Document:

exv10w3

 

Exhibit 10.3

 

 

OMNIBUS AGREEMENT

among

TARGA RESOURCES, INC.

TARGA RESOURCES GP LLC

and

TARGA RESOURCES PARTNERS LP

 

 

 

 

OMNIBUS AGREEMENT

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

RECITALS:

     1. The Parties desire by their execution of this Agreement to evidence their agreement, as
more fully set forth in Article II, with respect to the amount to be paid by the Partnership for
certain general and administrative services to be performed by Targa and its Affiliates as well as
direct expenses, including operating expenses, incurred by Targa and its Affiliates for and on
behalf of the Partnership Group (as defined herein).

     2. The Parties desire to evidence their agreement, as more fully set forth in Article III,
with respect to certain indemnification obligations of the Parties.

     In consideration of the agreements contained herein, and for other good and valuable
consideration, the Parties hereto hereby agree as follows:

ARTICLE I

Definitions

          1.1 Definitions.

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

     “Affiliate” is defined in the Partnership Agreement.

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

     “Closing Date” means the date of the closing of the Partnership’s initial public
offering of Common Units.

     “Common Units” is defined in the Partnership Agreement.

     “Conflicts Committee” is defined in the Partnership Agreement.

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

 

 

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

     (ii) any event, omission or condition associated with ownership or operation of the
North Texas Assets relating to Environmental Activities (including, without limitation, the
exposure to or presence of Hazardous Substances on, under, about or migrating to or from the
North Texas Assets or the exposure to or Release of Hazardous Substances arising out of
operation of the North Texas Assets) including, without limitation, (A) the cost and expense
of any Environmental Activities, (B) the cost or expense of the preparation and
implementation of any closure, remedial or corrective action or other plans required or
necessary under Environmental Laws and (C) the cost and expense for any environmental or
toxic tort pre-trial, trial or appellate legal or litigation support work; provided, in the
case of clauses (A) and (B), such cost and expense shall not include the costs associated
with project management and soil and ground water monitoring.

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

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

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

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

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

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

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

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

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

     “Limited Partner” is defined in the Partnership Agreement.

     “Losses” means all losses, damages, liabilities, claims, demands, causes of action,
judgments, settlements, fines, penalties, costs and expenses (including, without limitation,
court costs and reasonable attorney’s and experts’ fees) of any and every kind or character.

     “North Texas Assets” means the gathering and processing assets to be contributed to the
Partnership in connection with its initial public offering and as more completely described
in the Registration Statement and includes the pipelines, processing plants or related
equipment or assets, or portions thereof, conveyed, contributed or otherwise transferred or
intended to be conveyed, contributed or otherwise transferred to any member of the
Partnership Group, or owned by or necessary for the operation of the business, properties or
assets of any member of the Partnership Group, prior to or as of the Closing Date.

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

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Targa Resources Partners LP, dated as of the Closing Date, as such agreement
is in effect on the Closing Date, to which reference is hereby made for all purposes of this
Agreement. No amendment or modification to the Partnership Agreement subsequent to the
Closing Date shall be given effect for the purposes of this Agreement unless such amendment
receives the approval required pursuant to Section 4.5 hereof.

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

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

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

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

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

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

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

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

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

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ARTICLE II

Reimbursement Obligations

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

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

          (b) Subject to the provisions of Section 2.3(c) below, the Partnership Group hereby agrees to
reimburse Targa for all expenses and expenditures Targa or its Affiliates incur or payments they
make on behalf of the Partnership Group for these general and administrative services.

