Exhibit 10.1
MEMORANDUM OF UNDERSTANDING
     The undersigned parties to certain actions filed in the Court of Chancery
of the State of Delaware (“Court”), entitled Peter Brinckerhoff v. Texas Eastern
Products Pipeline Company, LLC, et al., Civil Action No. 2427-VCL, and In re
Texas Eastern Products Pipeline Company, LLC, Merger Litigation, Civil Action
No. 4548-VCL (the “Actions”), have reached an agreement in principle providing
for the settlement of the Actions on the terms and subject to the conditions set
forth below.
     WHEREAS, on September 18, 2006, Peter Brinckerhoff (“Brinckerhoff” or
“Derivative Plaintiff”) filed a derivative and class action complaint in the
Delaware Court of Chancery challenging certain transactions entered into between
affiliates of nominal defendant TEPPCO Partners, L.P. (“TEPPCO”) and Enterprise
Products Partners, L.P. (“EPD”) and certain proxy disclosures of TEPPCO (the
“Derivative Action”); and
     WHEREAS, Derivative Plaintiff held more than 40,000 TEPPCO units; and
     WHEREAS, on September 22, 2006, Derivative Plaintiff filed an initial
document request and a motion to expedite and requested that the Court set a
hearing for a preliminary injunction; and
     WHEREAS, in response to the litigation, on October 5, 2006, TEPPCO filed an
8-K containing supplemental disclosures with respect to its proxy solicitation;
and
     WHEREAS, on November 17, 2006, all defendants except the nominal defendant
moved to dismiss the complaint in its entirety; and
     WHEREAS, on July 12, 2007, Derivative Plaintiff filed an Amended Class and
Derivative Complaint (the “Amended Complaint”); and

 

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     WHEREAS, on September 28, 2007, defendants moved to dismiss Count III of
the Amended Complaint, which constituted Derivative Plaintiff’s class action
claims related to TEPPCO’s proxy solicitation, and certain defendants moved to
dismiss Count I of the Amended Complaint as against them related to the
transactions between affiliates of TEPPCO and EPD; and
     WHEREAS, during the pendency of the motions to dismiss, Derivative
Plaintiff voluntarily dismissed claims relating to a certain transaction against
defendant Thompson; and
     WHEREAS, after briefing and oral argument on the motions to dismiss, the
Court issued a Memorandum Opinion on November 15, 2008, dismissing Count III of
the Amended Complaint, but denying the motions to dismiss Count I of the Amended
Complaint; and
     WHEREAS, during the pendency of the motion to dismiss and following the
Court’s decision, the Derivative Plaintiff conducted extensive discovery on the
derivative claims contained in Counts I and II of the Amended Complaint; and
     WHEREAS, Derivative Plaintiff served four combined interrogatories and
document requests on defendants, subpoenaed six third party witnesses, including
Merrill Lynch, Pierce, Fenner & Smith, Inc., Goldman, Sachs & Co., EnCana Oil &
Gas (USA), Inc., and Simmons & Company, International; reviewed over five
hundred thousand pages of documents produced by defendants and third parties;
identified and provided to defendants more than 650 exhibits to be potentially
used at depositions; deposed the Chairman of TEPPCO’s Special Committee, a
representative of one financial advisor to the Committee, a senior Vice
President of TEPPCO and Enterprise, and TEPPCO’s Director of Development and
TEPPCO’s Chief Financial Officer; and
     WHEREAS, Derivative Plaintiff began depositions in November 2008 and took
depositions in Maryland and Texas through January 2009. Also, in January 2009,
Derivative

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Plaintiff’s counsel agreed with defendants’ counsel and various third parties to
schedule thirteen (13) additional depositions in Texas, New York, Colorado and
California so that all depositions would be completed prior to the discovery
cut-off of April 30, 2009; and
     WHEREAS, Derivative Plaintiff’s counsel represents that they consulted with
numerous experts, retained five experts in the fields of oil and gas, natural
gas liquids, financial analysis, mergers, acquisitions and fairness opinions,
and Master Limited Partnerships; and
     WHEREAS, in late January 2009, the parties agreed to mediation before one
of the members of the Delaware Chancery Court pursuant to Chancery Rule 174.
Vice Chancellor Lamb consented to joint requests that discovery be stayed for
ninety (90) days, and Vice Chancellor Strine agreed to act as mediator.
Mediation was set for April 16, 2009, and Vice Chancellor Strine ordered the
parties to submit simultaneous opening and answering mediation briefs; and
     WHEREAS, Derivative Plaintiff submitted mediation briefs together with
attached expert reports of two financial experts. Derivative Plaintiff’s experts
valued the derivative claims at approximately $700 million and, on a
disgorgement of profits basis, at more than one billion dollars; and
     WHEREAS, defendants submitted mediation briefs together with attached
expert reports and argued that the derivative claims had no value, including
that under the TEPPCO Partnership Agreement, TEPPCO’s General Partner could
engage in asset sales and joint ventures, including conflict of interest
transactions, in its “sole discretion;” and
     WHEREAS, in early April 2009, defendants’ counsel advised the Derivative
Plaintiff’s counsel of a possible merger transaction between EPD and TEPPCO and
that, if such merger occurred, it might lead to a potential resolution of the
Derivative Action. The parties

