{"id":41665,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/wild-horse-limited-liability-company-agreement-k-n-energy-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"wild-horse-limited-liability-company-agreement-k-n-energy-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/wild-horse-limited-liability-company-agreement-k-n-energy-inc.html","title":{"rendered":"Wild Horse Limited Liability Company Agreement &#8211; K N Energy Inc. and Tom Brown Inc."},"content":{"rendered":"<pre>                      LIMITED LIABILITY COMPANY AGREEMENT\n\n                                       OF\n\n                                WILD HORSE, LLC\n\n         This Limited Liability Company Agreement (this 'Agreement') is entered\ninto by and between K N Energy, Inc. ('KNE'), a Kansas corporation, and Tom\nBrown, Inc. ('TBI'), a Delaware corporation, as the sole Members of Wild Horse,\nLLC (the 'Company'), a Delaware Limited Liability Company formed pursuant to\nthe Delaware Limited Liability Company Act.  In consideration of the mutual\npromises made herein, KNE and TBI agree as follows:\n\n                                   ARTICLE I\n                                  DEFINITIONS\n\n         Capitalized words and phrases used herein shall have the meanings set\nforth below in this Article I unless defined elsewhere herein:\n\n         'Act' means the Delaware Limited Liability Company Act, as amended from\ntime to time.\n\n         'Agreed Value' means the fair market value of any contributed or\ndistributed Property net of any liability assumed or taken subject to, as fair\nmarket value is determined by the Members using any reasonable method of\nvaluation.\n\n         'Assignee' means a Person to whom all or part of a Member's Interest\nhas been assigned and who has been admitted as a Member as a result of such\nassignment..\n\n         'AMI' means the geographic area of mutual interest depicted on the\nplat attached hereto as Exhibit A (as the same may be amended or supplemented\nfrom time to time) in which the Company proposes to pursue opportunities to\nprovide the services described in Article VI hereof.\n\n         'Available Cash' means all cash funds of the Company from operations,\nrefinancings, asset sales, Capital Contributions, loans or any other source at\nany particular time available for Distribution after reasonable provision has\nbeen made for (i) payment of all operating expenses of the Company as of such\ntime and (ii) payment of all outstanding and unpaid current obligations of the\nCompany as of such time.\n\n         'Business' is defined in Section 3.1.\n\n         'Capital Account' means the account maintained for a Member or\nAssignee in accordance with Section 8.2.\n\n\n\n         'Capital Contribution' means, with respect to a Member, the amount of\ncash and the Agreed Value of the property (other than cash) contributed to the\nCompany with respect to such Member's Interest.\n\n         'Certificate of Formation' means the Certificate of Formation of the\nCompany as amended or restated from time to time in accordance with the terms\nof this Agreement and filed with the Delaware Secretary of State in the manner\nprovided by the Act.\n\n         'Code' means the Internal Revenue Code of 1986, as amended from time\nto time.\n\n         'Company' means Wild Horse, LLC, a Delaware limited liability company\nformed under the Act.\n\n         'Company Opportunity' is defined in Section 3.5.\n\n         'Consent' means, with respect to a Member, (a) as a noun, either the\nwritten consent of such Member or the affirmative vote of that Member at a\nmeeting, as the case may be, to do that for which the Consent of such Member is\ngiven and (b) as a verb, giving Consent for any such action.  To receive the\n'Consent of the Members' requires the requisite level of Consent of the Members\nprovided in this Agreement or as otherwise expressly required by the\nCertificate of Formation, the Act or other applicable law.\n\n         'Distribution' or 'Distributions' means any cash or other Property\ndistributed to a Member by the Company on account of that Member's Interest as\nprovided in Article VIII, and does not include payments to a Member (i)\npursuant to a loan by such Member to the Company or other transactions in which\nsuch Member is acting other than in its capacity as a Member within the meaning\nof section 707(a) of the Code or (ii) which are made to reimburse a Member or\nan Affiliate of a Member for amounts paid for or on behalf of the Company.\n'Distribute' means to make one or more Distributions.\n\n         'Effective Date' means January 1, 1996.\n\n         'Fiscal Year' means the annual accounting period of the Company, which\nshall be the calendar year or such portion of a calendar year during which the\nCompany is in existence.\n\n         'GAAP' means generally accepted accounting principles, conventions,\nrules and procedures in the United States set forth in the opinions and\npronouncements of the accounting principles board of the American Institute of\nCertified Public Accountants and statements and pronouncements of the Financial\nAccounting Standards Board (or any successor organization) that are applicable\nto the circumstances as of the date of determination.\n\n         'Interest' of a Member at any time means the entire percentage\nownership interest of such Member in the Company at such time and all benefits\nto which such Member is entitled\n\n\n\n\n\n                                       2\n\nunder this Agreement and applicable law, together with all obligations of such\nMember under this Agreement and applicable law.\n\n         'Manager' shall mean KNE, or such other party as may be designated as\nthe Manager by unanimous Consent of the Members.\n\n         'Members' means KNE and TBI and those Persons who subsequently are\nadmitted as Members.  'Member' means any one of the Members.\n\n         'Net Income' means, for any period, the excess, if any, of the\nCompany's items of income and gain for such period over the Company's items of\nloss and deduction for such period, including items described in Section\n705(a)(1)(B) and 705(a)(2)(B) of the Code, as computed for book purposes.\n\n         'Net Loss' means, for any period, the excess, if any, of the Company's\nitems or loss and deduction for such period over the Company's items of income\nand gain for such period, including items described in Section 705(a)(1)(B) and\n705(a)(2)(B) of the Code, as computed for book purposes.\n\n         'Operating Team' shall mean a group consisting of two representatives\nappointed by the Chief Executive Officer of KNE and two representatives\nappointed by the Chief Executive Officer of TBI.  Each Operating Team Member\nshall have an equal vote on all issues pertaining to the Company.  The two\ninitial representatives of the Operating Team appointed by KNE shall be H.\nRickey Wells and Geoff Solich and the two initial representatives of the\nOperating Team appointed by TBI shall be Peter R. Scherer and William H. Munn,\nII.\n\n         'Organization' means any corporation, partnership, joint venture,\nlimited liability company, unincorporated association, trust, estate,\ngovernmental entity or other entity.\n\n         'Person' means any natural person or Organization.\n\n         'Property' means all (or such lesser amount as indicated by the\ncontext used herein) property -- real, personal, tangible or intangible --\nowned from time to time by the Company as a result of Capital Contributions,\nacquisitions, operations or otherwise.\n\n         'Taxable Income' or 'Taxable Loss' for a particular Fiscal Year means\nan amount equal to the Company's taxable income or taxable loss for such Fiscal\nYear determined in accordance with Code section 703(a).\n\n         'Tax Distribution Amount' means, with respect to a Member for any\ncalendar quarter, the combined amount computed pursuant to Sections 8.7(a)(i)\nand 8.7(a)(ii) in reference to such calendar quarter.\n\n\n\n\n\n                                       3\n\n         'Transfer' means (a) as a noun, any voluntary or involuntary transfer,\nsale, assignment, alienation, gift, donation, grant, conveyance, lease,\nexchange, mortgage, pledge, encumbrance, hypothecation or other disposition of\nany kind, including dispositions by operation of law or legal process and (b)\nas a verb, the act of making any voluntary or involuntary Transfer.\n\n         'Treasury Regulations' means the final and temporary regulations of\nthe U.S. Department of the Treasury promulgated under the Code.\n\n                                   ARTICLE II\n                                    MEMBERS\n\n         2.1  Initial Members. Upon the formation of this Company, KNE and TBI\nshall be its sole Members.  After the formation of this Company, a Person may\nbecome a Member (a) in the case of a Person acquiring a membership interest\ndirectly from this Company, only by the written agreement of both Members; and\n(b) in the case of an assignment of a Member's interest, only if such\nassignment is to another Member or a Member's wholly owned subsidiary or such\nassignment has been agreed to in writing by the non-assigning Member.\n\n         2.2     Classes of Members.   The Company shall have two classes of\nMembers.  KNE and its successors and assigns shall be the Class A Member, and\nTBI and its successors and assigns shall be the Class B Member.\n\n         2.3     Place and Manner of Meeting.   All meetings of the Members\nshall be held at such time and place as shall be stated in the notice of the\nmeeting or in a duly executed waiver of notice thereof.  