          (c) The amount for which Targa shall be entitled to reimbursement from the Partnership Group
pursuant to Section 2.1(b) for general and administrative expenses shall not exceed $5.0 million
annually for a period of three (3) years following the date of this Agreement (the “G&A Expenses
Limit”). Following the first anniversary of this Agreement, the G&A Expenses Limit shall be
increased annually over the next two years by the percentage increase in the Consumer Price Index –
All Urban Consumers, U.S. City Average, Not Seasonally Adjusted for the applicable year (the “CPI
Index”). In making such adjustment, the G&A Expenses Limit shall be increased on the first
anniversary of this Agreement by the CPI Index for the prior year period based on the most recent
information available from the U.S. Department of Labor and similarly increased on the second
anniversary of this Agreement by the CPI Index for the prior year period. In the event that the
Partnership Group makes any acquisitions of assets or businesses or the business of the Partnership
Group otherwise expands during the first three years following the date of this Agreement, then the
G&A Expenses Limit shall be appropriately increased in order to account for adjustments in the
nature and extent of the general and administrative services by Targa to the Partnership Group,
with any such increase in the G&A Expenses Limit subject to the approval of the Conflicts
Committee. After the third anniversary of the date of this Agreement, the G&A Expenses Limit will
no longer apply and the General Partner will determine the amount of general and administrative
expenses that will be properly allocated to the Partnership in accordance with the terms of the
Partnership Agreement. The G&A Expenses Limit shall not apply to reimbursement for direct expenses
of the Partnership as provided in Section 2.2.

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     2.2 Reimbursement for Direct Expenses.

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

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

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

ARTICLE III

Indemnification

3.1 Environmental Indemnification.

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

          (b) The Partnership Group shall indemnify, defend and hold harmless Targa and its Affiliates,
other than any Partnership Group Member, from and against any Covered Environmental Losses suffered
or incurred by Targa and its Affiliates, other than any Partnership Group Member, relating to the
North Texas Assets occurring after the Closing Date except to the extent that the Partnership Group
is indemnified with respect to any of such Covered Environmental Losses under Section 3.1(a).

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

          (d) No claims may be made against Targa for indemnification pursuant to Section 3.1(a) unless
the aggregate dollar amount of the Losses suffered or incurred by the

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Partnership Group or
Partnership Indemnitees exceed $250,000, after such time Targa shall be liable for the full amount
of such claims, subject to the limitations of Section 3.1(c).

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

     3.2 Additional Indemnification

          (a) Subject to the provisions of Section 3.3, Targa shall indemnify, defend and hold harmless
the Partnership Group and the Partnership Indemnitees from and against any Losses suffered or
incurred by the Partnership Group or any Partnership Indemnitee by reason of or arising out of:

     (i) the failure of the Partnership Group to be the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests in and to the
lands on which are located any North Texas Assets, and such failure renders the
Partnership Group liable or unable to use or operate the North Texas Assets in
substantially the same manner that the North Texas Assets were used and operated by
Targa and its Affiliates immediately prior to the Closing Date as described in the
Registration Statement;

     (ii) the failure of the Partnership Group to have on the Closing Date any
consent or governmental permit necessary to allow (i) the transfer of any of the
North Texas Assets to the Partnership Group on the Closing Date or (ii) any such
North Texas Assets to cross the roads, waterways, railroads and other areas upon
which any such North Texas Assets are located as of the Closing Date, and any such
failure specified in such clause (ii) renders the Partnership Group unable to use or
operate the North Texas Assets in substantially the same manner that the North Texas
Assets were owned and operated by Targa and its Affiliates immediately prior to the
Closing Date as described in the Registration Statement;

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

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

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

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

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

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

     3.3 Indemnification Procedures.

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

          (b) The Indemnifying Party shall have the right to control all aspects of the defense of (and
any counterclaims with respect to) any claims brought against the Indemnified Party that are
covered by the indemnification set forth in this Article III, including, without limitation, the
selection of counsel, determination of whether to appeal any decision of any court or similar
authority and the settling of any such matter or any issues relating thereto; provided, however,
that no such settlement shall be entered into without the consent (which consent shall not be
unreasonably withheld, conditioned or delayed) of the Indemnified Party unless it includes a full
release of the Indemnified Party from such matter or issues, as the case may be.

          (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party with respect
to all aspects of the defense of any claims covered by the indemnification set forth in this
Article III, including, without limitation, the prompt furnishing to the Indemnifying Party of any
correspondence or other notice relating thereto that the Indemnified Party may receive, permitting
the names of the Indemnified Party to be utilized in connection with such defense, the making
available to the Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the making available to
the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in
connection therewith the Indemnifying Party agrees to use reasonable
efforts to minimize the impact thereof on the operations of the Indemnified Party and further
agrees to maintain the confidentiality of all files, records and other information furnished by the
Indemnified Party pursuant to this Section 3.3. In no event shall the obligation of the

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Indemnified
Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence
be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in
connection with the defense of any claims covered by the indemnification set forth in this Article
III; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire
and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any
such counsel hired by the Indemnified Party reasonably informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

          (d) In determining the amount of any loss, cost, damage or expense for which the Indemnified
Party is entitled to indemnification under this Agreement, the gross amount of the indemnification
will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such
correlative insurance benefit shall be net of any incremental insurance premium that becomes due
and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by
the Indemnified Party under contractual indemnities from third Persons.

