Exhibit 10.12
NGL TRANSPORTATION AGREEMENT
South Texas to Mont Belvieu
     THIS TRANSPORTATION AGREEMENT, (the “Agreement”) is entered into as of the
1st day of January, 2007 (“Effective Date”) by and between Enterprise Products
Operating L.P., a Delaware limited partnership (“CUSTOMER”), and South Texas NGL
Pipelines, LLC, a Delaware limited liability company (“SOUTH TEXAS”). The
parties agree to the following:
WITNESSETH
     1. NGL Transportation. For and in consideration of the rates and fees to be
paid by CUSTOMER to SOUTH TEXAS as provided herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, SOUTH TEXAS hereby agrees to provide transportation services for
Product (as herein defined) received from and delivered to Mont Belvieu. SOUTH
TEXAS represents and warrants that it has full right, power and authority to
extend and deliver the services described in this Agreement. Each of the parties
hereto represents and warrants that it has full power and authority to make,
enter and perform its obligations under this Agreement.
     2. Definitions. For the purpose of this Agreement, the following terms and
expressions shall have the following meanings:
     “Affiliate” means, of any specified Person, a Person that directly or
indirectly, through one or more intermediaries, Controls or is controlled by, or
is under common Control with, the Person specified.
     “Agreement” shall mean this Transportation Agreement.
     “Barrel” shall mean forty-two (42) U. S. Gallons.
     “Business Day” shall mean a Day on which Federal Reserve member banks in
Houston, Texas are open for business.
     “Control” of a non-natural Person means the power, directly or indirectly,
to (i) elect, appoint or cause the election or appointment of at least a
majority of the members of the board of directors of such Person (or if such
Person is a non-corporate Person, Persons having similar powers), or (ii) direct
or cause the direction of the management and policies of such Person, in either
case through beneficial ownership of the capital stock (or similar ownership
interests) of such Person or otherwise.
     “Day or Daily” shall mean a twenty-four (24) hour period commencing
12:01 a.m. local clock time, and extending until 12:00 midnight local clock
time.
     “Fee” shall mean the fees referenced in Section 5 (b) below.
     “Force Majeure” shall have the meaning specified in Section 17 hereinafter.

 

--------------------------------------------------------------------------------

 

     “Gallon” shall mean one U.S. Gallon, which is the unit of volume used for
the purpose of measurement of liquid. One (I) U.S. liquid Gallon contains two
hundred thirty-one (231) cubic inches when the liquid is at a temperature of
sixty degrees Fahrenheit (60°F) and at the Vapor pressure of the liquid being
measured.
     “Month” or “Monthly” shall mean a period commencing at 12:01 a.m. local
clock time on the first Day of a calendar Month and extending until 12:00
midnight local clock time on the first Day of the next calendar Month.
     “Offspec Product” shall have the meaning specified in Section 7
hereinafter.
     “Person” means any individual, Corporation, partnership, limited
partnership, limited liability partnership, limited liability company (whether
domestic or foreign), joint venture, association, joint-stock company, trust,
estate, custodian, trustee, executor, administrator, nominee, entity in a
representative capacity, unincorporated, organization, or governmental agency or
authority.
     “Product” shall mean ethane, propane, butane, natural gasoline and any
combination thereof.
     “Transportation Fee” shall mean the fee referenced at Section 4 (b) below.
     “Year” or “Yearly” shall mean a period of 365 consecutive Days’, provided,
however that any Year which contains the date of February 29 shall consist of
366 consecutive Days.
     3. Term. The term of this Agreement shall commence on January 1, 2007 and
shall continue for a term of ten (10) years “Primary Term” and shall continue
year to year thereafter until either party gives the other party at least
one-hundred eighty (180) days written notice of termination.
     4. Transportation of Product.
     (a) SOUTH TEXAS shall receive Product from CUSTOMER at SOUTH TEXAS’
pipeline interconnect with CUSTOMER’S Shoup and Armstrong Fractionation Plants
located in Nueces and Dewitt Counties, Texas and such other points as may be
mutually agreed and shall deliver such Product to CUSTOMER’S storage facility
located in Mont Belvieu, Texas. SOUTH TEXAS shall have care, custody and control
of such Product thereafter until it is returned to CUSTOMER in accordance with
this Agreement. CUSTOMER’S Product may be commingled with Product from other
customers. It is anticipated that SOUTH TEXAS shall receive Product from
CUSTOMER daily however, the actual date of shipments from CUSTOMER to SOUTH
TEXAS will depend on CUSTOMER’S needs. Receipt of Product from CUSTOMER shall be
subject to operating conditions, rates of delivery, delivery pressures,
scheduling, etc. of SOUTH TEXAS’ pipeline. CUSTOMER shall give SOUTH TEXAS
reasonable notice of deliveries of CUSTOMER’S Product.

