Returns required by applicable law
to be filed with respect to each of such General Partner Entities; (B) each such Tax Return is
true, correct and complete in all material respects; (C) all Taxes owed by the any of the General
Partner Entities (whether or not shown on any Tax Return) at any time on or prior to the Closing

-10-

 

Date, if required to have been paid, have been or will be timely paid (except for Taxes that are
being contested in good faith in appropriate proceedings and, to the extent the amount being
contested exceeds $100,000, that are set forth on Schedule 2.2(h)(ii)); (D) any material
liability of any of the General Partner Entities for Taxes not yet due and payable, or that is
being contested in good faith in appropriate proceedings, has been provided for on the financial
statements of the applicable General Partner Entity or Entities, as the case may be, in accordance
with GAAP; (E) there is no action, suit, proceeding, investigation, audit or claim now pending
against, or with respect to, any of the General Partner Entities in respect of any material Tax or
Tax assessment, nor has any claim for additional material Tax or Tax assessment been asserted in
writing; (F) no written claim has been made by any Tax authority in a jurisdiction where any of the
General Partner Entities does not currently file a Tax Return that it is or may be subject to Tax
by such jurisdiction; (G) none of the General Partner Entities has any outstanding request for any
extension of time within which to pay its Taxes or file its Tax Returns; (H) there has been no
waiver or extension of any applicable statute of limitations for the assessment or collection of
any Taxes of any of the Partnership Entities; (I) none of the General Partner Entities has entered
into any agreement or arrangement with any Tax authority that requires any of the General
Partner Entities or the Partnership Entities to take any action or to refrain from taking any
action; (J) none of the Selling Parties or the General Partner Entities is a “foreign person”
within the meaning of Section 1445 of the United States Internal Revenue Code of 1986, as amended
(the “Code”); (K) none of the General Partner Entities is a party to any agreement, whether written
or unwritten, providing for the payment of Taxes, payment for Tax losses, entitlements to refunds
or similar Tax matters; (L) each of the General Partner Entities treated as a partnership for
federal income tax purposes has made a currently effective election under Section 754 of the Code;
and (M) each of the General Partner Entities has withheld and paid all material Taxes required to
be withheld by such General Partner Entity in connection with any amounts paid or owing to any
partner, member, employee, creditor, independent contractor or other third party and (N) each of
the General Partner Entities is and has been since its formation treated as a partnership or
disregarded as an entity for federal income tax purposes.

     (i) Absence of Undisclosed Liabilities.

          (i) Except as disclosed on Schedule 2.2(i), the General Partner has no indebtedness or
liability, absolute or contingent, which is not shown or provided for in the GP Financial
Statements, other than (i) liabilities incurred or accrued in the ordinary course of business
consistent with past practice, including liens for current taxes and assessments not in default,
since August 31, 2006, (ii) liabilities of the General Partner that individually or in the
aggregate are not material to the General Partner and that are not required by GAAP to be included
in the GP Financial Statements and (iii) liabilities of ETE for which the General Partner may be
liable in its capacity as General Partner.

          (ii) Except as disclosed on Schedule 2.2(i), the General Partner has not made any
distributions to its members or redeemed or repurchased any equity securities of the General
Partner or the General Partner Entities, since August 31, 2006.

     (j) Litigation Except as set forth on Schedule 2.2(j), there are no Legal
Proceedings pending or, to the knowledge of the Selling Parties after reasonable inquiry,
threatened against the General Partner Entities or any officer, director or member thereof in its
capacity as a

-11-

 

member that, individually or in the aggregate, are reasonably likely to (a) have a
Material Adverse Effect or (b) materially impair or delay the ability of any of the Selling
Parties to perform its obligations under this Agreement or the Transaction Documents or consummate
the transactions contemplated hereby or thereby. Except as set forth in the GP Financial
Statements for the fiscal year ended August 31, 2006, there is no order, judgment, injunction or
decree of any Governmental Authority outstanding against the General Partner Entities that,
individually or in the aggregate, would have any effect referred to in the foregoing clauses (a)
and (b). “Legal Proceeding” shall mean any judicial, administrative or arbitral actions, suits,
proceedings (public or private), investigations or governmental proceedings before any
Governmental Authority.

     (k) Brokers. None of the General Partner Entities has employed the services of an
investment banker, financial advisor, broker or finder in connection with this Agreement or any of
the transactions contemplated hereby.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF BUYER

     As of the date hereof, Buyer hereby represents and warrants to each of the Selling Parties as
follows:

     SECTION 3.1. Limited Partnership Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of Delaware and has
all requisite limited partnership power and authority to own its properties and assets and to
conduct its business as now conducted. Buyer is duly qualified to do business as a foreign entity
in every jurisdiction where the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualifications necessary.

     SECTION 3.2. Validity of Agreement; Authorization. Buyer has the power and authority to
enter into this Agreement and the Transaction Documents to which Buyer is a party and to carry out
its obligations hereunder and thereunder. The execution and delivery of this Agreement and such
Transaction Documents and the performance of Buyer’s obligations hereunder and thereunder have
been duly authorized by the Board of Directors of the general partner of Buyer and no other
proceedings on the part of Buyer, its general partner or its owners are necessary to authorize
such execution, delivery and performance. This Agreement and the Transaction Documents to which
Buyer is a party each have been (in the case of this Agreement) or will be at the Closing (in the
case of such Transaction Documents) duly executed and delivered by Buyer and constitute or will
constitute at the Closing, as applicable, the valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms (except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar law affecting the
enforcement of creditors’ rights generally or by general equitable principles).

     SECTION 3.3. No Conflict or Violation. The execution, delivery and performance by Buyer of
this Agreement and the Transaction Documents to which Buyer is a party does not and will not: (a)
violate or conflict with any provision of its or its general

-12-

 

partner’s Organizational Documents, (b) violate any applicable provision of law, or any
order, judgment or decree of any Governmental Authority, (c) violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which
Buyer is a party or by which it is bound or to which any of its properties or assets is subject or
(d) result in the creation or imposition of any Encumbrance upon any of its properties or assets
where such violations, breaches, defaults or Encumbrances in the aggregate would have a material
adverse effect on the transactions contemplated hereby or on the assets, properties, business,
operations, net income or financial condition of Buyer.

          SECTION 3.4. Consents and Approvals. Except as disclosed on Schedule 3.4, no
material consent, approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person (on the part of Buyer), is required for Buyer to
execute and deliver this Agreement or the Transaction Documents to which Buyer is a party or to
perform its obligations hereunder or thereunder.

          SECTION 3.5. Buyer Status. Buyer is not an employee benefit plan or other organization
exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign
corporation or other foreign Person, or a regulated investment company within the meaning of
Section 851 of the Code.

          SECTION 3.6. Brokers. Except as disclosed on Schedule 3.6, Buyer has not employed
the services of an investment banker, financial advisor, broker or finder in connection with this
Agreement or any of the transactions contemplated hereby.

          SECTION 3.7. Independent Investigation. Buyer has conducted its own independent
investigation, review and analysis of the business, operations, assets, liabilities, results of
operations, financial condition and prospects of each of the Partnership Entities, both
individually and on a consolidated basis, which investigation, review and analysis was done by
Buyer and its Affiliates and, to the extent Buyer deemed necessary or appropriate, by Buyer’s
representatives. Buyer acknowledges that it and its representatives have been provided adequate
access to the personnel, properties, premises and records of each of the Partnership Entities for
such purpose.

          SECTION 3.8. Investment Intent; Investment Experience; Restricted Securities. In acquiring
the Securities, Buyer is not offering or selling, and will not offer or sell the Securities, for
the Selling Parties in connection with any distribution of any of such Securities, and Buyer does
not have a participation and will not participate in any such undertaking or in any underwriting
of such an undertaking except in compliance with
applicable federal and state securities laws. Buyer acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Securities, and has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks
of an investment in all of such Securities. Buyer is an “accredited investor” as such term is
defined in Regulation D under the Securities Act of 1933 (the “Securities Act”). Buyer
understands that none of the Securities will have been registered pursuant to the Securities Act
or any applicable state securities laws, that all of such Securities will be characterized as
“restricted securities” under federal securities laws and that under such laws and applicable

-13-

 

regulations none of such Securities can be sold or otherwise disposed of without registration
under the Securities Act or an exemption therefrom.

          SECTION 3.9. Litigation. No Action by or against the Buyer is pending or, to the best
knowledge of the Buyer, threatened, which could affect the legality, validity or enforceability of
this Agreement or the consummation of the transactions contemplated hereby or thereby.

          SECTION 3.10. Title to Redeemed Interests. The Redeemed Interests being sold to the General
Partner by Buyer are owned solely by the Buyer of record and beneficially. Upon delivery of the
Offered Common Units to the Buyer, the General Partner will acquire such Redeemed Interests free
and clear of any Encumbrances other than as set forth in the Amended and Restated LLC Agreement.

ARTICLE IV.

COVENANTS

          SECTION 4.1. Further Assurances. Upon the request of Buyer at any time on or after the
Closing Date, each of the Selling Parties will promptly execute and deliver, or cause the General
Partner to execute and deliver, such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents as Buyer or its counsel may reasonably
request in order to perfect title of Buyer and its successors and assigns to the Securities.

          SECTION 4.2. Commercially Reasonable Efforts. Upon the terms and subject to the conditions
of this Agreement, each of the Selling Parties and Buyer hereto will use all commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable consistent with applicable law to consummate and make
effective in the most expeditious manner practicable the transactions contemplated hereby.

          SECTION 4.3. Notice of Breach. Each party shall promptly give to the other parties written
notice with particularity upon having knowledge of any matter that would constitute a breach by
such party of any
representation, warranty, agreement or covenant of such party contained in this Agreement,
including, without limitation, the Selling Parties’ representations in Article II.

          SECTION 4.4. Tax Covenants.

     (a) All excise, sales, use, transfer (including real property transfer or gains), stamp,
documentary, filing, recordation and other similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or penalties,
resulting directly from the transactions contemplated by this Agreement (the “Transfer Taxes”),
shall be borne by the Selling Parties. Notwithstanding anything to the contrary in this
Section 4.4, any Tax Returns that must be filed in connection with Transfer Taxes shall be
prepared and filed when due by the party primarily or customarily responsible under the applicable
local law for

-14-

 

filing such Tax Returns, and such party will use commercially reasonable efforts to
provide such Tax Returns to the other party at least ten days prior to the due date for such Tax
Returns.

     (b) The Selling Parties shall cause each of the Partnership Entities to adopt the remedial
allocation method under Treas. Reg. Section 1.704-3(d).

          SECTION 4.5. No Control of the General Partner. Buyer hereby agrees with the General
Partner, NGP and Davis that Buyer shall not exercise any control whatsoever, take any action as a
Member, or request that any actions be taken by the Members or the Board of Directors other than
the transactions contemplated by this Agreement, with respect to the General Partner prior to the
redemption of the Redeemed Interests in accordance with Section 1.1(a).

ARTICLE V.

CONDITIONS TO OBLIGATIONS OF BUYER

     The obligations of Buyer to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or
more of which may be waived by Buyer in its sole discretion:

          SECTION 5.1. Receipt of Documents. The Selling Parties and the General Partner shall have
delivered, or be standing ready to deliver, to Buyer the items specified in Sections
1.2(a)(i)-(vii), and Section 1.2(d), respectively, in each case duly executed and
dated the Closing Date.

          SECTION 5.2. Representations and Warranties of the Selling Parties. All representations and
warranties made by the Selling Parties and the General Partner in this Agreement that are not
qualified by materiality or Material Adverse Effect shall be true and correct in all material
respects on and as of the Closing Date as if again made by the Selling Parties and the General
Partner on and as of such date, and all representations and
warranties that are qualified by materiality or Material Adverse Effect shall be true and
correct on the Closing Date as if made by the Selling Parties and the General Partner on and as of
such date; and Buyer shall have received a certificate dated the Closing Date and signed by a
senior executive officer of each of the Selling Parties and the General Partner to that effect.

          SECTION 5.3. Performance of Selling Parties’ Obligations. The Selling Parties shall have
performed in all material respects all obligations required under this Agreement to be performed
by them on or before the Closing Date, and Buyer shall have received a certificate dated the
Closing Date and signed by a senior executive officer of each of the Selling Parties to that
effect.

          SECTION 5.4. No Violation of Orders. No preliminary or permanent injunction or other order
issued by any Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before
any Governmental Authority shall have been instituted by a Governmental Authority or threatened by
any Government Authority that seeks to prevent or

-15-

 

delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that challenges the validity
or enforceability of this Agreement or any of the Transaction Documents.

          SECTION 5.5. Unitholder Rights and Restrictions Agreement. ETE shall have entered into the
Unitholder Rights and Restrictions Agreement with the Buyer substantially in the form attached
hereto as Exhibit 5.5.

          SECTION 5.6. Amended and Restated GP LLC Agreement. Warren, NGP VI, Davis and the Buyer
shall have executed the Amended and Restated GP LLC Agreement.

          SECTION 5.7. 10b-5 Certificate of ETE. Buyer shall have received a 10b-5 Certificate from
ETE in the form attached hereto as Exhibit 5.7.

ARTICLE VI.

CONDITIONS TO OBLIGATIONS OF SELLING PARTIES

     The obligations of the Selling Parties to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of the following
conditions, any one or more of which may be waived by the Selling Parties in their sole discretion:

          SECTION 6.1. Receipt of Documents. Buyer shall have delivered, or be standing ready to
deliver, to the Selling Parties and the General Partner the items specified in Section
1.2(b), in each case duly executed and dated the Closing Date.

          SECTION 6.2. Representations and Warranties of Buyer. All representations and warranties
made by Buyer in this Agreement that are not qualified by materiality or material adverse effect
shall be true and correct in all material respects on and as of the Closing Date as if again made
by Buyer on and as of such date, and all representations and warranties that are qualified by
materiality or material adverse effect shall be true and correct on the Closing Date as if made by
the Buyer on and as of such date; and the Selling Parties shall have received a certificate dated
the Closing Date and signed by a senior executive officer of Buyer to that effect.

          SECTION 6.3. Performance of Buyer’s Obligations. Buyer shall have performed in all material
respects all obligations required under this Agreement to be performed by it on or before the
Closing Date, and the Selling Parties shall have received a certificate dated the Closing Date and
signed by a senior executive officer of Buyer to that effect.

          SECTION 6.4. No Violation of Orders. No preliminary or permanent injunction or other order
issued by any Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before
any Governmental Authority shall have been instituted by a Governmental Authority or threatened by
any Governmental Authority that seeks to prevent or

-16-

 

delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that challenges the validity
or enforceability of this Agreement or any of the Transaction Documents.

          SECTION 6.5. Unitholder Rights and Restrictions Agreement. Buyer shall have entered into the
Unitholder Rights and Restrictions Agreement with ETE substantially in the form attached hereto as
Exhibit 5.5.

          SECTION 6.6. Amended and Restated GP LLC Agreement. Warren, NGP VI, Davis and the Buyer
shall have executed the Amended and Restated GP LLC Agreement.

ARTICLE VII.

TERMINATION AND ABANDONMENT

          SECTION 7.1. Methods of Termination; Upset Date. This Agreement may, or in the case of
Section 7.1(e) will, be terminated and the transactions contemplated hereby may be
abandoned at any time before the Closing:

     (a) by the mutual written consent of the Selling Parties and Buyer;

     (b) by the Selling Parties, if Buyer fails to comply with any of its covenants or agreements
contained herein, or breaches their representations and warranties contained herein, which failure
to comply or breach is not cured on the Closing Date;

     (c) by Buyer, if the Selling Parties fail to comply with any of their covenants or agreements
contained herein, or breaches its representations and warranties contained herein, which failure to
comply or breach is not cured on the Closing Date; or

     (d) by the Selling Parties or Buyer, if a Governmental Authority shall have issued an order,
decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall
use their commercially reasonable efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement and which order, decree, ruling
or other action is not subject to appeal; or

     (e) without any action required by the Selling Parties or Buyer, if the Closing has not
occurred by 11:59 p.m. New York time on the date after the date of this Agreement.

     SECTION 7.2. Effect of Termination. In the event of termination of this Agreement pursuant
to Section 7.1(a), (d) or (e) hereof, this Agreement shall forthwith become void
and there shall be no liability on the part of Buyer, the Selling Parties or the General Partner
(or their respective officers or directors), except based upon obligations set forth in
Sections 9.3 and 9.4 hereof, and except that Buyer shall thereupon promptly return
or destroy (and cause its agents and representatives to return or destroy) to the Selling Parties
all documents (and copies thereof) furnished to Buyer and the parties shall continue to adhere to
the Confidentiality Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, termination of this Agreement pursuant to Section 7.1(b) or Section
7.1(c) shall not in any way limit or restrict the rights and remedies of any party hereto
against any other

-17-

 

party hereto that has violated or breached any of the representations,
warranties, agreements or other provisions of this Agreement prior to termination hereof.

ARTICLE VIII.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

          SECTION 8.1. Survival. The representations and warranties of Buyer, the Selling Parties and
the General Partner contained herein or in any certificates or other documents delivered pursuant
to this Agreement on the Closing Date terminate on the Closing Date; provided, however, that (i)
the representations and warranties set forth in Section 2.1(b) and Section 2.2(b)
(Validity of Agreement; Authorization), Section 2.1(e) (Title), Section 2.1(g)
(Brokers) and Section 2.2(d) (Capitalization of the General Partner) shall survive
indefinitely; and (ii) the other representations and warranties made by the General Partner in
Section 2.2 shall survive for a period of six months after the Closing Date. The
covenants and agreements set forth in Article I, Section 4.1, this Article
VIII and Article IX shall survive the Closing for a period of one year.

          SECTION 8.2. Indemnification Coverage.

     (a) From and after the Closing, each Selling Party (the “Indemnifying Parties”) shall
severally but not jointly indemnify and defend, save and hold Buyer harmless if Buyer shall
actually incur any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax,
expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action
(each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from (i) any
breach or inaccuracy in any representation by the General Partner or the breach of any warranty by
the General Partner contained in Section 2.2 of this Agreement; (ii) any breach or
inaccuracy in any representation by such Selling Party contained in Section 2.1 of this
Agreement; or (iii) any breach of the covenants and agreements by such Selling Party under this
Agreement; provided, that in determining whether any representation or warranty has been breached
or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect
or materiality is not a qualification thereto.

     (b) The foregoing indemnification obligations shall be subject to the following limitations:

               (i) each Indemnifying Party’s aggregate liability (A) under
Section 8.2(a)(i), except
with respect to a breach of Section 2.2(d)(iii), shall not exceed such Indemnifying Party’s
allocated portion of $12,338,597 set forth on Schedule 1.3 to such Indemnifying Party’s
sale of a GP Interest and (B) under Section 8.2(a)(i) (with respect to a breach of Section
2.2(d)(iii) only), Section 8.2(a)(ii) or 8.2(a)(iii) shall not exceed the total
Purchase Price allocated on Schedule 1.3 to be paid to such Indemnifying Party;

               (ii) any claims made pursuant to (A) Section 8.2(a)(i), except with respect to a
breach of Section 2.2(d), must be made by Buyer within six months from the date of this
Agreement and (B) pursuant to Section 8.2(a)(i) (with respect to a breach of Section
2.2(d) only), Section 8.2(a)(ii) or 8.2(a)(iii) must be made by Buyer within
the survival period specified in

-18-

 

Section 8.1 for the representation or other provision which the Buyer is alleging has
been breached;

               (iii) the amount of any Losses suffered by Buyer shall be reduced by any third-party insurance
or other indemnification payments which such party receives in respect of or as a result of such
Losses, less the reasonable costs incurred to recover those insurance or indemnification payments
to the extent such costs are not otherwise recovered. If any Losses for which indemnification is
provided hereunder is subsequently reduced by any third-party insurance or other indemnification
payments received by the Buyer less the reasonable costs incurred to obtain payment, the amount of
the reduction shall be remitted pro rata to the Selling Parties who have made payment hereunder;

               (iv) no claim may be asserted nor may any action be commenced against any party for breach or
inaccuracy of any representation or breach of a warranty, unless written notice of such claim or
action is received by the other party describing in reasonable detail the facts and circumstances
with respect to the subject matter of such claim or action on or prior to the date on which the
representation or warranty on which such claim or action is based ceases to survive as set forth in
Section 8.1;

               (v) Buyer shall not be entitled under this Agreement to multiple recovery for the same Losses.

          SECTION 8.3. Procedures.