ARTICLE IV

Miscellaneous

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

          4.2 Notice. All notices or requests or consents provided for by, or permitted to be given pursuant
to, this Agreement must be in writing and must be given by depositing same in the United States
mail, addressed to the Person to be notified, postpaid, and registered or certified with return
receipt requested or by delivering such notice in person or by telecopier or telegram to such
Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice
given by telegram or telecopier shall be effective upon actual receipt if received during the
recipient’s normal business hours or at the beginning of the recipient’s next business day after
receipt if not received during the recipient’s normal business hours. All notices to be sent to a
Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such
other address as such Party may stipulate to the other Parties in the manner provided in this
Section 4.2.

if to Targa:

Targa Resources, Inc.

1000 Louisiana, Suite 4300

Houston, Texas 77002

Attention: General Counsel

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if to the Partnership Entities:

Targa Resources Partners LP

1000 Louisiana, Suite 4300

Houston, Texas 77002

Attention: General Counsel

          4.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to
the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

          4.4 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to or of
any breach or default by any Person in the performance by such Person of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person hereunder.

          4.5 Amendment or Modification. This Agreement may be amended or modified from time to time only by
the written agreement of all the Parties hereto; provided, however, that the Partnership may not,
without the prior approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that, in the reasonable discretion of the General Partner, will adversely affect the
holders of Common Units. Each such instrument shall be reduced to writing and shall be designated
on its face an “Amendment” or an “Addendum” to this Agreement.

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

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

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

          4.9 Further Assurances. In connection with this Agreement and all transactions contemplated by
this Agreement, each signatory party hereto agrees to execute and deliver such additional documents
and instruments and to perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

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

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

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

	 	 	 	 	 
	 	TARGA RESOURCES, INC.

 	 
	 	By:  	/s/ Rene R. Joyce 	 
	 	 	Rene R. Joyce 	 
	 	 	Chief Executive Officer 	 
	 
	 	TARGA RESOURCES LLC

 	 
	 	By:  	/s/ Rene R. Joyce 	 
	 	 	Rene R. Joyce 	 
	 	 	Chief Executive Officer 	 
	 
	 	TARGA RESOURCES GP LLC

 	 
	 	By:  	/s/ Rene R. Joyce 	 
	 	 	Rene R. Joyce 	 
	 	 	Chief Executive Officer 	 
	 
	 	TARGA RESOURCES PARTNERS LP

 	 
	 	By:  	Targa Resources GP LLC
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Rene R. Joyce 	 
	 	 	Rene R. Joyce 	 
	 	 	Chief Executive Officer 	 
	 

[Signature Page to the Omnibus Agreement]exv10w4

 

Exhibit 10.4

TARGA RESOURCES PARTNERS LP

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT (this “Agreement”) is effective February ___, 2007, between Targa Resources
Partners LP, a Delaware limited partnership (the “MLP”), Targa Resources GP LLC, a Delaware limited
liability company (the “Company”), and the undersigned director or officer of the Company
(“Indemnitee”).

     WHEREAS, the MLP Partnership Agreement (as defined below) provides for indemnification of each
director and officer of the Company and the MLP, as well as persons serving in various other
capacities, to the maximum extent permitted by law;

     WHEREAS, the Indemnitee is entitled to indemnification pursuant to the MLP Partnership
Agreement;

     WHEREAS, the Company LLC Agreement (as defined below) provides indemnification of each
director and officer of the Company, as well as persons serving in other capacities, to the maximum
extent authorized by law;

     WHEREAS, the Indemnitee is entitled to indemnification pursuant to the Company LLC Agreement;

     WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the MLP and the Company in an
effective manner, the MLP and the Company wish to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest extent permitted by law (whether
partial or complete) and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the MLP’s and/or the Company’s
directors’ and officers’ liability insurance policies;

     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the MLP and/or the Company on condition that the Indemnitee be so indemnified;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the MLP,
the Company and Indemnitee do hereby covenant and agree as follows:

     1. Definitions. As used in this Agreement:

          (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
inquiry or proceeding, whether brought by or in the right of the MLP or the Company or any
predecessor, subsidiary or affiliated company or otherwise and whether of a civil, criminal,
administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as
a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director or
officer of the MLP or the Company, by reason of any action taken by him or of any inaction on his
part while acting as a director or officer or by reason of the fact that he is or was

 

 

serving at the request of the MLP or the Company as a director, officer, trustee, employee or
agent of another corporation, partnership, joint venture, trust, limited liability company or other
enterprise; in each case whether or not he is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification or reimbursement can be provided
under this Agreement; provided that any such action, suit or proceeding which is brought by
Indemnitee against the MLP or the Company or any predecessor, subsidiary or affiliated company or
directors or officers of the MLP or the Company or any predecessor, subsidiary or affiliated
company, other than an action brought by Indemnitee to enforce his rights under this Agreement,
shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of
the Company.

          (b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties
against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a
Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation
fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and
expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably
incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in a Proceeding or establishing
Indemnitee’s right of entitlement to indemnification for any of the foregoing.

          (c) References to Indemnitee’s being or acting as “a director or officer of the MLP or the
Company” or “serving at the request of the MLP or the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise” shall include in each case service to or actions taken while and as a
result of being a director, officer, trustee, employee or agent of any predecessor, subsidiary or
affiliated company of the MLP or the Company.

          (d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the MLP or the Company” shall include any service as a director,
officer, employee or agent of the MLP or the Company which imposes duties on, or involves services
by, such director, officer, trustee, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries.

          (e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of “Expenses” herein.

          (f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.

          (g) The term “MLP Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the MLP, dated as of February ___, 2007, as amended or restated from time to time.

2

 

          (h) The term “Company LLC Agreement” means the Limited Liability Company Agreement of the
Company, dated as of October 23, 2006, as amended or restated from time to time.

          (i) The term “LLC Statute” means the Delaware Limited Liability Company Act.

          (j) The term “Partnership Statute” means the Delaware Revised Uniform Limited Partnership Act.

          (k) The term “Board of Directors” means the Board of Directors of the Company.

     2. Indemnity of Indemnitee. Each of the MLP and the Company hereby agrees (subject to the
provisions of Section 5 below) to hold harmless and indemnify Indemnitee against Expenses to the
fullest extent authorized or permitted by law (including the applicable provisions of the
Partnership Statute and the LLC Statute). The phrase “to the fullest extent permitted by law”
shall include, but not be limited to (a) to the fullest extent permitted by any provision of the
Partnership Statute and the LLC Statute that authorizes or permits additional indemnification by
agreement, or the corresponding provision of any amendment to or replacement of the Partnership
Statute and the LLC Statute and (b) to the fullest extent authorized or permitted by any amendments
to or replacements of the Partnership Statute and the LLC Statute adopted after the date of this
Agreement that increase the extent to which an entity may indemnify its officers and directors.
Any amendment, alteration or repeal of the Partnership Statute and the LLC Statute that adversely
affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such
right with respect to any Proceeding involving any occurrence or alleged occurrence of any action
or omission to act that took place prior to such amendment or repeal.

     3. Additional Indemnity. Each of the MLP and the Company hereby further agrees (subject to the
provisions of Section 5 below) to hold harmless and indemnify Indemnitee against Expenses incurred
by reason of the fact that Indemnitee is or was a director or officer of the MLP or the Company, or
is or was serving at the request of the MLP or the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise, including, without limitation, any predecessor, subsidiary or
affiliated entity of the MLP or the Company, provided that the Indemnitee shall not be indemnified
and held harmless if there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter for which the Indemnitee is
seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in
fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the
Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order of the
court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that Indemnitee acted in bad faith or engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was unlawful.