2

--------------------------------------------------------------------------------

 

     (b) CUSTOMER shall pay SOUTH TEXAS a Transportation Fee for all volumes of
Product produced at CUSTOMER’S Shoup and Armstrong fractionation plants,
regardless of whether such Product is delivered to SOUTH TEXAS for transport. In
exchange, SOUTH TEXAS shall stand ready to transport any of CUSTOMER’S Product
produced at the Armstrong and Shoup fractionation plants subject to SOUTH TEXAS’
physical pipeline and pumping limitations. The Transportation Fee shall
initially be $.02 per gallon. Beginning on the first anniversary and on each
anniversary thereafter, the Transportation Fee shall be adjusted based on the
following formula:
     Transportation Fee = ($.0025 x (Electricity/$.08/kwh))+($.005 x (PPI/) +
$.0125; where:
     Electricity = SOUTH TEXAS’ actual cost of electricity for the most recent
calendar quarter
     PPI = the Producer Price Index for the most recently available month as
published by the Department of Labor, Bureau of Labor Statistics.
     In no event will any adjusted Transportation Fee be less than $.02 per
gallon.
     (c) CUSTOMER shall provide volume information to SOUTH TEXAS on a monthly
basis.
     5. Measurement.
     (a) Measurement of Product received or delivered from CUSTOMER’S Shoup or
Armstrong fractionation plants shall be made by SOUTH TEXAS or its designee at
SOUTH TEXAS’ meters. CUSTOMER shall have the right to witness all such
measurements.
     (b) All shipments from the Shoup and Armstrong fractionation plants for the
CUSTOMER’S account shall be metered at the time of physical custody transfer
between SOUTH TEXAS and the CUSTOMER.
     (c) The meter and related custody transfer equipment must be designed,
operated and maintained in accordance with applicable chapters of API Manual of
Petroleum Measurement Standards, normal industry practice, and mutual agreement
of the Parties.
     (d) SOUTH TEXAS shall furnish to CUSTOMER custody transfer tickets for
CUSTOMER’S Product delivered to SOUTH TEXAS. The ticket will identify the
Product and state the net volume in barrels of Product measured.
     (e) The custody meter measurement tickets, issued on a monthly basis, will
be the documents used for custody transfer.
     (f) Each meter shall be proven when initially placed into service. The
meter shall be proven immediately after any meter maintenance is performed.
Subsequent

3

--------------------------------------------------------------------------------

 

provings shall be made every thirty (30) days, unless in accordance with the API
– MPMS the consistency of the meter factor allows the proving interval to be
extended, or provings shall be made when accuracy is in question.
     (g) If the custody transfer meter is not available for use, is inoperable,
has failed, or is measuring in error, the shipment volume shall be determined by
the best means available at the time as determined by the parties. Examples of
such alternative means include, but are not limited to:

  a.   using data recorded by any check measuring equipment that was accurately
registering;     b.   correcting the error if the percentage error can be
ascertained by calibrations, tests, or mathematical calculations; or     c.  
comparison with deliveries made under similar conditions when the measurement
station was registering accurately, using historical pipeline gain/loss.