     (a) Buyer shall notify the Indemnifying Party (with reasonable detail) promptly (but in each
case within 10 business days) after it becomes aware of facts supporting a claim or action for
indemnification under this Article VIII, and shall provide to the Indemnifying Party as
soon as practicable thereafter all reasonable available information and documentation necessary to
support and verify any Losses associated with such claim or action. Subject to Section
8.2(c)(iv), the failure to so notify or provide information to the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that it may have to Buyer, except to the extent
that the Indemnifying Party demonstrates that it has been materially prejudiced by Buyer’s failure
to give such notice, in which case the Indemnifying Party shall be relieved from its obligations
hereunder to the extent of such material prejudice. The Indemnifying Party shall participate in
and defend, contest or otherwise protect Buyer against any such claim or action by counsel of the
Indemnifying Party’s choice at its sole cost and expense; provided, however, that the Indemnifying
Party shall not make any settlement or compromise without the prior written consent of Buyer (which
consent shall not be unreasonably withheld or delayed) unless the sole relief provided is monetary
damages that are paid in full by the Indemnifying Party, there is no admission or statement of
fault or culpability on the part of Buyer and there is an unconditional release of Buyer from all
liability on any claims that are the subject of such claim or action. Buyer shall have the right,
but not the obligation, to participate at its own expense in the defense thereof by counsel of
Buyer’s choice and shall in any event use its commercially reasonable efforts to cooperate with and
assist the Indemnifying Party; provided, however, that the Indemnifying Party shall pay the fees
and expenses of separate counsel for Buyer if (i) the
Indemnifying Party has agreed to pay such fees and expenses or (ii) counsel for the
Indemnifying Party reasonably determines that representation of both the Indemnifying Party and
Buyer by the

-19-

 

same counsel would create a conflict of interest. If the Indemnifying Party fails
timely to defend, contest or otherwise protect against such suit, action, investigation, claim or
proceeding, Buyer shall have the right to do so, including, without limitation, the right to make
any compromise or settlement thereof, and Buyer shall be entitled to recover the entire cost
thereof from the Indemnifying Party, including, without limitation, reasonable attorneys’ fees,
disbursements and amounts paid as the result of such suit, action, investigation, claim or
proceeding.

          SECTION 8.4. Tax Treatment of Indemnity Payments. Each party, to the extent permitted by
applicable law, agrees to treat any payments made pursuant to this Article VIII as
adjustments to the Purchase Price for all federal and state income and franchise Tax purposes. To
the extent that any such payment is not permitted to be treated as an adjustment to the Purchase
Price, the amount of such payment shall be increased so that after reduction for the amount of any
actual additional Tax cost incurred as a result of the receipt of such payment, the amount
remaining will be equal to the amount of the payment that is owed under this Article VIII.

          SECTION 8.5. Remedies.

     (a) The Buyer acknowledges and agrees that following the Closing, the indemnification
provisions of Article VIII shall be the sole and exclusive remedies of the Buyer for any
breach by any Selling Party or the General Partner of the representations and warranties in this
Agreement, or any certificate delivered in connection herewith, and for any failure by the Selling
Parties or the General Partner to perform and comply with any covenants and agreements in this
Agreement, except that if any of the provisions of this Agreement are not performed in accordance
with their terms or are otherwise breached, the parties shall be entitled to specific performance
of the terms thereof in addition to any other remedy at law or equity. Each party hereto shall
take all commercially reasonable steps to mitigate its Losses upon and after becoming aware of any
event which could reasonably be expected to give rise to any Losses.

     (b) No Selling Party nor the General Partner shall have any liability under any provision of
this Agreement for any punitive or exemplary damages relating to the breach or alleged breach of
this Agreement or any representations or warranties contained herein or in any certificate
delivered in connection herewith.

     (c) The provisions of this Section 8.5 do not apply to nor restrict the remedies of
the Buyer with respect to any representations or warranties of ETE contained in the certificate to
be delivered to the Buyer by ETE pursuant to Section 5.7.

     (d) The Buyer and the Selling Parties agree that (i) the General Partner shall have no
liability under this Agreement to the Buyer or any Selling Party, for the breach of any
representations or warranty contained in Section 2.2, covenant or otherwise, except with
respect to the covenants set forth in Section 1.01(a)(ii), Section 1.01(a)(iii) and
Section 1.2(d)(i), and (ii) the Selling Parties shall be solely responsible to indemnify
the Buyer for any breach of any
representation or warranty of the General Partner under this Agreement, in accordance with
this Article VIII.

-20-

 

ARTICLE IX.

MISCELLANEOUS PROVISIONS

     SECTION 9.1. Publicity. On or prior to the Closing Date, no party shall, nor shall it permit
its Affiliates to, issue or cause the publication of any press release or other announcement with
respect to this Agreement or the transactions contemplated hereby without the consent of the other
party hereto; provided, any party may issue a press release and file any required reports with the
SEC after consultation with counsel for the Selling Parties. Notwithstanding the foregoing, in
the event any such press release or announcement is required by law or stock exchange rule to be
made by the party proposing to issue the same, such party shall use its commercially reasonable
efforts to consult in good faith with the other party prior to the issuance of any such press
release or announcement.

     SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries. This Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their respective successors and
permitted assigns. Except as set forth in Article VIII, nothing in this Agreement shall
confer upon any Person not a party to this Agreement, or the legal representatives of such Person,
any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement. No
party shall sell, assign or otherwise transfer all or any of its rights, benefits or obligations
hereunder without the prior written consent of the other party, such consent not to be
unreasonably withheld or delayed, provided, however, that, for the purposes of any financing or
refinancing arrangement entered into by the Buyer in connection with the purchase of the
Securities the Buyer may, without the Selling Parties’ prior written consent, assign to or create
a security interest in favor of any party providing any such financing or refinancing to the
Buyer, all of its rights, benefits, obligations and interests hereunder, and the Selling Parties
hereby consent to the exercise by any such party of any rights, benefits, obligations or interests
assigned to or created in favor of such party pursuant to the foregoing and any remedies arising
in connection therewith.

     SECTION 9.3. Fees and Expenses. Except as otherwise expressly provided in this Agreement,
all legal, accounting and other fees, costs and expenses of a party hereto incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the party incurring
such fees, costs or expenses.

     SECTION 9.4. Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made if delivered personally or
sent by
overnight courier or sent by facsimile (with evidence of confirmation of receipt) to the
parties at the following addresses:

	 	(a)	 	If to Buyer, to:

Enterprise GP Holdings L.P.

1100 Louisiana Street, 18th Floor

Houston, Texas 77002

Facsimile: (713) 803-2096

Attention: Michael A. Creel

-21-

 

with a copy to:

Enterprise GP Holdings L.P.

1100 Louisiana Street, 18th Floor

Houston, Texas 77002

Facsimile: (713) 381-2905

Attention: Richard H. Bachmann, Esq.

and with a copy to:

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Facsimile: (713) 220-4285

Attention: David C. Buck, Esq.

	 	(b)	 	If to the Selling Parties, to:

Natural Gas Partners VI, L.P.

125 East John Carpenter Freeway, Suite 600

Irving, TX 75062

Facsimile: (972) 432-1441

Attention: Richard L. Covington

with a copy to:

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Facsimile: (917) 777-4299

Ray C. Davis

Avatar Investments LLC

Avatar Holdings, LP

2838 Woodside Street

Dallas, Texas 75204

Facsimile: (214) 981-0703

with a copy to:

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Facsimile: (917) 777-4299

-22-

 

Lon Kile

c/o Natural Gas Partners VI, L.P.

125 East John Carpenter Freeway, Suite 600

Irving, TX 75062

Facsimile: (972) 432-1441

Attention: Lon Kile

with a copy to:

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Facsimile: (917) 777-4299

MHT Properties, Ltd.

125 East John Carpenter Freeway, Suite 600

Irving, TX 75062

Facsimile: (972) 432-1441

with a copy to:

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Facsimile: (917) 777-4299

P. Brian Smith Holdings LP

125 East John Carpenter Freeway, Suite 600

Irving, TX 75062

Facsimile: (972) 432-1441

Attention: P. Brian Smith

with a copy to:

McKee Nelson LLP

One Battery Park Plaza, 34th Floor

New York, NY 10004

Facsimile: (917) 777-4299

or to such other Persons or at such other addresses as shall be furnished by any party by like
notice to the other, and such notice or communication shall be deemed to have been given or made as
of the date so delivered or mailed. No change in any of such addresses shall be effective insofar
as notices under this Section 9.4 are concerned unless such changed address is located in
the United States of America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.4.

-23-

 

          SECTION 9.5. Entire Agreement. This Agreement, together with the Disclosure Schedules and
the Exhibits hereto, the Confidentiality Agreement and the Transaction Documents represent the
entire agreement and understanding of the parties with reference to the transactions set forth
herein and therein and no representations or warranties have been made in connection herewith and
therewith by Buyer, any Selling Party, the General Partner or any of their respective officers,
directors, employees or representatives other than those expressly set forth herein or therein.
This Agreement, together with the Disclosure Schedules and the Exhibits hereto, the
Confidentiality Agreement and the Transaction Documents supersede all prior negotiations,
discussions, correspondence, communications, understandings and agreements between the parties
relating to the subject matter hereof or thereof and all prior drafts of such documents, all of
which are merged into such documents. No prior drafts of such documents and no words or phrases
from any such prior drafts shall be admissible into evidence in any action or suit involving such
documents.

          SECTION 9.6. Waivers and Amendments. The Selling Parties or Buyer may, by written notice to
the other party: (a) extend the time for the performance of any of the obligations or other
actions of the other party; (b) waive any inaccuracies in the representations or warranties of the
other party contained in this Agreement or in any document delivered pursuant to this Agreement by
the other party; (c) waive compliance with any of the covenants of the other party contained in
this Agreement; (d) waive performance of any of the obligations of the other party created under
this Agreement; or (e) waive fulfillment of any of the conditions to its own obligations under
this
Agreement or in any documents delivered pursuant to this Agreement by the other party. The
waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach, whether or not similar, unless such waiver
specifically states that it is to be construed as a continuing waiver. This Agreement may be
amended, modified or supplemented only by a written instrument executed by the parties hereto.

          SECTION 9.7. Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there shall be added as
a part of this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

          SECTION 9.8. Titles and Headings. The Article and Section headings and any table of contents
contained in this Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision hereof.

          SECTION 9.9. Signatures and Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission shall be the same as delivery
of an original. At the request of Buyer or the Selling Parties, the parties will confirm facsimile
transmission by signing a duplicate original document. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which together shall be
considered one and the same agreement.

-24-

 

          SECTION 9.10. Enforcement of the Agreement; Damages. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereto, this being in addition to
any other remedy to which they are entitled at law or in equity.

          SECTION 9.11. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal and substantive laws of Texas and without regard to any conflicts of laws
concepts that would apply the substantive law of some other jurisdiction.

          SECTION 9.12. Disclosure. Certain information set forth in the Disclosure Schedules is included solely for
informational purposes, is not an admission of liability with respect to the matters covered by
the information, and may not be required to be disclosed pursuant to this Agreement. Disclosure
of any item in any section of the Disclosure Schedules only qualifies (i) the correspondingly
numbered representation and warranty or covenant in this Agreement to the extent specified therein
and (ii) such other representations and warranties or covenants in this Agreement that are
qualified by another Disclosure Schedule (or section of a Disclosure Schedule), but only to the
extent (a) there is an explicit cross-reference in such other Disclosure Schedule (or section of a
Disclosure Schedule, as applicable) or (b) such item is disclosed in such a way as to make its
relevance to the information called for by such other Disclosure Schedule (or section of a
Disclosure Schedule, as applicable) readily apparent on its face. The specification of any dollar
amount in the representations and warranties contained in this Agreement or the inclusion of any
specific item in the Disclosure Schedules is not intended to imply that such amounts (or higher or
lower amounts) are or are not material, and no party shall use the fact of the setting of such
amounts or the fact of the inclusion of any such item in the Disclosure Schedules in any dispute
or controversy between the parties as to whether any obligation, item, or matter not described
herein or included in a Disclosure Schedule is or is not material for purposes of this Agreement.

          SECTION 9.13. Consent to Jurisdiction. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Texas and the federal courts of the United States of
America located in Houston, Texas over any dispute arising out of or relating to this Agreement or
any of the transactions contemplated hereby, and each party irrevocably agrees that all claims in
respect of such dispute or proceeding shall be heard and determined in such courts. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the venue of any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each party agrees that a judgment in any
dispute heard in the venue specified by this section may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by applicable law.

          SECTION 9.14. Certain Definitions. For purposes of this Agreement, the term:

     (a) “Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation
by or before any Governmental Authority.

-25-

 

     (b) “Antitrust Investigation” shall mean any investigation, inquiry, review, proceeding,
action, or threatened action taken by a Governmental Authority in enforcing the Antitrust Laws.

     (c) “Antitrust Laws” shall include the Sherman Act, as amended, the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all other federal, state, and
foreign statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or lessening of
competition.

     (d) “Affiliate” of a Person means a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the first- mentioned
Person.

     (e) “Confidentiality Agreement” means, the Confidentiality Agreement among Buyer, Davis, NGP
VI and ETE, dated April 20, 2007.

     (f) “Governmental Authority” means any federal, national, supranational, state, provincial,
local or other government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body. including, but not limited to, all
U.S., state and foreign governmental agencies responsible for enforcing the Antitrust Laws.

     (g) “Material Adverse Effect” shall mean an adverse effect on the business, results of
operations, or financial condition, of the General Partner and its Subsidiaries, taken as a whole,
that would have a material adverse effect on the value of the Securities, it being understood that
none of the following shall be deemed to constitute a Material Adverse Effect: (i) any effect
resulting from entering into this Agreement or the announcement of the transactions contemplated by
this Agreement, (ii) any effect resulting from changes in general economic conditions in the
industry in which any of the Partnership Entities operates, and (iii) any effect resulting from
changes in the United States or global economy as a whole, unless in the case of clause (ii) or
(iii) above such change has a disproportionately adverse effect on the Partnership Entities, taken
as a whole.

     (h) “Non-ETE Subsidiary” means any Subsidiary of the Company other than ETE and any Subsidiary
of ETE.

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

     (j) “Partnership Agreement” means the Third Amended and Restated Agreement of Limited
Partnership of Energy Transfer Equity, L.P., dated as of February 8, 2006, as amended by Amendment
No. 1 dated effective as of November 1, 2006.

     (k) “Person” shall mean an individual, corporation, association, trust, limited liability
company, limited partnership, limited liability partnership, partnership, incorporated
organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act).

-26-

 

     (l) “Transaction Documents” shall mean the agreements, contracts, documents, instruments and
certificates provided for in this Agreement to be entered into by one or more of the parties hereto
or any of their Affiliates in connection with the transactions contemplated by this Agreement,
including without limitation the Bills of Sale.

     (m) “Unitholders Rights and Restrictions Agreements” means the agreement dated as of the date
hereof among ETE, Buyer, Davis and NGP substantially in the form attached hereto as Exhibit 5.5.

-27-

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	SELLING PARTIES:	 	Ray C. Davis	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ray C. Davis
 

	 	 
	 

	 	Name:
	 	Ray C. Davis	 	 
	 
	 	 	 	 	 	 
	 	 	Avatar Holdings, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ray C. Davis
 

	 	 
	 

	 	Name:
	 	Ray C. Davis
 

	 	 
	 

	 	Title:
	 	President
 

	 	 
	 
	 	 	 	 	 	 
	 	 	Avatar Investments, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Avatar Holdings, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ray C. Davis
 

	 	 
	 

	 	Name:
	 	Ray C. Davis
 

	 	 
	 

	 	Title:
	 	President
 

	 	 
	 
	 	 	 	 	 	 
	 	 	Natural Gas Partners VI, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	G.F.W. Energy VI, L.P., general partner	 	 
	 

	 	By:
	 	GFW VI, L.L.C., general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth A. Hersh
 

	 	 
	 

	 	Name:
	 	Kenneth A. Hersh	 	 
	 

	 	Title:
	 	Authorized Member	 	 
	 
	 	 	 	 	 	 
	 	 	Lon Kile	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lon Kile
 

	 	 
	 

	 	Name:
	 	Lon Kile	 	 
	 
	 	 	 	 	 	 
	 	 	MHT Properties, Ltd.	 	 
	 
	 	 	 	 	 	 
	 	 	MHT Properties, Ltd.	 	 
	 	 	By: MHT Group, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Eric R. Pitcher
 

	 	 
	 

	 	Name:
	 	Eric R. Pitcher	 	 
	 

	 	Title:
	 	President	 	 

-28-

 

	 	 	 	 	 	 	 
	 	 	P. Smith Holdings LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	P. Brian Smith Capital Corp., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kenneth A. Hersh
 

	 	 
	 

	 	Name:
	 	Kenneth A. Hersh	 	 
	 

	 	Title:
	 	Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	BUYER:	 	Enterprise GP Holding L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EPE HOLDINGS, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael A. Creel
 

	 	 
	 

	 	Name:
	 	Michael A. Creel, CEO	 	 
	 
	 	 	 	 	 	 
	GENERAL PARTNER:	 	LE GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds
 

	 	 
	 

	 	Name:
	 	John W. McReynolds	 	 
	 

	 	Title:
	 	President	 	 

-29-exv10w2

 

Execution Copy

EXHIBIT 10.2

 

AMENDED & RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

LE GP, LLC

A Delaware limited liability company

May 7, 2007

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 
	 	ARTICLE I	 	 	 	 
	 
	 	DEFINITIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Definitions	 	 	2	 
	Section 1.2
	 	Construction	 	 	13	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE II	 	 	 	 
	 
	 	ORGANIZATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Formation	 	 	14	 
	Section 2.2
	 	Name	 	 	14	 
	Section 2.3
	 	Registered Office; Registered Agent; Principal Office; Other Offices	 	 	14	 
	Section 2.4
	 	Purpose	 	 	14	 
	Section 2.5
	 	Foreign Qualification	 	 	14	 
	Section 2.6
	 	Term	 	 	14	 
	Section 2.7
	 	Powers	 	 	15	 
	Section 2.8
	 	No State-Law Partnership; Withdrawal	 	 	15	 
	Section 2.9
	 	Certain Undertakings Relating to the Separateness of the MLP	 	 	15	 
	Section 2.10
	 	Title to Company Property	 	 	17	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE III	 	 	 	 
	 
	 	MATTERS RELATING TO MEMBERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Members	 	 	17	 
	Section 3.2
	 	Creation of Additional Membership Interest	 	 	17	 
	Section 3.3
	 	Liability to Third Parties	 	 	17	 
	Section 3.4
	 	Meetings of the Members	 	 	17	 
	Section 3.5
	 	Quorum; Voting Requirement	 	 	17	 
	Section 3.6
	 	Notice of Meetings	 	 	18	 
	Section 3.7
	 	Waiver of Notice	 	 	18	 
	Section 3.8
	 	Action Without a Meeting	 	 	18	 
	Section 3.9
	 	Proxies	 	 	18	 
	Section 3.10
	 	Voting by Certain Holders	 	 	18	 
	Section 3.11
	 	Denial of Appraisal Rights	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IV	 	 	 	 
	 
	 	CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Capital Contributions	 	 	19	 
	Section 4.2
	 	Loans	 	 	19	 
	Section 4.3
	 	Return of Contributions	 	 	19	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE V	 	 	 	 
	 
	 	ALLOCATIONS AND DISTRIBUTIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Allocations of Profits	 	 	19	 
	Section 5.2
	 	Allocations of Losses	 	 	19	 
	Section 5.3
	 	Special Allocations	 	 	19	 

- ii -

 

	 	 	 	 	 	 	 
	Section 5.4
	 	Regulatory Allocations	 	 	21	 
	Section 5.5
	 	Loss Limitation	 	 	21	 
	Section 5.6
	 	Other Allocation Rules	 	 	22	 
	Section 5.7
	 	Tax Allocations; Code Section 704(c)	 	 	22	 
	Section 5.8
	 	Distributions	 	 	23	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VI	 	 	 	 
	 
	 	MANAGEMENT	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Management	 	 	23	 
	Section 6.2
	 	Board of Directors	 	 	27	 
	Section 6.3
	 	Officers	 	 	30	 
	Section 6.4
	 	Duties of Officers and Directors	 	 	32	 
	Section 6.5
	 	Compensation	 	 	32	 
	Section 6.6
	 	Indemnification	 	 	32	 
	Section 6.7
	 	Liability of Indemnitees	 	 	34	 
	Section 6.8
	 	Amendment and Vesting of Rights	 	 	35	 
	Section 6.9
	 	Severability	 	 	35	 
	Section 6.10
	 	Contracts with Members or Their Affiliates	 	 	35	 
	Section 6.11
	 	Other Business Ventures	 	 	36	 
	Section 6.12
	 	Acknowledged and Permitted NGP Activities	 	 	36	 
	Section 6.13
	 	Resolution of Conflicts of Interest; Standard of Conduct and Modification of Duties	 	 	36	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VII	 	 	 	 
	 
	 	TAX MATTERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Tax Returns and Information	 	 	38	 
	Section 7.2
	 	Tax Matters Member	 	 	39	 
	Section 7.3
	 	Tax Elections	 	 	39	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VIII	 	 	 	 
	 
	 	BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1
	 	Maintenance of Books	 	 	39	 
	Section 8.2
	 	Reports	 	 	39	 
	Section 8.3
	 	Information Rights	 	 	39	 
	Section 8.4
	 	Bank Accounts	 	 	40	 
	Section 8.5
	 	Fiscal Year	 	 	40	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IX	 	 	 	 
	 
