Document:

exv10w2

 

Exhibit 10.2

FOURTH AMENDMENT

TO

OMNIBUS AGREEMENT

     This Fourth Amendment to Omnibus Agreement (this “Amendment”) is dated as of July 1,
2007 and entered into by and among DCP Midstream, LLC, a Delaware limited liability Company,
formerly known as Duke Energy Field Services, LLC (“DCP Midstream”), DCP Midstream GP, LLC,
a Delaware limited liability company (“DCP GP”), DCP Midstream GP, LP, a Delaware limited
partnership (the “General Partner”), DCP Midstream Partners, LP, a Delaware limited
partnership (the “MLP”), and DCP Midstream Operating, LP (the “OLP”). The
above-named entities are sometimes referred to in this Amendment each as a “Party” and
collectively as the “Parties”.

RECITALS

	 	A.	 	The Parties entered into that certain Omnibus Agreement dated as of December 7,
2005, as amended by that certain First Amendment to Omnibus Agreement dated April 1,
2006, as further amended by that certain Second Amendment to Omnibus Agreement dated
November 1, 2006, and as further amended by that certain Third Amendment to Omnibus
Agreement dated May 9, 2007 (together referred to as the “Omnibus Agreement”)
(capitalized terms used but not defined herein shall have the meaning given thereto in
the Omnibus Agreement).
	 
	 	B.	 	The Parties desire to amend Section 3.3 of the Omnibus Agreement to adjust the
fixed general and administrative expenses to take into account the ownership interest
in Discovery Producer Services LLC acquired by the MLP in the transaction set forth in
that certain Contribution Agreement among DCP LP Holdings, LP, DCP Midstream, the
General Partner and the MLP dated as of May 23, 2007 (the “Discovery Contribution
Agreement”).

     FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledge, the Parties hereby agree as follows:

	 	1.	 	Omnibus Agreement Amendment. The Omnibus Agreement is hereby amended by
replacing Section 3.3(a) in its entirety with the following:
	 
	 	 	 	“The amount for which DEFS shall be entitled to reimbursement from the Partnership
Group pursuant to Section 3.1(b) for general and administrative expenses associated
with the original assets that were part of the MLP’s initial public offering shall
be a fixed fee equal to $4.8 million through calendar year 2006 (the “IPO G&A
Expenses Limit”). After calendar year 2006, the IPO G&A Expenses Limit shall be
increased annually by the percentage increase in the Consumer Price Index – All
Urban Consumers, U.S. City Average, Not Seasonally Adjusted for the applicable year
(the “CPI Adjustment”). The amount for which DEFS shall be entitled to
reimbursement from the Partnership Group pursuant to
Section 3.1(b) for general and administrative expenses associated with the
contribution of the GSR assets to the MLP in the Contribution Agreement shall be a

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	 	 	 	fixed fee equal to $2.0 million for calendar years 2006 and 2007 (the “GSR G&A
Expenses Limit”), but shall be prorated for calendar year 2006 based on the number
of days remaining in calendar year 2006 following the Closing Date (as that term is
defined in the Contribution Agreement). The amount for which DEFS shall be entitled
to reimbursement from the Partnership Group pursuant to Section 3.1(b) for general
and administrative expenses associated with the acquisition of the Anadarko assets
by the MLP in the Anadarko Purchase and Sale Agreement shall be a fixed fee equal to
$200,000 for calendar year 2007 (the “Anadarko G&A Expenses Limit”), but shall be
prorated for calendar year 2007 based on the number of days remaining in calendar
year 2007 following the Closing Date (as that term is defined in the Anadarko
Purchase and Sale Agreement). The amount for which DEFS shall be entitled to
reimbursement from the Partnership Group pursuant to Section 3.1(b) for general and
administrative expenses associated with the acquisition of the Discovery interests
by the MLP in the Discovery Contribution Agreement shall be a fixed fee equal to
$158,000 for calendar year 2007 (the “Discovery G&A Expenses Limit”), but shall be
prorated for calendar year 2007 based on the number of days remaining in calendar
year 2007 following the Closing Date (as that term is defined in the Discovery
Contribution Agreement). After calendar year 2007, the GSR G&A Expenses Limit, the
Anadarko G&A Expenses Limit, and the Discovery G&A Expenses Limit shall be increased
by the CPI Adjustment. In the event that the Partnership Group makes any additional
acquisitions of assets or businesses or the business of the Partnership Group
otherwise expands following the date of this Agreement, then the IPO G&A Expenses
Limit, the GSR G&A Expenses Limit, the Anadarko G&A Expenses Limit and/or the
Discovery G&A Expenses Limit shall be appropriately increased in order to account
for adjustments in the nature and extent of the general and administrative services
by DEFS to the Partnership Group, with any such increase subject to the approval of
both the Special Committee of DCP GP’s Board of Directors and DEFS. For time
periods after calendar year 2008, DEFS and the General Partner will determine the
amount of general and administrative expenses that will be properly allocated to the
Partnership in accordance with the terms of the Partnership Agreement.

	 	2.	 	Acknowledgement. Except as amended hereby, the Omnibus Agreement shall remain
in full force and effect as previously executed, and the Parties hereby ratify the
Omnibus Agreement as amended hereby.
	 
	 	3.	 	Counterparts. This Amendment may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the Parties hereto and
delivered (including by facsimile) to the other Parties.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     EACH OF THE UNDERSIGNED, intending to be legally bound, has caused this Amendment to be duly
executed and delivered to be effective as of the date first above written, regardless of the actual
date of execution of this Amendment.

	 	 	 	 	 	 	 
	 	 	DCP MIDSTREAM, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian S. Frederick
 

	 	 
	 	 	Name: Brian S. Frederick	 	 
	 	 	Title: Vice President, Planning and Corporate

Development	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM GP, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Richards	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michael S. Richards	 	 
	 	 	Title: Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM GP, LP	 	 
	 	 	By: DCP MIDSTREAM GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Richards	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michael S. Richards	 	 
	 	 	Title: Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM PARTNERS, LP	 	 
	 	 	By: DCP MIDSTREAM GP, LP, its general partner	 	 
	 	 	By: DCP MIDSTREAM GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Richards	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michael S. Richards	 	 
	 	 	Title: Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	DCP MIDSTREAM OPERATING, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael S. Richards	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Michael S. Richards	 	 
	 	 	Title: Vice President, General Counsel and Secretary	 	 

3exv10w3

 

Exhibit 10.3

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF DCP EAST TEXAS HOLDINGS, LLC

DATED JULY 1, 2007

BETWEEN

DCP MIDSTREAM, LLC

AND

DCP ASSETS HOLDING, LP

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1	 	 	1	 
	SUBJECT MATTER, DEFINITIONS AND RULES OF CONSTRUCTION	 	 	1	 
	1.1
	 	Subject Matter	 	 	1	 
	1.2
	 	Definitions	 	 	1	 
	1.3
	 	Rules of Construction	 	 	9	 
	1.4
	 	MLP Partnership Agreement	 	 	10	 
	ARTICLE 2	 	 	10	 
	ORGANIZATION AND CONDUCT OF BUSINESS	 	 	10	 
	2.1
	 	Company	 	 	10	 
	2.2
	 	Continuation of Company	 	 	10	 
	2.3
	 	Purpose	 	 	10	 
	2.4
	 	Place of Business	 	 	10	 
	2.5
	 	Term	 	 	10	 
	2.6
	 	Business Opportunities; No Implied Duty	 	 	11	 
	ARTICLE 3	 	 	11	 
	CAPITAL STRUCTURE	 	 	11	 
	3.1
	 	Percentage Interests	 	 	11	 
	3.2
	 	Capital Contributions	 	 	11	 
	3.3
	 	No Voluntary Contributions; Interest	 	 	11	 
	3.4
	 	Capital Accounts	 	 	11	 
	3.5
	 	Return of Capital	 	 	13	 
	ARTICLE 4	 	 	14	 
	ALLOCATIONS AND DISTRIBUTIONS	 	 	14	 
	4.1
	 	Allocations for Capital Account Purposes	 	 	14	 
	4.2
	 	Allocations for Tax Purposes	 	 	16	 
	4.3
	 	Distributions	 	 	18	 
	ARTICLE 5	 	 	18	 
	MANAGEMENT	 	 	18	 
	5.1
	 	The Management Committee	 	 	18	 
	5.2
	 	Composition; Removal and Replacement of Representative	 	 	18	 
	5.3
	 	Officers	 	 	18	 
	5.4
	 	Voting	 	 	18	 
	5.5
	 	Meetings of Management Committee	 	 	19	 
	5.6
	 	Remuneration	 	 	20	 
	5.7
	 	Individual Action by Members	 	 	20	 
	ARTICLE 6	 	 	20	 
	INDEMNIFICATION; LIMITATIONS ON LIABILITY	 	 	20	 
	6.1
	 	Indemnification by the Company	 	 	20	 
	6.2
	 	Indemnification by the Members	 	 	21	 
	6.3
	 	Defense of Action	 	 	21	 
	6.4
	 	Limited Liability of Members	 	 	22	 
	ARTICLE 7	 	 	22	 
	OPERATION OF COMPANY	 	 	22	 
	7.1
	 	Operator	 	 	22	 
	7.2
	 	Expenses	 	 	22	 

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	7.3
	 	Reimbursement for Insurance	 	 	23	 
	7.4
	 	Accounts	 	 	23	 
	ARTICLE 8	 	 	23	 
	TRANSFER OF INTERESTS	 	 	23	 
	8.1
	 	Restrictions on Transfer	 	 	23	 
	8.2
	 	Possible Additional Restrictions on Transfer	 	 	24	 
	8.3
	 	Right of First Offer	 	 	24	 
	8.4
	 	Substituted Members	 	 	25	 
	8.5
	 	Documentation; Validity of Transfer	 	 	26	 
	8.6
	 	Covenant Not to Withdraw or Dissolve	 	 	26	 
	ARTICLE 9	 	 	27	 
	DEFAULT	 	 	27	 
	9.1
	 	Events of Default	 	 	27	 
	9.2
	 	Consequence of a Default	 	 	28	 
	ARTICLE 10	 	 	29	 
	DISSOLUTION AND LIQUIDATION	 	 	29	 
	10.1
	 	Dissolution	 	 	29	 
	10.2
	 	Liquidation	 	 	29	 
	ARTICLE 11	 	 	31	 
	FINANCIAL MATTERS	 	 	31	 
	11.1
	 	Books and Records	 	 	31	 
	11.2
	 	Financial Reports; Budget	 	 	31	 
	11.3
	 	Accounts	 	 	32	 
	11.4
	 	Tax Matters	 	 	32	 
	ARTICLE 12	 	 	33	 
	MISCELLANEOUS	 	 	33	 
	12.1
	 	Notices	 	 	33	 
	12.2
	 	Amendment	 	 	34	 
	12.3
	 	Governing Law	 	 	34	 
	12.4
	 	Binding Effect	 	 	34	 
	12.5
	 	No Third Party Rights	 	 	34	 
	12.6
	 	Counterparts	 	 	35	 
	12.7
	 	Invalidity	 	 	35	 
	12.8
	 	Entire Agreement	 	 	35	 
	12.9
	 	Expenses	 	 	35	 
	12.10
	 	Waiver	 	 	35	 
	12.11
	 	Dispute Resolution	 	 	35	 
	12.12
	 	Disclosure	 	 	38	 
	12.13
	 	Brokers and Finder	 	 	38	 
	12.14
	 	Further Assurances	 	 	38	 
	12.15
	 	Section Headings	 	 	38	 
	12.16
	 	Waiver of Certain Damages	 	 	38	 
	12.17
	 	Certificates of Interest	 	 	39	 

Exhibits

                    None

ii

 

Schedules

     Schedule 3.1    Members’ Percentage Interest

     Schedule 5.4    Unanimous Consent Matters

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF DCP EAST TEXAS HOLDINGS, LLC

     This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”), dated
as of July 1, 2007, by and between DCP MIDSTREAM, LLC (the “Midstream Member”), a Delaware
limited liability company, and DCP ASSETS HOLDING, LP (the “MLP Member”), a Delaware
limited liability company.

ARTICLE 1

SUBJECT MATTER, DEFINITIONS AND RULES OF CONSTRUCTION

     1.1 Subject Matter. This Agreement amends and restates the Limited Liability Company
Agreement of DCP East Texas Holdings, LLC, a Delaware limited liability company (the
“Company”) dated as of March 23, 2007 (the “Initial Agreement”), by the Midstream
Member, as sole member.