Members may\nparticipate in such meetings by means of conference telephone or similar\ncommunications equipment by means of which all persons participating in the\nmeeting can hear each other. Participation in a meeting by a Member shall\nconstitute a waiver of notice of such meeting, except where a Member attends a\nmeeting for the express purpose of objecting to the transaction of any business\non the ground that the meeting is not lawfully called or convened.\n\n         2.4     Meetings.   An annual meeting of the Members for the\ntransaction of all business which may come before the meeting shall be held on\nsuch day and at such time during the period within six months after the close\nof each Fiscal Year of the Company as may be specified by the Manager in the\nnotice of the meeting.  If the annual meeting of Members is not held within the\nperiod above specified either Member may cause a special meeting of the Members\nin lieu thereof to be held as soon thereafter as convenient, and any business\ntransacted or election held at such meeting shall be as valid as if held at the\nannual meeting.  Failure to hold the annual meeting at the designated time\nshall not work a dissolution of the Company.  Special meetings of the Members\nmay be called at any time by either Member.\n\n         2.5     Notice.   Written or printed notice stating the place, day and\nhour of the meeting and, in case of a special meeting, the purpose or purposes\nfor which the meeting is called, shall be delivered not less than ten nor more\nthan sixty days before the date of the meeting either\n\n\n                                       4\n\npersonally or by mail, by the Person calling the meeting, to each Member\nentitled to vote at the meeting, provided that such notice may be waived as\nprovided in this Agreement.  If mailed, such notice shall be deemed to be\ndelivered when deposited in the United States mail addressed to the Member at\nits address as it appears on the records of the Company, with postage thereon\nprepaid.\n\n         2.6    Quorum of Members.   All Members, represented in person or by\nproxy, shall be required for a quorum at a meeting of Members.\n\n         2.7     Majority Vote; Withdrawal of Quorum.   The vote of the holders\nof a majority of the membership interests of each class of Members entitled to\nvote at a meeting at which a quorum is present shall be the act of the Members'\nmeeting, unless the vote of a greater number is required by law, the\nCertificate of Formation or this Agreement.  The Members present at a duly\norganized meeting may not continue to transact business if the other Members\nwithdraw from the meeting.\n\n         2.8     Action Without Meeting.   Subject to the requirements of the\nfirst sentence of the fourth paragraph of Section 15.4 of this Agreement, any\naction required by the Act, as amended, to be taken at any annual or special\nmeeting of the Members, or any action which may be taken at any annual or\nspecial meeting of the Members, may be taken without a meeting, without prior\nnotice, and without a vote, if a consent or consents in writing, setting forth\nthe action so taken, shall have been signed by each Member.\n\n         2.9     Right of Assignee to Become Member.\n\n         A.      A valid assignment of part or all of a Member's Interest shall\ncause the Assignee to become a Member.  It is the intent of this Agreement that\nthe tax status of this Company be the same as for a partnership, and except as\nallowed by the Code, and any corresponding rules and regulations, it is\nintended that this Company shall not allow free transferability of Interests,\nand to the extent possible, this Agreement shall be read and interpreted to\nprohibit the free transferability of Interests of any Member.\n\n         B.      To the extent a Member's Interest has been assigned, the\nAssignee shall be subject to the restrictions and liabilities of a Member under\nthis Agreement and the Act, as amended from time to time.\n\n         2.10    Withdrawal, Bankruptcy or Dissolution of a Member.  A Member\nmay not voluntarily withdraw during the first two (2) years of the term of this\nCompany, without the Consent of the other Members.  Thereafter, a Member may\nwithdraw upon sixty (60) days prior written notice to the Company and the other\nMember with such withdrawal to take effect at the time specified in such\nnotice, or if no time be specified, then at the time of its receipt by the non-\nwithdrawing Member.  This Company shall be dissolved upon the withdrawal,\nbankruptcy, liquidation or dissolution of a Member, or upon the occurrence of\nany other event that terminates the continued membership of a Member in this\nCompany under the terms of\n\n\n                                       5\n\nthis Agreement or the Act.  For purposes of this Section 2.10, the term\n'dissolution' does not include a merger, spin-off, consolidation,\nreorganization or recapitalization of a Member.  It is the intent of this\nAgreement that the tax status of this Company be the same as for a partnership,\nand except as allowed by the Code, and any corresponding rules and regulations,\nit is intended that this Company shall not have continuity of life and shall be\nread and interpreted so as to prohibit continuity of life.\n\n                                  ARTICLE III\n                             ORGANIZATION AND TERM\n\n         3.1     Company Purpose.  The purpose of the Company is to conduct any\nand all lawful business, to promote any lawful purpose and to engage in any\nlawful act or activities for which a limited liability company may be organized\nunder the Act, including, but not limited to, the furnishing of services\nrelated to crude oil and natural gas, natural gas liquids ('NGLs'), and other\nnatural gas products such as gathering services, processing and storage\nservices, marketing services, field services and all business activities\nrelated thereto (collectively, the 'Business'); provided, however, all of the\nforegoing shall be conducted or undertaken in accordance with all the terms and\nconditions of, and subject to the limitations set forth in, this Agreement.\n\n         3.2     Place of Business.  The principal place of business of the\nCompany shall be located at 370 Van Gordon, Lakewood, Colorado 80228.  The\nOperating Team at any time may establish and choose other offices and places of\nbusiness and change the principal place of business of the Company to any other\nplace.\n\n         3.3     Filings and Fees.  The Manager shall execute and file, or\ncause to be executed and filed, for recordation in the office of the\nappropriate authorities such reports, disclosures, certificates and other\nforms, schedules, instruments or documents as are required by applicable law or\nregulation or which otherwise may be necessary or appropriate with respect to\nthe formation of, and conduct of business by, the Company.  The Manager also\nshall cause the Company to pay all fees, taxes and other charges, including\nprofessional fees, incurred in connection with the preparation and filing of\nsuch reports, certificates, disclosures, forms, schedules, instruments or other\ndocuments.\n\n         3.4     Title to Property.  The Property shall be owned by the Company\nas an entity and no Member shall have any ownership interest in the Property in\nthat Member's individual name or right, and each Member's Interest shall be\npersonal property for all purposes.  The Company shall hold the Property in the\nname of the Company and not in the name of any Member.\n\n         3.5     Noncompetition: Conflicts of Interest.  Subject to the express\nprovisions of this Agreement, each Member shall be free to pursue other\nopportunities in industries engaged in the same or similar business as the\nCompany's Business, or otherwise; provided, however, that should any\nopportunity arise within the AMI which is related to, or developed from, the\nBusiness, such opportunity shall be accepted or rejected by the Company (a\n'Company\n\n\n                                       6\n\nOpportunity').  If the Company (acting through the Operating Team) elects to\nreject any Company Opportunity, the Member whose representatives on the\nOperating Team have voted for the proposal may pursue it for its own account,\nsubject only to reimbursing the Company for its out of pocket expenses incurred\nin connection with such Company Opportunity.\n\n         3.6     Limitation of Liability.  Except as otherwise expressly\nprovided herein or required by applicable law, no Member, as such, shall be\nbound by, or be personally liable for, the liabilities or obligations of the\nCompany or the other Member, or be required to lend any funds to (or provide\nany guarantees on behalf of) the Company, without the prior written consent of\nsuch Member.  No Member shall have any obligation to make Capital Contributions\nto the capital of the Company except those Capital Contributions agreed upon by\nthe Member or that may be required (a) to return the amount of any Distribution\nreceived by such Member in violation of, and to the extent required by the Act;\nor (b) under Section 8.2 with respect to the withholding by the Company of\nincome taxes.\n\n         3.7     Expenses.  The Company shall pay all costs and expenses\narising from the organization and operation of the Company.  The Company shall\nreimburse the Members for their reasonable out-of-pocket expenses incurred by\nthem on behalf of the Company in accordance with this Agreement.\n\n                                  ARTICLES IV\n                           MANAGER AND OPERATING TEAM\n\n         4.1     Manager and Operating Team.   The day to day business and\naffairs of the Company shall be managed by the Manager pursuant to written\nguidelines adopted by the Operating Team.  