	 	DISSOLUTION, WINDING-UP AND TERMINATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.1
	 	Dissolution	 	 	40	 
	Section 9.2
	 	Winding-Up and Termination	 	 	41	 
	Section 9.3
	 	Compliance With Certain Requirements of Treasury Regulations; Deficit Capital Accounts	 	 	41	 
	Section 9.4
	 	Deemed Distribution and Recontribution	 	 	42	 
	Section 9.5
	 	Allocations and Distributions During Period of Liquidation	 	 	42	 
	Section 9.6
	 	Character of Liquidating Distributions	 	 	42	 

- iii -

 

	 	 	 	 	 	 	 
	 
	 	ARTICLE X	 	 	 	 
	 
	 	MERGER, CONSOLIDATION OR CONVERSION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.1
	 	Authority	 	 	42	 
	Section 10.2
	 	Procedure for Merger, Consolidation or Conversion	 	 	42	 
	Section 10.3
	 	Approval by Members of Merger or Consolidation	 	 	44	 
	Section 10.4
	 	Certificate of Merger or Conversion	 	 	45	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE XI	 	 	 	 
	 
	 	TRANSFERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.1
	 	Restriction on Transfers	 	 	46	 
	Section 11.2
	 	Permitted Transfers	 	 	46	 
	Section 11.3
	 	Conditions to Permitted Transfers	 	 	46	 
	Section 11.4
	 	Prohibited Transfers	 	 	47	 
	Section 11.5
	 	Rights of Unadmitted Assignees	 	 	47	 
	Section 11.6
	 	Admission of Substituted Members	 	 	47	 
	Section 11.7
	 	Distributions and Allocations in Respect of Transferred Member Interests	 	 	48	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE XII	 	 	 	 
	 
	 	PREEMPTIVE RIGHTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.1
	 	Rights to Participate in Issuance of Additional Membership Interests	 	 	49	 
	Section 12.2
	 	Rights of First Refusal	 	 	49	 
	Section 12.3
	 	Rights to Compel Participation in Certain Transfers	 	 	50	 
	Section 12.4
	 	Rights to Participate in Transfer	 	 	51	 
	Section 12.5
	 	Purchase Option	 	 	52	 
	Section 12.6
	 	Put Right	 	 	53	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE XIII	 	 	 	 
	 
	 	GENERAL PROVISIONS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 13.1
	 	Notices	 	 	54	 
	Section 13.2
	 	Entire Agreement; Supersedure	 	 	54	 
	Section 13.3
	 	Effect of Waiver or Consent	 	 	54	 
	Section 13.4
	 	Amendment or Restatement	 	 	54	 
	Section 13.5
	 	Binding Effect	 	 	55	 
	Section 13.6
	 	Governing Law; Severability	 	 	55	 
	Section 13.7
	 	Further Assurances	 	 	55	 
	Section 13.8
	 	Offset	 	 	55	 
	Section 13.9
	 	Counterparts	 	 	55	 

- iv -

 

AMENDED & RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

LE GP, LLC

     THIS AMENDED & RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of LE GP, LLC,
a Delaware limited liability company (the “Company”), executed on May 7, 2007 (the “Effective
Date”), is adopted, executed and agreed to, by and among Ray C. Davis (“Davis”), and Kelcy Warren
(“Warren”), each of whom is an individual residing in Texas, Natural Gas Partners VI, L.P., a
Delaware limited partnership (“NGP”), Enterprise GP Holdings L.P., a Delaware limited partnership
(“EPE”), and LE GP-Tax, LLC, a Delaware limited liability company. The parties hereto shall be
referenced individually as a “Member” or “Party” and collectively as “Members” or “Parties.”

RECITALS

     WHEREAS, the Company was originally formed as a limited liability company under the laws of
the State of Texas, on and as of September 5, 2002 by the filing with the Secretary of State of the
State of Texas of the Articles of Organization of the Company;

     WHEREAS, in connection with the formation of the Company, effective as of September 4, 2002,
the Regulations of the Company were executed (the “Original Regulations”), and, effective as of
October 10, 2002, the Original Regulations were amended and restated in their entirety (the
“Amended Regulations”);

     WHEREAS, effective as of August 23, 2005, the Company was converted from a Texas limited
liability company to a Delaware limited liability company, and, effective as of February 8, 2006,
the Limited Liability Company Agreement of the Company was executed (the “Existing Agreement”);

     WHEREAS, pursuant to the Securities Purchase Agreement by and among Davis, Avatar Holdings,
L.L.C., Avatar Investments, L.P., NGP, Lon Kile, MHT Properties, Ltd., P. Brian Smith Holdings LP,
and EPE, dated as of the date hereof, Davis and NGP collectively sold to EPE 877,251 Equity Units
and the existing Members of the Company agreed to admit EPE as a member of the Company with respect
to such Transferred Interests;

     WHEREAS, immediately following the admission of EPE, the Company has distributed to EPE
392,020 Common Units held by the Company in redemption of 501,461 of the Equity Units held by EPE;
and

     WHEREAS, the Members desire to amend and restate in its entirety the Existing Agreement to
reflect the admission of EPE and LE GP-Tax, LLC as Members of the Company, and to make such
additional amendments to the Existing Agreement as agreed to by the Parties.

     NOW, THEREFORE, for and in consideration of the premises, the covenants and agreements set
forth herein and other good and valuable consideration, the receipt and

 

 

sufficiency of which is
hereby acknowledged, the Members hereby amend and restate the Existing Agreement in its entirety as
follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

     “Accepting Offerees” has the meaning assigned to such term in Section 12.2(d).

     “Act” means the Delaware Limited Liability Company Act and any successor statute, as amended
from time to time.

     “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if
any, in such Member’s Capital Account as of the end of the relevant Allocation Year, after giving
effect to the following adjustments:

     (i) Credit to such Capital Account any amounts which such Member is deemed obligated to
restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and

     (ii) Debit to such Capital Account the items described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).

     The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. As used herein, the term “control” means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

     “Agreement” means this Amended and Restated Limited Liability Company Agreement of the
Company, as the same may be amended, modified, supplemented or restated from time to time.

     “Allocation Year” means (i) the period commencing on January 1, 2007 and ending on December
31, 2007, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on
December 31, or (iii) any portion of the period described in clauses (i) or (ii) for which the
Company is required to allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Article V.

     “Applicable Law” means any Law to which a specified Person or property is subject.

- 2 -

 

     “Audit and Conflicts Committee” has the meaning assigned to such term in Section 6.2(e)(ii).

     “Bankruptcy” means, with respect to any Person, (a) such Person (i) makes a general assignment
for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject
of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceedings; (iv) files a petition or answer seeking for such Person a reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any Law; (v) files an
answer or other pleading admitting or failing to contest the material allegations of a petition
filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of
this clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of such Person or of all or any substantial part of such Person’s
properties; or (b) a proceeding against such Person seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any Law has been
commenced and 120 days have expired without dismissal thereof or with respect to which, without
such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all
or any substantial part of such Person’s properties has been appointed and 90 days have expired
without the appointment having been vacated or stayed, or 90 days have expired after the date of
expiration of a stay, if the appointment has not previously been vacated.

     “Board of Directors” or “Board” has the meaning assigned to such term in Section 6.1.

     “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the states of New York or
Texas shall not be regarded as a Business Day.

     “Capital Account” means, with respect to any Member, the Capital Account maintained for such
Member in accordance with the following provisions:

     (a) To each Member’s Capital Account there shall be credited (i) such Member’s Capital
Contributions, (ii) such Member’s distributive share of Profits and any items in the nature
of income or gain which are specially allocated to such Membership Interest pursuant to
Section 5.3 or Section 5.4, and (iii) the amount of any Company liabilities assumed by such
Member or that are secured by any Property distributed to such Member;

     (b) To each Member’s Capital Account there shall be debited (i) the amount of money and
the Gross Asset Value of any Property distributed to such Member pursuant to any provision
of this Agreement, (ii) such Member’s distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated to such Membership Interest
pursuant to Section 5.3 or Section 5.4, and (iii) the amount of any liabilities of such
Member assumed by the Company or that are secured by any Property contributed by such Member
to the Company;

     (c) In the event a Membership Interest is Transferred in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the transferor to the
extent it relates to the Transferred Membership Interest; and

- 3 -

 

     (d) In determining the amount of any liability for purposes of subparagraphs (a) and
(b) above, there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations; and

     The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such Regulations. In the event the
Tax Matters Member shall determine that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto are computed in order to comply with such Regulations,
the Tax Matters Member may make such modification. The Tax Matters Member also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the aggregate Capital
Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as
computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii)
make any appropriate modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b). The Tax Matters Member shall provide
each Member with written notice of any such adjustments or modifications.

     “Capital Contribution” has the meaning assigned to such term in Section 4.1(b).

     “Certificate of Conversion” means the Certificate of Conversion of the Company filed with the
Secretary of State of the State of Delaware as referenced in Section 2.1, as such Certificate of
Conversion may be amended, supplemented or restated from time to time.

     “Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

     “Common Unit” has the meaning assigned to such term in the ETE Agreement.

     “Company” has the meaning assigned to such term in the initial paragraph.

     “Company Minimum Gain” has the same meaning as “partnership minimum gain” set forth in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

     “Compelled Sale” has the meaning assigned to such term in Section 12.3(a).

     “Compelled Sale Notice” has the meaning assigned to such term in Section 12.3(a).

     “Compelled Sale Notice Period” has the meaning assigned to such term in Section 12.3(a).

     “Compelled Sale Price” has the meaning assigned to such term in Section 12.3(a).

     “Compensation Committee” has the meaning assigned to such term in Section 6.2(e)(iii).

     “Davis” has the meaning assigned to such term in the initial paragraph.

- 4 -

 

     “Delaware General Corporation Law” has the meaning assigned to such term in Title 8 of the
Delaware Code, as amended from time to time.

     “Depreciation” means, for each Allocation Year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to a depreciable or
amortizable asset for such Allocation Year for federal income tax purposes, except that (i) with
respect to any depreciable or amortizable asset whose Gross Asset Value differs from its adjusted
tax basis for federal income tax purposes and which difference is being eliminated by use of the
“remedial allocation method” defined by Regulations Section 1.704-3(d), Depreciation for such
Allocation Year shall be the amount of book basis recovered for such Allocation Year under the
rules prescribed by Regulations Section 1.704-3(d)(2), and (ii) with respect to any other
depreciable or amortizable asset whose Gross Asset Value differs from its adjusted basis for
federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such
beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax
purposes of a depreciable or amortizable asset at the beginning of such Allocation Year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Board. If the Gross Asset Value of a depreciable or amortizable
asset is adjusted pursuant to subparagraphs (b) or (d) of the definition of Gross Asset Value
during an Allocation Year, following such adjustment, Depreciation shall thereafter be calculated
under clause (i) or (ii) immediately above, whichever the case may be, based upon such Gross Asset
Value, as so adjusted.

     “Director” means each member of the Board of Directors elected as provided in Section 6.2.

     “Dispose,” “Disposing” or “Disposition” means, with respect to any asset, any
sale,
assignment, transfer, conveyance, gift, exchange or other disposition of such asset, whether such
disposition be voluntary, involuntary or by operation of Law.

     “Dissolution Event” has the meaning assigned to such term in Section 9.1(a).

     “Drag-Along Portion” means, with respect to any Member, (i) the Sharing Ratio of such Member
multiplied by (ii) the number of Equity Units proposed to be sold in the applicable Compelled Sale
under Section 12.3(a).

     “Effective Date” has the meaning assigned to such term in the initial paragraph.

     “Energy Transfer Entities” means ETE, the MLP and their subsidiaries.

     “EPE” has the meaning assigned to such term in the initial paragraph.

     “EPE Representative” has the meaning assigned to such term in Section 3.12.

- 5 -

 

     “Equity Units” means, with respect to each Member, the Equity Units held by such Member as set
forth opposite such Member’s name on Exhibit A attached hereto. Such Equity Units
represent the Membership Interest held by such Member.

     “ETE” means Energy Transfer Equity, L.P., a Delaware limited partnership.

     “ETE Agreement” means the Third Amended and Restated Agreement of Limited Partnership of
Energy Transfer Equity, as amended.

     “Excluded Business Opportunity” shall mean a business opportunity other than a business
opportunity: (i) that (A) has come to the attention of a Person solely in, and as a direct result
of, its or his capacity as a Member, Director or principal of, or advisor to the Company or a
subsidiary of the Company, or (B) was developed with the use or benefit of the personnel or assets
of the Company or a subsidiary of the Company, and (ii) that has not been independently brought to
the attention of the subject Person from a source that is not affiliated (other than through such
subject Person) with the Company or a subsidiary of the Company.

     “Existing Agreement” has the meaning assigned to such term in the Recitals.

     “Firm Offer” has the meaning assigned to such term in Section 12.2(b).

     “Governmental Authority” means a federal, state, local or foreign governmental authority; a
state, province, commonwealth, territory or district thereof; a county or parish; a city, town,
township, village or other municipality; a district, ward or other subdivision of any of the
foregoing; any executive, legislative or other governing body of any of the foregoing; any agency,
authority, board, department, system, service, office, commission, committee, council or other
administrative body of any of the foregoing; any court or other judicial body; and any officer,
official or other representative of any of the foregoing.

     “Gross Asset Value” means with respect to any asset, the asset’s adjusted basis for federal
income tax purposes, except as follows:

     (a) The initial Gross Asset Value of any asset contributed by a Member to the Company
shall be the gross fair market value of such asset;

     (b) The Gross Asset Values of all items of Property shall be adjusted to equal their
respective fair market values, as determined by the Board (taking Code Section 7701(g) into
account) as of the following times: (i) the acquisition of an additional Membership
Interest in the Company by any new or existing Member in exchange for more than a de minimis
Capital Contribution, (ii) in connection with the grant of a Membership Interest in the
Company (other than a de minimis Membership Interest) as consideration for the provision of
services to or for the benefit of the Company by an existing Member acting in a member
capacity, or by a new Member acting in a member capacity in anticipation of being a Member;
(iii) the distribution by the Company to a Member of more than a de minimis amount of
Property as consideration for a Membership Interest in the Company, and (iv) the liquidation
of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided that
an adjustment

- 6 -

 

described in clauses (i), (ii) and (iii) of this paragraph shall be made only
if the Board reasonably determines that such adjustment is necessary to reflect the relative
economic interests of the Members in the Company;

     (c) The Gross Asset Value of any item of Property distributed to any Member (other than
as consideration for a Membership Interest in the Company as described in clause (iii) of
subparagraph (b) above) shall be adjusted to equal the fair market value of such Property on
the date of distribution, as determined by the Board (taking Code Section 7701(g) into
account); and

     (d) The Gross Asset Values of each item of Property shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m) and subparagraph (f) of the definition of “Profits” and “Losses” or
Section 5.3(g); provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (d) to the extent that an adjustment pursuant to subparagraph (b) is
required in connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (d).

     If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph
(a), (b), or (d), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset, for purposes of computing Profits and Losses.

     “Gross Liability Value” means with respect to any Liability of the Company described in
Treasury Regulations Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay
to a willing assignee to assume such Liability in an arm’s-length transaction. The Gross Liability
Value of each Liability of the Company described in Treasury Regulations Section 1.752-7(b)(3)(i)
shall be adjusted at such times as provided in this Agreement for an adjustment to Gross Asset
Values.

     “Group Member” has the meaning assigned to such term in the ETE Agreement.

     “Indemnitee” means each of (a) any Person who is or was an Affiliate of the Company, (b) any
Person who is or was a member, director, officer, fiduciary or trustee of the Company, (c) any
Person who is or was an officer, member, partner, director, employee, agent or trustee of the
Company or any Affiliate of the Company, or any Affiliate of any such Person, and (d) any Person
who is or was serving at the request of the Company or any such Affiliate as a director, officer,
employee, member, partner, agent, fiduciary or trustee of another Person; provided, that a Person
shall not be an Indemnitee by reason of providing, on a fee-for- services basis, trustee, fiduciary
or custodial services and (e) any Person the Company designates as an “Indemnitee” for purposes of
this Agreement.

     “Independent Director” has the meaning assigned to such term in Section 6.2(a).

     “Issuance Items” has the meaning assigned to such term in Section 5.3(h).

- 7 -

 

     “Law” means any applicable constitutional provision, statute, act, code (including the Code),
law, regulation, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment,
decision, declaration or interpretative or advisory opinion or letter of a Governmental Authority
having valid jurisdiction.

     “Liability” means any liability or obligation, whether known or unknown, asserted or
unasserted, absolute or contingent, matured or unmatured, conditional or unconditional, latent or
patent, accrued or unaccrued, liquidated or unliquidated, or due or to become due.

     “Member” means any Person executing this Agreement as of the date of this Agreement as a
member or hereafter admitted to the Company as a member as provided in this Agreement, but such
term does not include any Person who has ceased to be a member in the Company.

     “Member Majority” means the Members holding a majority of the Membership Interests held by all
Members.

     “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” set
forth in Regulations Section 1.704-2(b)(4).

     “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section
1.704-2(i)(3).

     “Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse
deductions” set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

     “Membership Interest” means any interest in the Company representing the Capital Contributions
made by a Member or its predecessors in interest, including any and all benefits to which the
holder of a limited liability company interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and provisions of this
Agreement. The Membership Interest of each Member shall be represented by the number of Equity
Units held by such Member as set forth on Exhibit A attached hereto.

     “Merger Agreement” has the meaning assigned to such term in Section 10.1.

     “MLP” means Energy Transfer Partners, L.P., a Delaware limited partnership.

     “National Securities Exchange” means an exchange registered with the SEC under Section 6(a) of
the Securities Exchange Act or the Nasdaq National Market or any successor thereto.

     “NGP” has the meaning assigned to such term in the initial paragraph.

     “Non-ETE Subsidiary” means any Subsidiary of the Company other than ETE and any Subsidiary of
ETE.

- 8 -

 

     “Nonrecourse Deductions” has the meaning set forth in Regulations Sections 1.704-2(b)(1) and
1.704-2(c).

     “Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).

     “Offer Notice” has the meaning assigned to such term in Section 12.2(b).

     “Offer Period” has the meaning assigned to such term in Section 12.2(c).

     “Offer Price” has the meaning assigned to such term in Section 12.2(a).

     “Offered Amount” has the meaning assigned to such term in Section 12.5(a).

     “Offered Units” has the meaning assigned to such term in Section 12.2.

     “Offerees” has the meaning assigned to such term in Section 12.2(b).

     “Officers” has the meaning assigned to such term in Section 6.2(a).

     “Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to ETE or
the Company or any of its Affiliates) in a form acceptable to the Company.

     “Other Enterprise” includes any other limited liability company, limited partnership,
partnership, corporation, joint venture, trust, employee benefit plan or other entity, in which a
Person is serving at the request of the Company.

     “Permitted Transfer” has the meaning assigned to such term in Section 11.2.

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

     “Profits” and “Losses” mean, for each Allocation Year, an amount equal to the Company’s
taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following
adjustments (without duplication):

     (a) Any income of the Company that is exempt from federal income tax and not otherwise taken
into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses”
shall be added to such taxable income or loss;

     (b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses” shall be subtracted from such taxable income or loss;

- 9 -

 

     (c) In the event the Gross Asset Value of any item of Property is adjusted pursuant to
subparagraphs (b) or (c) of the definition of “Gross Asset Value,” the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the item
of Property) or an item of loss (if the adjustment decreases the Gross Asset Value of the item of
Property) from the Disposition of such item of Property and shall be taken into account for
purposes of computing Profits or Losses;

     (d) In the event the Gross Liability Value of any Liability of the Company described in
Treasury Regulations Section 1.752-7(b)(3)(i) is adjusted as required by this Agreement, the amount
of such adjustment shall be treated as an item of loss (if the adjustment increases the Gross
Liability Value of such Liability of the Company) or an item of gain (if the adjustment decreases
the Gross Liability Value of such Liability of the Company) and shall be taken into account for
purposes of computing Profits or Losses;

     (e) Gain or loss resulting from any Disposition of Property with respect to which gain or loss
is recognized for federal income tax purposes shall be computed by reference to the Gross Asset
Value of the Property Disposed of, notwithstanding that the adjusted tax basis of such Property
differs from its Gross Asset Value;

     (f) In lieu of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into account Depreciation
for such Allocation Year, computed in accordance with the definition of “Depreciation”;

     (e) To the extent an adjustment to the adjusted tax basis of any item of Property pursuant to
Code Section 734(b) is required, pursuant to Treasury Regulations Section 1.704-(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as a result of a distribution other than
in liquidation of a Member’s Membership Interest, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the item of Property) or loss (if the
adjustment decreases such basis) from the Disposition of such item of Property and shall be taken
into account for purposes of computing Profits or Losses; and

     (g) Notwithstanding any other provision of this definition, any items that are specially
allocated pursuant to Section 5.3 or Section 5.4 shall not be taken into account in computing
Profits or Losses.