     6. Proration. SOUTH TEXAS shall exercise reasonable efforts to receive and
deliver on any one-day the total of each customer’s requests for such day. If,
however, all of the receipt or delivery requests exceed the total capacity of
the Pipeline, the Product received or delivered on each day shall be prorated.
Prorations resulting from pipeline delivery limitations will be separated from
prorations resulting from truck loading limitations. Receipt and delivery
limitations resulting from limited pumping capability or brine availability will
be allocated across all delivery requests.
     (a) Proration shall be determined based on daily activity. Should proration
become necessary, CUSTOMER will be notified as timely as possible in advance by
phone and/or FAX.
     (b) Proration shall be based on CUSTOMER’S throughput during the previous
twelve (12) months as a percentage of the total throughput. This percentage will
then be applied to the total daily output capacity of the pipeline withdrawal
facilities.
     7. Quality.
     (a) All deliveries of Product by and to CUSTOMER hereunder shall meet SOUTH
TEXAS’ specifications, as such specifications may change from time to time,
pursuant to the mutual agreement of CUSTOMER and all parties, including
CUSTOMER, delivering Product. The specifications as to the date of this
Agreement are set forth in Exhibit “A” attached hereto and made a part hereof.
SOUTH TEXAS or its designee reserves the right to perform an analysis of
CUSTOMER’S Product prior to accepting same , but assumes no responsibility for
doing so, and may refuse to accept delivery of such Product if it is
contaminated or otherwise fails to conform with the applicable specifications
(“Offspec Product”). If SOUTH TEXAS accepts Offspec Product delivered by or on
behalf of CUSTOMER, CUSTOMER shall reimburse SOUTH TEXAS for the reasonable
costs and expenses incurred in handling such Offspec Product. CUSTOMER shall be
bound by the testing results obtained from analysis of CUSTOMER’S Product, if
any, performed by or on behalf of SOUTH TEXAS, unless proven to be in error. If
CUSTOMER disagrees with the analysis a referee sample shall

4

--------------------------------------------------------------------------------

 

be taken to a mutually agreed upon testing laboratory, which shall analyze the
sample in accordance with applicable ASTM/GPA methods. This analysis shall be
accepted by SOUTH TEXAS and the CUSTOMER as final and conclusive of the
proportions and components contained in the Product. The Parties will share
equally the cost of the referee analysis.
     (b) CUSTOMER may refuse receipt of any Product if it is contaminated or
otherwise does not conform to the applicable specifications.
     (c) CUSTOMER AGREES TO AND DOES INDEMNIFY FULLY AND HOLD HARMLESS SOUTH
TEXAS AND ITS PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS AND THEIR AGENTS,
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND
AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, DEMANDS, CLAIMS, PENALTIES,
FINES, ACTIONS, SUITS, LEGAL, ADMINISTRATIVE OR ARBITRATION OR ALTERNATIVE
DISPUTE RESOLUTION PROCEEDINGS, JUDGMENTS, ORDERS, DIRECTIVES, INJUNCTIONS,
DECREES OR AWARDS OF ANY JURISDICTION, COSTS AND EXPENSES (INCLUDING, BUT NOT
LIMITED TO, ATTORNEYS’ FEES AND RELATED COSTS) ARISING OUT OF OR IN ANY MANNER
RELATED TO CUSTOMER DELIVERING OR CAUSING TO BE DELIVERED INTO MONT BELVIEU ANY
OFFSPEC PRODUCTS.
     8. Invoicing and Payments. Each Month during the term of this Agreement,
SOUTH TEXAS shall invoice CUSTOMER for all amounts owed by CUSTOMER to SOUTH
TEXAS hereunder and CUSTOMER shall pay to SOUTH TEXAS the amounts due no later
than ten (10) Days after CUSTOMER’S receipt of invoice therefore. If the Day on
which any payment is due is not a Business Day, then the relevant payment shall
be due upon the immediately preceding Business Day, except if such payment due
date is a Sunday or Monday, then the relevant payment shall be due upon the
immediately succeeding Business Day. Any amounts which remain due and owing
after the due date shall bear interest thereon at a per annum rate of interest
equal to the lower of the “Prime Rate” of interest as quoted from time to time
by The Wall Street Journal or its successor, plus two percent per annum, or the
maximum lawful rate of interest (the “Base Rate”). If a good faith dispute
arises as to the amount payable in any statement, the amount not in dispute
shall be paid. If CUSTOMER elects to withhold any payment otherwise due as a
consequence of a good faith dispute, CUSTOMER shall provide SOUTH TEXAS with
written notice of its reasons for withholding payment. The parties hereto agree
to use all reasonable efforts to resolve any such disputes in a timely manner.
If it is subsequently determined, whether by mutual agreement of the parties or
otherwise, that CUSTOMER is required to pay all or any portion of the disputed
amounts to SOUTH TEXAS, in addition to paying over such amounts, CUSTOMER also
shall pay interest accrued on such amounts at the Base Rate from the original
due date until paid in full. If it is subsequently determined, whether by mutual
agreement of the parties or otherwise, that SOUTH TEXAS is required to return
all or any portion of the disputed amounts to CUSTOMER, in addition to paying
over such amounts, SOUTH TEXAS also shall pay interest accrued on such amounts
at the Base Rate from the date paid by CUSTOMER until paid in full.