The Manager shall act at the\ndiscretion of the Operating team in discharging all administration, staffing,\naccounting, legal representation and day to day operations of the Company.  The\nOperating Team shall also have the authority to delegate authority to perform\nfunctions for the Company to the Manager and to other parties from time to\ntime.  The Manager and the Operating Team shall call upon the expertise and\nresources of personnel from each of the Members to fulfill the business needs\nof the Company.\n\n         4.2   Election; Term.   The Manager shall not be changed, except by\nagreement of all Members.\n\n         4.3     Removal; Filling of Vacancies.   Any member of the Operating\nTeam appointed by KNE's Chief Executive Officer may be removed by KNE and any\nmember of the Operating Team appointed by TBI's Chief Executive Officer may be\nremoved by TBI.  Any vacancy (whether as a result of resignation, removal or\ndeath) occurring in the Operating Team with respect to KNE's representatives\nmay be filled by KNE's Chief Executive Officer, and any vacancy on the\nOperating Team with respect to TBI's representatives may be filled by TBI's\nChief Executive Officer.  Each Operating Team member shall serve at the\npleasure of the Chief Executive Officer appointing such Operating Team Member.\n\n\n\n\n\n                                       7\n\n         4.5     Resignations.   Any Operating Team member may resign at any\ntime.\n\n         4.5     Place and Manner of Meetings.   Meetings of the Operating Team\nshall be held quarterly or more frequently if necessary, to consider matters\nconcerning the Company, including such matters as budgets and general business\nplans.  Operating Team members may participate in such meetings by means of\nconference telephone or similar communications equipment by means of which all\npersons participating in the meeting can hear each other.\n\n         4.6     Meetings of the Operating Team.   A regular meeting of the\nOperating Team may be held at such time as shall be determined from time to\ntime by resolution of the Operating Team members.\n\n         Any member of the Operating Team may call a special meeting of the\nOperating Team by giving at least five (5) days' written notice stating the\ndate, place and hour of meeting to each Operating Team member either personally\nor by mail.  Such special meeting shall be held at the time specified in the\nnotice of meeting.  Except as otherwise expressly provided by statute, by the\nCertificate of Formation or by this Agreement, neither the business to be\ntransacted at, nor the purpose of, any special meeting need be specified in a\nnotice or waiver of notice.  In any case where all of the Operating Team\nmembers execute a waiver of notice of the time and place of meeting, no notice\nthereof shall be required, and any such meeting shall be held at the time and\nat the place specified in the waiver of notice.  Attendance of Operating Team\nmembers at any meeting shall constitute a waiver of notice of such meeting,\nexcept where the Operating Team members attend a meeting for the express\npurpose of objecting to the transaction of any business on the ground that the\nmeeting is not lawfully called or convened.\n\n         4.7     Action Without Meeting.   Any action which may be taken at a\nmeeting of the Operating Team may be taken without a meeting if a Consent,\nsetting forth the action so taken, shall be signed by at least three of the\nfour members of the Operating Team.  Such Consent shall have the same force and\neffect as a vote at a meeting.\n\n         4.8     Quorum; Majority Vote.   At all meetings of the Operating Team\na majority of the number of members of the Operating Team fixed by this\nAgreement shall constitute a quorum for the transaction of business.  The act\nof three of the four members of the Operating Team shall be the act of the\nOperating Team.\n\n         4.9     Compensation.   The Members may designate the duties of the\nOperating Team and the duties of each Operating Team Member engaged in the\nconduct of the Company's business.  The Members shall also determine the\ncompensation payable to each Operating Team member for his  services.  No such\npayment shall preclude any member of the Operating Team from serving the\nCompany in any other capacity and receiving compensation therefor.\n\n         4.10    Procedure.   The Operating Team shall keep a record of the\nactions of the Operating Team.\n\n\n                                       8\n\n         4.11    Annual Reports.  Within ninety (90) days after the end of each\nFiscal Year, the Operating Team shall cause to be prepared (and furnished to\neach Member) financial statements, which shall be prepared in accordance with\nGAAP, and which shall include the following:\n\n                (a)      A copy of the balance sheet of the Company as of the\n         last day of such Fiscal Year;\n\n                (b)      A statement of income or loss for the Company for such\n         Fiscal Year;\n\n                (c)      A statement of each Member's Capital Account and\n         changes therein and changes in owner's equity with respect to the\n         Company's for such Fiscal Year; and\n\n                (d)      A statement of cash flow of the Company for such\n         Fiscal Year.\n\n         4.12    Monthly Reports.  Within forty-five (45) days after the end of\neach month, the Operating Team shall cause each Member to be furnished with\nfinancial statements prepared in accordance with the Company's methods of\naccounting, of the type described in the preceding Section 4.11, as of the last\nday of such month, which financial statements shall include a comparison to (a)\nthe applicable budget projections for such month and (b) the financial\nstatements for the corresponding month of the prior Fiscal Year.\n\n         4.13    Annual Budget.  The Operating Team shall cause to be prepared\nand delivered to each Member (a) no later than November 30 of each year (the\n'budgeting year') a proposed operating budget for the Company for the following\nFiscal Year, and (b) no later than December 31 of the budgeting year a final\noperating budget for the Company for the following Fiscal Year.  Both said\nproposed and final budgets shall set forth in reasonable detail the Company's\nprojected operating expenses, capital expenditures, cash flow and income\nprojections for the following Fiscal Year on projected monthly and year-to-date\nbases.  The Operating Team also shall cause to be prepared and delivered to\neach of the Members, in conjunction with the preparation and delivery of the\nCompany's monthly and annual financial statements, a comparison of the actual\nto budgeted financial results.\n\n         4.14    Tax Returns and Information.  The Operating Team shall cause\nall tax returns that the Company is required to file to be prepared and timely\nfiled (including extensions) with the appropriate authorities of each Fiscal\nYear.  On or before July 15 (commencing in 1997) the Operating Team shall also\ncause to be delivered to each Member information pertaining to the Company and\nits operations for the previous Fiscal Year that is necessary for the Members\nto accurately prepare their respective federal and state income tax returns for\nsaid Fiscal Year.\n\n\n\n\n\n                                       9\n\n                                   ARTICLE V\n                                     SCOPE\n\n         5.1     Geographic\/Operated and Non-Operated.  Initially, the Company\nshall provide the services described in Article VI hereof in connection with\nthe gas production from TBI operated properties in the AMI.  The Company shall\nalso make such services available to third party properties located within the\nAMI.  On an ongoing basis, and in any event by December 31 of each year, the\nOperating Team will evaluate the success of the Company in providing the\nservices to the properties in the AMI, and determine whether and to what extent\nsuch services will be modified and\/or extended to additional properties\ndescribed in the overall scope of business of the Company.\n\n         The overall scope of business of the Company is contemplated to\neventually include some or all of TBI's and\/or third party current and future\noperated and non-operated production from other areas, including, but not\nlimited to, the Rockies, Mid-Continent, and Permian basins, and any production\nwhich TBI may acquire in its proposed acquisition of properties from Presidio\nOil Company ('the Presidio Properties').  This contemplated scope of business\nshall, however, exclude any production which is at the date of this Agreement\nalready dedicated or subject to third party agreements until such time as any\nsuch production is released from such agreement and is dedicated to the\nCompany, in the discretion of the Operating Team.\n\n         5.2     Area of Mutual Interests.  The Company shall be bound by the\nAMI.  On an ongoing basis, but in any event by December 31 of each year, the\nOperating Team will evaluate the success of the Company, and determine, in its\nsole discretion, whether the AMI shall be extended to include other areas.  The\nAMI (as amended or supplemented from time to time) shall specifically exclude\ntransmission assets, assets previously dedicated under or subject to third\nparty agreements, assets subject to federal rate regulation or state rate\nregulation as an intrastate pipeline, assets subject to contracts which are not\nassignable to third parties, assets and property specifically set forth on\nExhibit B hereto and any other assets or opportunities specifically excluded by\nthe Operating Team.  