     4. Contribution. If the indemnification provided under Section 2 is unavailable by reason of a
court decision, based on grounds other than any of those set forth in Section 5 below,

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then, in respect of any Proceeding in which the MLP or the Company is jointly liable with Indemnitee (or
would be if joined in such Proceeding), the MLP and the Company shall contribute to the amount of
Expenses actually and reasonably incurred and paid or payable by Indemnitee in such proportion as
is appropriate to reflect (a) the relative benefits received by the MLP or the Company on one hand
and Indemnitee on the other from the transaction from which such Proceeding arose and (b) the
relative fault of the MLP or the Company on the one hand and of Indemnitee on the other in
connection with the events that resulted in such Expenses as well as any other relevant equitable
considerations. The relative fault of the MLP or the Company on the one hand and of Indemnitee on
the other shall be determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the circumstances resulting
in such Expenses. Each of the MLP and the Company agrees that it would not be just and equitable
if contribution pursuant to this Section 4 were determined by pro rata allocation or any other
method of allocation that does not take into account of the foregoing equitable considerations.

     5. Exceptions. Any other provision herein to the contrary notwithstanding, the MLP and the Company
shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by way
of defense, except with respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement;

          (b) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) to the extent such expenses or liabilities have been paid directly to
Indemnitee by an insurance carrier under a policy of directors’ and officers’ liability insurance;

          (c) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment
of profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute;

          (d) Unlawful Claims. To indemnify Indemnitee to the extent such indemnification is
prohibited by applicable law; or

          (e) Unauthorized Settlement. To indemnify Indemnitee with regard to any judicial
award if the MLP or the Company was not given a reasonable and timely opportunity, to
participate in the defense of such action or to indemnify Indemnitee for any amounts paid in
settlement of any Proceeding effected without the MLP’s or the Company’s prior written consent.

     6. Choice of Counsel. If Indemnitee is a director but not an officer of the MLP or the Company,
he, together with the other directors who are not officers of the MLP or the Company and are
seeking indemnification (the “Outside Directors”), shall be entitled to employ, and be reimbursed
for the fees and disbursements of, a single counsel separate from that chosen

4

 

by Indemnitees who
are officers of the MLP or the Company. The principal counsel for Outside Directors (“Principal
Counsel”) shall be determined by majority vote of the Outside Directors who are seeking
indemnification, and the Principal Counsel for the Indemnitees who are not Outside Directors
(“Separate Counsel”) shall be determined by majority vote of such Indemnitees, in each case subject
to the consent of the MLP or the Company (not to be unreasonably withheld or delayed). The
obligation of the MLP and the Company to reimburse Indemnitee for the fees and disbursements of
counsel hereunder shall not extend to the fees and disbursements of any counsel employed by
Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless Indemnitee
has interests that are different from those of the other Indemnitees or defenses available to him
that are in addition to or different from those of the other Indemnitees such that Principal
Counsel or Separate Counsel, as the case may be, would have an actual or potential conflict of
interest in representing Indemnitee.

7. Advances of Expenses.

     (a) Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee
shall be paid by the MLP and the Company, in advance of the final disposition of the Proceeding,
within three business days after receipt of Indemnitee’s written request accompanied by
substantiating documentation and Indemnitee’s written affirmation as described in subsection (c)
below. No objections based on or involving the question whether such charges meet the definition
of “Expenses,” including any question regarding the reasonableness of such Expenses, shall be
grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount
claimed within such three business day period, and the undertaking of Indemnitee set forth in this
Section 7 to repay any such amount to the extent it is ultimately determined that Indemnitee is not
entitled to indemnification shall be deemed to include an undertaking to repay any such amounts
determined not to have met such definition.

     (b) Indemnitee hereby undertakes to repay to the MLP and the Company (i) any advances or
payment of Expenses made pursuant to this Section 7 and (ii) any judgments, penalties, fines and
settlements paid to or on behalf of Indemnitee hereunder, in each case to the extent that it is
ultimately determined in a final judgment or other final adjudication of a court of competent
jurisdiction that Indemnitee is not entitled to indemnification.

     (c) As a condition to the advancement of such Expenses or the payment of such judgments,
penalties, fines and settlements, Indemnitee shall execute an acknowledgment wherein Indemnitee affirms (i) that Indemnitee has met the applicable standard of conduct for
indemnification and (ii) that such Expenses or such judgments, penalties, fines and settlements, as
the case may be, are delivered pursuant and are subject to the provisions of this Agreement.