     1.2 Definitions. For purposes of this Agreement, including the Schedules hereto, the
meanings herein assigned to them and the capitalized terms defined elsewhere in this Agreement, by
inclusion in quotation marks and parentheses, shall have the meanings so ascribed to them.

     “Adjusted Capital Account” means the Capital Account maintained for each Member as of
the end of each taxable year of the Company, a) increased by any amount that such Member is
obligated to restore under the standards set by Regulations section 1.704-1(b)(2)(ii)(c) or is
deemed obligated to restore pursuant to the penultimate sentences of Regulations sections
1.704-2(g)(1) and 1.704-2(i)(5), and b) decreased by (i) the amount of all losses and deductions
that, as of the end of such taxable year, are reasonably expected to be allocated to such Member in
subsequent years under sections 704(e)(2) and 706(d) of the Code and Regulations section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such taxable
year, are reasonably expected to be made to such Member in subsequent years in accordance with the
terms of this Agreement or otherwise to the extent they exceed offsetting increases to such
Member’s Capital Account that are reasonably expected to occur during (or prior to) the year in
which such distributions are reasonably expected to be made (other than increases as a result of a
minimum chargeback pursuant to Section 4.1(d) or 4.1(e)). The foregoing definition
of Adjusted Capital Account is intended to comply with the provisions of the Regulations section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     “Adjusted Property” means any property of the Company, the Carrying Value of which has
been adjusted pursuant to Section 3.4(d).

     “Affiliate” means with respect to any specified Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common control with

 

 

such specified Person or, in the case of a Person that is a limited partnership, an
“Affiliate” shall include any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the general partner of such limited partnership. For
the purposes of this definition, “control” means the ownership, directly or indirectly, of more
than 50% of the Voting Stock, of such Person; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

     “Agreed Rate” means the lesser of (a) the rate publicly announced by Wachovia Bank,
National Association, New York, New York (or any successor bank) from time to time as its prime
rate, plus one percent (1%) and (b) the maximum rate permitted by applicable law.

     “Agreed Value” of any Contributed Property or Adjusted Property means the fair market
value of such property or other considerations at the time of contribution as determined by the
Company (but only in the absence of a negotiated determination of fair market value between the
Members, in which case such negotiated value shall be accepted as the Agreed Value) using such
reasonable methods of valuation as it may adopt. In the absence of a negotiated value between the
Members (if such negotiated allocation exists, the negotiated allocation will be conclusive), the
Company shall, in its sole discretion, use such method as it deems reasonable and appropriate to
allocate the aggregate Agreed Value of Contributed Properties or Adjusted Property in a single or
integrated transaction among such properties on a basis proportional to their fair market value.

     “Agreement” has the meaning ascribed to such term in the preamble.

     “Arbitral Dispute” means any dispute, claim, counterclaim, demand, cause of action,
controversy and other matters in question arising out of or relating to this Agreement or the
alleged breach hereof, or in any way relating to the subject matter of this Agreement or the
relationship between the Members created by this Agreement, regardless of whether (a) allegedly
extra-contractual in nature, (b) sounding in contract, tort, or otherwise, (c) provided for by
applicable Law or otherwise, or (d) seeking damages or any other relief, whether at Law, in equity,
or otherwise.

     “Available Cash” means, with respect to any Distribution Period ending prior to the
dissolution or liquidation of the Company, and without duplication:

     (a) the sum of (i) all cash and cash equivalents of the Company on hand at the end of
such Distribution Period, determined in the reasonable discretion of the Management
Committee, and (ii) all additional cash and cash equivalents of the Company on hand on the
date of determination of Available Cash with respect to such Distribution Period, less

     (b) the amount of any cash reserves that is necessary or appropriate in the reasonable
discretion of the Management Committee to (i) provide for the proper conduct of the
business of the Company (including reserves for future

2

 

capital expenditures and for anticipated future credit needs of the Company)
subsequent to such Distribution Period or (ii) comply with applicable Law or any loan
agreement, security agreement, mortgage, debt instrument or other agreement or obligation
to which the Company is a party or by which it is bound or its assets are subject;
provided, however, that distributions made by the Company or cash reserves established,
increased or reduced after the end of such Distribution Period but on or before the date of
determination of Available Cash with respect to such Distribution Period shall be deemed to
have been made, established, increased or reduced, for purposes of determining Available
Cash, within such Distribution Period if the Management Committee so determines.

Notwithstanding the foregoing, “Available Cash” with respect to the Distribution Period in
which a liquidation or dissolution of the Company occurs and any subsequent Distribution
Period shall equal zero.

     “Bankruptcy” means (i) the filing of any petition or the commencement of any suit or
proceeding by an individual or entity pursuant to Bankruptcy Law seeking an order for relief,
liquidation, reorganization or protection from creditors, (ii) the entry of an order for relief
against an individual or entity pursuant to Bankruptcy Law, or (iii) the appointment of a receiver,
trustee or custodian for a substantial portion individual’s or entity’s assets or property,
provided such order for relief, liquidation, reorganization or protection from creditors is not
dismissed within sixty (60) days after such appointment of a receiver, trustee or custodian.

     “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or state Law for the
relief of debtors.

     “Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between the Carrying Value
of such Contributed Property or Adjusted Property, and the adjusted basis thereof for federal
income tax purposes as of such date. A Member’s share of the Company’s Book Tax Disparities in all
Contributed Property or Adjusted Property will be reflected by the difference between such Member’s
Capital Account balance as maintained pursuant to Section 3.4 and the hypothetical balance
of such Member’s Capital Account computed as if it had been maintained strictly in accordance with
federal income tax accounting principles. The determination of Book Tax Disparity and a Member’s
share thereof shall be determined consistently with Regulations section 1.704-3(d).

     “Business Day” means any day other than a Saturday, Sunday or other day on which banks
in the State of Colorado are permitted or required to close.

     “Capital Account” means the capital account maintained for each Member for the
purposes of section 704(b) of the Code as described in Section 3.4.

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     “Capital Contribution” means, with respect to any Member, the amount of capital
contributed by such Member to the Company in accordance with Article 3 of this Agreement.

     “Carrying Value” means (a) with respect to Contributed Property, the Agreed Value of
such property reduced (but not below zero) by all depreciation, amortization and cost recovery
deductions relating to such property changed to the Members’ Capital Accounts, and (b) with respect
to any other Company property, the adjusted basis of such property for federal income tax purposes,
all as of the time of determination. The Carrying Value of any property shall be adjusted from
time to time in accordance with Section 3.4(d) and to reflect changes, additions or other
adjustments to the Carrying Value for dispositions and acquisitions of Company properties, as
deemed appropriate by the Company.

     “Certificates” have the meaning ascribed to such term in Section 12.17.

     “Certificate of Formation” means the certificate of formation of the Company, as
amended or restated from time to time, filed in the Office of the Secretary of State of the State
of Delaware in accordance with the Delaware Act.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company” has the meaning ascribed to such term in Section 1.1.

     “Company Assets” means the assets and properties owned, leased or used by the Company
in its business, including without limitation, all of the partnership interests in FCV, ELP and
DETG, which collectively own and operate certain midstream gathering, compression, dehydrating,
processing and fractionating assets located in Panola, Harrison, Shelby, and Rusk Counties, Texas,
and Caddo and DeSoto Parishes, Louisiana.

     “Company Indemnitee” has the meaning ascribed to such term in Section 6.1.

     “Company Minimum Gain” means the amount determined pursuant to Treasury Regulations
section 1.704-2(d).

     “Contributed Property” means each property or other asset, in such form as may be
permitted by the Delaware Act, but excluding cash or cash equivalents, contributed to the Company
by a Member. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section
3.4(d), such property shall no longer constitute a Contributed Property for the purposes of
Section 4.2, but shall be deemed an Adjusted Property for such purposes.

     “Default” has the meaning ascribed to such term in Section 9.1.

     “Defaulting Member” has the meaning ascribed to such term in Section 9.1.

4

 

     “Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. Code §§
18-101, et seq., as amended from time to time.

     “DETG” shall mean DCP East Texas Gathering, LP, a Delaware limited partnership.

     “Distribution Period” means a period equal to a fiscal quarter of the Company or such
shorter portion thereof, as determined from time to time by majority vote of the Management
Committee.

     “Economic Risk of Loss” has the meaning set forth in Regulations section 1.752-2(a).

     “ELP” shall mean EasTrans Limited Partnership, a Texas limited partnership.

     “Equity” means common stock in the case of a corporation, membership interest in the
case of a limited liability company, a partnership interest in the case of a partnership or other
similar interest in the case of another Person.

     “FCV” means Fuels Cotton Valley Gathering, LP, a Delaware limited partnership.

     “Fiscal Year” means (i)the period of time commencing on the effective date of the
Initial Agreement and ending on December 31, 2007, in the case of the first Fiscal Year of the
Company or (ii) in the case of subsequent Fiscal Years of the Company, any subsequent twelve (12)
month period commencing January 1 and ending on December 31.

     “GAAP” means generally accepted accounting principles in the United States of America.

     “GAAP Capital Account” means the capital account maintained in accordance with GAAP
for purposes of the annual financial statements referred to in Section 11.2.

     “Governmental Body” means a government organization, subdivision, court, agency or
authority thereof, whether foreign or domestic.

     “Indemnified Party” has the meaning ascribed to such term in Section 6.3.

     “Indemnifying Party” has the meaning ascribed to such term in Section 6.3.

     “Initial Agreement” has the meaning ascribed to such term in Section 1.1.

     “Interest” means the ownership interest of a Member in the Company (which shall be
considered intangible personal property for all purposes) consisting of (i) such Member’s right to
receive its Percentage Interest of the Company’s profits, losses,

5

 

allocations and distributions, (ii) such Member’s right to vote or grant or withhold consents
with respect to matters related to the Company as provided herein or in the Delaware Act and (iii)
such Member’s other rights and privileges as herein provided.

     “Internal Transfer” has the meaning ascribed to such term in Section 8.1.

     “Internal Transferee” has the meaning ascribed to such term in Section 8.1.

     “Laws” means all applicable statutes, laws, rules, regulations, orders, ordinances,
judgments and decrees of any Governmental Body, including the common or civil law of any Government
Body.

     “Liabilities” has the meaning ascribed to such term in Section 6.1.

     “Majority” means one or more Members having between them more than 50% of the
Interests of all Members entitled to vote.

     “Make-Whole Amount” has the meaning ascribed to such term in Section 8.6(b).

     “Management Committee” means the committee comprised of the individuals designated by
the Members pursuant to Section 5.2 hereof and all other individuals who may from time to
time by duly appointed by the Members to serve as representatives of such committee in accordance
with the provisions hereof, in each case so long as such individual shall continue in such capacity
in accordance with the terms hereof. References herein to the Management Committee shall refer to
such individuals collectively in their capacity as representatives on such committee.

     “Marketed Interest” has the meaning ascribed to such term in Section 8.3.

     “Member Indemnitee” has the meaning ascribed to such term in Section 6.2.

     “Members” means the Midstream Member, the MLP Member and any other Persons who are
admitted as Members in the Company pursuant to this Agreement, but does not include any Person who
has ceased to be a Member in the Company.

     “Midstream Member” has the meaning ascribed to such term in the preamble.

     “Minimum Gain Attributable to a Member Nonrecourse Debt” means the amount determined
in accordance with the principles of Regulations section 1.704-2(i)(3).

     “MLP” means DCP Midstream Partners, LP, a Delaware limited partnership.

     “MLP Member” has the meaning ascribed to such term in the preamble.

6

 

     “MLP Partnership Agreement” means the Second Amended and Restated Agreement of the
Limited Partnership of the MLP, dated November 1, 2006, as it may be amended and restated from time
to time.

     “Monetary Default” has the meaning ascribed to such term in Section 9.1.

     “Negotiation Period” has the meaning ascribed to such term in Section 8.3.

     “Net Agreed Value” means (i) in the case of any Contributed Property, the fair market
value of such property reduced by any liabilities either assumed by the Company upon such
contribution or to which such property is subject when contributed, and (ii) in the case of any
property distributed to a Member by the Company, the Company’s Carrying Value of such property at
the time such property is distributed, reduced by any indebtedness either assumed by such Member
upon such distribution or to which such property is subject at the time of distribution as
determined under section 752 of the Code.

     “Net Income” means, for any taxable period, the excess, if any, of the Company’s items
of income and gain for such taxable period over the Company’s items of loss and deduction for such
taxable period. The items included in the calculation of Net Income shall be determine in
accordance with Section 3.4(b) and shall not include any items specifically allocated under
Section 4.1(d) through 4.1(j). For purposes of Section 4.1(a) and
(b), in determining whether Net Loss has been allocated to any member for any previous
taxable period, any Unrealized Gain or Unrealized Loss allocated pursuant to Section 3.4(d)
shall be treated as an item of gain or loss to be allocated pursuant to Section 4.1.