It is contemplated that the Operating Team shall endeavor,\non an ongoing basis, to identify additional opportunities to be available to\nthe Company\n\n                                   ARTICLE VI\n                                    SERVICES\n\n                 TBI will grant to the Company the right to perform certain\nservices related to TBI's natural gas, NGL's and other gas byproducts produced\nfrom the properties of TBI located within the AMI.  All services shall be\nprovided at competitive rates, governed by contracts and rate schedules to be\nagreed upon and administered by the Operating Team.  Such services will include\nthe following:\n\n\n                                       10\n\n         A.      Gathering Services.\n         B.      Processing Services.\n         C.      Marketing Services.\n         D.      Storage Services.\n\n         Further, TBI will grant to the Company the right to perform certain\nfield services, including such services as pumper services and other related\nphysical operation services, measurement, etc, on existing properties of TBI\nlocated within the AMI, at TBI's discretion.  However, the KNPC Properties\nwithin the AMI which are currently utilizing KNE's field services shall be\nincluded in the group of properties for which the Company shall perform field\nservices, and shall not be at TBI's discretion, provided that the costs payable\nby TBI for such services shall be substantially equivalent to the costs charged\nfor such services prior to TBI's acquisition of the KNPC Properties.\n\n         The Members agree that the Operating Team, on an ongoing basis, but in\nany event after one year of operation under any given rate schedule and service\nagreement, shall review with TBI the rates for services provided, and the\nquality of the services provided, and determine whether the rates and services\nare satisfactory to each of the parties.  To the extent corrections must be\nmade, the Operating Team shall determine the appropriate remedies necessary to\nresolve the problems, and shall reevaluate the outcome of the remedies\nemployed within one year of their implementation.  TBI shall not be required to\nutilize such services if the quality of services being provided is not adequate\n(in TBI's opinion) or if such services are not being provided at competitive\nrates.\n\n                                  ARTICLE VII\n                              OWNERSHIP INTERESTS\n\n         KNE shall have a fifty-five percent (55%) and TBI shall have a\nforty-five percent (45%) Interest in the Company.  Except as herein\nspecifically provided, neither KNE or TBI shall be obligated to transfer to the\nCompany any ownership, or title to their respective assets and properties for\nwhich services under the Company are contemplated to be provided.\n\n                                  ARTICLE VIII\n                                 CAPITALIZATION\n\n         8.1     Capital Contributions.  Initially, TBI will contribute to the\nCompany (by separate agreement and subject to any existing agreements) the\nright to perform the services described in Article VI of this Agreement and\nrelated to the natural gas, NGL's and natural gas byproducts from its owned and\noperated production in the AMI.  KNE will contribute to the Company the current\nmarketing opportunities for the sale of gas to specific end use markets located\nwithin the AMI as set forth on Exhibit A attached hereto.  In addition, KNE\nwill grant the Company the right to sell at least 30% of TBI's currently owned\ngas, into K N Marketing, Inc.'s ('KNM') specific end use markets located in the\nHeartland and Front Range markets described on Exhibit A to the extent such\nvolumes do not exceed 20% or 9000 MMBtu\/D of\n\n\n\n\n\n                                       11\n\nthe K N Interstate (KNI) pool, whichever is lesser, and 20% or 6000 MMBtu\/D of\nthe Colorado Interstate Gas (CIG) pool, whichever is lesser.  Sales of gas by\nthe Company to Heartland and Front Range markets will be at the weighted\naverage market price received by KNM from third party consumers in such\nmarkets.  TBI will cause Retex Gathering Company, Inc.  (TBI's wholly owned\nsubsidiary and marketing affiliate) to dedicate to the Company its CIG-firm and\nKNI-firm transportation capacity, unless otherwise currently committed, and K N\nwill cause KNM to dedicate to the Company 6000 MMBtu\/D of its KNI-firm\ntransportation capacity and will cause Northern Gas Company, a wholly owned\nsubsidiary of KNE to agree to use reasonable efforts to purchase volumes\navailable from the Company, subject to physical requirements and prudency\nrequirements established by applicable state commissions.  In addition, both\nTBI and KNE shall make proportionate working capital contributions as necessary\nand appropriate, pursuant to decisions of the Operating Team.  The initial\ncontributions by KNE and TBI to the Company shall consist of those items\ndescribed on Exhibit C hereto, and all of which shall be contributed to the\nCompany within thirty days following the date of this Agreement.  The Members\nagree that fifty five percent (55%) of the aggregate value of the items listed\non Exhibit C and the items to be contributed as contemplated in Article XIII is\nbeing contributed by KNE or K N Gathering Company and that forty five percent\n(45%) of the aggregate value of the items listed on Exhibit C and the items to\nbe contributed as contemplated in Article XIII is being contributed by TBI or\nTBI Production Company.  The Operating Team shall determine the agreed values\nof such contributions within thirty days following the date of this Agreement.\n\n         8.2     Capital Accounts.  A Capital Account shall be established and\nmaintained for each Member.  Each Member's Capital Account shall be increased\nby (i) the amount of money contributed by that Member to the Company, (ii) the\nfair market value of property contributed by that Member to the Company (net of\nliabilities secured by such contributed property that the Company is considered\nto assume or take subject to under Section 752 of the Code), and (iii)\nallocations to that Member of Net Income and Net Loss (or items thereof),\nincluding income and gain exempt from tax and income and gain described in\nTreasury Regulation Section 1.704-1(b)(2)(iv)(g), but excluding income and\ngain described in Treasury 1.704-1(b)(4)(i), and shall be decreased by (iv) the\namount of money distributed to that Member by the Company, (v) the fair market\nvalue of property distributed property that such Member is considered to assume\nor take subject to under Section 752 of the Code), (vi) allocations to that\nMember of expenditures of the Company described in Section 1.704-1(b)(2)(iv)(f)\nand as required by the other provisions of Treasury Regulation Section\n1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treasury\nRegulation Section 1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments\nto reflect the allocations to the Members of depreciation, depletion,\namortization, and gain or loss as computed for book purposes rather than the\nallocation of the corresponding items as computed for tax purposes, as required\nby Treasury Regulation Section 1.704-1(b)(2)(iv)(g).  A Member who has more\nthan one interest in the Company shall have a single Capital Account that\nreflects all such interests, regardless of the class of interests owned by such\nMember and regardless of the time or manner in which such interests were\nacquired.  Upon the transfer of all or part of an interest in the Company, the\nCapital Account of the transferor that is attributable to the transferred\ninterest in the Company\n\n\n                                       12\n\nshall carry over to the transferee Member in accordance with the provisions of\nTreasury Regulation Section 1.704-1(b)(2)(iv)(l).\n\n         8.3     Allocations of Net Income or Net Loss.\n\n                 (a)      For purposes of maintaining the Members' Capital\n         Accounts, the Net Income or Net Loss of the Company for each year\n         shall be allocated among the Members in accordance with their\n         Interests.\n\n                 (b)      Except as otherwise provided in Section 8.3(c): for\n         federal and state tax purposes each item of income, gain, loss,\n         deduction and credit shall be allocated among the Members in the same\n         manner as each correlative item of Net Income or Net Loss is allocated\n         to the Members for purposes of maintaining their respective Capital\n         Accounts.\n\n                 (c)      Income, gain, loss and deduction with respect to\n         property contributed to the Company by a Member or revalued pursuant\n         to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be allocated\n         among the Members in a manner that takes into account the variation\n         between the adjusted tax basis of such property and its book value, as\n         required by Section 704(c) of the Code and Treasury Regulation Section\n         1.704-1(b)(4)(i), using the remedial allocation method permitted by\n         Treasury Regulation Section 1.704-3(d).\n\n                 (d)      All Net Income and Net Loss (and any item of income,\n         gain, loss, deduction or credit) shall be allocated, and all\n         distributions shall be made, to the Persons shown on the records of\n         the Company to have been Members as of the last day of the period for\n         which the allocation or distribution is to be made.  