     The amounts of the items of Company income, gain, loss, or deduction available to be specially
allocated pursuant to Sections 5.3 and 5.4 shall be determined by applying rules analogous to those
set forth in subparagraphs (a) through (g) above.

     “Property” means all real and personal property acquired by the Company, including cash, and
any improvements on real or personal property, and shall include both tangible and intangible
property.

     “Purchase Offer” has the meaning assigned to such term in Section 12.2(a).

     “Purchase Option” has the meaning assigned to such term in Section 12.5(a).

- 10 -

 

     “Purchase Option Notice” has the meaning assigned to such term in Section 12.5(b).

     “Purchase Option Notice Period” has the meaning assigned to such term in Section 12.5(b).

     “Purchase Option Portion” means, with respect to any Member exercising its Purchase Option
pursuant to Section 12.5, (i) the Sharing Ratio of such Member divided by the sum of the Sharing
Ratios of all Members eligible to exercise their Purchase Option under Section 12.5 at such time
multiplied by (ii) the Offered Amount.

     “Purchase Option Price” has the meaning assigned to such term in Section 12.5(b).

     “Purchaser” has the meaning assigned to such term in Section 12.2(a).

     “SEC” means the United States Securities and Exchange Commission.

     “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, supplemented
or restated from time to time and any successor to such statute.

     “Seller” has the meaning assigned to such term in Section 12.2.

     “Shared Services Agreement” means the Shared Services Agreement, dated as of August 26, 2005,
by and among the Company and the MLP.

     “Sharing Ratio” shall mean for any Member, the proportion that such Member’s Equity Units bear
to the total number of Equity Units outstanding as of the date of such determination.

     “Special Approval” means approval by a majority of the members of the Audit and Conflicts
Committee.

     “Subject Member” has the meaning assigned to such term in Section 12.5(a).

     “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

- 11 -

 

interest or (ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.

     “Super-Majority Interest” means, as to any agreement, election, vote or other action of the
Members, those Members whose combined Sharing Ratios exceed eighty percent (80%).

     “Surviving Business Entity” has the meaning assigned to such term in Section 10.2(a)(ii).

     “Tag-Along Notice” has the meaning assigned to such term in Section 12.4(a).

     “Tag-Along Notice Period” has the meaning assigned to such term in Section 12.4(b).

     “Tag-Along Offer” has the meaning assigned to such term in Section 12.4(a).

     “Tag-Along Portion” means with respect to any Tagging Person, the product of (i) the Sharing
Ratio of such Tagging Person immediately prior to such Transfer to which Section 12.4 applies and
(ii) a fraction the numerator of which is the maximum number of Equity Units that the buyer in the
Tag-Along Sale is willing to purchase, and the denominator of which is the number of Equity Units
held by all Members electing to participate in the Tag-Along Sale.

     “Tag-Along Response Notice” has the meaning assigned to such term in Section 12.4(b).

     “Tag-Along Right” has the meaning assigned to such term in Section 12.4(b).

     “Tag-Along Sale” has the meaning assigned to such term in Section 12.4(a).

     “Tagging Person” has the meaning assigned to such term in Section 12.4(b).

     “Tax Matters Member” means LE GP — Tax, LLC so long as it continues to serve in such capacity,
provided that LE GP — Tax, LLC will be deemed to have withdrawn as a member upon the withdrawal of
Warren or if at any time LE GP — Tax, LLC shall cease to be a direct or indirect wholly-owned
subsidiary of Warren (and in such event the Members shall designate a successor Tax Matters
Member), or (ii) any Person that is admitted to the Company as a successor Tax Matters Member of
the Company or any Member deemed to replace the Tax Matters Member in accordance with this
Agreement. The Membership Interest of LE GP — Tax, LLC is a noneconomic and non-voting interest in
the Company and, as such, LE GP — Tax, LLC (i) will not receive allocations or distributions, (ii)
has no obligation or right to make Capital Contributions, (iii) will have no Capital Account, (iv)
has no right to vote or consent to any matter hereunder, and (v) has no other rights or obligations
except as expressly provided in this Agreement.

     “Taxable Year” means (i) the period commencing on January 1, 2007 and ending on December 31,
2007, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31,
and (iii) the period commencing on the immediately preceding

- 12 -

 

January 1 and ending on the date on
which all Property is distributed to the Members pursuant to Article IX.

     “Transfer” when used in this Agreement with respect to a Membership Interest, shall be deemed
to refer to a transaction by which a Member assigns its Membership Interest to another Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange, or any
other disposition by law or otherwise.

     “Treasury Regulations” means the Income Tax Regulations, including Temporary Regulations,
promulgated under the Code, as such regulations are amended from time to time.

     “Trigger Amount” means the amount of Common Units equal to 10% of the amount of Common Units
held directly or indirectly by such Member on the date hereof, and which (i) with respect to Davis,
NGP and EPE, is described on Schedule 3.01 of the Unitholder Rights and Restrictions Agreement, and
(ii) with respect to Warren, is 38,976,090 Common Units (which excludes Common Units owned directly
by the Company).

     “Trigger Event” means the completion of the sale, transfer or disposition by any Member of an
amount of Common Units held directly or indirectly by such Member equal to or greater than the
Trigger Amount since (i) the date of this Agreement or (ii) once a Trigger Event has occurred, the
date of the previous Trigger Event.

     “Two-Thirds Interest” means, as to any agreement, election, vote or other action of the
Members, those Members whose combined Sharing Ratios exceed 66.67%.

     “Unitholder Rights and Restrictions Agreement” means the Unitholder Rights and Restrictions
Agreement by and among ETE, EPE, Davis and NGP, dated as of the date hereof.

     “Warren” has the meaning assigned to such term in the initial paragraph.

     “Wholly Owned Affiliate” of any Person means (i) an Affiliate of such Person one hundred
percent (100%) of the voting stock or beneficial ownership of which is owned directly or indirectly
by such Person, or by any Person who, directly or indirectly, owns one hundred percent (100%) of
the voting stock or beneficial ownership of such Person, (ii) an Affiliate of such Person who,
directly or indirectly, owns one hundred percent (100%) of the voting stock or beneficial ownership
of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clause (i) or
clause (ii).

     “Withdraw,” “Withdrawing” and “Withdrawal” means the withdrawal, resignation or
retirement of
a Member from the Company as a Member.

     Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to
Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term “include”
or “includes” means includes “including” or words of like import shall be deemed to be followed by
the words “without limitation;” and the terms “hereof,” “herein” or “hereunder”

- 13 -

 

refer to this
Agreement as a whole and not to any particular provision of this Agreement. The table of contents
and headings contained in this Agreement are for reference purposes only, and shall not affect in
any way the meaning or interpretation of this Agreement.

ARTICLE II

ORGANIZATION

     Section 2.1 Formation. The Company was formed as of August 23, 2005 pursuant to the
Certificate of Conversion and Certificate of Formation converting LE GP, LLC, a Texas limited
liability company, into LE GP, LLC, a Delaware limited liability company. The Members ratify the
organization and formation of the Company and continue the Company, pursuant to the terms and
conditions of this Agreement. This Agreement amends and restates in its entirety and supersedes the
Existing Agreement, which shall have no further force or effect. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Members and the administration, dissolution and termination of the Company shall
be governed by the Act.

     Section 2.2 Name. The name of the Company is and shall continue to be “LE GP, LLC” and all
Company business must be conducted in that name or such other names that comply with Law as the
Board of Directors may select.

     Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and
until changed by the Board of Directors, the registered office of the Company in the State of
Delaware shall continue to be located at 1209 Orange Street, Suite 400, Wilmington, Delaware 19801,
and the registered agent for service of process on the Company in the State of Delaware at such
registered office shall continue to be The Corporation Trust Company. The principal office of the
Company shall continue to be located at 2828 Woodside Street, Dallas, Texas 75204 or such other
place as the Board of Directors may from time to time designate. The Company may maintain offices
at such other place or places within or outside the State of Delaware as the Board of Directors
deems necessary or appropriate.

     Section 2.4 Purpose. The purposes of the Company are the transaction of any or all lawful
business for which limited liability companies may be organized under the Act.

     Section 2.5 Foreign Qualification. Prior to the Company’s conducting business in any
jurisdiction other than the State of Delaware, the Board shall cause the Company to comply, to the
extent procedures are available and those matters are reasonably within the control of the Board,
with all requirements necessary to qualify the Company as a foreign limited liability company in
that jurisdiction. At the request of the Board, the Members shall execute, acknowledge, swear to
and deliver all certificates and other instruments conforming with this Agreement that are
necessary or appropriate to qualify, continue and terminate the Company as a foreign limited
liability company in all such jurisdictions in which the Company may conduct business.

     Section 2.6 Term. The Company shall continue until terminated in accordance with Section 9.2.

- 14 -

 

     Section 2.7 Powers. The Company is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described in Section 2.4 and for the protection and benefit of the
Company.

     Section 2.8 No State-Law Partnership; Withdrawal. It is the intent that the Company shall be a
limited liability company formed under the Laws of the State of Delaware and shall not be a
partnership (including a limited partnership) or joint venture, and that the Members not be a
partner or joint venturer of any other party for any purposes other than federal and state tax
purposes, and this Agreement may not be construed to suggest otherwise. A Member does not have the
right to Withdraw from the Company; provided, however, that a Member shall have the power to
Withdraw at any time in violation of this Agreement. If a Member exercises such power in violation
of this Agreement, (a) such Member shall be liable to the Company and its Affiliates for all
monetary damages suffered by them as a result of such Withdrawal; and (b) such Member shall not
have any rights under Section 18.604 of the Act. In no event shall the Company have the right,
through specific performance or otherwise, to prevent a Member from Withdrawing in violation of
this Agreement.

     Section 2.9 Certain Undertakings Relating to the Separateness of the MLP.

          (a) Separateness Generally. The Company shall, and shall cause ETE to, conduct their
respective businesses and operations separate and apart from those of any other Person, except the
Company and ETE, in accordance with this Section 2.9.

          (b) Separate Records. The Company shall, and shall cause ETE to, (i) maintain their respective
books and records and their respective accounts separate from those of any other Person, (ii)
maintain their respective financial records, which will be used by them in their ordinary course of
business, showing their respective assets and liabilities separate and apart from those of any
other Person, except their consolidated Subsidiaries, (iii) not have their respective assets and/or
liabilities included in a consolidated financial statement of any Affiliate of the Company (other
than the inclusion of the assets and/or liabilities of ETE and its Subsidiaries in the consolidated
financial statements of the Company) unless appropriate notation shall be made on such Affiliate’s
consolidated financial statements to indicate the separateness of the Company and ETE and their
assets and liabilities from such Affiliate and the assets and liabilities of such Affiliate, and to
indicate that the assets and liabilities of the Company and ETE are not available to satisfy the
debts and other obligations of such Affiliate, and (iv) file their respective own tax returns
separate from those of any other Person, except (A) to the extent that ETE or the Company (x) is
treated as a “disregarded entity” for tax purposes or (y) is not otherwise required to file tax
returns under Applicable Law or (B) as may otherwise be required by Applicable Law.

          (c) Separate Assets. The Company shall not commingle or pool, and shall cause ETE not to
commingle or pool, their respective funds or other assets with those of any other Person, and shall
maintain their respective assets in a manner that is not costly or difficult to segregate,
ascertain or otherwise identify as separate from those of any other Person.

- 15 -

 

          (d) Separate Name. The Company shall, and shall cause ETE to, (i) conduct their respective
businesses in their respective own names, (ii) use separate stationery, invoices, and checks, (iii)
correct any known misunderstanding regarding their respective separate identities from that of any
other Person, and (iv) generally hold itself out as an entity separate from any other Person.

          (e) Separate Credit. The Company shall, and shall cause ETE to, (i) pay their respective
obligations and liabilities from their respective own funds (whether on hand or borrowed), (ii)
maintain adequate capital in light of their respective business operations, (iii) not guarantee or
become obligated for the debts of any other Person, other than the Company and ETE, (iv) not hold
out their respective credit as being available to satisfy the obligations or liabilities of any
other Person, (v) not acquire debt obligations or debt securities of the MLP or its Affiliates
(other than ETE and/or the Company), (vi) not pledge their assets for the benefit of any Person or
make loans or advances to any Person, or (vii) use its commercially reasonable efforts to cause the
operative documents under which ETE borrows money, is an issuer of debt securities, or guarantees
any such borrowing or issuance after the Effective Date, to contain provisions to the effect that
(A) the lenders or purchasers of debt securities, respectively, acknowledge that they have advanced
funds or purchased debt securities, respectively, in reliance upon the separateness of the Company
and ETE from each other and from any other Persons and (B) the Company and ETE have assets and
liabilities that are separate from those of other Persons; provided that the Company and ETE may
engage in any transaction described in clauses (v)-(vi) of this Section 2.9(e) if prior Special
Approval has been obtained for such transaction and either (A) the Audit and Conflicts Committee
has determined that the borrower or recipient of the credit support is not then insolvent and will
not be rendered insolvent as a result of such transaction or (B) in the case of transactions
described in clause (v), such transaction is completed through a public auction or a National
Securities Exchange.

          (f) Separate Formalities. The Company shall, and shall cause ETE to, (i) observe all limited
liability company or partnership formalities and other formalities required by their respective
organizational documents, the laws of the jurisdiction of their respective formation, or other
laws, rules, regulations and orders of Governmental Authorities exercising jurisdiction over it,
(ii) engage in transactions with the MLP and its Affiliates (other than the Company or ETE) in
conformity with the requirements of Section 7.6 of the ETE Agreement, and (iii) subject to the
terms of the Shared Services Agreement, promptly pay, from their respective own funds and on a
timely basis, their respective allocable shares of general and administrative expenses, capital
expenditures, and costs for shared services performed by the MLP or Affiliates of the MLP (other
than the Company or ETE). Each material contract between the Company or ETE, on the one hand, and
the MLP or Affiliates of the MLP (other than the Company or ETE), on the other hand, shall be
subject to the requirements of Section 7.6 of the ETE Agreement, and must be (x) approved by
Special Approval or (y) on terms objectively demonstrable to be no less favorable to ETE than those
generally being provided to or available from unrelated third parties, and in any event must be in
writing.

          (g) No Effect. Failure by the Company to comply with any of the obligations set forth above
shall not affect the status of the Company as a separate legal entity, with its separate assets and
separate liabilities.

- 16 -

 

     Section 2.10 Title to Company Property. All property owned by the Company, whether real or
personal, tangible or intangible, shall be deemed to be owned by the Company as an entity, and no
Member, individually, shall have any ownership of such property. The Company may hold its property
in its own name or in the name of a nominee which may be the Board or any of its Affiliates or any
trustee or agent designated by it.

ARTICLE III

MATTERS RELATING TO MEMBERS

     Section 3.1 Members. Each Member owns a Membership Interest in the Company as represented by
the Equity Units held by such the Member as set forth in Exhibit A attached hereto.

     Section 3.2 Creation of Additional Membership Interest. Subject to Article XI, the Company may
issue additional Membership Interests in the Company pursuant to this Section 3.2. The terms of
admission or issuance may provide for the creation of different classes or groups of Members having
different rights, powers, and duties. The creation of any new class or group of Members approved as
required herein may be reflected in an amendment to this Agreement executed in accordance with
Section 13.4 indicating the different rights, powers, and duties thereof. Any such admission is
effective only after the new Member has executed and delivered to the Members an instrument
containing the notice address of the new Member and the new Member’s ratification of this Agreement
and agreement to be bound by it.

     Section 3.3 Liability to Third Parties. Except as may be expressly provided in another
separate, written guaranty or other agreement executed by a Member, no Member shall be liable for
the Liabilities of the Company, including under a judgment, decree or order of a court. Except as
otherwise provided in this Agreement, no Member has the authority or power to act for or on behalf
of or bind the Company or to incur any expenditures on behalf of the Company.

     Section 3.4 Meetings of the Members. Meetings of the Members will not be required to be held
at any regular frequency, but, instead, will be held upon the call of any Member. All meetings of
the Members will be held at the principal office of the Company or at such other place, either
within or without the State of Delaware, as is designated by the Person calling the meeting and
stated in the notice of the meeting or in a duly executed waiver of notice thereof. Members may
participate in a meeting of the Members by means of conference telephone or video equipment or
similar communications equipment whereby all participants in the meeting can hear each other, and
participation in a meeting in this manner will constitute presence in person at the meeting.

     Section 3.5 Quorum; Voting Requirement.

          (a) The presence, in person or by proxy, of a Member Majority will constitute a quorum for the
transaction of business by the Members. If less than a Member Majority is represented at a meeting,
then any Member may adjourn the meeting to a specified date not longer than 90 days after such
adjournment, without further notice. At such adjourned meeting at which a quorum is present or
represented by proxy, any business may be transacted that might have been transacted at the meeting
as originally noticed.

- 17 -

 

          (b) Each Member has the right to vote in accordance with its Membership Interest. A Member
Majority will constitute a valid decision of the Members, except where a larger vote is required by
the Act or this Agreement.

     Section 3.6 Notice of Meetings. Notice stating the place, day, hour and the purpose for which
the meeting is called will be given, not less than three days nor more than 60 days before the date
of the meeting, by or at the direction of the Member or Members calling the meeting, to each Member
entitled to vote at such meeting. A Member’s attendance at a meeting:

          (a) waives objection to lack of notice or defective notice of the meeting, unless such Member,
at the beginning of the meeting, objects to holding the meeting or transacting business at the
meeting; and

          (b) waives objection to consideration of a particular matter at the meeting that is not within
the purpose or purposes described in the notice of meeting, unless such Member objects to
considering the matter when it is presented.

     Section 3.7 Waiver of Notice. Whenever any notice is required to be given to any Member under
the provisions of this Agreement, a waiver thereof in writing signed by such Member, whether before
or after the time stated therein, will be deemed equivalent to the giving of such notice.

     Section 3.8 Action Without a Meeting. Any action that is required to or may be taken at a
meeting of the Members may be taken without a meeting if consents in writing, setting forth the
action so taken, are signed by a Member Majority. Such consents will have the same force and effect
as a vote at a meeting duly held.

     Section 3.9 Proxies. At any meeting of the Members, every Member having the right to vote
thereat will be entitled to vote in person or by proxy appointed by an instrument in writing signed
by such Member and bearing a date not more than three years prior to such meeting.

     Section 3.10 Voting by Certain Holders. In the case of a Member that is a corporation, its
Membership Interest may be voted by such officer, agent or proxy as the bylaws of such corporation
may prescribe, or, in the absence of such provision, as the board of directors of such corporation
may determine. In the case of a Member that is a general or limited partnership, its Membership
Interest may be voted, in person or by proxy, by such Person as is designated by such Member. In
the case of a Member that is another limited liability company, its Membership Interest may be
voted, in person or by proxy, by such Person as is designated by the governing agreements of such
other limited liability company, or, in the absence of such designation, by such Person as is
designated by the limited liability company. In the case of a Member that is a trust, its
Membership Interest may be voted by the trustee of such trust.

     Section 3.11 Denial of Appraisal Rights. No Member will have any appraisal rights or
dissenters’ rights with respect to any merger, consolidation, conversion or dissolution of the
Company, any sale of assets by the Company or any amendment to this Agreement, the Members’ rights
with respect to such matters being limited to those rights, if any, expressly set forth in this
Agreement.

- 18 -

 

ARTICLE IV

CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

     Section 4.1 Capital Contributions.

          (a) No Member shall be required to make any Capital Contributions to the Company except as
agreed to by a Super-Majority Interest.

          (b) The amount of money and the fair market value (as of the date of contribution) of any
property (other than money) contributed to the Company by a Member in respect of the issuance of a
Membership Interest to such Member shall constitute a “Capital Contribution.” Any reference in this
Agreement to the Capital Contribution of a Member shall include a Capital Contribution of its
predecessors in interest.

     Section 4.2 Loans. If the Company does not have sufficient cash to pay its obligations, any
Member that may agree to do so may, upon approval of a Super-Majority Interest, advance all or part
of the needed funds for such obligation to or on behalf of the Company. An advance described in
this Section 4.2 constitutes a loan from the Member to the Company, may bear interest at a rate
comparable to the rate the Company could obtain from third parties, and is not a Capital
Contribution.

     Section 4.3 Return of Contributions. A Member is not entitled to the return of any part of its
Capital Contributions or to be paid interest in respect of its Capital Contributions. An unrepaid
Capital Contribution is not a liability of the Company or of any Member. No Member will be required
to contribute or to lend any cash or property to the Company to enable the Company to return any
Member’s Capital Contributions.

ARTICLE V

ALLOCATIONS AND DISTRIBUTIONS

     Section 5.1 Allocations of Profits. After giving effect to the special allocations set forth
in Section 5.3 and Section 5.4, Profits for any Allocation Year shall be allocated to the Members
in proportion to their Sharing Ratios.

     Section 5.2 Allocations of Losses. After giving effect to the special allocations set forth in
Section 5.3 and Section 5.4 and subject to Section 5.5, Losses for any Allocation Year shall be
allocated to the Members in proportion to their Sharing Ratios.