     “Net Loss” means, for any taxable period, the excess, if any, of the Company’s items
of loss and deduction for such taxable period over the Company’s items of income and gain for such
taxable period. The items included in the calculation of Net Loss shall be determined in accordance
with Section 3.4(b) and shall not include any items specifically allocated under
Sections 4.1(d) through 4.1(j). For purposes of Sections 4.1(a) and
(b), in determining whether Net Loss has been allocated to any Member for any previous
taxable period, any Unrealized Gain or Unrealized Loss allocated pursuant to Section 3.4(d)
shall be treated as an item of gain or loss to be allocated pursuant to Section 4.1.

     “Nonrecourse Built-in Gain” means with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative hedge securing a Nonrecourse
Liability, the amount of any taxable gain that would be allocated to the Members pursuant to
Section 4.2(b)(i)(A) or 4.2(b)(ii)(A) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other consideration.

     “Nonrecourse Debt” has the meaning set forth in Regulations section 1.704-2(b)(4).

7

 

     “Nonrecourse Deductions” means any and all items of loss, deduction, or expenditure
(described in section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Regulations section 1.704-2(b)(i) are attributable to a Nonrecourse Liability.

     “Nondefaulting Member” has the meaning ascribed to such term in Section 9.1.

     “Non-selling Member” has the meaning ascribed to such term in Section 8.3.

     “Notice of Dispute” has the meaning ascribed to such term in Section 12.11.

     “Operator” has the meaning ascribed to such term in Section 7.1.

     “Parent” means (a) with respect to the Midstream Member, DCP Midstream, LLC, a
Delaware limited liability company, (b) with respect to the MLP Member, the MLP.

     “Percentage Interest” means, with respect to a Member, the percentage set forth
opposite such Member’s name on Schedule 3.1, subject to adjustment pursuant to a transfer
of an Interest by a Member or the issuance of new Interests by the Company, in either case, in
compliance with the terms of this Agreement.

     “Person” means any individual, corporation, partnership, joint venture, association,
joint stock company, limited liability company, trust, estate, unincorporated organization or
Governmental Body.

     “Purchase Notice” has the meaning ascribed to such term in Section 8.3.

     “Recapture Income” means any gain recognized by the Company (computed without regard
to any adjustment required by section 734 or 743 of the Code) upon the disposition of any property
or asset of the Company, which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.

     “Record Date” means the dated established by the Members from time to time for
determining the identity of Members entitled to receive any distribution pursuant to Section
4.3.

     “Regulations” means the U.S. Treasury Regulations promulgated under the Code, as in
effect from time to time.

     “Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Company recognized for federal income tax purposes resulting from a sale, exchange
or other disposition of a Contributed Property or Adjusted Property, to the extent such item of
gain or loss is not allocated to Section 4.2(b)(i)(A) or 4.2(b)(ii)(A), to
eliminate Book Tax Disparities.

8

 

     “Sale Offer” has the meaning ascribed to such term in Section 8.3.

     “Section 708 Termination” has the meaning ascribed to such term in Section
8.6(b).

     “Selling Member” has the meaning ascribed to such term in Section 8.3.

     “Tax Matters Partner” has the meaning ascribed to such term in Section 11.4.

     “Third Party Action” has the meaning ascribed to such term in Section 6.3.

     “Unrealized Gain” attributable to any item of Company property means, as of any date
of determination, the excess, if any, of (a) the fair market value of such property as of such date
over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 3.4(d) or 3.4(e) as of such date). In determining such
Unrealized Gain, the aggregate cash amount and fair market value of a Company asset (including cash
or cash equivalents) shall be determined by the Company and agreed to by the Members using such
reasonable method of valuation as it may adopt.

     “Unrealized Loss” attributable to any item of Company property means, as of any date
of determination, the excess, if any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 3.4(d) or 3.4(e) as of such
date) over (b) the fair market value of such property as of such date. In determining such
Unrealized Loss, the aggregate cash amount and fair market value of a Company asset (including cash
or cash equivalents) shall be determined by the Company and agreed to by the Members using such
reasonable method of valuation as it may adopt.

     “Voting Stock” means the securities or other ownership interest in any Person which
have ordinary voting power under ordinary circumstances or the election of directors (or the
equivalent) of such Person.

     1.3 Rules of Construction. For purposes of this Agreement, including the Exhibits and
Schedules hereto:

     (a) General. Unless the context otherwise requires, (i) “or” is not
exclusive; (ii) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP; (iii) words in the singular include the plural and words in the
plural include the singular; (iv) words in the masculine include the feminine and words in
the feminine include the masculine; (v) any date specified for any action that is not a
Business Day shall be deemed to mean the first Business Day after such date; (vi) a
reference to a Member includes its successors and permitted assigns; and (vii) any
reference to $ or dollars shall be a reference to U.S. dollars.

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     (b) Articles and Sections. Reference to Articles and Sections are, unless
otherwise specified, to Articles and Sections of this Agreement.

     1.4 MLP Partnership Agreement. Notwithstanding any other provision of this Agreement,
the Members agree that to the extent any provision of this Agreement contradicts with or is in
conflict with any provision of the MLP Partnership Agreement, the provisions of the MLP Partnership
Agreement shall control.

ARTICLE 2

ORGANIZATION AND CONDUCT OF BUSINESS

     2.1 Company. Subject to the terms and conditions of this Agreement, the Members
hereby agree to operate and manage the Company, a limited liability company organized pursuant to
the Delaware Act, which shall engage in the business described herein.

     2.2 Continuation of Company. The parties hereto hereby continue the Company, which is
that certain limited liability company formed on March 23, 2007, upon the filing of a Certificate
of Formation in the Office of Secretary of State of the State of Delaware in accordance with the
requirements of the Delaware Act. From time to time, the Company shall file such further
certificates of formation, qualifications to do business, fictitious name certificates or make
filings in such jurisdictions as may be necessary or appropriate in connection with the conduct of
the Company’s business or to provide notification of the limitation of liability of the Members
under applicable law.

     2.3 Purpose. The business and purposes of the Company shall be (i) to own and operate
the Company Assets and (ii) to engage in such other business activities that may be undertaken by a
limited liability company under the Delaware Act as the Members may from time to time determine;
provided, however, that the Members determine, as of the date of the acquisition or commencement of
such other business activity, that such activity (a) generates “qualifying income” (as such term is
defined pursuant to section 7704 of the Code) or (b) enhances the operations of an activity of the
Company that generates qualifying income.

     2.4 Place of Business. The principal place of business of the Company shall be 370
17th Street, Suite 2500, Denver, Colorado 80202 or such other place as the Members may
from time to time determine. The registered office of the Company in the State of Delaware shall
be 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the registered agent for
service of process on the Company shall be The Corporation Trust Company, whose business address is
the same as the Company’s registered office (or such other registered office and registered agent
as the Members may from time to time select).

     2.5 Term. The Company shall continue indefinitely unless dissolved in accordance with
Section 10.1.

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     2.6 Business Opportunities; No Implied Duty. Except as may be provided in the MLP
Partnership Agreement, the Members and their respective Affiliates may engage, directly or
indirectly, without the consent of the other Members or the Company, in other business
opportunities, transactions, ventures or other arrangements of any nature or description,
independently or with others, including without limitation business of a nature which may be
competitive with or the same as or similar to the business of the Company, regardless of the
geographic location of such business, and without any duty or obligation to account to the other
Members or the Company in connection therewith.

ARTICLE 3

CAPITAL STRUCTURE

     3.1 Percentage Interests. The Percentage Interests of the Members on the date hereof
are set forth on Schedule 3.1 hereto. Upon the transfer by a Member of all or a portion of
such Member’s Interest pursuant to Article 8 or the issuance of new Interests by the
Company in compliance with this Agreement, Schedule 3.1 shall be updated to reflect the
Percentage Interests of the Members effective upon such transfer or issuance.

     3.2 Capital Contributions. The Members shall make Capital Contributions of cash,
property or services as they determine and approve pursuant to Section 5.4. If the Members
determine and approve pursuant to Section 5.4 that cash Capital Contributions should be
made for any purpose, the Members shall make such cash Capital Contributions in proportion to their
respective Percentage Interests in such amounts and on such dates as the Members may determine.
The Management Committee shall issue a written request to each Member for payment of such cash
Capital Contributions on such due dates and in such amounts; provided, that the due date for any
such cash Capital Contribution shall be no less that 5 days after the date such written request is
issued to the Members. All Capital Contributions received by the Company after the due date
specified in such written request shall be accompanied by interest on such overdue amounts, which
interest shall be payable to the Company and shall accrue from and after such specified dates until
paid at the Agreed Rate.

     3.3 No Voluntary Contributions; Interest. No Member shall make any Capital
Contributions to the Company except pursuant to this Article 3. No Member shall be
entitled to interest on its Capital Contribution.

     3.4 Capital Accounts. A separate Capital Account shall be established and maintained
for each Member in accordance with Regulations section 1.704(b)(2)(iv), Section 4.1 and
following terms and conditions:

     (a) Increases and Decreases. Each Member’s Capital Account shall be (i)
increased by (A) the amount of cash or cash equivalent Capital Contributions made by such
Member, (B) the Net Agreed Value of non-cash assets contributed as Capital Contributions by
such Member, and (C) allocations to such Member of Company income and gain (or items
thereof), including, without limitation, income and gain exempt from tax and income and
gain described in Regulations

11

 

section 1.704-1(b)(2)(iv)(g), but excluding income and gain described in Regulations
section 1.704-1(b)(4)(i); and (ii) shall be decreased by (A) the amount of cash or cash
equivalents distributed to such Member by the Company, (B) the Net Agreed Value of any
non-cash assets or other property distributed to such Member by the Company, and (C)
allocations to such Member of Company losses and deductions (or items thereof), including
losses and deductions described in Regulations section 1.704-1(b)(2)(iv)(g) (but excluding
losses or deductions described in Regulations section 1.704-1(b)(4)(i) or (iii)).

     (b) Computation of Amounts. For purposes of computing the amount of any item
of income, gain, loss or deduction to be reflected in the Members’ Capital Accounts, the
determination, recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes (including,
without limitation, any method of depreciation, cost recovery or amortization used for that
purpose), provided that:

               (i) All fees and other expenses incurred by the Company to promote the sale of (or to
sell) any interest that can neither be deducted nor amortized under section 709 of the
Code, if any, shall, for purposes of Capital Account maintenance, but treated as an item of
deduction at the time such fees and other expenses are required and shall be allocated
between the Members pursuant to Sections 4.1 and 4.2.

               (ii) Except as otherwise provided in Regulations section 1.704-1(b)(2)(iv)(m), the
computation of all items of income, gain, loss and deduction shall be made without regard
to any election under section 754 of the Code which may be made by the Company and, as to
those items described in section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard
to the fact that such items are not includable in gross income or are neither currently
deductible nor capitalized for federal income tax purposes.

               (iii) Any income, gain or loss attributable to the taxable disposition of any Company
property shall be determined as if the adjusted basis of such property as of such date of
disposition were equal in amount to the Company’s Carrying Value with respect to such
property as of such date.

               (iv) In accordance with the requirements of section 704(b) of the Code, any deductions
for depreciation, cost recovery or amortization attributable to any Contributed Property
shall be determined as if the adjusted basis of such property of the date it was acquired
by the Company was equal to the Agreed Value of such property on the date if was acquired
by the Company. Upon an adjustment pursuant to Section 3.4(d) or 3.4(e) to
the Carrying Value of any Company property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined (A) as if the adjusted basis of such
property were equal to the Carrying Value of such property immediately

12

 

following such adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method or useful life (or, if applicable, the meaning
useful life) as is applied for federal income tax purposes; provided, however, that if the
asset has a zero adjusted basis for federal income tax purposes, depreciation, cost
recovery or amortization deductions shall be determined using any reasonable method that
the Company may adopt.

     (c) Transferees. A transferee of all or a part of a Member’s Interest shall
succeed to all or the transferred part of the Capital Account of the transferring Member.

     (d) Contributed Unrealized Gains and Losses. Consistent with the provisions
of the Regulations section 1.704-1(b)(2)(iv)(f), on an issuance of additional Interests for
cash or Contributed Property, the Capital Accounts of all Members and the Carrying Value of
each Company property immediately prior to such issuance shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company
property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual
sale of each such property immediately prior to such issuance and had been allocated to the
Members at such time pursuant to Section 4.1.