Notwithstanding\n         the foregoing, if an Interest is transferred during a taxable year,\n         Net Income and Net Loss (and any item of income, gain, loss, deduction\n         or credit) for such taxable year allocable to the transferred Interest\n         shall be prorated between the transferor and the transferee based upon\n         that portion of such taxable year during which each was recognized as\n         owning such Interest, without regard to the results of Company\n         operations during particular portions of such taxable year and without\n         regard to distributions made to the transferor and the transferee\n         during such taxable year; provided, that such allocation must be in\n         accordance with a method permissible under Section 706 of the Code and\n         the Treasury Regulations thereunder.\n\n         8.4     Available Cash.  Available Cash shall be Distributed in the\nfollowing order and priority:\n\n                 (a)      Tax Distributions.  If at the end of a calendar\n         quarter of a Fiscal Year, the Company estimates that it will allocate,\n         to one or both Members with respect to such Fiscal Year, (i) Taxable\n         Income (or items thereof) excluding items allocated pursuant to\n         Section 8.3(c) and (ii) items of income, gain, loss and deduction\n         required to be\n\n\n                                       13\n\n         separately stated and computed by the Members pursuant to section\n         613A(c)(7)(D) of the Code (the amounts described in Clauses (i) and\n         (ii) shall be referred to in this Section 8.4(a) as 'Net Taxable\n         Income'), then not later than the twentieth (20th) day prior to the\n         date upon which estimated federal income tax payments are required to\n         be made by corporations for such calendar quarter, the Company shall\n         make a Distribution of Available Cash to each Member in an amount\n         equal to the following:\n\n                          (i)     Prior Income.  First, that portion of any Tax\n                 Distribution Amount for the calendar quarter immediately\n                 preceding the calendar quarter to which Section 8.4(a)(ii)\n                 refers for which a Distribution to such Member pursuant to\n                 this Section 8.4(a) had not been made.  The amount to be\n                 Distributed pursuant to this Section 8.4(a) (i) shall be\n                 determined by subtracting (A) the aggregate Distributions of\n                 Available Cash made to such Member pursuant to this Section\n                 8.4(a) as of the calendar quarter to which Section 8.4(a) (ii)\n                 refers from (B) the aggregate of the amounts calculated\n                 pursuant to Section 8.4(a) (ii), as adjusted, to be\n                 Distributed to such Member for all such calendar quarters;\n\n                          (ii) Current Income Tax Distribution.  Second, the\n                 product of (A) (I) such Member's distributive share of the\n                 Company's estimated Net Taxable Income for such calendar\n                 quarter, determined in accordance with the allocation\n                 provisions of Article VIII, (II) plus or minus, as the case\n                 may be, any increase or reduction in the estimates of Net\n                 Taxable Income with respect to prior calendar quarters of such\n                 Fiscal Year and (B) 38.25%; and\n\n                 (b) Remainder.  The Company, with the Consent of the Members,\n         may, thereafter, make Distributions of Available Cash to the Members\n         in accordance with their Interests.\n\n         8.5     Non-Cash Distributions.  Except as otherwise provided in this\nAgreement, each Member must look solely to the Property of the Company for the\nreturn of such Member's Capital Contribution and shall have no right or power\nto demand or receive Property other than cash.\n\n         8.6     Maintenance of Adequate Cash Reserves.  The Company shall take\nall reasonable and appropriate action necessary to ensure that it will have at\nall times adequate cash reserves to make the Distributions prescribed by\nSection 8.4(a) at the time provided therein, including refraining from making\nany further capital or discretionary expenditures to the extent reasonably\nnecessary for the Company to have adequate Available Cash to do so.\n\n                                   ARTICLE IX\n                               FINANCIAL SERVICES\n\n         KNE shall have the right, but not the obligation, to participate in\nthe bidding process to provide financing for any material capital projects\nundertaken by the Company in the future,\n\n\n\n\n\n                                       14\n\nincluding debt offerings or other borrowings.  The Company shall be under no\nobligation to select KNE as the financing entity in any such project.\n\n                                   ARTICLE X\n                   WIND RIVER GATHERING COMPANY JOINT VENTURE\n                                   AGREEMENT\n\n         It is the intent of the parties that all existing terms and conditions\nof the Wind River Gathering Company Joint Venture Agreement (the 'Wind River\nJV') be incorporated into the Company's business or, in the alternative, that\nthe Wind River JV be operated or managed by the Company pursuant to an\noperating or management agreement.  The parties understand that the\nincorporation of the Wind River JV into the Company or, in the alternative, the\nassumption of operations or management of the Wind River JV by the Company may\nnot occur immediately, but the parties will endeavor to accomplish such\nincorporation or assumption of operations or management no later than July 1,\n1996.  Terms regarding ownership of, and liability for, the jointly owned\ngathering assets in the Wind River JV shall not be changed, and the accounting\nfor the Wind River JV properties and production shall remain separate from the\naccounting of the Company.\n\n                                   ARTICLE XI\n                                   LIABILITY\n\n         The Company has been formed as a limited liability company, which\nshall assume the obligation for all services to be performed pursuant to the\nterms of this Agreement.  Each Member hereby retains several liability\n(including, without limitation, all environmental and tax liability) associated\nwith its respective ownership and operation of the assets and properties upon\nwhich services are to be performed by the Company; provided, however, the\nliability associated with the assets and properties which are currently owned\nby KNE and TBI pursuant to the Wind River JV Agreement shall be joint and\nseveral, including, but not be limited to, all environmental and tax\nliabilities.\n\n                                  ARTICLE XII\n                         PREFERENTIAL RIGHT TO PURCHASE\n\n         TBI hereby grants first to the Company, and if the Company declines,\nthen to KNE, an exclusive preferential right during the term of this Agreement\nto purchase, on a competitive basis, any assets downstream of the wellhead\nsales meter now owned by TBI in the AMI (including such assets as gathering,\nprocessing and pipelines) and, to the extent it is legally able to do so, to\nassets acquired by TBI in the future (including any such downstream assets to\nbe assigned to TBI from KNPC) which are located in the AMI, but in each case\nonly to the extent such assets become available for sale prior to dissolution\nof the Company.  KNE hereby grants to TBI an exclusive preferential right\nduring the term of this Agreement to purchase, on a competitive basis, any\nupstream assets owned by KNE now or in the future to the extent such assets\nbecome available for sale prior to dissolution of the Company.\n\n\n\n\n\n                                       15\n\n         KNE and TBI each hereby grant to the Company an exclusive preferential\nright to participate in any gathering, processing, storage, or field services\nprojects which are made available to either of KNE or TBI by another Person and\nwhich fall within the AMI.\n\n         KNE and TBI hereby each grant to the Company an exclusive preferential\nright to marketing sales opportunities for sales of gas to specific end use\nmarkets and customers located within the AMI.\n\n         The Member proposing to sell any of the assets or to engage in any\nother activities subject to a preferential right in favor of the Company or the\nother Member shall promptly give written notice to the Company and\/or the other\nMember, with full information concerning the proposed transaction, which shall\ninclude the name and address of any Party involved in the proposed transaction\n(who must be ready, willing and able to proceed with the transaction), a full\nexplanation of the consideration involved, a full description of the assets to\nbe sold or activities to be engaged in and all other terms of any such proposed\ntransaction.  The Company or the non-selling Member shall have a period of\nfifteen (15) days after the notice is delivered, to exercise its preferential\nright granted hereunder on the same terms and conditions as are set forth in\nthe notice received from the other Member.  If the notice does not set forth a\nspecific price to be paid by a bona fide third party purchaser to the party\nproposing the sale and the parties are unable to agree on  such a price, each\nparty shall appoint one appraiser and the two appraisers shall appoint a third\nappraiser.  The three appraisers shall, by majority vote, determine the\nappropriate price.  Each party appointing an appraiser shall be responsible for\nthe appraiser appointed by such party and the cost of the third appraiser shall\nbe borne equally by the parties appointing the first two appraisers.  