     Section 5.3 Special Allocations. The following special allocations shall be made in the
following order:

          (a) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section
1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in
Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company
income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in
accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective

- 19 -

 

amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in accordance with
Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.3(a) is intended to
comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith.

          (b) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations
Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during
any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i)(5), shall be allocated items of Company income and gain for such Allocation Year
(and, if necessary, subsequent Allocation Years) in an amount equal to such Member’s share of the
net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. The items to be so allocated shall be determined in
accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.3(b)
is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.

          (c) Qualified Income Offset. In the event that any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Company
income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate,
to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such
Member as quickly as possible; provided that an allocation pursuant to this Section 5.3(c) shall be
made only if and to the extent that such Member would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article V have been tentatively made as if this
Section 5.3(c) were not in this Agreement.

          (d) Gross Income Allocation. In the event that any Member has an Adjusted Capital Account
Deficit at the end of any Allocation Year, each such Member shall be allocated items of Company
income and gain in the amount of such deficit as quickly as possible; provided that an allocation
pursuant to this Section 5.3(d) shall be made only if and to the extent that such Member would have
an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for
in this Article V have been tentatively made as if Section 5.3(c) and this Section 5.3(d) were not
in this Agreement.

          (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be allocated
to the Members in proportion to their respective Sharing Ratios.

          (f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Year
shall be allocated to the Member who bears the economic risk of loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i)(1).

- 20 -

 

          (g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any
Company asset, pursuant to Code Sections 734(b) or 743(b) is required, pursuant to Treasury
Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account
in determining Capital Accounts as the result of a distribution to a Member in complete liquidation
of such Member’s interest in the Company, the amount of such adjustment to Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be allocated to the Members in
accordance with their interests in the Company in the event Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          (h) Allocations Relating to Taxable Issuance of Equity Units. Any income, gain, loss, or
deduction realized as a direct or indirect result of the issuance of Equity Units by the Company to
a Member (the “Issuance Items”) shall be allocated among the Members so that, to the extent
possible, the net amount of such Issuance Items, together with all other allocations under this
Agreement to each Member shall be equal to the net amount that would have been allocated to each
such Member if the Issuance Items had not been realized.

     Section 5.4 Regulatory Allocations. The allocations set forth in Sections 5.3(a), 5.3(b),
5.3(c), 5.3(d), 5.3(e), 5.3(f) and 5.3(g), and 5.5 (the “Regulatory Allocations”) are intended to
comply with certain requirements of the Treasury Regulations. It is the intent of the Members
that, to the extent possible, the Regulatory Allocations shall be offset either with special
allocations of other items of Company income, gain, loss, or deduction pursuant to this Section
5.4. Therefore, notwithstanding any other provision of this Article V (other than the Regulatory
Allocations), the Board shall make such offsetting special allocations of Company income, gain,
loss, or deduction in whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the Regulatory Allocations were not part
of this Agreement and all Company items were allocated pursuant to Section 5.1, Section 5.2, and
Section 5.3(h). In exercising its discretion under this Section 5.4, the Board shall take into
account future Regulatory Allocations under Sections 5.3(a) and 5.3(b) that, although not yet made,
are likely to offset other Regulatory Allocations previously made under Sections 5.3(e) and 5.3(f).

     Section 5.5 Loss Limitation. Losses allocated pursuant to Section 5.2 shall not exceed the
maximum amount of Losses that can be allocated without causing any Member to have an Adjusted
Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the
Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses
pursuant to Section 5.2, the limitation set forth in this Section 5.5 shall be applied on a Member
by Member basis and Losses not allocable to any Member as a result of such limitation shall be
allocated to the other Members in accordance with the positive balances in such Member’s Capital
Accounts so as to allocate the maximum permissible Losses to each Member under Treasury Regulations
Section 1.704-1(b)(2)(ii)(d).

- 21 -

 

     Section 5.6 Other Allocation Rules.

          (a) Profits, Losses, and any other items of income, gain, loss, or deduction will be allocated
to the Members pursuant to this Article V as of the last day of each Taxable Year; provided that
Profits, Losses, and such other items shall also be allocated at such times as the Gross Asset
Values of Property are adjusted pursuant to subparagraph (b) of the definition of “Gross Asset
Value.”

          (b) For purposes of determining the Profits, Losses, or any other items allocable to any
period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other
basis, as determined by the Board using any permissible method under Code Section 706 and the
Treasury Regulations thereunder.

          (c) The Members are aware of the income tax consequences of the allocations made by this
Article V and hereby agree to be bound by the provisions of this Article V in reporting their
shares of Company income and loss for income tax purposes, except as otherwise required by law.

     Section 5.7 Tax Allocations; Code Section 704(c).

          (a) Except as otherwise provided in this Section 5.7, each item of income, gain, loss and
deduction of the Company for federal income tax purposes shall be allocated among the Members in
the same manner as such items are allocated for book purposes under this Article V.

          (b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income,
gain, loss, and deduction with respect to any Property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such Property to the Company for federal income tax
purposes and its initial Gross Asset Value (computed in accordance with the definition of “Gross
Asset Value”) using the “remedial allocation method” described in Treasury Regulations Section
1.704-3(d).

          (c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (b) of the definition of “Gross Asset Value,” subsequent allocations of income, gain,
loss, and deduction with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Treasury Regulations thereunder applying the “remedial
allocation method” described in Treasury Regulations Section 1.704-3(d).

          (d) Any elections or other decisions relating to such allocations shall be made by the Board
in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section 5.7 are solely for purposes of federal, state, and local taxes and shall
not affect, or in any way be taken into account in computing, any Member’s Capital Account or share
of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

- 22 -

 

     Section 5.8 Distributions. Except as otherwise provided in Article IX and subject to Section
6.1(c), the Board of Directors may cause the Company to distribute funds of the Company which the
Board of Directors reasonably determines are not needed for the payment of existing or foreseeable
Company obligations and expenditures to the Members; provided, however, that the Company shall make
quarterly tax distributions sufficient and in time for Members to make quarterly estimated federal
tax payments, subject to availability of sufficient cash, utilizing to the maximum extent possible
funds available to be drawn under credit facilities of the Company and its Affiliates, and subject
to the terms and restrictions imposed by such credit facilities. All such distributions made
pursuant to this Section 5.8 shall be made to the Members in accordance with their respective
Sharing Ratios.

ARTICLE VI

MANAGEMENT

     Section 6.1 Management.

          (a) Generally.

     (i) Subject to the provisions of Section 6.1(b) and Section 6.1(c), all
management powers over the business and affairs of the Company shall be exclusively
vested in a Board of Directors (“Board of Directors” or “Board”) and, subject to the
direction of the Board of Directors, the Officers. The Officers and Directors shall
each constitute a “manager” of the Company within the meaning of the Act. Except as
otherwise specifically provided in this Agreement, no Member, by virtue of having
the status of a Member, shall have or attempt to exercise or assert any management
power over the business and affairs of the Company or shall have or attempt to
exercise or assert actual or apparent authority to enter into contracts on behalf
of, or to otherwise bind, the Company. Except as otherwise specifically provided in
this Agreement, the authority and functions of the Board of Directors on the one
hand and of the Officers on the other shall be identical to the authority and
functions of the board of directors and officers, respectively, of a corporation
organized under the Delaware General Corporation Law. Except as otherwise
specifically provided in this Agreement, the business and affairs of the Company
shall be managed under the direction of the Board of Directors, and the day-to-day
activities of the Company shall be conducted on the Company’s behalf by the
Officers, who shall be agents of the Company.

     (ii) In addition to the powers that now or hereafter can be granted to managers
under the Act and to all other powers granted under any other provision of this
Agreement, except as otherwise provided in this Agreement, the Board of Directors
and the Officers shall have full power and authority to do all things as are not
restricted by this Agreement, the ETE Agreement, the Act or Applicable Law, on such
terms as they may deem necessary or appropriate to conduct, or cause to be
conducted, the business and affairs of the Company.

- 23 -

 

     (b) Limitations with Respect to ETE and Matters Relating to ETE. Management powers over the
business and affairs of the Company with respect to management and control of ETE (in the Company’s
capacity as general partner of ETE) shall be vested exclusively in the Board of Directors;
provided, notwithstanding anything herein to the contrary:

     (i) without obtaining approval of a Super-Majority Interest, the Company shall
not, and shall not take any action to cause ETE to:

     (A). make or consent to a general assignment for the benefit of the
creditors of the ETE;

     (B). file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code
naming ETE, or otherwise seek, with respect to ETE, relief from debts or
protection from creditors generally;

     (C). file or consent to the filing of a petition or answer seeking for
ETE a liquidation, dissolution, arrangement, or similar relief under any
law;

     (D). file an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the Company or ETE in a
proceeding of the type described in any of clauses (A) — (C) of this Section
6.1(b)(i);

     (E). seek, consent to or acquiesce in the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or any
similar official for ETE or for all or any substantial portion of such
entity’s properties;

     (F). sell all or substantially all of the assets of ETE;

     (G). dissolve or liquidate ETE, other than in accordance with Article
VIII of the ETE Agreement;

     (H). merge or consolidate ETE;

     (I). amend the ETE Agreement in a manner that would reasonably be
expected to have a material adverse effect on the Company (including in its
capacity as the general partner of ETE); or

     (J). declare or make the payment of any material extraordinary
distribution on the Common Units; and

     (ii) without obtaining approval of a Two-Thirds Interest, the Company shall
not, and shall not take any action to cause ETE to exercise the rights of the
Company as general partner of ETE (or those exercisable after the Company

- 24 -

 

ceases to
be the general partner of ETE) pursuant to the following provisions of the ETE
Agreement:

     (A). Sections 4.6(a) and (b) (“Transfer of the General Partner
Interest”) solely with respect to the decision by the Company to transfer
its general partner interest in ETE;

     (B). Section 5.2 (“Continuation of General Partner and Limited Partner
Interests; Initial Offering; Contributions by the General Partner and its
Affiliates”), solely with respect to the decision to make additional capital
contributions to ETE;

     (C). Section 5.9 (“Limited Preemptive Right”);

     (D). Section 7.5(d) (relating to the right of the Company and its
Affiliates to purchase Units or other Partnership Securities and exercise
rights related thereto) and Section 7.11 (“Purchase and Sale of Partnership
Securities”), solely with respect to decisions by the Company or its
Affiliates to purchase or otherwise acquire and sell Partnership Securities
for their own account;

     (E). Section 7.6(a) (“Loans from the General Partner; Loans or
Contributions from the Partnership; Contracts with Affiliates; Certain
Restrictions on the General Partner”), solely with respect to the decision
by the Company to lend funds to a Group Member, subject to the provisions of
Section 7.9 of the ETE Agreement;

     (F). Section 7.7 (“Indemnification”), solely with respect to any
decision by the Company to exercise its rights as an “Indemnitee”;

     (G). Section 7.12 (“Registration Rights of the General Partner and its
Affiliates”), solely with respect to any decision to exercise registration
rights and to take actions in connection therewith;

     (H). Section 11.1 (“Withdrawal of the General Partner”), solely with
respect to the decision by Company to withdraw as general partner of ETE and
to giving notices required thereunder;

     (I). Section 11.3(a) and (b) (“Interest of Departing General Partner
and Successor General Partner”); and

     (J). Section 15.1 (“Right to Acquire Limited Partner Interests”).

     (c) Limitations with Respect to the Company. The full power and authority over the business
and affairs of the Company and its Non-ETE Subsidiaries that do not relate to management and
control of ETE and its subsidiaries shall be exclusively vested in the Members; provided, however,
that:

- 25 -

 

     (i) without obtaining approval of a Two-Thirds Interest, the Members shall not
cause the Company to, or permit any Non-ETE Subsidiary to:

     (A). make any distributions to the Members or refrain from making
distributions to the Members requested by such Super-Majority Interest,

     (B). issue or repurchase any equity interests in the Company or any
Non-ETE Subsidiary;

     (C). prosecute, settle or manage any claim made directly against the
Company or any Non-ETE Subsidiary,

     (D). sell, convey, transfer or pledge any asset of the Company or any
Non-ETE Subsidiary,

     (E). amend, modify or waive any rights relating to the assets of the
Company or any Non-ETE Subsidiary,

     (F). enter into any agreement to incur an obligation of the Company
other than an agreement entered into for and on behalf of ETE for which the
Company is liable exclusively by virtue of the Company’s capacity as general
partner of ETE or of any of its affiliates;

     (G). without the approval of the Audit and Conflicts Committee of the
Board of Directors of the Company and such Members constituting a
Super-Majority Interest, take any action that would result in the Company
engaging in any business or activity or incurring any debts or liabilities
except in connection with or incidental to (A) its performance as general
partner of ETE or (B) the acquiring, owning or disposing of debt of equity
securities of ETE; or

     (H). form, create or otherwise obtain a subsidiary other than ETE and
its subsidiaries; and

     (ii) without obtaining approval of a Super-Majority Interest, the Members shall
not cause the Company to, or permit any Non-ETE Subsidiary to:

     (A). make or consent to a general assignment for the benefit of the
creditors of the Company;

     (B). file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code
naming the Company, or otherwise seek, with respect to the Company, relief
from debts or protection from creditors generally;

- 26 -

 

     (C). file or consent to the filing of a petition or answer seeking for
the Company a liquidation, dissolution, arrangement, or similar relief under
any law;

     (D). file an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the Company in a
proceeding of the type described in any of clauses (ix) — (xi) of this
Section 6.1(c);

     (E). seek, consent to or acquiesce in the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or any
similar official for the Company or for all or any substantial portion of
such entity’s properties;

     (F).
sell all or substantially all of the assets of the Company;

     (G).
dissolve or liquidate the Company; or

     (H).
merge or consolidate the Company.

     Section 6.2 Board of Directors.

          (a) Generally. The Board of Directors shall consist of not less than five nor more than ten
natural persons. The members of the Board of Directors shall be appointed by the Members
constituting a Two-Thirds Interest, provided that at least three of such Directors shall meet the
independence, qualification and experience requirements of the New York Stock Exchange and Section
10A(m)(3) of the Securities Exchange Act of 1934 (or any successor Law), the rules and regulations
of the SEC, other Applicable Law and the charter of the Audit and Conflicts Committee (each, an
“Independent Director”); provided, however, that if at any time at least three of the Directors are
not Independent Directors, the Board of Directors shall still have all powers and authority granted
to it hereunder, the Members acting with the approval of a Two-Thirds Interest shall endeavor to
elect additional Independent Directors to come into compliance with this Section 6.2(a).

          (b) Term; Resignation; Vacancies; Removal. Each Director shall hold office until his successor
is appointed and qualified or until his earlier resignation or removal. Any Director may resign at
any time upon written notice to the Board, to the President or to any other Officer. Such
resignation shall take effect at the time specified therein, and unless otherwise specified therein
no acceptance of such resignation shall be necessary to make it effective. Vacancies and newly
created directorships resulting from any increase in the authorized number of Directors or from any
other cause shall be filled by the Members acting with the approval of a Two-Thirds Interest. Any
Director may be removed, with or without cause, by the Members constituting a Two-Thirds Interest
at any time, and the vacancy in the Board caused by any such removal shall be filled by the Members
acting with the approval of a Two-Thirds Interest.

          (c) Voting; Quorum; Required Vote for Action. Unless otherwise required by the Act, other Law
or the provisions hereof,

- 27 -

 

     (i) each member of the Board of Directors shall have one vote;

     (ii) except for matters requiring Special Approval, the presence at a meeting
of a majority of the members of the Board of Directors shall constitute a quorum at
any such meeting for the transaction of business; and

     (iii) except for matters requiring Special Approval, the act of a majority of
the members of the Board of Directors present at a meeting duly called in accordance
with Section 6.2(d) at which a quorum is present shall be deemed to constitute the
act of the Board of Directors.

     (d) Meetings. Regular meetings of the Board of Directors shall be held at such times and
places as shall be designated from time to time by resolution of the Board of Directors. Special
meetings of the Board of Directors or meetings of any committee thereof may be called by written
request authorized by any member of the Board of Directors or a committee thereof on at least 48
hours prior written notice to the other members of such Board or committee. Any such notice, or
waiver thereof, need not state the purpose of such meeting, except as may otherwise be required by
law. Attendance of a Director at a meeting (including pursuant to the last sentence of this Section
6.2(d)) shall constitute a waiver of notice of such meeting, except where such Director attends the
meeting for the express purpose of objecting to the transaction of any business on the ground that
the meeting is not lawfully called or convened. Subject to Article 11, any action required or
permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken
without a meeting, without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, are signed by at least as many members of the Board of Directors
or committee thereof as would have been required to take such action at a meeting of the Board of
Directors or such committee. Members of the Board of Directors or any committee thereof may
participate in and hold a meeting by means of conference telephone, video conference or similar
communications equipment by means of which all Persons participating in the meeting can hear each
other, and participation in such meetings shall constitute presence in person at the meeting.

     (e) Committees.

     (i) Subject to compliance with this Article 6, committees of the Board of
Directors shall have and may exercise such of the powers and authority of the Board
of Directors with respect to the management of the business and affairs of the
Company as may be provided in a resolution of the Board of Directors. Any committee
designated pursuant to this Section 6.2(e) shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of Directors
when requested, and, subject to Section 6.2(d), shall fix its own rules or
procedures and shall meet at such times and at such place or places as may be
provided by such rules or by resolution of such committee or resolution of the Board
of Directors. At every meeting of any such committee, the presence of a majority of
all the members thereof shall constitute a quorum and the affirmative

- 28 -

 

vote of a
majority of the members present shall be necessary for the adoption by it of any
resolution (except for obtaining Special Approval at meetings of the Audit and
Conflicts Committee, which requires the affirmative vote of a majority of the
members of such committee). The Board of Directors may designate one or more
Directors as alternate members of any committee who may replace any absent or
disqualified member at any meeting of such committee; provided, however, that any
such designated alternate of the Audit and Conflicts Committee must meet the
standards for an Independent Director. In the absence or disqualification of a
member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the place
of the absent or disqualified member; provided, however, that any such replacement
member of the Audit and Conflicts Committee must meet the standards for an
Independent Director.

     (ii) In addition to any other committees established by the Board of Directors
pursuant to Section 6.2(e)(i), the Board of Directors shall maintain an “Audit and
Conflicts Committee,” which shall be composed of at least three Independent
Directors. The Audit and Conflicts Committee shall be responsible for (A) approving
or disapproving, as the case may be, any matters regarding the business and affairs
of the Company and ETE required to be considered by, or submitted to, such Audit and
Conflicts Committee pursuant to the terms of the ETE Agreement, (B) assisting the
Board in monitoring (1) the integrity of ETE’s and the Company’s financial
statements, (2) the qualifications and independence of ETE’s and the Company’s
independent accountants, (3) the performance of ETE’s and the Company’s internal
audit function and independent accountants, and (4) ETE’s and the Company’s
compliance with legal and regulatory requirements, (C) preparing the report required
by the rules of the SEC to be included in ETE’s annual report on Form 10-K, (D)
approving any material amendments to the Shared Services Agreement, (E) approving or
disapproving, as the case may be, the entering into of any material transaction with
a Member or any Affiliate of a Member, other than transactions in the ordinary
course of business to the extent that the Board of Directors requests the Audit and
Conflicts Committee to make such determination, (F) approving any of the actions
described in Section 6.1(a) — (g) and Section (c)(v) to be taken on behalf of the
Company or ETE, (G) amending (1) Section 2.9, (2) the definition of “Independent
Director” in Section 6.2(a), (3) the requirement that at least three of the
directors be Independent Directors, (4) Sections 6.1(a) — (g) or 6.2 (c)(v) or (5)
this Section 6.2(e)(ii), and (H) performing such other functions as the Board may
assign from time to time, or as may be specified in a written charter of the Audit
and Conflicts Committee. In acting or otherwise voting on the matters referred to in
this Section 6.2(e)(ii), to the fullest extent permitted by law, including Section
18-1101(c) of the Act and Section 17-1101(c) of the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time, the Directors constituting the Audit
and Conflicts Committee shall consider only the interest of the Company or ETE, as
applicable, including their respective creditors.

     (iii) In addition to any other committees established by the Board of Directors
pursuant to Section 6.2(e)(i), the Board of Directors shall maintain a

- 29 -

 

“Compensation
Committee,” which shall be composed of at least two Independent Directors. The
Compensation Committee shall be responsible for setting the compensation for
officers of the Company as well as administering any incentive plans adopted by the
Company. The Compensation Committee shall perform such other functions as the Board
may assign from time to time or as may be specified in a written charter for the
Compensation Committee adopted by the Board.

     Section 6.3 Officers.

          (a) Generally. The Board may appoint agents of the Company, which agents shall be referred to
as “Officers” of the Company, having the titles, power, authority and duties described in this
Section 6.3 or as otherwise granted by the Board. Subject to the foregoing, the Officers shall have
the full authority to and shall manage, control and oversee the day-to-day business and affairs of
the Company and shall perform all other acts as are customary or incident to the management of such
business and affairs, which will include the general and administrative affairs of the Company and
the operation and maintenance of the Company Assets, all in accordance with the provisions of
Section 6.3.