5

--------------------------------------------------------------------------------

 

     9. Title to Product. It is understood and agreed that (i) title to the
Product received hereunder shall remain in CUSTOMER, subject to being commingled
with like Product belonging to SOUTH TEXAS and/or other parties, which CUSTOMER
hereby grants unto SOUTH TEXAS the right to do so, and ii) Product redelivered
to CUSTOMER by SOUTH TEXAS may not be identical Product delivered by CUSTOMER.
     10. Limitation of Liability.
          (a) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, SOUTH
TEXAS SHALL NOT BE RESPONSIBLE FOR ANY PRODUCT LOSSES OR DAMAGES TO THE PRODUCT
OR FOR ANY CLAIMS UNDER ANY INDEMNITY OBLIGATIONS THAT SOUTH TEXAS MAY HAVE AS
SET FORTH IN THIS AGREEMENT IN EXCESS OF THE CURRENT MARKET REPLACEMENT COST.
THE FOREGOING SHALL APPLY WHETHER OR NOT SUCH CLAIMS ARE FOUNDED IN WHOLE OR IN
PART UPON THE NEGLIGENCE OF SOUTH TEXAS OR IF LIABILITY WITHOUT FAULT IS IMPOSED
ON SOUTH TEXAS.
          (b) CUSTOMER AGREES TO DEFEND, INDEMNIFY AND HOLD SOUTH TEXAS AND ITS
AFFILIATES AND ITS AND THEIR RESPECTIVE AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS WHICH ARISE IN CONNECTION WITH CUSTOMER’S TRANSPORTATION, STORAGE, USE,
OR HANDLING OF PRODUCT AFTER DELIVERY OF CUSTODY, POSSESSION AND CONTROL OF SUCH
PRODUCT TO CUSTOMER.
          (c) SOUTH TEXAS AGREES TO DEFEND, INDEMNIFY AND HOLD CUSTOMER AND ITS
AFFILIATES AND ITS AND THEIR RESPECTIVE AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS WHICH ARISE IN CONNECTION WITH SOUTH TEXAS’ TRANSPORTATION, STORAGE, USE
OR HANDLING OF PRODUCT WHILE IN THE CUSTODY, POSSESSION AND CONTROL OF SOUTH
TEXAS AND FOR ANY AND ALL CLAIMS WHICH ARISE IN CONNECTION WITH ANY SPILL OR
DISCHARGE OF ANY PRODUCT FROM THE PIPELINE SYSTEM.
          (d) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE
OF DAMAGES IS PROVIDED IN THIS AGREEMENT, SUCH EXPRESS REMEDY OR MEASURE OF
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND THE OBLIGOR’S
LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER
REMEDIES OR DAMAGES ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY
PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL
DAMAGES ONLY, EXCLUDING LOST PROFITS, AND SUCH DIRECT ACTUAL DAMAGES SHALL BE
THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND ALL OTHER REMEDIES OR DAMAGES ARE
WAIVED. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER ANY
PROVISION OF THIS AGREEMENT FOR CONSEQUENTIAL, INCIDENTAL,