If the\nholder of the preferential right fails to exercise such right, the Member\nproposing the transaction subject to the preferential right may proceed with\nthe transaction on terms and at a price no less favorable than that offered to\nthe party with the preferential right, provided, if such transaction is not\nconcluded within Sixty (60) days following the expiration of the first right of\nrefusal, the Member proposing the transaction must again offer the transaction\nto the parties with the preferential right in accordance with the foregoing\nbefore proceeding with the transaction.\n\n                                  ARTICLE XIII\n                          WOLF CREEK STORAGE FACILITY\n\n         Within seven (7) days following the formation of the Company KNE shall\ncause K N Gathering Company (a wholly owned subsidiary of KNE) to convey all of\nits interest in the Bonanza Gathering Systems to the Company for a Class A\nmembership Interest in the Company and TBI will cause TBI Production Company\n(formerly named K N Production Company) to convey the Wolf Creek Storage\nFacility to the Company for a Class B membership Interest in the Company.  The\nWolf Creek Storage Facility shall, however, be subject to an operating lease\nbetween KNE and the Company acceptable to KNE and appropriate regulatory\nauthorities as necessary.  Any costs associated with such operating lease shall\nbe allocated to and be the sole responsibility of KNE.  All Net Income and Net\nLosses associated with KNE's operation of the\n\n\n\n\n\n                                       16\n\nWolf Creek Storage Facility shall be shared in the proportion of 55% by the\nClass A Members and 45% by the Class B Members.\n\n                                  ARTICLE XIV\n                                INDEMNIFICATION\n\n         14.1    Indemnification.  The Members, acting by and through the\nOperating Team, may adopt such provisions pertaining to indemnification of\nMembers, Managers, Operating Team members and others as may be permitted under\nthe Delaware Limited Liability Company Act; provided, however, no Person may be\nindemnified under any section of this Article XIV in respect of a proceeding:\n\n         (A)     in which the Person is found liable on the basis that personal\nbenefit was improperly received by or it, whether or not the benefit resulted\nfrom an action taken in the Person's official capacity; or\n\n         (B)     in which the Person is found liable to the Company.\n\n         14.2    Liability Insurance.   The Company may purchase and maintain\ninsurance or another arrangement on behalf of any Person who is or was a\nManager, Operating Team member, officer, employee, or agent of the Company or\nwho is or was serving at the request of the Company as a Manager, Operating\nTeam member, director, officer, partner, venturer, proprietor, trustee,\nemployee, agent, or similar functionary of another foreign or domestic limited\nliability company, corporation, partnership, joint venture, sole\nproprietorship, trust, employee benefit plan or other enterprise, against any\nliability asserted against him or it and incurred by him or it in such a\ncapacity or arising out of his or its status as such a person, whether or not\nthe Company would have the power to indemnify him against that liability under\nthis Article XIV.\n\n                                   ARTICLE XV\n                            CERTIFICATES AND MEMBERS\n\n         15.1    Certificates.   Each Member shall receive a certificate (in\nthe form determined by the Operating Team) representing all membership\ninterests to which such Member is entitled.  Such certificates shall be\nconsecutively numbered and shall be entered in the books of the Company as they\nare issued.  Each certificate shall state on the face thereof the holder's\nname, the class of membership, the membership interest, and such other matters\nas may be required by the laws of the State of Delaware.  They shall be signed\nby a representative of the Company.\n\n         15.2    Registered Members.   The Company shall be entitled to treat\nthe holder of record of any certificate of membership interest of the Company\nas the owner thereof for all purposes and, accordingly, shall not be bound to\nrecognize any equitable or other claim to or interest in such membership\ninterest or any rights deriving from such membership interest on\n\n\n\n\n\n                                       17\n\nthe part of any other Person, including (but without limitation) a purchaser,\nassignee or transferee, unless and until such other Person becomes the holder\nof record of such membership interest, whether or not the Company shall have\neither actual or constructive notice of the interest of such person, except as\notherwise provided by law.\n\n         15.3    Liability for Contribution Obligations.\n\n         A.      A promise by a Member to make a contribution to, or otherwise\npay cash or transfer Property to, the Company shall be in writing and signed by\nthe Member.\n\n         B.      If a Member does not make a contribution or payment of cash or\ntransfer of property required by the enforceable promise, whether as a\ncontribution or with respect to a contribution previously made, that Member is\nobligated, at the option of the Company, to pay to the Company an amount of\ncash equal to that portion of the agreed value, as stated in this Agreement or\nin the Company's records required to be kept under the Act, of the contribution\nrepresented by the amount of cash that has not been paid or the value of the\nproperty that has not been transferred.\n\n         C.      Unless otherwise provided by this Agreement, the obligation of\na Member to make a contribution or otherwise pay cash or transfer property to\nthe Company may be compromised or released only with the written agreement of\nthe other Member.\n\n         D.      The Company, by and through the Operating Team, will have the\nauthority to request (but not require) the Members to contribute additional\ncapital when additional capital is reasonably needed to pay existing or\nanticipated expenses of operation and administration, debt service for any\namounts borrowed by the Company, insurance and tax payments on the cost of\nacquiring, maintaining and selling property of the Company.\n\n         15.4    Restriction upon Ownership and Transfer of Ownership Interest.\nThis Company is formed by a closely-held group who know and trust one another,\nand who will have surrendered certain management rights (in exchange for\nlimited liability) based upon their relationship and trust.  Capital is also\nmaterial to the business and investment objectives of the Company and its\nfederal tax status.  An unauthorized transfer of a Member's Interest could\ncreate a substantial hardship to the Company, jeopardize its capital base, and\nadversely affect its tax structure.  These restrictions upon ownership and\ntransfer are not intended as a penalty, but as a method to protect and preserve\nexisting relationships based upon trust and the Company's capital and its\nfinancial ability to continue.\n\n         The ownership and transfer of a membership Interest is subject to the\nfollowing disclosure and condition:\n\n         THE MEMBERSHIP INTEREST OF THE COMPANY HAS NOT BEEN NOR WILL BE\nREGISTERED OR QUALIFIED UNDER FEDERAL OR STATE SECURITIES LAWS.  THE\nMEMBERSHIP INTEREST OF THE LIMITED LIABILITY COMPANY MAY NOT\n\n\n                                       18\n\nBE OFFERED FOR SALE, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED UNLESS SO\nREGISTERED OR QUALIFIED, OR UNLESS AN EXEMPTION FROM REGISTRATION OR\nQUALIFICATION EXISTS AND THEN ONLY WITH THE CONSENT OF ALL MEMBERS.  THE\nAVAILABILITY OF ANY EXEMPTION FROM REGISTRATION OR QUALIFICATION MUST BE\nESTABLISHED BY AN OPINION OF COUNSEL FOR THE OWNER THEREOF, WHICH OPINION OF\nCOUNSEL MUST BE REASONABLY SATISFACTORY TO THE COMPANY.\n\n         No Member may sell, transfer or otherwise dispose of all or any part\nof its Interest without the prior written consent of all other Members, which\nconsent may be withheld or denied in the sole discretion of each such Member.\nNotwithstanding the foregoing, a Member may transfer any part or all of its\nInterest to a wholly owned subsidiary of the Member without the consent of the\nother Members.  If the ownership of an Interest is in doubt, or if there is\nreasonable doubt as to who is entitled to a distribution of the income realized\nfrom an Interest, the Company may accumulate the income until such issue is\nfinally determined and resolved.  Accumulated income will be credited to the\ncapital account of the Member whose Interest is in question.\n\n         15.5    Option to Purchase.  If the Interest of a Member (the\n'Transferring Member') is acquired by any Person or agency other than a wholly\nowned subsidiary of the Transferring Member, the Interest of the transferee may\nthen be acquired by the Non-Transferring Member upon the following terms and\nconditions:\n\n                 (a)      The Non-Transferring Member will have the option to\n         acquire the Interest by giving written notice to the transferee of its\n         intent to purchase within 90 days from the date it receives notice of\n         such transfer or proposed transfer.\n\n                 (b)      The Non-Transferring Member will have 180 days from\n         the first day of the month following the month in which it delivers\n         notice exercising its option to purchase the Interest.  The valuation\n         date for the Interest will be the first day of the month following the\n         month in which such notice is delivered.\n\n                 (c)      Unless the Non-Transferring Member and the transferee\n         agree otherwise, the fair market value of a Member's Interest is to be\n         determined by qualified appraisers appointed by the Members in\n         accordance with the procedure set out in Article XII above.