          (b) Titles and Number. The Officers may include a Chairman, a Chief Executive Officer (or
Co-Chief Executive Officers), a President, one or more Vice Presidents, a Secretary, a Treasurer,
and one or more Assistant Secretaries and Assistant Treasurers, and any other officer position or
title as the Board may approve. Any person may hold two or more offices.

          (c) Appointment and Term of Office. The Officers may be appointed by the Board at such times
and for such terms as the Board shall determine. Any Officer may be removed, with or without cause,
only by the Board. Vacancies in any office may be filled only by the Board.

          (d) Chairman of the Board. The Chairman of the Board shall preside at all meetings of the
Board of Directors and of the unitholders of ETE; and he shall have such other powers and duties as
from time to time may be assigned to him by the Board of Directors. There may be more than one
person holding the office of Chairman, in which case they shall act as Co-Chairmen and shall share
the duties of such office.

          (e) Chief Executive Officer. In accordance with and subject to the limitations imposed by this
Agreement or any direction of the Board, the Chief Executive Officer (or Co-Chief Executive
Officers), as such, shall (i) supervise generally the other Officers, (ii) be responsible for the
management and day-to-day business and affairs of the Company, its other Officers, employees and
agents and shall supervise generally the affairs of the Company, (iii) have full authority to
execute all documents and take all actions that the Company may legally take and (iv) have the
power and authority to delegate the Chief Executive Officer’s powers and authority to any proper
Officer.

          (f) President. Subject to the limitations imposed by this Agreement, any employment agreement,
any employee plan or any determination of the Board of Directors, the

- 30 -

 

President, subject to the
direction of the Board of Directors, shall be the chief executive officer of the Company in the
absence of a Chief Executive Officer and shall be responsible for the management and direction of
the day-to-day business and affairs of the Company, its other Officers, employees and agents, shall
supervise generally the affairs of the Company and shall have full authority to execute all
documents and take all actions that the Company may legally take. In the absence of the Chairman of
the Board or a Chief Executive Officer, the President shall preside at all meetings of the
unitholders of ETE and (should he be a director) of the Board of Directors. The President shall
exercise such other powers and perform such other duties as
may be assigned to him by this Agreement or the Board of Directors, including any duties and
powers stated in any employment agreement approved by the Board of Directors.

          (g) Vice Presidents. In the absence of the President, each Vice President appointed by the
Board shall have all of the powers and duties conferred upon the President, including the same
power as the President to execute documents on behalf of the Company. Each such Vice President
shall perform such other duties and may exercise such other powers as may from time to time be
assigned to him by the Board. Vice Presidents may be designated Executive Vice Presidents, Senior
Vice Presidents, or any other title determined by the Board.

          (h) Secretary and Assistant Secretaries. The Secretary shall record or cause to be recorded in
books provided for that purpose the minutes of the meetings or actions of the Board of Directors,
shall see that all notices are duly given in accordance with the provisions of this Agreement and
as required by law, shall be custodian of all records (other than financial), shall see that the
books, reports, statements, certificates and all other documents and records required by law are
properly kept and filed, and, in general, shall perform all duties incident to the office of
Secretary and such other duties as may, from time to time, be assigned to him by this Agreement,
the Board of Directors or the President. The Assistant Secretaries shall exercise the powers of the
Secretary during that Officer’s absence or inability or refusal to act.

          (i) Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to
be kept and maintained, adequate and correct books and records of account of the Company and ETE.
He shall receive and deposit all moneys and other valuables belonging to the Company in the name
and to the credit of the Company and shall disburse the same and only in such manner as the Board
of Directors or the appropriate Officer of the Company may from time to time determine. He shall
receive and deposit all moneys and other valuables belonging to ETE in the name and to the credit
of ETE and shall disburse the same and only in such manner as the Board of Directors or the
President may require. He shall render to the Board of Directors and the President, whenever any of
them request it, an account of all his transactions as Chief Financial Officer and of the financial
condition of the Company, and shall perform such further duties as the Board of Directors or the
President may require. The Chief Financial Officer shall have the same power as the President to
execute documents on behalf of the Company.

          (j) Treasurer and Assistant Treasurers. The Treasurer shall have such duties as may be
specified by the Chief Financial Officer in the performance of his duties. The Assistant Treasurers
shall exercise the power of the Treasurer during that Officer’s absence or inability or refusal to
act. Each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the Company. If

 - 31 - 

 

no Treasurer or
Assistant Treasurer is appointed and serving or in the absence of the appointed Treasurer and
Assistant Treasurer, the Senior Vice President, or such other Officer as the Board of Directors
shall select, shall have the powers and duties conferred upon the Treasurer.

          (k) Powers of Attorney. The Company may grant powers of attorney or other authority as
appropriate to establish and evidence the authority of the Officers and other persons.

          (l) Delegation of Authority. Unless otherwise provided by resolution of the Board of
Directors, no Officer shall have the power or authority to delegate to any person such Officer’s
rights and powers as an Officer to manage the business and affairs of the Company.

          (m) Officers. The Board of Directors shall appoint Officers of the Company to serve from the
date hereof until the death, resignation or removal by the Board of Directors with or without cause
of such officer.

     Section 6.4 Duties of Officers and Directors. Except as otherwise specifically provided in
this Agreement, the duties and obligations owed to the Company and to the Board of Directors by the
Officers of the Company and by members of the Board of Directors of the Company shall be the same
as the respective duties and obligations owed to a corporation organized under the Delaware General
Corporation Law by its officers and directors, respectively.

     Section 6.5 Compensation. The members of the Board of Directors who are neither Officers nor
employees of the Company shall be entitled to compensation as directors and committee members as
approved by the Board and shall be reimbursed for out-of-pocket expenses incurred in connection
with attending meetings of the Board of Directors or committees thereof.

     Section 6.6 Indemnification.

          (a) To the fullest extent permitted by Law but subject to the limitations expressly provided
in this Agreement, each Indemnitee shall be indemnified and held harmless by the Company from and
against any and all losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses), judgments, fines, penalties, interest, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, in which any such Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, by reason of such person’s status as an
Indemnitee; provided, however that the Indemnitee shall not be indemnified and held harmless if
there has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which the Indemnitee is seeking indemnification
pursuant to this Section 6.6, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct, or in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was unlawful; provided, further, no indemnification pursuant to this Section 6.6 shall be available
to the Members or their Affiliates (other than the MLP and any Group Member) with respect to its or
their obligations incurred pursuant to the Underwriting Agreement. The termination of any action,
suit or proceeding by judgment, order,

 - 32 - 

 

settlement, conviction or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this Section 6.6 shall be made only out of
assets of the Company, it being agreed that a Member shall not be personally liable for such
indemnification and shall have no obligation to contribute or loan any monies or property to the
Company to enable it to effectuate such indemnification.

     (i) To the fullest extent permitted by law, expenses (including reasonable
legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 6.6(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnitee to repay such amount if it shall be
determined that the Indemnitee is not entitled to be indemnified as authorized in
this Section 6.6.

     (ii) The Company shall, to the fullest extent permitted under the Act, pay or
reimburse expenses incurred by an Indemnitee in connection with the Indemnitee’s
appearance as a witness or other participation in a proceeding involving or
affecting the Company at a time when the Indemnitee is not a named defendant or
respondent in the proceeding.

          (b) The indemnification provided by this Section 6.6 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both
as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other
capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

          (c) The Company may purchase and maintain insurance, on behalf of the members of the Board of
Directors, the Officers and such other Persons as the Board of Directors shall determine, against
any liability that may be asserted against or expense that may be incurred by such Person in
connection with the Company’s activities, regardless of whether the Company would have the power to
indemnify such Person against such liability under the provisions of this Agreement.

          (d) For purposes of this Section 6.6, the Company shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the
Indemnitee of such Indemnitee’s duties to the Company also imposes duties on, or otherwise involves
services by, the Indemnitee to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an Indemnitee with respect to an employee benefit plan pursuant to Applicable Law shall
constitute “fines” within the meaning of Section 6.6(a); and action taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of such Indemnitee’s duties
for a purpose reasonably believed by such Indemnitee to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is in, or not opposed to, the
best interests of the Company.

 - 33 - 

 

          (e) An Indemnitee shall not be denied indemnification in whole or in part under this Section
6.6 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

          (f) The provisions of this Section 6.6 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.

          (g) No amendment, modification or repeal of this Section or any provision hereof shall in any
manner terminate, reduce or impair either the right of any past, present or future Indemnitee to be
indemnified by the Company or the obligation of the Company to indemnify any such Indemnitee under
and in accordance with the provisions of this Section 6.6 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted, provided such Person became an Indemnitee hereunder prior to
such amendment, modification or repeal.

          (h) Any act or omission performed or omitted by an Indemnitee on advice of legal counsel or an
independent consultant who has been employed or retained by the Company shall be presumed to have
been performed or omitted in good faith without gross negligence or willful misconduct.

          (i) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 6.6 ARE INTENDED BY THE
PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL
RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

     Section 6.7 Liability of Indemnitees.

          (a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall
be liable for monetary damages to the Company, the Members or any other Person for losses sustained
or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a
final and non-appealable judgment entered by a court of competent jurisdiction determining that, in
respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was criminal.

          (b) Subject to its obligations and duties as set forth in this Article 6, the Board of
Directors and any committee thereof may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or by or through the
Company’s Officers or agents, and neither the Board of Directors nor any committee thereof shall be
responsible for any misconduct or negligence on the part of any such Officer or agent appointed by
the Board of Directors or any committee thereof in good faith.

          (c) Any amendment, modification or repeal of this Section 6.7 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on

 - 34 - 

 

liability under this Section
6.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims
arising from or relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may be asserted.

     Section 6.8 Amendment and Vesting of Rights. The rights granted or created hereby will be
vested in each Person entitled to indemnification hereunder as a bargained-for, contractual
condition of such Person’s being or serving or having served as a Director, officer or
representative of the Company or serving at the request of the Company as a director, officer or in
any other comparable position of any Other Enterprise and, while this Article VI may be amended or
repealed, no such amendment or repeal will release, terminate or adversely affect the rights of
such Person under this Article VI with respect to any (a) act taken or the failure to take any act
by such Person prior to such amendment or repeal or (b) action, suit or proceeding concerning such
act or failure to act filed after such amendment or repeal.

     Section 6.9 Severability. If any provision of this Article VI or the application of any such
provision to any Person or circumstance is held invalid, illegal or unenforceable for any reason
whatsoever, the remaining provisions of this Article VI and the application of such provision to
other Persons or circumstances will not be affected thereby and, to the fullest extent possible,
the court finding such provision invalid, illegal or unenforceable must modify and construe the
provision so as to render it valid and enforceable as against all Persons and to give the maximum
possible protection to Persons subject to indemnification hereby within the bounds of validity,
legality and enforceability. Without limiting the generality of the foregoing, if any Member,
Director, officer or representative of the Company or any Person who is or was serving at the
request of the Company as a director, officer or in any other comparable position of any Other
Enterprise, is entitled under any provision of this Article VI to indemnification by the Company
for some or a portion of the judgments, amounts paid in settlement, attorneys’ fees, penalties,
ERISA excise taxes, fines or other expenses actually and reasonably incurred by any such Person in
connection with any threatened, pending or completed action, suit or proceeding (including the
investigation, defense, settlement or appeal of such action, suit or proceeding), whether civil,
criminal, administrative, investigative or appellate, but not, however, for all of the total amount
thereof, the Company will nevertheless indemnify such Person for the portion thereof to which such
Person is entitled.

     Section 6.10 Contracts with Members or Their Affiliates.

          (a) All contracts or transactions not involving ETE that are between the Company and its
Members, Directors or officers or between the Company and another Person in which a Member,
Director or officer has a financial interest or with which a Member, Director or officer is
affiliated are permissible if such contract or transaction, and such Member’s, Director’s or
officer’s interest therein, are fully disclosed to the Members and approved by a Two-Thirds
Interest.

          (b) All contracts or transactions involving ETE and the Members, Directors or officers of the
Company in which a Member, Director or officer has a financial interest that is not proportionate
to such Member’s ownership interest in ETE or with which a Member, Director or officer is
affiliated are permissible if such contract or transaction, and such

 - 35 - 

 

Member’s, Director’s or
officer’s interest therein, are fully disclosed to and approved by a Audit and Conflicts Committee
of the Board of Directors.

     Section 6.11 Other Business Ventures. Any Member may engage in, or possess an interest in,
other business ventures of every nature and description, independently or with others,
whether or not similar or identical to the business of the Company or ETE, and neither the
Company nor any Member will have any right by virtue of this Agreement in or to such other business
ventures or to the income or profits derived therefrom. The Members and their representatives are
not required to devote all of their time or business efforts to the affairs of the Company, but
will devote so much of their time and attention to the Company as is reasonably necessary and
advisable to manage the affairs of the Company to the best advantage of the Company. The foregoing
will not supersede any employment, confidentiality, noncompetition or other specific agreement that
may exist between the Company (or an affiliate of the Company) and any Member (or an affiliate of
any Member).

     Section 6.12 Acknowledged and Permitted NGP Activities. The Company and the Members recognize
that: (i) NGP and its Affiliates own and will in the future acquire substantial equity interests in
other companies that participate in the energy industry (“NGP Portfolio Companies”), (ii) NGP will
enter into advisory service agreements with those NGP Portfolio Companies, and representatives of
NGP who serve as Director of the Company and provide services to the Company and ETE, also serve in
similar capacities and provide similar services to other NGP Portfolio Companies, (iii) that at any
given time, other NGP Portfolio Companies may be in direct or indirect competition with the Company
and ETE, and/or their subsidiaries; and (iv) Davis and Warren own and will own equity interests in
companies or properties which participate in the energy industry that are Affiliated with ETE but
in which the partners of ETE do not own an interest. The Company and the Members acknowledge and
agree that: (i) NGP and its Affiliates: (A) shall not be prohibited or otherwise restricted by
their relationship with the Company and its subsidiaries from engaging in the business of investing
in NGP Portfolio Companies, entering into agreements to provide services to such companies or
acting as managers, directors or advisors to, or other principals of, such NGP Portfolio Companies,
regardless of whether such activities are in direct or indirect competition with the business or
activities of the Company or its subsidiaries, and (B) shall not have any obligation to offer the
Company or its subsidiaries any Excluded Business Opportunity, (ii) the Company and the Members
hereby renounce any interest or expectancy in any Excluded Business Opportunity pursued by NGP
and/or its Affiliates, NGP representatives or another NGP Portfolio Company and waive any claim
that any such business opportunity constitutes a business opportunity of the Company or any of its
subsidiaries; and (iii) Davis and Warren shall similarly not be prohibited or otherwise restricted
from engaging in other endeavors in the energy industry that are otherwise permitted under the
terms of the Confidentiality and Non-Compete Agreements entered into as of the date hereof.

     Section 6.13 Resolution of Conflicts of Interest; Standard of Conduct and Modification of
Duties.

          (a) Unless otherwise expressly provided in this Agreement, whenever a potential conflict of
interest exists or arises between the Members or any of their Affiliates (other than the MLP or any
Group Member), on the one hand, and ETE or any Group Member,

 - 36 - 

 

on the other hand, any resolution or
course of action by the Board of Directors in respect of such conflict of interest shall be
permitted and deemed approved by all Members, and shall not constitute a breach of this Agreement
or of any agreement contemplated herein or therein, or of any duty stated or implied by law or
equity, if the resolution or course of action in respect of such conflict of interest is (i)
approved by Special Approval, (ii) approved by the vote of a
majority of the Common Units excluding Common Units owned by the Members and their Affiliates,
(iii) on terms no less favorable to ETE or a Group Member, as the case may be, than those generally
being provided to or available from unrelated third parties or (iv) fair and reasonable to ETE or
Group Member, as the case may be, taking into account the totality of the relationships between the
parties involved (including other transactions that may be particularly favorable or advantageous
to ETE or Group Member, as the case may be). The Board of Directors shall be authorized but not
required in connection with its resolution of such conflict of interest to seek Special Approval of
such resolution, and the Board of Directors may also adopt a resolution or course of action that
has not received Special Approval. If Special Approval is not sought and the Board of Directors
determines that the resolution or course of action taken with respect to a conflict of interest
satisfies either of the standards set forth in clauses (iii) or (iv) above, then it shall be
presumed that, in making its decision, the Board of Directors acted in good faith, and in any
proceeding brought by any Member or by or on behalf of such Member or ETE or Group Member, as the
case may be, challenging such approval, the Person bringing or prosecuting such proceeding shall
have the burden of overcoming such presumption.

          (b) Whenever the Company makes a determination or takes or declines to take any other action,
or any of its Affiliates causes it to do so, in its capacity as the general partner of ETE as
opposed to in its individual capacity, whether under this Agreement, or any other agreement
contemplated hereby or otherwise, then unless another express standard is provided for in this
Agreement, the Company, or such Affiliates causing it to do so, shall make such determination or
take or decline to take such other action in good faith and shall not be subject to any other or
different standards imposed by this Agreement, any other agreement contemplated hereby or under the
Act or any other law, rule or regulation or at equity. In order for a determination or other action
to be in “good faith” for purposes of any action taken or delivered to be taken by the Company in
its capacity as the general partner of ETE, the Person or Persons making such determination or
taking or declining to take such other action must believe that the determination or other action
is in the best interests of ETE.

          (c) Whenever the Company (including the Board of Directors or any committee thereof acting on
behalf of the Company) makes a determination or takes or declines to take any other action, or any
of its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as a
general partner of ETE, whether under this Agreement or any other agreement contemplated hereby or
otherwise, then the Company (including the Board of Directors or any committee thereof acting on
behalf of the Company), or such Affiliates causing it to do so, are entitled to make such
determination or to take or decline to take such other action free of any fiduciary duty or
obligation whatsoever to ETE or any partner thereof, and the Company (including the Board of
Directors or any committee thereof acting on behalf of the Company), or such Affiliates causing it
to do so, shall not be required to act in good faith or pursuant to any other standard imposed by
this Agreement, any other agreement contemplated hereby or under the Act or any other law, rule or
regulation. By way of illustration and not of

 - 37 - 

 

limitation, whenever the phrase, “at the option of
the Company,” or some variation of that phrase, is used in this Agreement, it indicates that the
Company is acting in its individual capacity. For the avoidance of doubt, whenever the Company
votes or transfers its Common Units, or refrains from voting or transferring its Common Units, it
shall be acting in its individual capacity.

          (d) Notwithstanding anything to the contrary in this Agreement, none of the Company, nor the
Board or any committee thereof and the Affiliates of the Company shall have any duty or obligation,
express or implied, to (i) sell or otherwise Dispose of any asset of ETE or any Group Member or
(ii) permit ETE or any Group Member to use any facilities or assets of the Company and its
Affiliates, except as may be provided in contracts entered into from time to time specifically
dealing with such use. Any determination by the Company or any of its Affiliates to enter into such
contracts shall be at its option.

          (e) Whenever a particular transaction, arrangement or resolution of a conflict of interest is
required under this Agreement to be “fair and reasonable” to any Person, the fair and reasonable
nature of such transaction, arrangement or resolution shall be considered in the context of all
similar or related transactions.

ARTICLE VII

TAX MATTERS

     Section 7.1 Tax Returns and Information.

          (a) The Board of Directors shall cause to be prepared and timely filed (on behalf of the
Company) all federal, state and local tax returns required to be filed by the Company, including
making all elections on such tax returns and to provide all Members, upon request, access to
accounting and tax information and schedules as shall be necessary for the preparation by such
Member of its income tax returns and such Member’s tax information reporting requirements. The
Company shall bear the costs of the preparation and filing of its returns.

          (b) Not less than 60 days prior to the date (as extended) on which the Company intends to file
its federal income tax return or any state income tax return but in any event no earlier than March
1 of each year, the return proposed to be filed by the Company shall be furnished to the Members
for review.

          (c) The Board of Directors shall cause to be prepared and timely filed (for the Company, and
on behalf of ETE) all federal, state and local tax returns required to be filed by the Company or
ETE. The Company shall deliver a copy of each such tax return to the Members within ten days
following the date on which any such tax return is filed, together with such additional information
as may be required by the Members.

          (d) The Board of Directors shall cause to be prepared and delivered or provide access to such
information reasonably required by Members from time to time with respect to “qualifying income”
(within the meaning of Section 7704(d) of the Code) of the Company, ETE, and its subsidiaries.