6

--------------------------------------------------------------------------------

 

PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES IN TORT, CONTRACT OR OTHERWISE.
     11. Notice of Claim and Filing of Suit. Claims by CUSTOMER and all other
persons claiming, by, through or under CUSTOMER, must be presented in writing to
SOUTH TEXAS within a reasonable time, and in no event later than sixty (60) Days
after (i) CUSTOMER’S Product is delivered or (ii) CUSTOMER is notified by SOUTH
TEXAS that loss of or injury to Product has occurred, whichever is shorter. No
action may be maintained by CUSTOMER and any other persons claiming by, through
or under CUSTOMER, against SOUTH TEXAS for loss of or injury to Product, unless
a written claim therefore is received by SOUTH TEXAS within the time periods set
forth herein and such action is commenced within twenty-four (24) Months after
(a) CUSTOMER’S Product is redelivered or (b) CUSTOMER is notified by SOUTH TEXAS
that loss of or injury to Product has occurred whichever is shorter. In the
situation where SOUTH TEXAS notifies CUSTOMER of a loss or, injury to Product,
the time limits for making written claims and the maintaining of actions after
notice, as set forth herein, begin on the date such notice is sent by SOUTH
TEXAS.
     12. Force Majeure. In the event either party is rendered unable, wholly or
in part, by Force Majeure to carry out its obligations under this Agreement, it
is agreed that upon such party’s giving notice and reasonably full particulars
of such Force Majeure in writing to the other party after the occurrence of the
cause relied on, then the obligations (except for the obligation to pay money
due as of the date of Force Majeure) of the party giving such notice, so far as
and to the extent that they are affected by such Force Majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period, and such cause shall so far as possible be remedied with all reasonable
dispatch. The term “Force Majeure” as used herein shall mean acts of God,
strikes, lockouts, or other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, tornadoes, hurricanes, or storms, tornado, hurricane, or
storm warnings which in any party’s reasonable judgment require the
precautionary shutdown of a facility, floods, washouts, arrests or restraints of
the government, either federal or state, civil or military, civil disturbances,
explosions, sabotage, breakage, or accident to equipment, machinery or lines of
pipe, freezing of machinery, equipment or lines of pipe, electric power
shortages, inability of any party to obtain necessary permits and/or permissions
due to existing or future rules, orders, laws or governmental authorities (both
federal, state and local), or any other causes, whether of the kind herein
enumerated or otherwise, which were not reasonably foreseeable, and which are
not within the control of the party claiming suspension and which such party is
unable to overcome by the exercise of due diligence. The term “Force Majeure”
shall also include those instances in which either party hereto is delayed in
acquiring, at reasonable cost and after the exercise of reasonable diligence,
(i) materials and supplies required for the purpose of constructing and
maintaining facilities, when such party is obligated to do so for the
performance of its obligations under this Agreement, or (ii) permits or
permission from any governmental agency required for the purpose of
(a) constructing and maintaining such facilities or (b) acquiring materials or
supplies required for such purpose. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion of the
party having the difficulty, and that the above requirement that any Force

7

--------------------------------------------------------------------------------

 