     (e) Distributed Unrealized Gains and Losses. In accordance with Regulations
section 1.704-1(b)(2)(iv)(f), immediately prior to any distribution to a Member of any
Company property (other than a distribution of cash or cash equivalents that are not in
redemption or retirement of a Member’s Interest), the Capital Accounts of all Members and
the Carrying Value of each Company property shall be adjusted upward or downward to reflect
any Unrealized Gain or Unrealized Loss attributable to such Company property, as if such
Unrealized Gain or Unrealized Loss had been recognized in a sale of such property
immediately prior to such distribution for an amount equal to its fair market value (which
shall be determined by the Company using any valuation method it deems reasonable under the
circumstances), and had been allocated to the Members at such time, pursuant to Section
4.1.

     (f) Code Compliance. Notwithstanding any provision in this Agreement to the
contrary, each Member’s Capital Account shall be maintained and adjusted in accordance with
the Code and the Regulations thereunder, including without limitation (i) the adjustments
permitted or required by Code section 704(b) and, to the extent applicable, the principles
expressed on Code section 704(c) and (ii) the adjustments required to maintain capital
accounts in accordance with the “substantial economic effect test” set forth in the
Regulations under Code section 704(b).

     3.5 Return of Capital. No Member shall have the right to demand a return of such
Member’s Capital Contributions (or the balance of such Member’s Capital Account). Further, no
Member has the right (i) to demand and receive any distribution from the

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Company in any form other than cash or (ii) to bring an action of partition against the
Company or its property. Neither the Members nor the Management Committee shall have any personal
liability for the repayment of the Capital Contributions from Members. No Member is required to
contribute or to lend any cash or property to the Company to enable the Company to return any other
Member’s Capital Contribution.

ARTICLE 4

ALLOCATIONS AND DISTRIBUTIONS

     4.1 Allocations for Capital Account Purposes. For purposes of maintaining the Capital
Accounts and in determining the rights of the Members between themselves, the Company’s items of
income, gain, loss and deduction (computed in accordance with Section 3.4(b)) shall be allocated
between the Members in each taxable year or portion thereof (an “allocation period”) as provided
herein below.

     (a) Net Income. All items of income, gain, loss and deduction taken into
account in computing Net Income for such allocation period shall be allocated to each of
the Members in accordance with its respective Percentage Interest.

     (b) Net Losses. All items of income, gain, loss and deduction taken into
account in computing Net Losses for such allocation period shall be allocated to each
Member in accordance with its respective Percentage Interest; provided, however, that Net
Losses shall not be allocated pursuant to this Section 4.1(b) to the extent that
such allocation would cause a Member to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing deficit balance in its
Adjusted Capital Account).

     (c) Nonrecourse Liabilities. For the purposes of Regulations section
1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company in excess of
the sum of (A) the amount of Company Minimum Gain and (B) the total amount of Nonrecourse
Built-in Gain shall be allocated between the Members in accordance with their respective
Percentage Interests.

     (d) Company Minimum Gain Chargeback. Notwithstanding the other provisions of
this Section 4.1, except as provided in Regulations section 1.704-2(f)(2)
through(5), if there is a net decrease in Company Minimum Gain during any Company taxable
year, each Member shall be allocated items of Company income and gain for such period (and,
if necessary, subsequent periods) in the manner and amounts provided in Regulations
sections 1.704-2(f)(6) and (g)(2) and section 1.704(j)(2)(i), or any successor provisions.
For purposes of this Section 4.1(d), each Member’s Adjusted Capital Account balance
shall be determined, and the allocation of income or gain required hereunder shall be
effected, prior to the application of any other allocations pursuant to this Section
4.1 with respect to such taxable year (other than an allocation pursuant to Section
4.1(h) or (i)).

14

 

     (e) Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt.
Notwithstanding the other provisions of this Section 4.1 (other than Section
4.1(d), except as provided in Regulations section 1.704-2(i)(4)), if there is a net
decrease in Minimum Gain Attributable to Member Nonrecourse Debt during any Company taxable
period, any Member with a share of Minimum Gain Attributable to Member Nonrecourse Debt at
the beginning of such taxable period shall be allocated items of Company income and gain
for such period (and, if necessary, subsequent periods) in the manner and amounts provided
in Regulations sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions.
For purposes of this Section 4.1, such Member’s Adjusted Capital Account balance
shall be determined and the allocation of income or gain required hereunder shall be
effected, prior to the application of any other allocations pursuant to this Section 4.1,
other than Sections 4.1(d), (h) and (i), with respect to such
taxable period.

     (f) Qualified Income Offset. If any Member unexpectedly receives adjustments,
allocations or distributions described in Regulations section 1.704-1(b)(2)(ii)(d)(4)
through (6) (or any successor provisions), items of Company income and gain shall be
specifically allocated to such Member in an amount and manner sufficient to eliminate, to
the extent required by the Regulations promulgated under section 704(b) of the Code; the
deficit balance, if any, in its Adjusted Capital Account created by such adjustments,
allocations or distributions as quickly as possible unless such deficit balance is
otherwise eliminated pursuant to Section 4.1(d) or 4.1(e).

     (g) Gross Income Offset. If any Member has a deficit balance in its Adjusted
Capital Account at the end of any Company taxable period which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provisions of this
Agreement and (ii) the amount such Member is deemed obligated to restore pursuant to the
penultimate sentences of Regulations sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member
shall be specifically allocated items of Company gross income and gain in the amount of
such excess as quickly as possible; provided that an allocation pursuant to this
Section 4.1(g) shall be made only if and to the extent that such Member would have
a deficit balance in its Adjusted Capital Account after all other allocations provided in
this Section 4.1 have been tentatively made as if this Section 4.1(g) was
not in the Agreement.

     (h) Nonrecourse Deductions. Nonrecourse Deductions for any taxable year shall
be allocated to the Members in accordance with their respective Percentage Interests. If
the Company determines in its good faith discretion that the Company’s Nonrecourse
Deductions must be allocated in a different ration to satisfy the safe harbor requirements
of the Regulations promulgated under section 704(b) of the Code, the Company is authorized,
upon notice to the Members, to revise the prescribed ration to the numerically closest
ration which does satisfy the requirements.

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     (i) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any
taxable year shall be allocated 100% to the Member that bears the Economic Risk of Loss for
such Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable
in accordance with Regulations section 1.704-2(i) (or any successor provision). If more
than one Member bears the Economic Risk of Loss of respect to a Member Nonrecourse Debt,
such Member Nonrecourse Deductions attributable thereto shall be allocated between such
Members ratably in proportion to their respective shares of such Economic Risk of Loss.

     (j) Code Section 754 Adjustments. To the extent an adjustment tax basis of
any Company asset pursuant to section 734(b) or 743(b) of the Code is required, pursuant to
Regulations section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustments to the 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 item gain or loss shall be specially allocated
to the Members in a manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such section of the Regulations.

     4.2 Allocations for Tax Purposes. The Members agree as follows:

     (a) Allocations of Gain, Loss, etc. Except as otherwise provided herein, for
federal income tax purposes, each item of income, gain loss and deduction which is
recognized by the Company for federal income tax purposes shall be allocated between the
Members in the same manner as its correlative item of “book” income, gain, loss or
deduction is allocated pursuant to Section 4.1 hereof.

     (b) Book-Tax Disparities. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income, gain, loss
depreciation, amortization and cost recovery deductions shall be allocated for federal
income tax purposes between the Members as follows:

               (i) In the case of a Contributed Property, (A) such items of income, gain, loss,
depreciation, amortization and cost recovery deductions attributable thereto shall be
allocated between the Members in the manner provided under section 704(c) of the Code and
section 1.704-3(d) of the Regulations (i.e. the “remedial method”) that takes into account
the variation between the Agreed Value of such property and its adjusted basis at the time
of contribution; and (B) any item of Residual Gain or Residual Loss attributable thereto
shall be allocated between the Members in the same manner as its correlative of “book” gain
or loss is allocated pursuant to Section 4.1.

16

 

               (ii) In the case of an Adjusted Property, (A) such items of shall be allocated between
the Members in a manner consistent with the principles of section 704(c) of the Code and
section 1.704-3(d) of the Regulations (i.e. the “remedial method”) to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the allocations
thereof pursuant to Section 3.4(d) or (e), unless such property was
originally a Contributed Property, in which case such items shall be allocated between the
Members in a manner consistent with Section 4.2(b)(i); and (B) any item of Residual
Gain or Residual Loss attributable to an Adjusted Property shall be allocated between the
Members in the same manner as its correlative item “book” gain or loss is allocated
pursuant to Section 4.1.

     (c) Conventions/Allocations. For the proper administration of the Company,
the Company shall (i) adopt such conventions as it deems appropriate in determining the
amount of depreciation, amortization and cost recovery deductions; and (ii) amend the
provisions of this Agreement as appropriate to reflect the proposal or promulgation of
Regulations under section 704(b) or section 704(c) of the Code. The Company may adopt such
conventions, make such allocations and make such amendments to this Agreement as provided
in Section 4.2(c) only if such conventions, allocations or amendments are
consistent with section 704 of the Code.

     (d) Section 743(b). The Company may determine to depreciate the portion of an
adjustment under section 743(b) of the Code attributable to unrealized appreciation in any
Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a
predetermined rate derived from the depreciation method and useful life applied to the
Company’s common basis of such property, despite the inconsistency of such method with
Regulations section 1.167(c)-1(a)(6), or any successor provisions. If the Company
determines that such reporting position cannot reasonably be taken, the Company may adopt
any reasonable depreciation convention that would not have a material adverse effect on the
Members.

     (e) Recapture Income. Any gain allocated to the Members upon the sale or
other taxable disposition of any Company asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 4.2 be
characterized as Recapture Income in the same proportions and the same extent as such
Members (or their predecessors in interest) have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.

     (f) Section 754. All items of income, gain, loss, deduction and credit
recognized by the Company for federal income tax purposes and allocated by the Members in
accordance with the provisions hereof shall be determined without regard to any election
under section 754 of the Code which may be made by the Company; provided, however, that
such allocations, once made, shall be adjusted

17

 

as necessary or appropriate to take into account those adjustments permitted or
required by sections 734 and 743 of the Code.

     4.3 Distributions. Within 30 days following the end of each Distribution Period, an
amount equal to 100% of Available Cash with respect to such Distribution Period shall, subject to
section 18-607 of the Delaware Act, be distributed in accordance with this Article 4 by the
Company to the Members in accordance with their respective Percentage Interests.

ARTICLE 5

MANAGEMENT

     5.1 The Management Committee. The business and affairs of the Company shall be
managed by or under the direction of the Members acting through the Management Committee, subject
to the delegation of powers and duties to officers of the Company and other Persons as provided for
by resolution of the Management Committee.

     5.2 Composition; Removal and Replacement of Representative. The Management Committee
shall be comprised of one or more representatives designated by each Member. Each Member shall
designate by written notice to the other Members its representatives to serve on the Management
Committee and alternates to serve in such representatives’ absences. Each representative and
alternate shall serve at the pleasure of such Member and shall represent and bind such Member with
respect to any matter. Alternates may attend all Management Committee meetings but shall have no
vote at such meetings except in the absence of the representative for whom he is the alternate.
Upon the death, resignation or removal for any reason of any representative or alternate of a
Member, the appointing Member shall promptly appoint a successor.

     5.3 Officers. The Management Committee may appoint employees of Members or their
Affiliates to serve as officers of the Company, and such officers may include but not be limited to
a president, one or more vice presidents, a treasurer and a secretary.

     5.4 Voting. All decisions, approvals and other actions of any Member under this
Agreement shall be effected by vote of its representative on the Management Committee. The
Management Committee representative of each Member shall have one vote equal to the Percentage
Interest of the Member appointing such representative and shall exercise such vote on behalf of
such appointing Member in connection with all matters under this Agreement.

     (a) All decisions and actions with respect to the Company and its business shall be
made and taken by the affirmative vote of the Member or Members holding a Majority acting
through their representative on the Management Committee, except as provided in clauses
(b) and (c) of this Section 5.4.

18

 

     (b) In the case of those matters set forth on Schedule 5.4, any decision
or action with respect to such matters shall be made and taken by unanimous affirmative
vote of Members acting through their representatives on the Management Committee; provided,
that the approval of any such matter set forth on Schedule 5.4 by the MLP Member
shall not require, and shall not be inferred to require, that such matter be referred to,
considered or approved by the conflicts committee of the board of directors of the general
partner of the MLP Member, it being understood that conflicts of interest, if any, shall be
addressed in the manner provided in the MLP Partnership Agreement.