\n\n                 (d)      Closing of the sale will occur at the registered\n         office of the Non-Transferring Member at 10 o'clock A.M. on the first\n         Tuesday of the month following the month in which the value of the\n         Interest is determined.   Until Closing, or if the Non-Transferring\n         Member does not elect to purchase any part of the Interest in\n         question, the transferee will be considered a nonvoting owner of such\n         membership interest, and entitled to all items of income, deduction,\n         gain or loss from the membership interest,\n\n\n                                       19\n\n         plus any additions or subtractions therefore, but shall not be\nconsidered a Member for any other purposes.\n\n                 (e)      In order to reduce the burden upon the resources of\n         the Non-Transferring Member, the Non-Transferring Member will have\n         the option, to be exercised in writing delivered at closing, to pay\n         its purchase money obligation in not more than three equal annual\n         installments with interest thereon at then existing market rates.\n         The first installment of principal will be due and payable on the day\n         of the closing, and subsequent annual installments, with interest due\n         thereon, will be due and payable, in order, on the same day of each\n         subsequent calendar year until the entire amount of the obligation,\n         principal and interest, is fully paid.  The Non-Transferring Member\n         will have the right to prepay all or any part of the purchase money\n         obligation at any time without premium or penalty.\n\n                 (f)      Neither the transferee of an unauthorized transfer or\n         the Member causing the transfer will have the right to vote during the\n         prescribed option period, or if the option to purchase is timely\n         exercised, until the sale is actually closed.\n\n         15.6    Buy-Sell Rights After Change of Control.  Notwithstanding any\npreferential rights to purchase or any other provisions in this Agreement, if\nat any time during their ownership of an Interest (directly or through a wholly\nowned subsidiary) either KNE or TBI should undergo a change of control, defined\nas any situation in which a new Person, or group of Persons becomes in control\n(as such term is defined in Rule 405 promulgated by the Securities and Exchange\nCommission under the Securities Act of 1933) of either KNE or TBI, or a\nmajority of the board of directors of either of them shall change within any\ntwelve month period of time, then the party not undergoing the change of\ncontrol ('Notifying Party') shall have the right at any time within the ninety\n(90) days following receipt by the Notifying Party of written notice of such\nchange of control to trigger the Buy-Sell Rights After Change of Control\nprovided for in this Section 15.6.  Such rights shall be triggered by the\nNotifying Party giving to the other (the 'Receiving Party') notice in writing\nthat it wishes to exercise its rights under this Section 15.6, which notice\nshall specify the value the Notifying Party has assigned to a 1% Interest in\nthe Company (the 'Specified 1% Value').  For a period of thirty (30) days after\nreceipt of such notice, the Receiving Party shall have the right to elect to\nsell its Interest in the Company to the Notifying Party at the price of the\nSpecified 1% Value times the number of 1% Interests in the Company held by the\nNotifying Party.  Such election by the Receiving Party shall be made by written\nnotice given by the Receiving Party to the  Notifying Party during such\nthirty-day period.  If no such notice shall be given, it shall be deemed that\nthe Receiving Party elected to sell its Interest in the Company to the\nNotifying Party at the price of the Specified 1% Value times the number of 1%\nInterests in the Company held by the Receiving Party.  After the expiration of\nsuch thirty-day period, the sale and purchase of the Interest in the Company\nbeing bought and sold as aforesaid shall proceed without avoidable delay by\ndelivery to the selling party of the consideration of its Interest in the\nCompany in exchange for the assignment to the buying party for the Interest in\nthe Company being bought, free and clear of all liens and encumbrances, except\nthose to which the Interest was previously subject.  The provisions of this\n\n\n                                       20\n\nSection 15.6 shall survive for a period of 180 days following any termination\nof the Company pursuant to Section 16.1(f) hereof.\n\n                                  ARTICLE XVI\n                                  DISSOLUTION\n\n         16.1  Dissolution.  This Company shall be dissolved on the first of\nthe following to occur:\n\n                 (a)      when the period fixed for the duration of this\n         Company expires;\n\n                 (b)      upon the occurrence of events specified in the\n         Certificate of Formation or this Agreement to cause dissolution;\n\n                 (c)      the written Consent of all members;\n\n                 (d)      except as otherwise provided in this Agreement, upon\n         the withdrawal, expulsion, bankruptcy, or dissolution of a Member or\n         the occurrence of any other event which terminates the continued\n         membership of a Member in this Company;\n\n                 (e)      Entry of a decree of judicial dissolution under the \n         Act; or\n\n                 (f)      Upon sixty (60) days written notice by one Member to\n         the other at any time after the first two (2) years from the Effective\n         Date.\n\n         For purposes of this Section 16.1, the term 'dissolution' does not\ninclude a merger, spin-off, consolidation, reorganization or recapitalization\nof a Member.\n\n         16.2    Judicial Dissolution.  On application by or for a Member, a\ncourt of competent jurisdiction may decree dissolution of this Company if it is\nnot reasonably practicable to carry on the business of this Company in\nconformity with its Certificate of Formation and this Agreement.\n\n         16.3    Winding Up.  On the dissolution of this Company, its affairs\nshall be wound up as soon as reasonably practicable.  The winding up shall be\naccomplished by the Operating Team or by a party or parties appointed by the\nMembers.  In addition, a court of competent jurisdiction, on cause shown, may\nwind up the Company's affairs on application of any Member or the Member's\nlegal representative or assignee and, in connection with the winding up, may\nappoint a Person to carry out the liquidation and may make all other orders,\ndirections, and inquiries that the circumstances require.\n\n         16.4    Transfer of Assets.  On the winding up of the Company, its\nassets shall be paid or transferred as follows:\n\n\n\n\n\n                                       21\n\n                 (a)      To the extent otherwise permitted by law, to\ncreditors, including Members who are creditors in satisfaction of liabilities\n(other than for Distributions) of the Company, whether by payment or by\nestablishment of reserves;\n\n                 (b)      To Members and former Members in satisfaction of the\nCompany's liability for Distributions; and\n\n                 (c)      To Members in the manner provided in this Agreement.\n\n         16.5    Distributions Upon Termination and Dissolution of this\nCompany.  Upon termination and dissolution of the Company, the Operating Team\nor other Person designated by the Members will proceed to wind up the affairs\nof the Company.  The liabilities and obligations to creditors and all expenses\nincurred in its liquidation and dissolution will be paid and will have first\npriority in winding up as otherwise provided in this Agreement.  The Operating\nTeam or other Person appointed by the Members may retain from available cash\nand other assets of the Company sufficient reserves for anticipated and\ncontingent liabilities.  Undistributed cash, and other property valued at its\nfair market value on the date of Distribution, will be Distributed to the\nMembers in the following order:\n\n                 (a)      Distributions will first be made to repay any loans\nto the Company by a Member, including the amount of any deferred payment\nobligation to a Member or a Member's personal representative.\n\n                 (b)      Distributions will then be made to the Members in an\namount equal to the credit balances in their capital accounts so that the\ncapital account of each Member shall be brought to zero.  For the purpose of\ndetermining Distributions in liquidation, a negative capital account balance\nwill be considered to be a loan from the Company to a Member.\n\n                 (c)      The balance, if any, will be made to the Members in\nan amount equal to each Member's percentage interest in the Company as\ndetermined immediately prior to the Distribution of the credit balances of the\nMember's capital accounts.\n\n                 The Operating Team or other Person appointed by the Members,\nin making or preparing to make a partial or final distribution will have the\nauthority to:  (1) partition any asset or class of assets and deliver divided\nand segregated interests to Members; (2) sell any asset or class of assets\n(whether or not susceptible to partition in kind), and deliver to the Members a\ndivided interest in the proceeds of sale and\/or divided or undivided interests\nin any note and security arrangement taken as part of the purchase price;\nand\/or (3) deliver undivided interests in an asset or class of assets to the\nMembers subject to any indebtedness which may be secured by the property.  