     8. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any
indemnification payment under this Agreement, other than pursuant to Section 7 hereof, shall be
made no later than 30 days after receipt by the MLP and the Company of the written request of
Indemnitee, accompanied by substantiating documentation, unless a determination is made within said
30-day period that Indemnitee has not met the relevant standards for indemnification set forth in
Section 3 hereof by (a) the Board of Directors by a majority vote of a quorum consisting of
directors who are not or were not parties to such Proceeding, (b) a committee of the Board of
Directors designated by majority vote of the Board

5

 

of Directors, even though less than a quorum,
(c) if there are no such directors, or if such directors so direct, independent legal counsel in a
written opinion or (d) the equity owners.

     The right to indemnification or advances as provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is
not appropriate shall be on the MLP and the Company. Neither the failure of the MLP or the Company
(including its Board of Directors, any committee thereof, independent legal counsel or its equity
owners) to have made a determination prior to the commencement of such action that indemnification
is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor
an actual determination by the MLP and the Company (including its Board of Directors, any committee
thereof, independent legal counsel or its equity owners) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.

     9. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses
provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may be entitled under the MLP Partnership Agreement, the Company LLC Agreement, the Partnership
Statute, the LLC Statute, any directors and officers insurance maintained by or on behalf of the
MLP or the Company, any agreement, or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office; provided, however, that this Agreement
supersedes all prior written indemnification agreements between the MLP or the Company (or any
predecessor thereof) and Indemnitee with respect to the subject matter hereof. However, Indemnitee
shall reimburse the MLP and the Company for amounts paid to Indemnitee pursuant to such other
rights to the extent such payments duplicate any payments received pursuant to this Agreement.

     10. Continuation of Indemnity. All agreements and obligations of the MLP and the Company contained
herein shall continue during the period Indemnitee is a director or officer of the MLP or the
Company (or is or was serving at the request of the MLP or the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other
enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible
Proceeding (notwithstanding the fact that Indemnitee has ceased to serve the MLP or the Company).

     11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the MLP and the Company for a portion of Expenses, but not, however, for the
total amount thereof, the MLP and the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses to which Indemnitee is entitled.

6

 

     12. Acknowledgements. Each of the MLP and the Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve or to continue to serve as a director or officer of the MLP and/or the Company,
and acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve or in
continuing to serve as a director or officer of the MLP and/or the Company.

     13. Enforcement. In the event Indemnitee is required to bring any action or other proceeding to
enforce rights or to collect moneys due under this Agreement and is successful in such action, the
MLP and the Company shall reimburse Indemnitee for all of Indemnitee’s expenses in bringing and
pursuing such action.

     14. Severability. If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable (a) the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement
is a separate and independent portion of this Agreement. If the indemnification to which
Indemnitee is entitled with respect to any aspect of any claim varies between two or more sections
of this Agreement, that section providing the most comprehensive indemnification shall apply.

     15. Liability Insurance. To the extent the MLP or the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available and maintained by the MLP or the Company for any director or officer of the MLP
or the Company or any applicable subsidiary or affiliated company.

     16. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Delaware, without giving effect to principles of conflict
of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by any party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

          (c) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

7

 

          (d) Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given (i) when delivered personally to the recipient, (ii) one business day after the
date when sent to the recipient by reputable overnight courier service (charges prepaid), or (iii)
five business days after the date when mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other communications shall
be sent to the parties at the addresses indicated on the signature page hereto, or to such other
address as any party hereto may, from time to time, designate in writing delivered pursuant to the
terms of this Section 16(d).

          (e) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

          (f) Successors and Assigns. This Agreement shall be binding upon the MLP and the
Company and their respective successors and assigns and shall inure to the benefit of Indemnitee
and Indemnitee’s heirs, legal representatives and assigns.

          (g) Subrogation. In the event of payment under this Agreement, the MLP and the
Company shall be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to
secure such rights and to enable the MLP and the Company to effectively bring suit to enforce such
rights.

8

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 
	 	TARGA RESOURCES PARTNERS LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 

	 	Address:
	 	1000 Louisiana, Suite 4300
	 

	 	 	 	Houston, Texas 77002
	 
	 	 	 	 

	 	 	 	 	 
	 	TARGA RESOURCES GP LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 

	 	Address:
	 	1000 Louisiana, Suite 4300
	 

	 	 	 	Houston, Texas 77002
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	INDEMNITEE:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 

	 	[Name]	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

9

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