     (c) Notwithstanding clauses (a) and (b) of this Section 5.4,
if (i) a material breach or default under a material agreement of the Company, (ii) a
default or failure to make payment of an obligation of the Company or a failure to take
other action is likely to result in the imposition of a lien upon or a seizure or other
collection action against a material asset or assets of the Company or (iii) a failure to
comply with an order of a Governmental Body having jurisdiction directed to the Company, in
each case, would be reasonably likely to have a material adverse effect on the business,
operations or financial condition of the Company, any Member may require all of the Members
to make a Capital Contribution pursuant to Section 3.2 hereof to cure such default,
pay such obligation, comply with such order or take other action in connection therewith by
delivering written notice of the other Member of its intent to require a Capital
Contribution pursuant to this Section 5.4(c); provided, the aggregate amount of
such required Capital Contribution may be no more than the minimum amount necessary to
prevent a default, seizure or noncompliance of the type described in clauses (i), (ii) and
(iii) of this paragraph.

     5.5 Meetings of Management Committee. The Members agree as follows:

     (a) Scheduling. Meetings of the Management Committee shall occur when called
by any member of the Management Committee. The member calling the meeting shall provide
notice of and an agenda for the Management Committee meeting to all representatives at
least 10 Business Days prior to the dates of such meetings, provided that the business
matters to be acted upon at any such meeting shall not be limited to the matters included
on such agenda.

     (b) Conduct of Business. The Management Committee shall conduct its meetings
in accordance with such rules as it may from time to time establish and the secretary shall
keep minutes of its meetings and issue resolutions evidencing the actions taken by it.
Upon the request of any Member, the secretary shall provide such Member with copies of such
minutes and resolutions. Management Committee representatives may attend meetings and vote
either in person or through duly authorized written proxies. Unless otherwise agreed, all
meetings of the Management Committee shall be held at the principal office of the Company
or by conference telephone or similar means of communication by

19

 

which all representatives can participate in the meeting. Any action of the
Management Committee may be taken without a meeting by unanimous written consent of the
representatives.

     (c) Quorum. At meetings of the Management Committee representatives of (i)
Members holding a Majority present in person, by conference telephone or by written proxy
and entitled to vote, shall constitute a quorum for the transaction of business for
purposes for considering matters under Section 5.4(a) and (ii) all of the Members
present in person, by conference telephone or by written proxy and entitled to vote, shall
constitute a quorum for the transaction of business for purposes of considering matters
under Section 5.4(b).

     5.6 Remuneration. The Management Committee representative and alternate employed by
each Member shall receive no compensation from the Company for performing services in such
capacity. Each Member shall be responsible for the payment of the salaries, benefits, retirement
allowances and travel and lodging expenses for its Management Committee representatives or
alternates.

     5.7 Individual Action by Members. No individual Member, solely by reason of its
status as such, has any right to transact any business for the Company or any authority of power to
sign for or bind the Company unless such power or authority has been expressly delegated to such
Member in accordance with this Agreement; provided, however, that with respect to the enforcement
of the Company’s rights under any contract between the Company and a Member or an Affiliate of a
Member, any and all actions necessary to enforce the Company’s rights thereunder shall be taken
exclusively by the Members who are not, or whose Affiliate is not, party to such contract.
Further, each individual Member shall have the right to participate in audits by the Company of the
Affiliates of another Member which audits are made pursuant to contracts between the Company and
such Affiliates.

ARTICLE 6

INDEMNIFICATION; LIMITATIONS ON LIABILITY

     6.1 Indemnification by the Company. The Company shall indemnify and hold harmless
each Member, the Management Committee representatives and alternates of each Member and the
officers of the Company (each individually, a “Company Indemnitee”) from and against any
and all losses, claims, demands, costs, damages, liabilities, expenses of any nature (including
reasonable attorneys’ fees and disbursements), judgments, fines, settlements, and other amounts
actually and reasonably incurred by such Company Indemnitee and arising from any threatened,
pending or completed claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative or other, including any appeals to which a Company Indemnitee was
or is a party or is threatened to be made a party (collectively, “Liabilities”), arising
out of or incidental to the business of the Company or such Company Indemnitee’s status as a
Member, Management Committee representative or

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alternate of a Member or an officer of the Company; provided, however, that the Company shall
not indemnify and hold harmless any Company Indemnitee for any Liabilities which are due to actual
fraud or willful misconduct of such Company Indemnitee.

     (a) Rights of Company Indemnitee. Reasonable expenses incurred by a Company
Indemnitee in defending any claim, demand, action, suit or proceeding subject to this
Section 6.1 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 the Company by or on behalf of such Company Indemnitee to repay such
amounts if ultimately determined that such Company Indemnitee is not entitled to be
indemnified as authorized in this Section 6.1. The indemnification provided by
this Section 6.1 shall inure solely to the benefit of the Company Indemnitee and
his heirs, successors, assigns and administrators and shall be deemed to create any rights
for the benefit of any other Persons.

     6.2 Indemnification by the Members. Each Member shall indemnify and hold harmless the
Company, the other Members and their respective Management Committee representatives and alternates
and the officers of the Company (each individually, a “Member Indemnitee”) for any and all
Liabilities that result solely from the actual fraud or willful misconduct of such Member, its
Management Committee representatives and alternates or any officer of the Company employed by such
Member or its Affiliates.

     6.3 Defense of Action. Promptly after receipt by a Company Indemnitee or a Member
Indemnitee (either an “Indemnified Party”) of a notice of any pending or threatened claim,
demand action, suit, proceeding or investigation made or instituted by a Person other than another
Indemnified Party (a “Third Party Action”), such Indemnified Party shall, if a claim in
respect thereof is to be made by such Indemnified Party against a Person providing indemnification
pursuant to Sections 6.1 or 6.2 (“Indemnifying Party”), give notice thereof
to the Indemnifying Party. The Indemnifying Party, at its own expense may elect to assume the
defense of any such Third Party Action through its own counsel on behalf of the Indemnified Party
(with full right of subrogation to the Indemnified Party’s rights and defenses). The Indemnified
Party may employ separate counsel in any such Third Party Action and participate in the defense
thereof; but the fees and expenses of such counsel shall be at the expense of the Indemnified Party
unless the Indemnified Party shall have been advised by its counsel that there may be one or more
legal defenses available to it which are different from or additional to those available to this
Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume the
defense of such Third Party Action on behalf of the Indemnified Party), it being understood,
however, that the Indemnifying Party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the Indemnified Parties, and such
fees shall be designated in writing by the Indemnified Parties. All fees and expenses for any such
separate counsel shall be paid

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periodically as incurred. The Indemnifying Party shall not be liable for any settlement of
any such Third Party Action effected without its consent unless the Indemnifying Party shall elect
in writing not to assume the defense thereof or fails to prosecute diligently such defense and
fails after written notice from the Indemnified Party to promptly remedy the same, in which case,
the Indemnified Party without waiving any rights to indemnification hereunder may defend such Third
Party Action and enter into any good faith settlement thereof without prior written consent from
the Indemnifying Party. The Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, effect any settlement of any such Third Party Action unless such settlement
includes an unconditional release of the Indemnified Party from all Liabilities that are the
subject of such Third Party Action. The Members agree to cooperate in any defense or settlement of
any such Third Party Action and to give each other reasonable access to all information relevant
thereto. The Members will similarly cooperate in the prosecution of any claim or lawsuit against
any third party. If, after the Indemnifying Party elects to assume the defense of a Third Party
Action, it is determined pursuant to the Dispute Resolution procedures described in Section
12.11 that the Indemnified Party is not entitled to indemnification with respect thereto, the
Indemnifying Party shall discontinue the defense thereof, and if any fees or expenses for separate
counsel to represent the Indemnified Party were paid by the Indemnifying Party, the Indemnified
Party shall promptly reimburse the Indemnifying Party for the full amount thereof.

     6.4 Limited Liability of Members. No Member shall be personally liable for any debts,
liabilities or obligations of the Company, provided that each Member shall be responsible (i) for
the making of any Capital Contribution required to be made to the Company by such Member pursuant
to the terms hereof and (ii) for the amount of any distribution made to such Member that must be
returned to the Company pursuant to the Delaware Act.

ARTICLE 7

OPERATION OF COMPANY

     7.1 Operator. Subject to this Article 7, the Members agree to appoint the
Midstream Member as the initial operator of the Company (the “Operator”) and Midstream
Member accepts such appointment and agrees to act in such capacity. From time to time, the
Management Committee may appoint a successor operator of the Company. The Operator shall be
responsible for the day-to-day operation, maintenance and repair of the Company Assets and the
managerial and administrative duties relating thereto. Subject to Section 5.4 and item
10 on Schedule 5.4, the Operator, in its sole discretion, may subcontract with another
Person, including an Affiliate, to perform the activities required to comply with the
responsibilities as operator hereunder; provided any such subcontract shall not relieve the
Operator of such responsibilities.

     7.2 Expenses. The Operator shall be reimbursed on a monthly basis, or such other
basis as the Operator may determine, for (a) all direct and indirect costs and expenses it incurs
or payments it makes on behalf of the Company (including salary, bonus, incentive compensation and
other amounts paid to any Person including Affiliates

22

 

of the Operator to perform services for the Company or for the Operator in the discharge of
its duties in such capacity), and (b) all other costs and expenses allocable to the Company or
otherwise incurred by the Operator in connection with operating the Company’s business (including
the Company’s allocable share of general and administrative costs and expenses (G&A) borne by the
Operator and its Affiliates). The Operator shall maintain or cause to be maintained accurate
records of such costs and expenses, and upon written request, the Operator shall permit a Member to
inspect, or shall provide such requesting Member with a copy of such records. The amount for which
the Operator shall be entitled to reimbursement from the Company for G&A shall be as follows: (a)
for calendar year 2007, $8,012,000 (prorated for calendar year 2007 based on the number of days
remaining in calendar year 2007 following the date hereof), (b) for calendar year 2008, $8,012,000,
increased by the applicable annual percentage increase in the Consumer Price Index — All Urban
Consumers, U.S. City Average, Not Seasonally Adjusted for the applicable year, and (c) for periods
after calendar year 2008, an amount mutually agreed upon. If the Company makes any acquisitions of
assets or businesses or the business of the Company otherwise expands prior to December 31, 2008,
then G&A shall be reasonably increased in order to account for adjustments in the nature and extent
of the general and administrative services provided by the Operator to the Company. Reimbursements
pursuant to this Section 7.2 shall be in addition to any reimbursement due the Operator as
a result of indemnification pursuant to Section 6.1.

     7.3 Reimbursement for Insurance. The Company shall reimburse the Operator for all
expenses it incurs or payment it makes on behalf of the Company for insurance, including (a)
insurance coverage with respect to the Company; (b) insurance coverage with respect to claims
related to fiduciary obligations of officers, directors, and control persons of the Company as and
if applicable; and (c) insurance coverage with respect to claims under federal and state securities
laws.

     7.4 Accounts. The Management Committee shall establish and maintain one or more
separate bank and investment accounts and arrangements for Company funds in the Company’s name with
such financial institutions and firms it may determine. The Company may not commingle the
Company’s funds with the funds of any other Person. All such accounts shall be and remain the
property of the Company and all funds shall be received, held and disbursed for the purposes
specified in this Agreement.

ARTICLE 8

TRANSFER OF INTERESTS

     8.1 Restrictions on Transfer. The Members agree as follows:

     (a) Consent. Subject to Sections 8.1(b) and 8.1(c) and except
as provided in Section 8.3(c), no Member may at any time sell, assign, transfer,
convey, merge, consolidate, reorganize or otherwise dispose of all or any part of such
Member’s interest without the express written consent of the other Members, which consent
may be granted or withheld by any such other Members in its absolute discretion; provided,
however, that subject to Sections 8.1(b) and 8.1(c),

23

 

and upon notice to the other Members, any Member may transfer its respective Interest
to one or more Persons (an “Internal Transferee”) wholly owned directly or
indirectly by the ultimate parent of such Member (an “Internal Transfer”) without
the consent of the other Members, and such Internal Transferee shall be admitted as a
Member.

     (b) Certain Prohibited Transfers. No Member shall transfer all or any part of
its Interest if such transfer (i) (either considered alone or in the aggregate with
prior transfers by the same Member or any other Members) would result in the termination of
the Company for federal income tax purposes; (ii) would result in violation of the
Delaware Act or any other applicable Laws; or (iii) would result in a default under or
termination of an existing financial agreement to which the Company is a party or
acceleration of debt thereunder.