 - 38 - 

 

     Section 7.2 Tax Matters Member. The Tax Matters Member is authorized to take such actions and
to execute and file all statements and forms on behalf of the Company which may be permitted or
required by the applicable provisions of the Code or Regulations issued thereunder. The Tax
Matters Member shall have full and exclusive power and authority on behalf of the Company to
represent the Company (at the Company’s expense) in connection with all examinations of the
Company’s affairs by tax authorities, including resulting administrative and
judicial proceedings, and to expend Company funds for professional services and costs
associated therewith. The Tax Matters Member shall keep the Members informed as to the status of
any audit of the Company’s tax affairs, and shall take such action as may be necessary to cause any
Member so requesting to become a “notice partner” within the meaning of Section 6223 of the
Internal Revenue Code. Without first obtaining the approval of a Super-Majority Interest of the
Members, the Tax Matters Member shall not, with respect to Company tax matters: (i) enter into a
settlement agreement with respect to any tax matter which purports to bind Members other than the
Tax Matters Member, (ii) intervene in any action pursuant to Code Section 6226(b)(5), (iii) enter
into an agreement extending the statute of limitations, or (iv) file a petition pursuant to Code
Section 6226(a) or 6228. If an audit of any of the Company’s tax returns shall occur, the Tax
Matters Member shall not settle or otherwise compromise assertions of the auditing agent which may
be adverse to any Member as compared to the position taken on the Company’s tax returns without the
prior written consent of each such affected Member.

     Section 7.3 Tax Elections. The Company shall make the election under Section 754 of the Code
in accordance with the Treasury Regulations thereunder. Except as otherwise provided herein, the
Board of Directors shall determine whether the Company should make any other elections under the
Code.

ARTICLE VIII

BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS

     Section 8.1 Maintenance of Books. The Board of Directors shall keep or cause to be kept at the
principal office of the Company or at such other location approved by the Board of Directors
complete and accurate books and records of the Company, supporting documentation of the
transactions with respect to the conduct of the Company’s business and minutes of the proceedings
of the Board of Directors and any other books and records that are required to be maintained by
Applicable Law.

     Section 8.2 Reports. The Board of Directors shall cause to be prepared and delivered to each
Member such reports, forecasts, studies, budgets and other information as the Members may
reasonably request from time to time.

     Section 8.3 Information Rights. At the request of any Member, the Company shall deliver
copies of any information or documents provided to the Board of Directors if and when so delivered
to the Board of Directors including, without limitation, annual, quarterly and monthly financial
reports. Notwithstanding the foregoing, the Board of Directors, acting by a majority vote, may
refrain from disclosing specific information to any Member who may have information rights pursuant
to this Section 8.3 if (i) the Board of Directors reasonably determines it is not in the best
interests of ETE or any of its subsidiaries to disclose such specific information to any such
Member, (ii) such information does not relate to an adverse change

 - 39 - 

 

regarding the business,
management, operations, financial condition, results of operations or prospects of ETE or any of
its subsidiaries and (iii) such information is not otherwise reasonably required by such Member in
connection with the preparation of its filings with the SEC, and the failure to provide such
information would not constitute a material omission or cause a material misstatement with respect
to other information provided to the Member in light of the circumstances in which such information
is made.

     Section 8.4 Bank Accounts. Funds of the Company shall be deposited in such banks or other
depositories as shall be designated from time to time by the Board of Directors. All withdrawals
from any such depository shall be made only as authorized by the Board of Directors and shall be
made only by check, wire transfer, debit memorandum or other written instruction.

     Section 8.5 Fiscal Year. For financial accounting purposes, the fiscal year of the Company
will end on August 31 of each year unless a different year is adopted by the Members.

ARTICLE IX

DISSOLUTION, WINDING-UP AND TERMINATION

     Section 9.1 Dissolution.

          (a) The Company shall dissolve and its affairs shall be wound up on the first to occur of the
following events (each a “Dissolution Event”):

     (i) the unanimous consent of the Board of Directors;

     (ii) the entry of a decree of judicial dissolution of the Company under Section
18-802 of the Act; and

     (iii) at any time there are no Members of the Company, unless the Company is
continued in accordance with the Act or this Agreement.

          (b) No other event shall cause a dissolution of the Company.

          (c) Upon the occurrence of any event that causes there to be no Members of the Company, to the
fullest extent permitted by law, the personal representative of the last remaining Member is hereby
authorized to, and shall, within 90 days after the occurrence of the event that terminated the
continued membership of such Member in the Company, agree in writing (i) to continue the Company
and (ii) to the admission of the personal representative or its nominee or designee, as the case
may be, as a substitute Member of the Company, effective as of the occurrence of the event that
terminated the continued membership of such Member in the Company.

          (d) Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall
not cause such Member to cease to be a member of the Company and, upon the occurrence of such an
event, the Company shall continue without dissolution.

 - 40 - 

 

     Section 9.2 Winding-Up and Termination.

          (a) On the occurrence of a Dissolution Event, the Board of Directors shall select one or more
Persons to act as liquidator. The liquidator shall proceed diligently to wind up the affairs of the
Company and make final distributions as provided herein and in the Act. The costs of winding up
shall be borne as a Company expense. Until final distribution, the liquidator shall continue to
operate the Company properties with all of the power and authority of the Board of Directors. The
steps to be accomplished by the liquidator are as follows:

     (i) as promptly as possible after dissolution and again after final winding up,
the liquidator shall cause a proper accounting to be made by a recognized firm of
certified public accountants of the Company’s assets, liabilities, and operations
through the last calendar day of the month in which the dissolution occurs or the
final winding up is completed, as applicable;

     (ii) the liquidator shall discharge from Company funds all of the debts,
liabilities and obligations of the Company or otherwise make adequate provision for
payment and discharge thereof (including the establishment of a cash escrow fund for
contingent liabilities in such amount and for such term as the liquidator may
reasonably determine);

     (iii) the liquidator may sell any or all Company property, including to
Members; and

     (iv) all remaining assets of the Company (including cash) shall be distributed
to the Members in accordance with the positive balance in their Capital Accounts
after giving effect to all contributions, distributions, and allocations for all
periods.

          (b) The distribution of cash or property to a Member in accordance with the provisions of this
Section 9.2 constitutes a complete return to the Member of its Capital Contributions and a complete
distribution to the Member of its share of all the Company’s property and constitutes a compromise
to which all Members have consented within the meaning of Section 18-502(b) of the Act. No Member
shall be required to make any Capital Contribution to the Company to enable the Company to make the
distributions described in this Section 9.2.

          (c) On completion of such final distribution, the liquidator shall file a Certificate of
Cancellation with the Secretary of State of the State of Delaware and take such other actions as
may be necessary to terminate the existence of the Company.

     Section 9.3 Compliance With Certain Requirements of Treasury Regulations; Deficit Capital
Accounts. In the event the Company is “liquidated” within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to Section 9.2 to the Members
who have positive Capital Accounts in compliance with Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2). If any Member has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions, and allocations for all Allocation Years, including the
Allocation Year during which such liquidation occurs), such Member shall

 - 41 - 

 

have no obligation to make
any contribution to the capital of the Company with respect to such deficit, and such deficit shall
not be considered a debt owed to the Company or to any other Person for any purpose whatsoever.

     Section 9.4 Deemed Distribution and Recontribution. Notwithstanding any other provision of
this Article IX, in the event the Company is liquidated within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be
liquidated, the Company’s Debts and other Liabilities shall not be paid or
discharged, and the Company’s affairs shall not be wound up. Instead, solely for federal
income tax purposes, the Company shall be deemed to have contributed all its Property and
Liabilities to a new limited liability company in exchange for an interest in such new company and,
immediately thereafter, the Company will be deemed to liquidate by distributing interests in the
new company to the Members.

     Section 9.5 Allocations and Distributions During Period of Liquidation. During the period
commencing on the first day of the Taxable Year during which a Dissolution Event occurs and ending
on the date on which all of the assets of the Company have been distributed to the Members pursuant
to Section 9.2, the Members shall continue to share Profits, Losses and other items of Company
income, gain, loss, or deduction in the manner provided in Article V but no distributions shall be
made pursuant to Section 5.8 after the day on which the Dissolution Event occurs.

     Section 9.6 Character of Liquidating Distributions. All payments made in liquidation of the
Membership Interest of a Member in the Company shall be made in exchange for the Membership
Interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including the
interest of such Member in Company goodwill.

ARTICLE X

MERGER, CONSOLIDATION OR CONVERSION

     Section 10.1 Authority. Subject to Section 6.1, the Company may merge, consolidate with or
convert to one or more corporations, limited liability companies, statutory trusts or associations,
real estate investment trusts, common law trusts or unincorporated businesses, including a
partnership (whether general or limited (including a limited liability partnership)) or convert
into any such entity, whether such entity is formed under the laws of the State of Delaware or any
other state of the United States of America, pursuant to a written agreement of merger or
consolidation (“Merger Agreement”) or a written plan of conversion (“Plan of Conversion”), as the
case may be, in accordance with this Article X.

     Section 10.2 Procedure for Merger, Consolidation or Conversion.

          (a) Merger, consolidation or conversion of the Company pursuant to this Article X requires the
prior consent of the Board of Directors. Upon such approval, the Merger Agreement shall set forth:

     (i) The names and jurisdictions of formation or organization of each of the
business entities proposing to merge, consolidate or convert;

 - 42 - 

 

     (ii) The name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (“Surviving Business
Entity”);

     (iii) The terms and conditions of the proposed merger or consolidation;

     (iv) The manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or general
or limited partnership or limited liability company interests, rights,
securities or obligations of the Surviving Business Entity; and (i) if any general
or limited partnership or limited liability company interests, rights, securities or
obligations of any constituent business entity are not to be exchanged or converted
solely for, or into, cash, property or general or limited partnership or limited
liability company interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partnership or limited
liability company interests, rights, securities or obligations of any general or
limited partnership, limited liability company, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such interests,
rights, securities or obligations of the constituent business entity are to receive
in exchange for, or upon conversion of, their interests, rights, securities or
obligations and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partnership or limited liability company interests, rights, securities or
obligations of the Surviving Business Entity or any general or limited partnership,
limited liability company, corporation, trust or other entity (other than the
Surviving Business Entity), or evidences thereof, are to be delivered;

     (v) A statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation, articles of
trust, declaration of trust, certificate or agreement of limited partnership or
limited liability company or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;

     (vi) The effective time of the merger or consolidation, which may be the date
of the filing of the certificate of merger pursuant to Section 10.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided, that
if the effective time of the merger or consolidation is to be later than the date of
the filing of the certificate of merger or consolidation, the effective time shall
be fixed no later than the time of the filing of the certificate of merger or
consolidation and stated therein); and

     (vii) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the Board of Directors.

     (viii) If the Board of Directors shall determine to consent to the conversion,
the Board of Directors may approve and adopt a Plan of Conversion

 - 43 - 

 

containing such
terms and conditions that the Board of Directors determines to be necessary or
appropriate.

     Section 10.3 Approval by Members of Merger or Consolidation.

          (a) Except as provided in Section 10.3(d), the Board of Directors, upon its approval of the
Merger Agreement or Plan of Conversion, as the case may be, shall direct that the Merger Agreement
or the Plan of Conversion, as applicable, be submitted to a vote of the Members, whether at a
special meeting or by written consent, in either case in accordance with
the requirements of Section 3.5. A copy or a summary of the Merger Agreement or the Plan of
Conversion, as applicable, shall be included in or enclosed with the notice of a special meeting or
the written consent.

          (b) Except as provided in Section 10.3(d), the Merger Agreement or the Plan of Conversion, as
applicable, shall be approved upon receiving the affirmative vote or consent of the Super-Majority
Interest.

          (c) Except as provided in Section 10.3(d), after such approval by vote or consent of the
Members, and at any time prior to the filing of the certificate of merger or a certificate of
conversion pursuant to Section 10.4, the merger, consolidation or conversion may be abandoned
pursuant to provisions therefor, if any, set forth in the Merger Agreement or the Plan of
Conversion, as the case may be.

          (d) Notwithstanding anything else contained in this Article X or in this Agreement, the Board
of Directors is permitted without Member approval, to convert the Company into a new limited
liability entity, to merge the Company into, or convey all of the Company’s assets to, another
limited liability entity which shall be newly formed and shall have no assets, liabilities or
operations at the time of such conversion, merger or conveyance other than those it receives from
the Company if (i) the Board of Directors has received an Opinion of Counsel that the merger or
conveyance, as the case may be, would not result in the loss of the limited liability of any Member
or cause the Company or ETE to be treated as an association taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes (to the extent not previously treated as
such), (ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in
the legal form of the Company into another limited liability entity and (iii) the governing
instruments of the new entity provide the Members and the Board of Directors with the same rights
and obligations as are herein contained.

          (e) Additionally, notwithstanding anything else contained in this Article X or in this
Agreement, the Board of Directors is permitted, without Member approval, to merge, consolidate or
convert the Company with or into another entity if (A) the Board of Directors has received an
Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the
loss of the limited liability of any Member or cause the Company to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to
the extent not previously treated as such), (B) the merger or consolidation would not result in an
amendment to this Agreement, other than any amendments that could be adopted pursuant to Section
13.4, (C) the Company is the Surviving Business Entity in such merger or consolidation and (D) the
Membership Interests outstanding immediately prior to the effective

 - 44 - 

 

date of the merger or
consolidation are to be identical Membership Interests of the Company after the effective date of
the merger or consolidation.

     Section 10.4 Certificate of Merger or Conversion.

          (a) Upon the required approval, if any, by the Board of Directors and the Members of a Merger
Agreement or a Plan of Conversion, as the case may be, a certificate of merger or certificate of
conversion, as applicable, shall be executed and filed with the Secretary of State of the State of
Delaware in conformity with the requirements of the Delaware Act.

          (b) At the effective time of the certificate of merger:

     (i) all of the rights, privileges and powers of each of the business entities
that has merged or consolidated, and all property, real, personal and mixed, and all
debts due to any of those business entities and all other things and causes of
action belonging to each of those business entities, shall be vested in the
Surviving Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of each
constituent business entity;

     (ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired
because of the merger or consolidation;

     (iii) all rights of creditors and all liens on or security interests in
property of any of those constituent business entities shall be preserved
unimpaired; and

     (iv) all debts, liabilities and duties of those constituent business entities
shall attach to the Surviving Business Entity and may be enforced against it to the
same extent as if the debts, liabilities and duties had been incurred or contracted
by it.

          (c) At the effective time of the certificate of conversion:

     (i) the Company shall continue to exist, without interruption, but in the
organizational form of the converted entity rather than in its prior organizational
form;

     (ii) all rights, title, and interests to all real estate and other property
owned by the Company shall continue to be owned by the converted entity in its new
organizational form without reversion or impairment, without further act or deed,
and without any transfer or assignment having occurred, but subject to any existing
liens or other encumbrances thereon;

     (iii) all liabilities and obligations of the Company shall continue to be
liabilities and obligations of the converted entity in its new organizational form
without impairment or diminution by reason of the conversion;

 - 45 - 

 

     (iv) all rights of creditors or other parties with respect to or against the
prior interest holders or other owners of the Company in their capacities as such in
existence as of the effective time of the conversion will continue in existence as
to those liabilities and obligations and may be pursued by such creditors and
obligees as if the conversion did not occur;

     (v) a proceeding pending by or against the Company or by or against any of
Members in their capacities as such may be continued by or against the
converted entity in its new organizational form and by or against the prior
members without any need for substitution of parties; and

     (vi) the Membership Interests that are to be converted into partnership
interests, shares, evidences of ownership, or other securities in the converted
entity as provided in the Plan of Conversion or certificate of conversion shall be
so converted, and Members shall be entitled only to the rights provided in the Plan
of Conversion or certificate of conversion.

A merger, consolidation or conversion effected pursuant to this Article shall not be deemed to
result in a transfer or assignment of assets or liabilities from one entity to another.

ARTICLE XI

TRANSFERS

     Section 11.1 Restriction on Transfers. Except as otherwise permitted by this Agreement, no
Member shall Transfer all or any portion of its Membership Interest; provided, however, that a
Member may pledge or otherwise encumber all or any part of its Membership Interest as security for
the payment of a debt, subject to any such pledge or hypothecation being made pursuant to a pledge
or hypothecation agreement that requires the pledgee or secured party to be bound by all of the
terms and conditions of this Article XI.

     Section 11.2 Permitted Transfers. Subject to the conditions and restrictions set forth in
Section 11.3, a Member may at any time Transfer all or any portion of its Membership Interest to
(a) any Wholly Owned Affiliate of the transferor, (b) the transferor’s administrator or trustee to
whom such Membership Interest is transferred involuntarily by operation of law, or (c) any
Purchaser in accordance with Section 12.2 (any such Transfer being referred to in this Agreement as
a “Permitted Transfer”).

     Section 11.3 Conditions to Permitted Transfers. A Transfer shall not be treated as a
Permitted Transfer under Section 11.2 hereof unless and until the following conditions are
satisfied:

          (a) The transferor and transferee shall execute and deliver to the Company such documents and
instruments of conveyance as may be necessary or appropriate to effectuate such Transfer and to
confirm the agreement of the transferee to be bound by the provisions of this Agreement.

          (b) Such Transfer will be exempt from all applicable registration requirements and will not
violate any applicable laws regulating the Transfer of securities, and, except in the

 - 46 - 

 

case of a
Transfer of a Membership Interest to another Member or to a Wholly Owned Affiliate of any Member,
including the transferor, the transferor shall provide an opinion of nationally recognized counsel
to such effect.

          (c) Such Transfer will not cause the Company to be deemed to be an “investment company” under
the Investment Company Act of 1940, as amended and the transferor shall provide an opinion of
nationally recognized counsel to such effect. The
Company and the other Members shall provide to such counsel any information available to the
Company or to such other Members, as the case may be, and relevant to such opinion.

          (d) No notice or request initiating the procedures contemplated by Article XII may be given by
any Member, while any notice, purchase or Transfer is pending under Article XII, as the case may
be, or after a Dissolution Event has occurred. No Member may sell any portion of its Membership
Interest pursuant to Article XII during any period that, as provided above, it may not give the
notice initiating the procedures contemplated by such Article or thereafter until it has given such
notice and otherwise complied with the provisions of such Article.

     Section 11.4 Prohibited Transfers.

          (a) Any purported Transfer of a Membership Interest that is not a Permitted Transfer shall, to
the fullest extent permitted by law, be null and void and of no force or effect whatever; provided
that, if the Company is required to recognize a Transfer that is not a Permitted Transfer, the
rights with respect to the Transferred Membership Interest shall be strictly limited to the
transferor’s rights to allocations and distributions as provided by this Agreement with respect to
the Transferred Membership Interest, which allocations and distributions may be applied (without
limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or
Liabilities for damages that the transferor or transferee of such Membership Interest may have to
the Company.

          (b) In the case of a Transfer or attempted Transfer of a Membership Interest that is not a
Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable
to indemnify and hold harmless the Company and the other Members from all Liability and damages
that the Company or any of such indemnified Members may incur (including incremental tax
liabilities, lawyers’ fees and expenses) as a result of such Transfer or attempted Transfer and
efforts to enforce the indemnity granted hereby.

     Section 11.5 Rights of Unadmitted Assignees. A Person who acquires a Membership Interest but
who is not admitted as a substituted Member pursuant to Section 11.6 shall be entitled only to
allocations and distributions with respect to such Membership Interest in accordance with this
Agreement, and, to the fullest extent permitted by law, shall have no right to any information or
accounting of the affairs of the Company, shall not be entitled to inspect the books or records of
the Company, and shall not have any of the rights of a Member under the Act or this Agreement.

     Section 11.6 Admission of Substituted Members. Subject to the other provisions of this
Article XI, a transferee of a Membership Interest may be admitted to the

 - 47 - 

 

Company as a substituted
Member only upon satisfaction of the conditions set forth in this Section 11.6:

          (a) The Membership Interest with respect to which the transferee is being admitted was
acquired by means of a Permitted Transfer;

          (b) The transferee of a Membership Interest (other than, with respect to clauses (i) and (ii)
below, a transferee that was a Member prior to the Transfer) shall, by written
instrument, (i) accept and adopt the terms and provisions of this Agreement, including this
Article XI and Article XII, and (ii) assume the obligations of the transferor Member under this
Agreement with respect to the Transferred Membership Interest. The transferor Member shall be
released from all such assumed obligations except (x) those obligations or Liabilities of the
transferor Member arising out of a breach of this Agreement by the transferor Member and (y) in the
case of a Transfer to any Person other than a Member, those obligations or Liabilities of the
transferor Member based on events occurring, arising, or maturing prior to the date of Transfer;
and

          (c) The transferee and transferor shall each execute and deliver such other instruments as the
Members acting with the approval of a Two-Thirds Interest reasonably deem necessary or appropriate
to effect, and as a condition to, such Transfer, including amendments to the Certificate or any
other instrument filed with the State of Delaware or any other state or Governmental Authority.

     Section 11.7 Distributions and Allocations in Respect of Transferred Member Interests. If any
Membership Interest is Transferred during any Allocation Year in compliance with the provisions of
this Article XI, Profits, Losses, each item thereof, and all other items attributable to the
Transferred Membership Interest for such Allocation Year shall be divided and allocated between the
transferor and the transferee by taking into account their varying Membership Interests during the
Taxable Year in accordance with Code Section 706(d), using any conventions permitted by law and
agreed to by the transferor and transferee. All distributions on or before the date of such
Transfer shall be made to the transferor, and all distributions thereafter shall be made to the
transferee. Solely for purposes of making such allocations and distributions, the Company shall
recognize such Transfer not later than the end of the calendar month during which it is given
notice of such Transfer; provided that, if the Company is given notice of a Transfer at least ten
(10) Business Days prior to the Transfer, the Company shall recognize such Transfer as of the date
of such Transfer; and provided, further that if the Company does not receive a notice stating the
date such Membership Interest was Transferred and such other information as the Members may
reasonably require within thirty (30) days after the end of the Allocation Year during which the
Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to
the Person who, according to the books and records of the Company, was the owner of the Membership
Interest on the last day of such Allocation Year. To the fullest extent permitted by law, neither
the Company nor the Members shall incur any Liability for making allocations and distributions in
accordance with the provisions of this Section 11.7, whether or not any of the Members or the
Company has knowledge of any Transfer of ownership of any Membership Interest.