To\nthe extent possible, any properties contributed to the Company (except the Wolf\nCreek Storage properties) shall be returned to the Member contributing the same\nupon any Dissolution of the Company.  Ownership of the Wolf Creek Storage\nproperties and the Bonanza Gas Gathering System properties upon Dissolution of\nthe Company shall be shared by the Members in the ratio of 55% to KNE and 45%\nto TBI.\n\n\n\n\n\n                                       22\n\n                 The Company may continue beyond its scheduled termination date\nfor a time reasonably necessary to conclude the administration of the Company,\npay expenses of termination and distribute all of the Property to those\nentitled thereto.\n\n                                  ARTICLE XVII\n                                 MISCELLANEOUS\n\n         17.1    Books and Records.\n\n         A.      The Company shall maintain such books and records as are\nrequired by statute and as it may deem necessary or desirable.  All books and\nrecords of the Company shall be open to inspection and copying by the Members\nfrom time to time  The Company shall keep and maintain the following records in\nits principal office and make them available in such office within five days\nafter the date of receipt of a written request:\n\n                 (1)      a current record that includes:\n\n                          (a)     the name and mailing address of each Member;\n\n                          (b)     the percentage interest in the Company owned \n         by each Member; and\n\n                          (c)     if more than one class of Members is\n         established under the Certificate of Formation or this Agreement, the\n         names of the Members who are members of each specified class;\n\n                 (2)      copies of the federal, state, and local information\nor income tax returns for the Company's seven most recent tax years.\n\n                 (3)      a copy of the Certificate of Formation and this\nAgreement, all amendments or restatements thereof, executed copies of any\npowers of attorney, and copies of any document that creates, in the manner\nprovided by the Certificate of Formation or this Agreement, classes of members;\n\n                 (4)      The minutes of proceedings of the Operating Team or\nthis Agreement shall set forth:\n\n                          (a)     the amount of the cash contribution and a\n         description and statement of the Agreed Value of any other\n         contribution made by each Member, and the amount of the cash\n         contribution and a description and statement of the Agreed Value of\n         any other contribution that the Member has agreed to make in the\n         future as an additional contribution;\n\n\n                                       23\n\n                          (b)     the times at which additional contributions\n         are to be made or events requiring additional contributions to be\n         made;\n\n                          (c)     events requiring the Company to be dissolved \n         and its affairs wound up;\n\n                          (d)     the date on which each Member in the Company \n         became a Member;\n\n                 (5)      correct and complete books and records of account of\n                          the Company.\n\n         B.      The Company shall maintain its records in written form or in\nanother form capable of conversion into written form within a reasonable time.\n\n         C.      A Member, on written request stating the purpose, may examine\nand copy, in person or by the Member's authorized representative, at any\nreasonable time, for any proper purpose, and at the Member's expense, records\nrequired to be kept under this Section 17.1 and other information regarding the\nbusiness, affairs, and financial condition of the Company as is just and\nreasonable for the person to examine and copy.\n\n         D.      A Member, upon notice to the Company, shall have the right to\naudit the books and records of the Company for any period, at the cost of the\nMember conducting such audit unless otherwise agreed by the Members.\n\n         E.      On the written request by any Member of a membership interest,\nthe Company shall provide to the requesting Member without charge true copies\nof:\n\n                 (1)      the Certificate of Formation and this Agreement and\nall amendments or restatements; and\n\n                 (2)      any tax returns of the Company.\n\n         17.2    Method.  Whenever by statue or the Certificate of Formation or\nthis Agreement, notice is required to be given to any Member or the Company,\nand no provision is made as to how the notice shall be given, it shall not be\nconstrued to mean personal notice, but any such notice may be given in writing\npostage prepaid, addressed to the Company, the Operating Team or Member at the\naddress appearing on the books of the Company, or by any other method permitted\nby law.  Any notice required or permitted to be given by mail shall be deemed\ngiven at the time when the same is deposited in the United States mails.\n\n         17.3    Tax Matters.\n\n                 (a)      Tax Matters Member.  KNE is hereby designated as the\n         'Tax Matters Member' of the Company in accordance with Section\n         6231(a)(7) of the Code and shall\n\n\n                                       24\n\n         serve in such capacity until the Members determine otherwise.  Should\n         the unified audit rules of subchapter C of Chapter 63 of Subtitle F of\n         the Code be applicable, the Tax Matters Member shall: (i) take such\n         action as may be necessary to cause each of the other Members to\n         become a notice partner within the meaning of Section 6223 of the\n         Code, (ii) keep each of the other Members fully advised of the\n         progress of any audit, (iii) promptly notify each of the other Members\n         of any audit adjustments proposed by the Internal Revenue Service or\n         other taxing authority and furnish any supporting information\n         requested by a Member in connection therewith, (iv) prior to\n         submitting any materials to the Internal Revenue Service, or other\n         taxing authority, provide a copy of such materials to each of the\n         other Members, and (v) not enter into a settlement agreement pursuant\n         to Section 6224 of the Code without obtaining the prior Consent of all\n         Members.  The Tax Matters Member shall be reimbursed by the Company\n         for any reasonable expenses incurred by the Tax Matters Member, or on\n         that Member's behalf, in such Member's capacity as the Tax Matters\n         Member.\n\n                 (b)      Elections.  The Member shall make all elections and\n         other determinations for federal, state, local and foreign tax\n         purposes, on behalf of the Company.\n\n         17.4    Seal.   The Company shall have no seal.\n\n         17.5    Amendments.   This Agreement may be altered or repealed only\nby unanimous Consent of the Members.\n\n         17.6    Headings.   The headings used in this Agreement have been\ninserted for convenience only and do not constitute matter to be construed in\ninterpretation.\n\n         17.7    Construction.   Whenever the context so requires, the\nmasculine shall include the feminine and neuter, and the singular shall include\nthe plural, and conversely.  If any portion of this Agreement shall be invalid\nor inoperative, then, so far as is reasonable and possible:\n\n         (A)     the remainder of this Agreement shall be considered valid and\n                 operative; and\n  \n         (B)     effect shall be given to the intent manifested by the portion\nheld invalid or inoperative.\n\n         17.8    Taxable as a Partnership.  The Company will constitute a\npartnership for federal income tax purposes.  The Company shall prepare or\ncause to be prepared all necessary tax reports and other information required\nby the Internal Revenue Service and a report for income tax purposes to each\nmember of its distributive share of items of income, gain, Loss, deduction and\ncredit.\n\n\n                                       25\n\n         The undersigned, being all of the Members of the Company, hereby\ncertify that the foregoing Agreement has been unanimously adopted, this 31st\nday of January, 1996.\n\n                                        K N ENERGY, INC.\n\n\n                                        By:  \/s\/ H. Rickey Wells\n                                           ------------------------------------\n                                        Name:    H. Rickey Wells \n                                        Title:   Vice President - Operations\n\n\n                                        TOM BROWN, INC.\n\n\n                                        By:  \/s\/ Peter R. Scherer \n                                           ------------------------------------\n                                        Name:    Peter R. Scherer \n                                        Title:   Executive Vice President\n\n\n\n\n\n\n\n\n\n\n                                       26\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6962],"corporate_contracts_industries":[9409],"corporate_contracts_types":[9573,9576],"class_list":["post-41665","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-brown-tom-inc","corporate_contracts_industries-energy__exploration","corporate_contracts_types-formation","corporate_contracts_types-formation__llc"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41665"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41665"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41665"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}