     (c) Defaulting Members. No Defaulting Member may transfer its Interest except
(i) as expressly provided under Article 8, and (ii) with the consent of the
Nondefaulting Members.

     (d) Effect of Prohibited Transfers. Any offer or purported transfer of a
Member’s Interest in violation of the terms of this Agreement shall be void.

     8.2 Possible Additional Restrictions on Transfer. Notwithstanding anything to the
contrary contained in this Agreement, in the event of (i) the enactment (or imminent enactment) of
any legislation, (ii) the publication of any temporary or final Regulations, (iii) any ruling by
the Internal Revenue Service or (iv) any judicial decision that in any such case, in the opinion of
counsel, would result in the taxation of the Company for federal income tax purposes as a
corporation or would otherwise subject the Company to being taxed as an entity for federal income
tax purposes, this Agreement shall be deemed to impose such restrictions on the transfer of a
Member’s Interest as may be required, in the opinion of counsel to the Company, to prevent the
Company from being taxed as a corporation or otherwise being taxed as an entity for federal income
tax purposes, and the Members thereafter shall amend this Agreement as necessary or appropriate to
impose such restrictions.

     8.3 Right of First Offer. The Members agree as follows:

     (a) Initial Offer to Members. If a Member (the “Selling Member”)
desires to sell or otherwise transfer all or a portion of its Interest (the “Marketed
Interest”) other than pursuant to an Internal Transfer, such Selling Member shall
submit to each of the other Members (the “Non-Selling Members”) a good faith offer
(a “Sale Offer”), which Sale Offer shall include a form of acquisition agreement
that specifies the form and amount of consideration to be received and the other material
terms on which the Selling Member proposes to sell the Marketed Interest. Upon receipt of
a Sale Offer, a Non-Selling Member interested in purchasing all of such Marketed Interest
shall deliver written notice (a “Purchase Notice”) to the Selling Member within 20
days of receipt of such

24

 

Sale Offer (the “Notice Period”). Upon the expiration of such Notice Period,
the Selling Member and any Non-Selling Members that have timely delivered a Purchase Notice
to the Selling Member shall have 45 days (the “Negotiation Period”) to negotiate
and enter into a definitive agreement pursuant to which such Non-Selling Member(s) will
acquire the Marketed Interest. If the parties enter into a definitive agreement within
such Negotiation Period, the Non-Selling Member shall acquire the Marketed Interest
pursuant to the terms of such definitive agreement. The closing under any such definitive
agreement may occur after the expiration of such Negotiation Period. If more than one
Non-Selling Member delivers a Purchase Notice to the Selling Member, each such Non-Selling
Member shall be entitled to acquire a pro rata portion of the Marketed Interest determined
by dividing such Non-Selling Member’s Percentage Interest by the aggregate Percentage
Interests of all of the Non-Selling Members that delivered a Purchase Notice.

     (b) Negotiation with Third Party. If (i) no Non-Selling Member delivers a
Purchase Notice to the Selling Member prior to the expiration of the Notice Period, (ii)
the Non-Selling Member(s) and the Selling Member are unable to enter into a definitive
agreement prior to the expiration of the Negotiation Period, or (iii) a definitive
agreement is timely entered into but is subsequently terminated prior to closing, then the
Selling Member shall have 120 days to market, offer, negotiate and consummate the sale of
the Marketed Interest to a third party; provided, however, the Selling Member may not
consummate any such sale to a third party unless (i) the acquisition consideration to be
paid by such third party is at least equal in value to the consideration set forth in the
Sale Offer and (ii) the other terms and provisions of such sale are not materially more
favorable to such third party than the terms and provisions contained in the Sale Offer.
If the Selling Member is unable to consummate the sale of the Marketed Interest to a third
party within in the 120-day period referred to in the immediately preceding sentence, such
Selling Member must make another Sale Offer to each of the Non-Selling Members, as provided
in Section 8.3(a), and otherwise comply with the provisions of this Section
8.3 in order to sell such Marketed Interest.

     (c) Applicability of Transfer Restrictions. All transfers pursuant to this
Section 8.3 must comply with the restrictions on transfers set forth in Sections
8.1 and 8.2, except that a transfer to a third party after compliance with this
Section 8.3 shall not require the consent of the Non-Selling Members and the
restriction in Section 8.1(b)(i) shall not apply.

     8.4 Substituted Members. As of the effectiveness of any transfer of an Interest
permitted under this Agreement, (i) any transferee acquiring the Interest of a Member shall be
deemed admitted as a substituted Member with respect to the Interest transferred, and (ii) such
substituted Member shall be entitled to the rights and powers and subject to the restrictions and
liabilities of the transferring Member with respect to the Interest so acquired. No purported
transfer of an Interest in violation of the terms of this Agreement (including any transfer
occurring by operation of Law) shall vest the

25

 

purported transferee with any rights, powers or privileges hereunder, and no such purported
transferee shall be deemed a Member hereunder for any purposes or have any right to vote or consent
with respect to Company matters, to inspect Company records, to maintain derivative proceedings, to
maintain any action for an accounting or to exercise any other rights of a Member hereunder or
under the Delaware Act.

     8.5 Documentation; Validity of Transfer. No purported transfer of a Member’s Interest
shall be effective as to the Company or the other Members unless and until the applicable
provisions of Sections 8.1, 8.2 and 8.3 have been satisfied and such other
Members have received a document in a form acceptable to such other Members executed by both the
transferring Member (or its legal representative) and the transferee. Such document shall include:
(i) the notice address of the transferee and such transferee’s express agreement to be bound by all
the terms and conditions of this Agreement with respect to the Interest being transferred; (ii) the
Interests of the transferring Member and the transferee after the transfer; and (iii)
representations and warranties from both the transferring Member and the transferee that the
transfer was made in accordance with all applicable Laws (including state and federal securities
Laws) and the terms and conditions of this Agreement. Each transfer shall be effective against the
Company and the other Members as of the first Business Day of the calendar month immediately
succeeding the Company’s receipt of the document required by this Section 8.5, and the
applicable requirements of Section 8.1, 8.2 and 8.3 have been met.

     8.6 Covenant Not to Withdraw or Dissolve.

     (a) Notwithstanding any provision of the Delaware Act, each Member hereby agrees that
it has entered into this Agreement based on the expectation that all Members will continue
as Members and carry out the duties and obligations undertaken by them hereunder. Except
as otherwise expressly required or permitted hereby, each Member hereunder covenants and
agrees not (i) to take any action to file a certificate of dissolution or its equivalent
with respect to itself, (ii) take any action that would cause a Bankruptcy of such Member,
(iii) withdraw or attempt to withdraw from the Company, expect as otherwise expressly
permitted by this Agreement or the Delaware Act, (iv) exercise any power under the Delaware
Act to dissolve the Company, (v) transfer all or any portion of its Interest, except as
expressly provided herein, or (vi) demand a return of such Member’s contributions or
profits (or a bond or other security for the return of such contribution or profits), in
each case without the consent of the other Members.

     (b) Prior to any Member causing or permitting an interest in itself to be transferred
such that, after the transfer, the Company would be considered to have terminated within
the meaning of section 708 of the Code “Section 708 Termination”, the transferring
Member or its designee must provide written notice and offer to pay to each other Member
prior to the transfer in cash the amount (the “Make-Whole Amount”) necessary to
hold that other Member harmless against any deferral of state or federal income tax
depreciation or other increase in

26

 

liability for such tax (including any change in the present value of such liability)
that such Section 708 Termination would cause. Any such payment shall be due and payable
immediately upon the consummation of such transfer. For purposes of calculating the
Make-Whole Amount, such other Member(s) will be treated as if they are corporations for
federal and state income tax purposes. In the case of any transfer to which this
Section 8.6(b) applies, the Make-Whole Amount for each Member entitled to be paid
that amount will be computed on a net present value basis using: (i) the Agreed Rate in
effect on the date of payment and (ii) the highest marginal applicable state and federal
corporate income tax rates for the year of payment. Using those same highest marginal
rates, the amount that is determined pursuant to the preceding sentence will be grossed up
such that the increased amount reduced by the state and federal income tax that are deemed
paid by reason of the receipt thereof is equal to the amount that is determined pursuant to
the preceding sentence. If the applicable state income tax is deductible for federal
income tax purposes, effect will be given to that deduction in calculating the Make-Whole
Amounts.

ARTICLE 9

DEFAULT

     9.1 Events of Default. If any of the following events occur:

     (a) the Bankruptcy, insolvency, dissolution, liquidation, death, retirement,
resignation, termination, expulsion of a Member or the occurrence of any other event under
the Delaware Act which terminates the continued membership of a Member in the Company;

     (b) all or any part of the Interest of Member is seized by a creditor of such Member,
and the same is not released from seizure or bonded out within 30 days from the date of the
notice of seizure;

     (c) a Member (i) fails to provide any Capital Contribution request by a Member
pursuant to Section 5.4(c) or as otherwise required by Article 3, (ii)
fails to indemnify or reimburse the other Members for the liabilities and obligations as
set forth in this Agreement, or (iii) fails to perform or fulfill when due any other
material financial or monetary obligation imposed on such Member in this Agreement and, in
each case, such failure continues for 15 days or such shorter period as may be specified
for a Default under such agreement relating to borrowed money (each of the foregoing, a
“Monetary Default”);

     (d) a Member Defaults or otherwise fails to perform or fulfill any material covenant,
provision or obligation (other than financial or monetary obligations, which are covered in
Section 9.1(c)) under this Agreement or any agreement relating to borrowed money to
which the Company is a party and such failure continues for 30 days or such shorter period
as may be specified for a Default under such agreement relating to borrowed money; or

27

 

     (e) a Member transfers or attempts to transfer all or any portion of its Interest in
the Company other than in accordance with the terms of this Agreement;

then a “Default” hereunder shall be deemed to have occurred. The Member with respect to
which one or more events of Default has occurred shall be referred to as the “Defaulting
Member”, and the other Member shall be referred to as the “Nondefaulting Member.”

     9.2 Consequence of a Default. The Members agree that upon the occurrence of a
Default, the rights of the Nondefaulting Member and Defaulting Member shall be as follows:

     (a) Suspension of Certain Rights Upon Monetary Default. Notwithstanding
anything in this Agreement to the contrary, no distribution shall be made to any Defaulting
Member who is in Monetary Default, and the voting rights under this Agreement of any
Defaulting Member who is in Monetary Default shall be transferred to the Nondefaulting
Member. So long as any Monetary Default is continuing, the Defaulting Member assigns to
the Nondefaulting Member (i) its rights to receive any and all distributions under this
Agreement, and such distributions shall be payable to the Nondefaulting Member as
reimbursements for losses, damages, costs and expense resulting directly or indirectly from
such Monetary Default and (ii) its voting rights under this Agreement. If the Defaulting
Member shall dispute whether an event of Default has occurred, or the amount of the loss,
damage, cost or expense incurred by the Nondefaulting Member as a consequence of a Monetary
Default, the matter shall be submitted promptly to the dispute resolution procedure
provided for in Section 12.11 hereof.

     (b) Options of Nondefaulting Member Upon Any Event of Default. The
Nondefaulting Member may, but is not obligated to, take one or more of the following
actions upon the occurrence of a Default:

          (i) cure the Default (including, if applicable, by making a cover payment) and cause
the cost of such cure to be charged against a special loan account established for the
Defaulting Member until the entire amount of such costs plus interest on the unpaid balance
in accordance with Section 3.2 shall have been paid or reimbursed to the
Nondefaulting Member from any subsequent distributions made pursuant to this Agreement to
which the Defaulting Member would otherwise have been entitled, which amounts shall be paid
first as interest and then principal, until the cost is paid in full; or

          (ii) exercise any other rights and remedies available at law or in equity, subject to
Section 12.11.

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ARTICLE 10

DISSOLUTION AND LIQUIDATION

     10.1 Dissolution. The Company shall be dissolved upon the earliest to occur of the
following:

     (a) all or substantially all of the Company’s assets and properties have been sold and
reduced to cash;

     (b) the written consent of each Member; or

     (c) entry of a decree of judicial dissolution of the Company under Section 18-802 of
the Delaware Act.

The Members expressly recognize the right of the Company to continue in existence upon the
occurrence of a Default specified in Section 9.1(a) unless the Nondefaulting Members elect
to dissolve the Company pursuant to this Section 10.1.