 - 48 - 

 

ARTICLE XII

PREEMPTIVE RIGHTS

     Section 12.1 Rights to Participate in Issuance of Additional Membership Interests. If any
additional Membership Interests are issued in accordance with Section 3.2, each Member shall have
the right to acquire any such additional Membership Interests issued by the Company pro rata in
accordance with such Member’s Sharing Ratio.

     Section 12.2 Rights of First Refusal. In addition to the other limitations and restrictions
set forth in Article XI, (i) no Member shall Transfer, other than (A) pursuant to a Permitted
Transfer pursuant to Section 11.2(a) or (b), or (B) pursuant to Section 12.3, all or any portion of
its Equity Units and (ii) Davis, Warren, NGP or EPE shall not transfer an interest in any Wholly
Owned Affiliate that owns Equity Units and has been admitted as a Member, unless such Member (the
“Seller”) first offers to sell the Equity Units described in clauses (i) or (ii), as the case may
be (the “Offered Units”), pursuant to the terms of this Section 12.2.

          (a) Limitation on Transfers. No Transfer may be made under this Section 12.2 unless the Seller
has received a bona fide written offer (the “Purchase Offer”) from a Person (the “Purchaser”) to
purchase, directly or indirectly, the Offered Units for a purchase price (the “Offer Price”)
denominated and payable in United States dollars at closing or according to specified terms, with
or without interest, which offer shall be in writing signed by the Purchaser and shall be
irrevocable for a period ending no sooner than the Business Day following the end of the Offer
Period, as hereinafter defined.

          (b) Offer Notice. Prior to making any Transfer that is subject to the terms of this Section
12.2, the Seller shall give to the Company and each other Member written notice (the “Offer
Notice”) that shall include a copy of the Purchase Offer and an offer (the “Firm Offer”) to sell
the Offered Units to the other Members (the “Offerees”) for the Offer Price, payable according to
the same terms as (or more favorable terms than) those contained in the Purchase Offer, provided
that the Firm Offer shall be made without regard to the requirement of any earnest money or similar
deposit required of the Purchaser prior to closing, and without regard to any security (other than
the Offered Units) to be provided by the Purchaser for any deferred portion of the Offer Price.

          (c) Offer Period. The Firm Offer shall be irrevocable for a period (the “Offer Period”) ending
at 11:59 p.m., local time at the Company’s principal place of business, on the ninetieth
(90th) day following the day of the Offer Notice.

          (d) Acceptance of Firm Offer. At any time during the Offer Period, any Offeree may accept the
Firm Offer as to all or any portion of the Offered Units, by giving written notice of such
acceptance to the Seller and each other Offeree, which notice shall indicate the maximum number of
Equity Units that such Offeree is willing to purchase, such number not to exceed the product of (i)
a fraction, the numerator of which is the Sharing Ratio of such Offeree, and the denominator of
which is the aggregate Sharing Ratios of all of the Offerees, multiplied by (ii) the number of
Offered Units. If at the end of the Offer Period, the Offerees accepting the initial Firm Offer
(the “Accepting Offerees”), in the aggregate, accept the Firm Offer with respect to less than all
of the Offered Units, such remaining portion of the Offered Units shall be

 - 49 - 

 

offered to the Accepting
Offerees for an additional 30-day period. If there are two or more Accepting Offerees who accept
this second offer and they desire to acquire in the aggregate a total number of Offered Units in
excess of the remaining portion available, then the remaining portion of the Offered Units shall be
allocated to such Accepting Offerees pro rata based on the number of Offered Units such Accepting
Offerees elected to purchase in the initial Firm Offer, or in such manner as otherwise agreed to
among the Accepting Offerees. Offerees do not accept the Firm Offer as to all of the Offered Units
during the Offer Period, including such additional 30-day period, then the Firm Offer shall be
deemed to be rejected.

          (e) Closing of Purchase Pursuant to Firm Offer. In the event that the Firm Offer is accepted,
the closing of the sale of the Offered Units shall take place within thirty (30) days after the
Firm Offer is accepted or, if later, the date of closing set forth in the Purchase Offer. The
Seller and all Accepting Offerees shall execute such documents and instruments as may be necessary
or appropriate to effect the sale of the Offered Units pursuant to the terms of the Firm Offer,
Article XI and this Article XII.

          (f) Sale Pursuant to Purchase Offer if Firm Offer Rejected. If the Firm Offer is not accepted
in the manner hereinabove provided, the Seller may sell the Offered Units to the Purchaser at any
time within sixty (60) days after the last day of the Offer Period, provided that such sale shall
be made on terms no more favorable to the Purchaser than the terms contained in the Purchase Offer
and, provided, further, that such sale complies with other terms, conditions, and restrictions of
this Agreement that are not expressly made inapplicable to sales occurring under this Section 12.2.
In the event that the Offered Units are not sold in accordance with the terms of the preceding
sentence, the Offered Units shall again become subject to all of the conditions and restrictions of
this Section 12.2.

     Section 12.3 Rights to Compel Participation in Certain Transfers.

          (a) If any Members with an aggregate Sharing Ratio of 80% or more propose to Transfer Equity
Units to a Third Party in a bona fide sale representing at least 80% of the Equity Units held by
all Members (a “Compelled Sale”), such Members may at their option require all Members to Transfer
their Drag-Along Portion for the same consideration per Equity Unit and otherwise on the same terms
and conditions. The Members proposing such Transfer shall provide written notice of such Compelled
Sale to the other Members (a “Compelled Sale Notice”) at least thirty (30) days prior to the
proposed Closing of Compelled Sale. The Compelled Sale Notice shall identify the transferee, the
number of Equity Units subject to the Compelled Sale, the consideration for which a Transfer is
proposed to be made (the “Compelled Sale Price”), the Drag-Along Portion of such other Member and
all other material terms and conditions of the Compelled Sale. The number of Equity Units to be
sold by each other Member will be the Drag-Along Portion of the Equity Units that such other Member
owns. Each other Member shall be required to participate in the Compelled Sale on the terms and
conditions set forth in the Compelled Sale Notice and to tender the Drag-Along Portion of its
Equity Units as set forth below. The price payable in such Transfer shall be the Compelled Sale
Price. Not later than the fifteenth (15th) day following the date of the Compelled Sale
Notice (the “Compelled Sale Notice Period”), each of the other Members shall execute and deliver to
the Company such documents and instruments of conveyance as may be necessary or appropriate to
effectuate such Transfer. If any other Member should fail to deliver such documents and
instruments to the

 - 50 - 

 

Company, the Company (subject to reversal under Section 12.3(b)) shall cause the
books and records of the Company to show that such Equity Units are bound by the provisions of this
Section 12.3(a) and that such Equity Units shall be Transferred to the third party immediately upon
surrender for Transfer by the holder thereof.

          (b) The Members proposing the Compelled Sale shall have a period of one hundred twenty (120)
days from the date of the Compelled Sale Notice to consummate the Compelled Sale on the terms and
conditions set forth in such Compelled Sale Notice, provided that, if such Compelled Sale is
subject to regulatory approval, such 120-day period shall be
extended until the earlier of (x) one hundred fifty (150) days from the date of the Compelled
Sale Notice and (y) the expiration of five Business Days after all such approvals have been
received. If the Compelled Sale shall not have been consummated during such period, the Company
immediately shall return to each of the other Members any documents in the possession of Company
executed by the other Members in connection with such proposed Compelled Sale, and all the
restrictions on Transfer contained in this Agreement or otherwise applicable at such time with
respect to such Equity Units owned by the other Members shall again be in effect.

          (c) The provisions of this Section 12.3 shall not apply to any proposed Transfer of any Equity
Units by a Member pursuant to Section 12.4.

     Section 12.4 Rights to Participate in Transfer.

          (a) If, after compliance with Section 12.2, any Members propose to Transfer Equity Units held
by such Members to a Third Party in a bona fide sale representing at least fifty percent (50%) of
the Equity Units held by all Members (a “Tag-Along Sale”), then each Member may elect at its
option, to transfer its Tag-Along Portion in the manner provided in this Section 12.4. In the
event of such a proposed Transfer, the prospective selling Members shall provide each other Member
written notice of the terms and conditions of such proposed transfer (“Tag-Along Notice”) and offer
each other Member the opportunity to participate in such sale. The Tag-Along Notice shall identify
the number of Equity Units subject to the offer (the “Tag-Along Offer”), and the Tag-Along Portion
of such other Member assuming that all other Members exercise their Tag-Along Rights, the
consideration at which the Transfer is proposed to be made and all other material terms and
conditions including copies of definitive agreements of the Tag-Along Offer, including the form of
the proposed agreement, if any.

          (b) From the date of the receipt of the Tag-Along Notice, each other Member shall have the
right (a “Tag-Along Right”), exercisable by written notice (“Tag-Along Response Notice”) given to
the prospective selling Members within ten (10) Business Days of its receipt of the Tag-Along
Notice (the “Tag-Along Notice Period”), to request that the prospective selling Members include in
the proposed Transfer the number of Equity Units held by such other Member (each such other Member
a “Tagging Person”) not to exceed such other Member’s Tag-Along Portion as is specified in such
Tag-Along Response Notice. Each Tagging Person may include in the Tag-Along Sale all or any
portion of such Tagging Person’s Tag-Along Portion of Equity Units. Delivery of
the Tag-Along
Response Notice shall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging
Persons. Each Tag-Along Response Notice shall include wire transfer instructions for payment or
delivery of

 - 51 - 

 

the consideration for the Equity Units to be sold in such Tag-Along Sale. Each Tagging
Person that exercises its Tag-Along Rights hereunder shall deliver to the Company, no later than
three (3) Business Days prior to the closing of the Tag-Along Sale, such documents and instruments
of conveyance as may be necessary or appropriate to effectuate such Transfer.

          (c) If, at the end of a 120-day period after the expiration of the Tag-Along Notice Period
(which 120-day period shall be extended if any of the transactions contemplated by the Tag-Along
Offer are subject to regulatory approval until the earlier of (x) one hundred fifty (150) days
after the expiration of Tag-Along Notice Period and (y) the expiration of five
(5) Business Days after all such approvals have been received), the prospective selling
Members have not completed the Transfer of all such Equity Units on the same terms and conditions
set forth in the Tag-Along Notice, the Company immediately shall return to each of the other
Members any documents in the possession of the Company executed by the other Members in connection
with such proposed Tag-Along Sale, and all the restrictions on Transfer contained in this Agreement
or otherwise applicable at such time with respect to such Equity Units owned by the other Members
shall again be in effect.

          (d) If, at the termination of the Tag-Along Notice Period, any Member shall not have elected
to participate in the Tag-Along Sale, such Member will be deemed to have waived any and all of its
rights under this Section 12.4 with respect to the Transfer of its securities pursuant to such
Tag-Along Sale.

     Section 12.5 Purchase Option.

          (a) Upon the occurrence of a Trigger Event by any Member (the “Subject Member”), the Subject
Member shall offer to sell to each other Member a number of Equity Units (the “Offered Amount”)
equal to:

     (i) (A) the aggregate number of Common Units sold, transferred or disposed of
after the date hereof through and including the date of the Trigger Event, divided
by the Trigger Amount; multiplied by (B) 10% of the total amount of Equity Units
held by the Member on the date hereof; minus

     (ii) the total number of Equity Units previously sold by the Subject Member
pursuant to the provisions of this Section 12.5 or otherwise.

In the event the Offered Amount is zero, the Subject Member shall not extend any offer to the other
Members, and the other Members shall have no right to purchase any Equity Units from the Subject
Member pursuant to this Section 12.5 until the occurrence of a subsequent Trigger Event.

          (b) The purchase price of each Equity Unit offered and sold pursuant to this Section 12.5
shall be equal to (i) the value of the interests in ETE held by the Company at such time divided by
(ii) the aggregate number of Equity Units outstanding at such time (the “Purchase Option Price”).
For purposes of this Section 12.5, the general partner interest in ETE held by the Company shall be
valued based on its equivalent Common Units and such equivalent Common Units and the other Common
Units held by the Company shall be valued based on the average of the reported closing prices of
Common Units on the principal stock

 - 52 - 

 

exchange on which the Common Units are then traded on each
trading day during the 10 trading day period ending immediately prior to the date of the
determination.

          (c) Immediately upon the occurrence of a Trigger Event, the Subject Member shall give the
other Members written notice (the “Purchase Option Notice”) that shall include the Offered Amount
and the Purchase Option Price. Each other Member shall have the right to exercise its Purchase
Option and acquire its Purchase Option Portion of the Offered Amount of Equity Units pursuant to
the terms of the Purchase Option Notice for a period of thirty (30) days (the “Purchase Option
Notice Period”). If, at the termination of the Purchase Option Notice
Period, any Member shall not have elected to exercise its rights under this Section 12.5, such
Member will be deemed to have waived any and all of its rights under this Section 12.5 and such
portion of the Purchasable Units not purchased by such Member shall be offered to the other Members
pursuant to the terms set forth in this Section 12.5(c) for an additional thirty (30) day period.

     Section 12.6 Put Right.

          (a) At any time during the twelve-month period following the date on which Warren holds Equity
Units representing less than twenty percent (20%) of the Equity Units held by all Members or is no
longer a Member, Davis shall have the right to cause the Company to purchase all of his Equity
Units for the purchase price set forth in Section 12.6(c).

          (b) If (i) a Member has sold all of the Common Units owned, directly or indirectly, by such
Member, (ii) the Purchase Option Notice Period and the additional 30-day period set forth in
Section 12.5(b) has expired, and (iii) such Member continues to hold Equity Units, then at any time
during the twelve-month period following the expiration of the 30-day period set forth in Section
12.5(b), such Member shall have the right to cause the Company to purchase all of its Equity Units
for the purchase price set forth in Section 12.6(c).

          (c) The purchase price of each Equity Unit offered and sold pursuant to this Section 12.6
shall be equal to (i) the value of the interests in ETE held by the Company at such time divided by
(ii) the aggregate number of Equity Units outstanding at such time. For purposes of this Section
12.6, the general partner interest in ETE held by the Company shall be valued based on its
equivalent Common Units and such equivalent Common Units and the other Common Units held by the
Company shall be valued based on the average of the reported closing sale prices of Common Units on
the principal stock exchange on which the Common Units are then traded on each trading day during
the 10 trading-day period ending immediately prior to the date of the determination.

          (d) The Company shall be required to purchase all of the Equity Units held by a Member
exercising its rights under this Section 12.6 for cash within sixty (60) days of deliver by such
Member to the Company of written notice that such Member is exercising such rights. The Members
hereby agree that the Company may require the other Members to make additional Capital
Contributions to the Company in amount not to exceed the purchase price of the Equity Units sold
pursuant to this Section 12.6.

 - 53 - 

 

ARTICLE XIII

GENERAL PROVISIONS

     Section 13.1 Notices. Except as expressly set forth to the contrary in this Agreement, all
notices, requests or consents provided for or permitted to be given under this Agreement must be in
writing and must be delivered to the recipient in person, by courier or mail or by facsimile or
other electronic transmission and a notice, request or consent given under this Agreement is
effective on receipt by the Person to receive it; provided, however, that a facsimile or other
electronic transmission that is transmitted after the normal business hours of the recipient shall
be deemed effective on the next Business Day. All notices, requests and consents to be sent to a
Member must be sent to or made at the addresses given for that Member as that Member may
specify by notice to the other Members. Any notice, request or consent to the Company must be given
to all of the Members. Whenever any notice is required to be given by Applicable Law, the
Organizational Certificate or this Agreement, a written waiver thereof, signed by the Person
entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Whenever any notice is required to be given by Law, the Organizational
Certificate or this Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such
notice.

     Section 13.2 Entire Agreement; Supersedure. This Agreement constitutes the entire agreement of
the Members and their respective Affiliates relating to the subject matter hereof and supersedes
all prior contracts or agreements with respect to such subject matter, whether oral or written.

     Section 13.3 Effect of Waiver or Consent. Except as provided in this Agreement, a waiver or
consent, express or implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or waiver to or of any
other breach or default in the performance by that Person of the same or any other obligations of
that Person with respect to the Company. Except as provided in this Agreement, failure on the part
of a Person to complain of any act of any Person or to declare any Person in default with respect
to the Company, irrespective of how long that failure continues, does not constitute a waiver by
that Person of its rights with respect to that default until the applicable statute-of-limitations
period has run.

     Section 13.4 Amendment or Restatement. This Agreement may be amended or restated only by a
written instrument executed by all Members; provided, however, that notwithstanding anything to the
contrary contained in this Agreement, each Member agrees that the Board of Directors, without the
approval of any Member, may amend any provision of the Certificate of Formation and this Agreement,
and may authorize any Officer to execute, swear to, acknowledge, deliver, file and record any such
amendment and whatever documents may be required in connection therewith, to reflect any change
that does not require consent or approval (or for which such consent or approval has been obtained)
under this Agreement or does not materially adversely affect the rights of the Members; provided,
further, that any amendment to Section 2.4 of this Agreement shall be deemed to materially affect
the Members.

 - 54 - 

 

     Section 13.5 Binding Effect. This Agreement is binding on and shall inure to the benefit of
the Members and their respective heirs, legal representatives, successors and assigns.

     Section 13.6 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR
PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION. In the event of a direct conflict between the provisions of this Agreement
and (a) any provision of the Organizational Certificate, or (b) any mandatory, non-waivable
provision of the Act, such provision of the Organizational Certificate or the Act shall control. If
any provision of the Act provides that it may be varied or superseded
in the limited liability company agreement (or otherwise by agreement of the members or
managers of a limited liability company), such provision shall be deemed superseded and waived in
its entirety if this Agreement contains a provision addressing the same issue or subject matter. If
any provision of this Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any extent, (a) the remainder of this Agreement and the application of
that provision to other Persons or circumstances is not affected thereby and that provision shall
be enforced to the greatest extent permitted by Law, and (b) the Members or Directors (as the case
may be) shall negotiate in good faith to replace that provision with a new provision that is valid
and enforceable and that puts the Members in substantially the same economic, business and legal
position as they would have been in if the original provision had been valid and enforceable.

     Section 13.7 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Member shall execute and deliver any additional documents and instruments
and perform any additional acts that may be necessary or appropriate to effectuate and perform the
provisions of this Agreement and those transactions.

     Section 13.8 Offset. Whenever the Company is to pay any sum to any Member, any amounts that a
Member owes the Company may be deducted from that sum before payment.

     Section 13.9 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signing parties had signed the same document. All counterparts shall be
construed together and constitute the same instrument.

[Signature page follows.]

 - 55 - 

 

     IN WITNESS WHEREOF, the Members have executed this Agreement as of the date first set forth
above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	LE GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John W. McReynolds	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	MEMBERS:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Ray C. Davis	 	 
	 	 	 	 	 
	 	 	RAY C. DAVIS	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kelcy L. Warren	 	 
	 	 	 	 	 
	 	 	KELCY L. WARREN	 	 
	 
	 	 	 	 	 	 
	 	 	NATURAL GAS PARTNERS VI, L.P.	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	G.F.W. Energy VI, L.P.,	 	 
	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	GFW VI, L.L.C.,	 	 
	 	 	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Kenneth Hersh	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	An Authorized Member	 	 

	 	 	 	 	 	 	 
	 	 	ENTERPRISE GP HOLDINGS L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael A. Creel	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael A. Creel, CEO	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	LE GP-TAX, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kelcy L. Warren	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Kelcy L. Warren	 	 
	 

	 	Title:
	 	Sole Member	 	 

 - 56 - 

 

EXHIBIT A 

	 	 	 	 	 
	Name and Address of Member:	 	Number of Equity Units:
	Ray C. Davis

2828 Woodside Street

Dallas, Texas 75204

	 	 	174,538	 
	 
	 	 	 	 
	Kelcy L. Warren

2828 Woodside Street

Dallas, Texas 75204

	 	 	375,790	 
	 
	 	 	 	 
	Natural Gas Partners VI, L.P.

125 East John Carpenter Frwy.

Suite 600

Irving, Texas 75062

	 	 	151,370	 
	 
	 	 	 	 
	Enterprise GP Holdings L.P.

1100 Louisiana Street, 18th Floor

Houston, Texas 77002

	 	 	375,790	 
	 
	 	 	 	 
	LE GP-Tax, LLC

2828 Woodside Street

Dallas, Texas 75204

	 	 	-0-	 

 - 57 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]