Majeure shall be remedied with all reasonable dispatch shall not require the
settlement of strikes or lockouts by acceding to the demands of opposing Parties
when such course is inadvisable in the discretion of the party having
difficulty.
     13. Inspection. CUSTOMER shall have the right to inspect the SOUTH TEXAS
pipeline at all reasonable times on prior written notice to SOUTH TEXAS.
     14. Insurance. SOUTH TEXAS agrees to maintain in full force and effect
during the term of this Agreement the following insurance coverage on the Teppco
pipeline, with reputable and licensed insurance companies:
          (i) worker’s compensation in accordance with the statutory
requirements of the State of Texas and employer’s liability insurance with
minimum limits of Five Hundred Thousand Dollars ($500,000);
          (ii) commercial or comprehensive general liability insurance,
including bodily injury, property damage, sudden and accidental pollution,
contractual liability and contractors’ protective liability for a limit of
$15,000,000; and
          (iii) automobile liability for owned and/or leased automobiles for a
limit of $2,000,000.
          Evidence of Insurance – Upon request, SOUTH TEXAS shall have its
authorized insurance representative furnish to CUSTOMER a certificate of
insurance. The certificate of insurance is to certify that all insurance
policies and endorsements required by this Agreement have been issued and shall
be in effect during the term of this Agreement. Each and every such policy shall
state that the policy cannot be cancelled, lapsed or materially altered without
at least thirty (30) days prior written notice by SOUTH TEXAS’ insurance
representative or insurer.
     15. Environmental Response. In the event of any such escape or discharge or
other environmental pollution from the South Texas pipeline, SOUTH TEXAS shall
commence emergency response and containment or clean-up operations as deemed
appropriate or necessary by SOUTH TEXAS or required by any governmental
authorities. SOUTH TEXAS is responsible for any claims, violations, and fines
resulting from spills or contamination and/or groundwater or damage to natural
resources and agrees to indemnify CUSTOMER for the same, except to the extent
the escape or discharge is a result of CUSTOMER’S negligence or breach of this
Agreement.
     16. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding the foregoing, CUSTOMER shall not assign or
sublet this Agreement in whole or in part without the express written consent of
SOUTH TEXAS, which consent shall not be unreasonably withheld; provided,
however, SOUTH TEXAS shall have the right to assign this Agreement to any of its
Affiliates without the necessity of obtaining from CUSTOMER any consent thereto.
Further provided, however, CUSTOMER shall have the right to assign this
Agreement to any of its Affiliates, without the necessity of obtaining from

8

--------------------------------------------------------------------------------

 

SOUTH TEXAS any consent thereto, but any such assignment shall in no way relieve
or release CUSTOMER from any obligations hereunder whether accrued before or
after any such assignment. CUSTOMER shall also have the right to assign this
Agreement to a successor in the event of a sale or transfer of all or
substantially all of CUSTOMER’S assets.
     17. No Commissions, Fees or Rebates. No director, employee or agent of
either party shall give or receive any commission, fee, rebate gift or
entertainment of significant cost or value in connection with this Agreement.
Any representative or representative(s) authorized by either party may audit the
applicable records of the other party for the purpose of determining whether
there has been compliance with this Section.
     18. Severability. This Agreement and the operations hereunder shall be
subject to the valid and applicable federal and state laws and the valid and
applicable orders, laws, local ordinances, rules, and regulations of any local,
state or federal authority having jurisdiction, but nothing contained herein
shall be construed as a waiver of any right to question or contest any such
order, laws, rules, or regulations in any forum having jurisdiction in the
premises. If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under the present or future laws effective during the term of this
Agreement, (i) such provision will be fully severable, (ii) this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part of this Agreement, and (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision, there will be added automatically as a part of this
Agreement a provision similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and as may be legal, valid, and
enforceable. If a provision of this Agreement is or becomes illegal, invalid, or
unenforceable in any jurisdiction, the foregoing event shall not affect the
validity or enforceability in that jurisdiction of any other provision of this
Agreement nor the validity or enforceability in other jurisdictions of that or
any other provision of this Agreement.
     19. Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED, AND
PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF
LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF TEXAS.
     20. Entire Agreement Waiver. This Agreement, including, without limitation,
all exhibits hereto, integrates the entire understanding between the Parties
with respect to the subject matter covered and supersedes all prior
understandings, drafts, discussions, or statements, whether oral or in writing,
expressed or implied, dealing with the same subject matter. This Agreement may
not be amended or modified in any manner except by a written document signed by
both parties that expressly amends this Agreement. No waiver by either party
hereto of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a