     10.2 Liquidation. The Members agree as follows:

     (a) Procedures. Upon dissolution of the Company, the Management Committee, or
if there are no remaining Management Committee representatives, such Person as is
designated by the Members (the remaining Management Committee or such Person being herein
refereed to as the “Liquidator”) shall proceed to wind up the business and affairs
of the Company in accordance with the terms hereof and the requirements of the Delaware
Act. A reasonable amount of time shall be allowed for the period of winding up in light of
prevailing market conditions and so as to avoid undue loss in connection with any sale of
Company assets. This Agreement shall remain in full force and effect during the period of
winding up.

     (b) Distributions. In connection with the winding up of the Company, the
Company Assets or proceeds thereof shall be distributed as follows:

          (i) To creditors, including Members who are creditors, to the extent otherwise
permitted by Law, in satisfaction of the liabilities of the Company (whether by payment or
the making of reasonable provision for the payment thereof) other than liabilities for
which reasonable provision for payment has been make and liabilities to Members and former
Members under sections 18-601 and 18-604 of the Delaware Act;

          (ii) To Members and former Members in satisfaction of liabilities for distributions
under sections 18-601 and 18-604 of the Delaware Act; and

29

 

          (iii) all remaining Company Assets shall be distributed to the Members as follows:

          (A) the Liquidator may sell any or all Company Assets to any Person, including
to one or more Members (other than any Member in Default at the time of
dissolution), and any resulting gain or loss from each sale shall be computed and
allocated to the Capital Accounts of the Members in accordance with Article
4;

          (B) with respect to all Company Assets that have not been sold, the fair
market value of such Company Assets (as determined by the Liquidator using any
method of valuation as it, using its best judgment, deems reasonable) shall be
determined and the Capital Accounts of the Members shall be adjusted in accordance
with Article 4 to reflect the manner in which the unrealized income, gain,
loss, and deduction inherent in such Company Assets that have not been reflected in
the Capital Accounts previously would be allocated between the Members if there
were a taxable disposition of such Company Assets for their fair market value on
the date of distribution;

          (C) Company Assets shall be distributed between the Members ratably in
proportion to each Member’s positive Capital Account balances, as determined after
taking into account all Capital Account adjustments for the taxable year of the
Company during which the liquidation of the Company occurs (other than those made
by reason of this clause (C)); and in each case, those distributions shall be made
by the end of the taxable year of the Company during which the liquidation of the
Company occurs (or, if later, 90 days after the date of the liquidation); and

          (D) All distributions in kind to the Members shall be made subject to the
liability of each distributee for costs, expenses and liabilities theretofore
incurred or for which the Company has committed prior to the date of termination
and those costs, expenses and liabilities shall be allocated to the distributee
pursuant to this Section 10.2(b)(iii). This distribution of Company Assets
to a Member in accordance with the provisions of this Section 10.2(b)(iii)
constitutes a complete return to the Member of its Capital Contributions and a
complete distribution to the Member of its Interest in and to all the Company
Assets.

     (c) Capital Account Deficits; Termination. To the extent that any Member has
a deficit in its Capital Account, upon dissolution of the Company, such deficit shall not
be an asset of the Company and such Members shall not be obligated to contribute any
amounts to the Company to bring the balance of such Member’s Capital Account to zero.
Following the completion of the winding up of the affairs of the Company and the
distribution of Company Assets, the Company shall be deemed terminated and the Liquidator
shall file a certificate of

30

 

cancellation in the Office of the Secretary of State of Delaware as required by the
Delaware Act.

ARTICLE 11

FINANCIAL MATTERS

     11.1 Books and Records. The Company shall maintain or cause to be maintained accurate
and complete books and records, on the accrual basis, in accordance with GAAP (which, having been
adopted, shall not be changed without the prior written consent of the Members), showing all costs,
expenditures, sales, receipts, assets, liabilities, profits and losses and all other records
necessary, convenient or incidental to recording the Company’s business and affairs; provided,
however, that the Member’s Capital Accounts shall be maintained in accordance with Article
3, and the books and records will include sufficient information to identify capital
expenditures split between growth and maintenance capital (maintenance capital defined as cash
expenditures which add to or improve capital assets owned or acquired or construct new capital
assets if such expenditures are made to maintain, including over the long term, the operating
capacity or revenues). All of such books and records of the Company shall be open to inspection by
each Member or its designated representative at the inspecting Member’s expense at a reasonable
time during business hours and shall be audited every year by a joint audit team consisting of
representatives from each Member. Each Member shall be responsible for all costs incurred by or
associated with its respective representatives on such joint audit team.

     11.2 Financial Reports; Budget.

     (a) No later than 25 days following the last day of each month, the Company shall
cause each Member to be furnished with an unaudited balance sheet and income statement as
of the end of such month, prepared in accordance with normal month-end closing procedures.
No later than 25 days following the last day of each calendar quarter, the Company shall
cause each Member to be furnished with a balance sheet, an income statement and a statement
of cash flows for, or as of the end of such calendar quarter. The Management Committee
shall cause each Member to be furnished with audited financial statements no later than 60
days following the last day of each fiscal year, including a balance sheet, an income
statement, a statement of cash flows, and a statement of changes in each Member’s GAAP
Capital Account as of the end of the immediately preceding Fiscal Year. The Management
Committee also may cause to be prepared or delivered such other reports as it may deem in
its sole judgment, appropriate. The Company shall bear the costs of the preparation of the
reports and financial statements referred to in this Section 11.2(a).

     (b) Upon request of a Member, the Company will prepare and deliver to any such Member
or its Parent all of such additional financial statements, notes thereto and additional
financial information not prepared pursuant to Section 11.2(a) above as may be
required in order for such Member or Parent to comply

31

 

with its reporting requirements under (i) the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, (ii) the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder and (iii) any national
securities exchange or automated quotation system, in each case, on a timely basis. All of
such financial statements must be prepared in accordance with GAAP and, upon the request of
a Member, be audited or reviewed by independent public accountants. The requesting Member
shall bear the incremental costs of the preparation of the reports and financial statements
for and by the independent public accountants.

     (c) Prior to the beginning of each fiscal year, the Company shall prepare and submit
to the Management Committee for approval by unanimous vote a business plan for the upcoming
fiscal year, including capital and operating expense budgets and operating income
projections; provided, that the unanimous vote of the Management Committee shall not be
required for the Company with respect to items not covered by such business plan unless
otherwise required by Schedule 5.4.

     11.3 Accounts. The Company shall establish and maintain one or more separate bank and
investment accounts and arrangements for Company funds in the Company’s name with such financial
institutions and firms as the Management Committee may determine. The Company may not commingle
the Company’s funds with the funds of any other Person. All such accounts shall be and remain the
property of the Company and all funds received, held and disbursed for the purposes specified in
this Agreement.

     11.4 Tax Matters. The Members agree as follows:

     (a) Tax Matters Partner. The Midstream Member shall be designated as the
“Tax Matters Partner” pursuant to section 6231(a)(7) of the Code and the
Regulations promulgated thereunder. The Tax Matters Partner shall be responsible for all
tax compliance and audit functions related to federal, state and local tax returns of the
Company. The Tax Matters Partner is specifically directed and authorized to take whatever
steps such Member, in its discretion, deems necessary or desirable to perfect such
designation, including filing any forms or documents with the Internal Revenue Service and
taking such other action as may be from time to time required. The Tax Matters Partner
shall not be liable to the Company or the Members for act or omission taken or suffered by
it in its capacity as Tax Matters Partner in good faith in the belief that such act or
omission is in accordance with the directions of the Management Committee; provided that
such act or omission is not in willful violation of this Agreement and does not constitute
fraud or a willful violation of law.

     (b) Tax Information. Upon written request of the Tax Matters Partner, the
Company and each Member shall furnish to the Tax Matters Partner, all pertinent information
in its possession relating to the Company operations that is

32

 

necessary to enable the Tax Matters Partner to file all federal, state and local tax
returns of the Company in a manner to meet all applicable tax filing deadlines.

     (c) Tax Elections. The Company shall make the following elections on the
appropriate tax returns:

	 	(i)	 	to adopt the accrual method of accounting;
	 
	 	(ii)	 	an election pursuant to section 754 of the Code; and
	 
	 	(iii)	 	any other election that a Majority may deem appropriate.

It is the expressed intention of the Members hereunder to be treated as a partnership for
federal and state tax purposes. Neither the Company nor any Member may make an election
for the Company to be excluded from the application of the provisions of subchapter K of
chapter 1 of the subtitle A of the Code or any similar provisions of applicable state law,
and no provision of this Agreement shall be construed to sanction or approve such an
election.

     (d) Notices. The Tax Matters Partner shall take such action as may be
necessary to cause each Member to become a “notice partner” within the meaning of section
6223 of the Code and shall inform each Member of all significant matters that may come to
its attention in its capacity as Tax Matters Partner by giving notice thereof on or before
the tenth Business Day after becoming aware thereof and, within that time, shall forward to
each Member copies of all significant written communications it may receive in that
capacity. The Tax Matters Partner may not take any action contemplated by sections 6222
and 6232 of the Code without the consent of a Majority.

     (e) Filing of Returns. The Tax Matters Partner shall file all tax returns in
a timely manner, provide all Members, upon request, access to accounting and tax
information and schedules as shall be necessary for the preparation of such Member of its
income tax returns and such Member’s tax information reporting requirements, provide all
Members with a draft of the return for their review and comment and provide all Members
with a final return for the preparation for their federal and state returns in a manner to
meet all applicable tax filing deadlines.

ARTICLE 12

MISCELLANEOUS

     12.1 Notices. All notices, consents, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or delivered on the date
of receipt if (a) delivered personally; (b) telecopied or telexed with transmission confirmation;
(c) mailed by registered or certified mail return receipt request; or (d) delivered by a recognized
commercial courier to the Member as

33

 

follows (or such other address as any Member shall have last designated by written notice to
the other Members):

     If to the Company, notices shall be made to Midstream Member so long as it remains the
Operator (and then to the successor Operator):

DCP East Texas Holdings, LLC

370 17th Street, Suite 2500

Denver, Colorado 80202

Fax: 303-605-2226

Phone: 303-595-1630

Attention: Group Vice President and General Counsel

If to the Midstream Member:

DCP East Texas Holdings, LLC

370 17th Street, Suite 2500

Denver, Colorado 80202

Fax: 303-605-2226

Phone: 303-595-1630

Attention: Group Vice President and General Counsel

If to the MLP Member:

DCP Midstream Partners, LP

370 17th Street, Suite 2775

Denver, Colorado 80202

Telephone: (303) 633-2900

Facsimile: (303) 633-2921

Attention: President; and with a copy to General Counsel

     12.2 Amendment. This Agreement, including this Section 12.2 and the Schedules
hereto, shall not be amended or modified except by an instrument in writing signed by or on behalf
of all of the Members.

     12.3 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the Laws of the State of Delaware as applied to contracts made and performed within
the State of Delaware, without regard to principles of conflict of Laws.

     12.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Members and their respective successors and permitted assigns.

     12.5 No Third Party Rights. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any Person or entity not party to this Agreement,
except (i) the Company Indemnitees and Member Indemnitees are third

34

 

party beneficiaries to Article 6 of this Agreement and their rights are subject to the
terms of such Article 6 and (ii) as provided in Section 11.2(b).

     12.6 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same
instrument.

     12.7 Invalidity. If any of the provisions of this Agreement, including the Schedules,
is held invalid or unenforceable, such invalidity or unenforceability shall not affect in any way
the validity or enforceability of any other provision of this Agreement. If any provision of this
Agreement is held invalid or unenforceable, the Members shall attempt to agree on a valid or
enforceable provision which shall be a reasonable substitute for such invalid or unenforceable
provision in light of the tenor of this Agreement and, on so agreeing, shall incorporate such
substitute provision in this Agreement.

     12.8 Entire Agreement. This Agreement, including the Schedules, contains the entire
agreement between the Members hereto with respect to the subject matter hereof and all prior or
contemporaneous understandings and agreements shall merge herein. There are no additional terms,
whether consistent or inconsistent, oral or written, which are intended to be part of the Members’
understandings which have not been incorporated into this Agreement or the Schedules.

     12.9 Expenses. Except as the Members may otherwise agree or as otherwise provided
herein, each Member shall bear its respective fees, costs and expenses in connection with this
Agreement and the transactions contemplated hereby.

     12.10 Waiver. No waiver by any Member, whether express or implied, of any right under
any provision of this Agreement shall constitute a waiver of such Member’s right at any other time
or a waiver of such Member’s rights under any other provision of this Agreement unless it is made
in writing and signed by the President or a Vice President of the Member waiving the condition. No
failure by any Member hereto to take any action with respect to any breach of this Agreement or
Default by another Member shall constitute a waiver for the former Member’s right to enforce any
provision of this Agreement or to take action with respect to such breach or Default or any
subsequent breach or Default by such later Member.

     12.11 Dispute Resolution and Arbitration.

          (a) Negotiation. In the event of any Arbitral Dispute, the Members shall promptly
seek to resolve any such Arbitral Dispute by negotiations between senior executives of the Members
who have authority to settle the Arbitral Dispute. When a Member believes there is an Arbitral
Dispute under this Agreement that Member will give the other Member written notice of the Arbitral
Dispute. Within 15 days after receipt of such notice, the receiving Member shall submit a written
response. Both the notice and response shall include (i) a statement of each Member’s position and
a summary of the evidence and arguments supporting such position, and (ii) the name, title,

35

 

fax number, and telephone number of the executive or executives who will represent that
Member. If the Arbitral Dispute involves a claim arising out of the actions of any Person not a
Member or an Affiliate, or an employee or agent of a Member or an Affiliate for purposes of this
Agreement, the receiving Member shall have such additional time as necessary, not to exceed an
additional 30 days, to investigate the Arbitral Dispute before submitting a written response. The
executives shall meet at a mutually acceptable time and place within 15 days after the date of the
response and thereafter as often as they reasonably deem necessary to exchange relevant information
and to attempt to resolve the Arbitral Dispute. If one of the executives intends to be accompanied
at a meeting by an attorney, the other executives shall be given at least 5 Business Days’ notice
of such intention and may also be accompanied by an attorney.

          (b) Failure to Resolve. If the Arbitral Dispute has not been resolved within 60 days
after the date of the response given pursuant to Section 12.11(a) above, or such additional
time, if any, that the Members mutually agree to in writing, or if a Member receiving such notice
denies the applicability of the provisions of Section 12.11(a) or otherwise refuses to
participate under the provisions of Section 12.11(a), either Member may initiate binding
arbitration pursuant to the provisions of Section 12.11(c) below.

          (c) Arbitration. Any Arbitral Disputes not settled pursuant to the foregoing
provisions shall be resolved through the use of binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“Arbitration Rules”),
as supplemented to the extent necessary to determine any procedural appeal questions by the Federal
Arbitration Act (Title 9 of the United States Code) and in accordance with the following
provisions:

               (i) If there is any inconsistency between this Section 12.11(c) and the Arbitration
Rules or the Federal Arbitration Act, the terms of this Section 12.11(c) will control the
rights and obligations of the Members.

               (ii) Arbitration shall be initiated by a Member serving written notice, via certified mail, on
the other Member that the first Member elects to refer the Arbitral Dispute to binding arbitration
before a neutral panel of 3 arbitrators having expertise in the matters in controversy, along with
a statement of the matter in controversy. Within 15 days after receipt of such demand for
arbitration, the receiving Member shall submit its response to the other Member along with a
statement of any further matters in controversy. The Members will then have 15 days to submit
responses concerning any additional matters in controversy identified by the receiving Member. If
the Members are not able to agree on three arbitrators within 30 days of such 15 day period, either
Member may request the Chief U.S. District Court Judge for the District of Colorado, or such other
person designated by such judge, to select one or more arbitrators as soon as possible. If the
Judge declines to appoint an arbitrator, appointment shall be made, upon application of either
Member, pursuant to the Commercial Arbitration Rules of the American Arbitration Association. If
any arbitrator refuses or fails to fulfill his or her duties hereunder, such arbitrator shall be
replaced through the foregoing procedures.

36

 

               (iii) The Members each agree to submit to the arbitrators its respective desired outcome and
request for award, together with any supporting data that was used in developing its outcome and
request, no later than 30 days following the selection of the arbitrators. The arbitrators shall
be required to select one Member’s desired outcome and requested award and the arbitrators shall
have no right or authority to alter the desired outcome and requested award selected.

               (iv) The hearing will be conducted in Denver, Colorado, no later than 30 days after the
Members have submitted their desired outcomes and requests for award to the arbitrators. At the
hearing the Members shall present such evidence and witnesses as they may choose, with or without
counsel. The Members and the arbitrators should proceed diligently and in good faith in order that
the award may be made as promptly as possible.

               (v) Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be
binding on and non-appealable by the Members. Any such decision may be filed in any court of
competent jurisdiction and may be enforced by any Member as a final judgment in such court.

               (vi) The arbitrators shall have no right or authority to grant or award exemplary, punitive,
remote, speculative, consequential, special or incidental damages.

               (vii) Pre-hearing discovery shall be limited to a reasonable exchange of documents between the
Members, within the maximum number of documents specified by the arbitrators, and shall not include
depositions of any Person nor the use of subpoenas to compel testimony. The arbitrators may take a
Member’s cooperation or lack of cooperation in furnishing information to the arbitrators and the
other Member into account in reaching their decision. Except as provided within this subsection,
the Federal Rules of Civil Procedure, as modified or supplemented by the local rules of civil
procedure for the U.S. District Court of Colorado, shall apply in the arbitration.

               (viii) Adherence to formal rules of evidence shall not be required. The arbitrators shall
consider any evidence and testimony that they determine to be relevant.

               (ix) The Members hereby request that the arbitrators render their decision within 15 days
following conclusion of the hearing.

               (x) The defenses of statute of limitations and laches shall be tolled from and after the date
a Member gives the other Member written notice of an Arbitral Dispute as provided in Section
12.11(a) above until such time as the Arbitral Dispute has been resolved pursuant to
Section 12.11(a), or an arbitration award has been entered pursuant to this Section
12.11(c).

37

 

          (d) Recovery of Costs and Attorneys’ Fees. If arbitration arising out of this
Agreement is initiated by either Member, the decision of the arbitrators may include the award of
court costs, fees and expenses of such arbitration (including reasonable attorneys’ fees).

          (e) Choice of Forum. If, despite the Members’ agreement to submit any Arbitral
Disputes to binding arbitration, there are any court proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby, such proceedings shall be brought and tried in,
and the Members hereby consent to the jurisdiction of, the federal or state courts situated in the
City and County of Denver, State of Colorado.

          (f) Jury Waivers. THE PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY.

          (g) Settlement Proceedings. All aspects of any settlement proceedings, including
discovery, testimony and other evidence, negotiations and communications pursuant to this
Section 12.11, briefs and the award shall be held confidential by each Member and the
arbitrators, and shall be treated as compromise and settlement negotiations for the purposes of the
Federal and State Rules of Evidence.

     12.12 Disclosure. Each Member is acquiring its Interest in the Company based upon its
own independent investigation, and the exercise by such Member of its rights and the performance of
its obligations under this Agreement are based upon its own investigation, analysis and expertise.
Each Member’s acquisition of its Interest in the Company is being made for its own account for
investment, and not with a view to the sale or distribution thereof.

     12.13 Brokers and Finder. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the intervention of any Person acting
on behalf of any Member in such manner as to give rise to any valid claim against any Member for
any brokerage or finder’s commission, fee or similar compensation.

     12.14 Further Assurances. The Members shall provide to each other such information
with respect to the transactions contemplated hereby as may be reasonably requested and shall
execute and deliver to each other such further documents and take such further action as may be
reasonably contemplated herein.

     12.15 Section Headings. The section headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the interpretation of any provision
hereof.

     12.16 Waiver of Certain Damages. Each of the Members (individually, and on behalf of
the Company) waives any right to recover any damages, including

38

 

consequential or punitive damages, in excess of actual damages from any other Member or the
Company in connection with a default under this Agreement.

     12.17 Certificates of Interest. Upon the request of either Member, the Interests of
the Members in the Company shall be represented by Certificates (“Certificates”), which
shall certify the Percentage Interest held by such Member. Subject to the laws of Delaware and the
terms of this Agreement, Interests in the Company shall be transferable only upon the books of the
Company by the holders thereof, upon surrender and cancellation of certificates for such Interest
transferred, with a duly execute assignment and power of transfer endorsed thereon or attached
thereto, and with such proof of the authenticity of the signature to such assignment and power of
transfer as the Company or its agents may reasonably require. All transfers and assignments shall
be subject to the provisions of Article 8 and the other provisions of this Agreement. The
Company may issue a new certificate in place of any certificate previously issued by it and alleged
to have been lost, stolen or destroyed.

39

 

IN WITNESS WHEREOF, the Members hereto have executed this Agreement to be effective as of the date
first written herein.

	 	 	 	 	 
	 	DCP MIDSTREAM, LLC

 	 
	 	By:  	/s/ Brian S. Frederick
 	 
	 	 	Name:  	Brian S. Frederick 	 
	 	 	Title:  	Vice President, Planning and Corporate
Development 	 
	 
	 	DCP ASSETS HOLDING, LP

 	 
	 	By:  	/s/ Greg K. Smith
 	 
	 	 	Name:  	Greg K. Smith 	 
	 	 	Title:  	Vice President, Business Development
 and
Director 	 

Amended and Restated Limited Liability Company Agreement

of DCP East Texas Holdings, LLC

40

 

SCHEDULE 3.1

to that

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF DCP EAST TEXAS HOLDINGS, LLC

DATED JULY 1, 2007

BETWEEN

DCP MIDSTREAM, LLC

AND

DCP ASSETS HOLDING, LP

	 	 	 
	Member	 	Percentage Interest
	DCP Midstream, LLC
	 	75%
	DCP Assets Holding, LP
	 	25%

Schedule 3.1-Page 1

 

 

SCHEDULE 5.4

to that

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF DCP EAST TEXAS HOLDINGS, LLC

DATED JULY 1, 2007

BETWEEN

DCP MIDSTREAM, LLC

AND

DCP ASSETS HOLDING, LP

Pursuant to Section 5.4(b), the following is a list of matters requiring unanimous
vote of the Management Committee for approval:

	1.	 	The sale, assignment, transfer, lease or other disposition of all or any portion of the
Company Assets for consideration in excess of $20,000,000 in the aggregate.
	 
	2.	 	The purchase or other acquisition of any asset or business of, any equity interest in, or any
investment in, any Person for consideration in excess of $20,000,000 in the aggregate.
	 
	3.	 	The Company canceling, compromising, waiving, releasing or settling of any right, claim or
lawsuit for an amount in excess of $20,000,000.
	 
	4.	 	The undertaking by the Company of any capital project in excess of $20,000,000, other than
(a) reasonable capital expenditures in connection with any emergency or force majeure events
or (b) as contemplated by the capital budget prepared and approved in accordance with the
provisions of Section 11.2.
	 
	5.	 	The issuance, incurrence, guarantee or assumption of any indebtedness or letter of credit by
the Company except guaranties and letters of credit of ordinary course of business contracts,
and indebtedness and letters of credit necessary for the day-to-day operation, maintenance and
repair of the Company Assets.
	 
	6.	 	The issuance or sale of any equity interest of the Company or any option, warrant or other
security convertible into or exercisable for any equity interests of the Company.
	 
	7.	 	The redemption, repurchase or other acquisition of any equity interest of the Company.
	 
	8.	 	The Company making any distributions (whether in cash or otherwise) with respect to the
Membership Interests (except as provided in Section 4.3).
	 
	9.	 	The Company entering into, amending, terminated, canceling or renewing any material contracts
outside the ordinary course of business.

Schedule 5.4-Page 1

 

	10.	 	The Company engaging in any transaction with an Affiliate of the Company; provided, that the
foregoing shall not apply to transactions or contracts in effect on the date of this
Agreement, or ordinary course of business transactions on commercially reasonable terms for
the provision of natural gas or natural gas liquids gathering, processing, treating,
compressing, storing, transporting, terminaling, trading or marketing services or for the
purchase of power, natural gas or natural gas liquids for fuel or system requirements.
	 
	11.	 	The Company merging or consolidating with another Person.
	 
	12.	 	The Company making any loan to any Person (other than extensions of credit to customers in
the ordinary course of business and inter-company loans under DCP Midstream, LLC’s cash
management system).
	 
	13.	 	A call for capital contributions by the Members, except as provided in Section 5.4(c)
of the Agreement.
	 
	14.	 	Any amendment to this Agreement or the Certificate of Formation of the Company.
	 
	15.	 	Any liquidation, dissolution, recapitalization or other winding up of the Company.
	 
	16.	 	The Company making any material change in any method of accounting or accounting principles,
practices or policies, other than those required by GAAP or applicable law.
	 
	17.	 	The Company making, amending or revoking any material election with respect to taxes.
	 
	18.	 	Acquiring, commencing or conducting any activity or business that may generate income for
federal income tax purposes that may not be “qualifying income” (as such term is defined
pursuant to section 7704 of the Code.)

Schedule 5.4-Page 2

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