9

--------------------------------------------------------------------------------

 

continuing waiver unless expressly provided. No waiver shall be effective unless
made in writing and signed by the party to be charged with such wavier.
     21. Setoffs and Counterclaims. Except as otherwise provided herein, each
party hereto reserves to itself all rights, set-offs, counterclaims, and other
remedies and/or defenses which it is or may be entitled to arising from or out
of this Agreement or as otherwise provided by law.
     22. No Partnership, Association, etc. Nothing contained in this Agreement
shall be construed to create an association, trust, partnership, or joint
venture or impose a trust or partnership duty, obligation, or liability on or
with regard to either party.
     23. Exhibits. All Exhibits attached hereto are incorporated herein by
reference as fully as though contained in the body hereof. If any provision of
any Exhibit conflicts with the terms and provisions hereof, the provisions of
this Agreement shall prevail.
     24. Principles or Construction and Interpretation. In construing this
Agreement, the following principles shall be followed:
     (a) no consideration shall be given to the fact or presumption that one
party had a greater or lesser hand in drafting this Agreement;
     (b) examples shall not be construed to limit, expressly or by implication,
the matter they illustrate;
     (c) the word “includes” and its syntactical variants mean “includes, but is
not limited to” and corresponding syntactical variant expressions; and
     (d) the plural shall be deemed to include the singular and vice versa, as
applicable.
     25. Default. A party will be in default if it: (a) breaches this Agreement,
and the breach is not cured within thirty (30) days after receiving written
notice of such default (or alleged default) from the other party specifying the
nature of the breach; (b) becomes insolvent; or (c) files or has filed against
it a petition in bankruptcy, for reorganization, or for appointment of a
receiver or trustee. In the event of default, the non-defaulting party may
terminate this Agreement upon notice to the defaulting party. For the avoidance
of doubt, SOUTH TEXAS’ failure to perform any of the services for any reason
other than Force Majeure will be deemed a breach of this Agreement to which
subsection (a) of this Section 25 applies.
     26. Notice. Any notice or other communication provided for in this
Agreement or any notice which either party may desire to give to the other shall
be in writing and shall be deemed to have been properly given if and when sent
by facsimile transmission, delivered by hand, or if sent by mail, upon deposit
in the United States mail, either U.S. Express Mail, registered mail or
certified mail, with all postage fully prepaid, or if sent by courier, by

10

--------------------------------------------------------------------------------

 

delivery to a bonded courier with charges paid in accordance with the customary
arrangements established by such courier, in each case addressed to the parties
at the following addresses:
If to SOUTH TEXAS:
SOUTH TEXAS NGL PIPELINES, LLC
1100 Louisiana Street
Houston, Texas 77002
Attention: Manager, Asset Management
Phone: (713)381-8376
Fax: (713)381-7962
If to CUSTOMER:
Enterprise Products Operating L.P.
1100 Louisiana Street
Houston, Texas 77002
Attention: Manager, NGL Marketing
Phone: (713) 381-xxxx
Fax: (xxx) xxx-xxxx
or at such other address as either party shall designate by written notice to
the other. A notice sent by facsimile shall be deemed to have been received by
the close of the Business Day following the Day on which it was transmitted and
confirmed by transmission report or such earlier time as confirmed orally or in
writing by the receiving party. Notice by U. S. Mail, whether by U. S. Express
Mail, registered mail or certified mail, or by overnight courier shall be deemed
to have been received by the close of the second Business Day after the Day upon
which it was sent, or such earlier time as is confirmed orally or in writing by
the receiving party. Any party may change its address or facsimile number by
giving notice of such change in accordance herewith.

11

--------------------------------------------------------------------------------

 

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

              SOUTH TEXAS NGL PIPELINES, LLC
 
       
 
  By:   /s/ Gil H. Radtke
 
       
 
       
 
  Name:   Gil H. Radtke
 
       
 
       
 
  Title:   Senior Vice President and Chief Operating Officer
 
       
 
            ENTERPRISE PRODUCTS OPERATING L.P.,
 
            By: Enterprise Products OLPGP, Inc.,
its general partner
 
       
 
  By:   /s/ Jim Teague
 
       
 
       
 
  Name:   Jim Teague
 
       
 
       
 
  Title:   Executive Vice President
 
       

12