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agreed that the mediation be adjourned for sixty days; and
     WHEREAS, on or about April 29, 2009, TEPPCO announced that it had received
a proposal from EPD dated March 9, 2009 for the acquisition by EPD of all of
TEPPCO’s outstanding limited partnership units in exchange for $1.00 per unit
and 1.043 EPD units (the “Merger Proposal”), which represented at the time
$21.89 per TEPPCO unit, and that the Special Committee had rejected the proposal
as inadequate; and
     WHEREAS, Derivative Plaintiff’s counsel represents that following that
announcement, along with Derivative Plaintiff, they reviewed analyst reports
concerning the proposal and saw no analyst report projecting more than a 10%
increase in the deal; and
     WHEREAS, on April 29, 2009, Brinckerhoff filed a class action complaint in
the Delaware Court of Chancery challenging the fairness of the offer; and
     WHEREAS, on April 29, 2009, Renee Horowitz (together with Brinckerhoff,
“Plaintiffs”) filed a class action complaint in the Delaware Court of Chancery
challenging the fairness of the offer, which action was consolidated into the
new Brinckerhoff action on May 11, 2009, entitled Texas Eastern Products
Pipeline Company, LLC, Merger Litigation, C.A. No. 4548-VCL (the
“Class Action”); and
     WHEREAS, on May 11, 2009, the law firm of Bragar Wexler Eagel & Squire,
P.C. was designated as Plaintiffs’ Lead Counsel in the Class Action and the law
firm of Rosenthal, Monhait & Goddess, P.A., was designated as Delaware Liaison
Counsel for Plaintiffs; and
     WHEREAS, the Audit, Conflicts and Governance Committee of the board of
directors of TEPPCO’s general partner appointed a special committee comprised of
independent directors (the “Special Committee”) to consider the Merger Proposal.
The Special Committee was comprised of a TEPPCO director who joined the TEPPCO
GP Board more than a year after the

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Derivative Action had been filed, and was joined by two new directors named to
the TEPPCO’s GP Board in April 2009; and
     WHEREAS, the Special Committee retained independent legal and financial
advisors; and

 
     WHEREAS, in early May, 2009, Derivative Plaintiff was invited to make a
presentation on the merits of the Derivative Action to the Special Committee and
its advisors in Houston. Derivative Plaintiff’s attorneys prepared a memorandum,
charting from the mediation memoranda Derivative Plaintiff’s arguments,
defendants’ responses, and Derivative Plaintiff’s reply. Also, for the Special
Committee, Derivative Plaintiff’s counsel prepared a power point presentation
summarizing the applicable contractual standards, evidence of liability and
damages. Derivative Plaintiff’s counsel also circulated copies of and included
in the presentation, about 20 of the most important exhibits marked in
discovery. Derivative Plaintiff’s experts also prepared reply expert reports to
respond to defendants’ expert report that defendants had submitted with their
mediation answering memorandum. Derivative Plaintiff, five of his attorneys,
together with three of Derivative Plaintiff’s attorneys’ experts, participated
in the presentation to the Special Committee. All members of the Special
Committee, their counsel, and Delaware counsel, and financial experts, listened
to the presentation for about three hours, and posed questions to Derivative
Plaintiff’s attorneys and their experts. The Special Committee requested, and
Derivative Plaintiff’s team provided, a “bottom line” estimate of the value of
the Derivative Action; and
     WHEREAS, defendants represent that the Special Committee and its advisors
conducted extensive negotiations with EPD; and
     WHEREAS, from and after May 2009, Derivative Plaintiff’s counsel and the

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Special Committee’s counsel were in regular communication. In discussions with
counsel for the Special Committee, Derivative Plaintiff’s counsel repeatedly
urged that if the Special Committee concluded that EPD refused to pay fair
consideration for the Derivative Action, TEPPCO, prior to the merger, should
transfer TEPPCO’s claim to a litigation trust; and
     WHEREAS, on June 17, 2009, the Special Committee and its counsel engaged in
a lengthy telephone discussion with the Derivative Plaintiff and Plaintiffs’
counsel concerning the terms of, and the history of the negotiations for, the
proposed merger. Derivative Plaintiff requested that the Special Committee
request that EPD increase the distributions to be made on EPD units; the Special
Committee requested that EPD increase the distributions to be made on EPD units,
and EPD agreed to make certain representations regarding proposed distributions
following the merger; and
     WHEREAS, on June 19, 2009, Plaintiffs authorized their attorneys to sign an
MOU, subject to the results of confirmatory discovery. Prior to signing this
MOU, Plaintiffs’ attorneys arranged for one of their experts to examine certain
financial materials prepared for the Special Committee and to report whether, on
a preliminary basis, the merger consideration appeared fair; and
     WHEREAS, TEPPCO and EPD have agreed on the terms of an acquisition by EPD
of all of the outstanding limited partnership units of TEPPCO as set forth below
(the “Merger”); and
     WHEREAS, the Derivative Action was considered by the Special Committee to
be a significant asset of TEPPCO for which fair value was sought and obtained in
the merger consideration. During the negotiations, the Special Committee advised
EPD that EPD had not

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sufficiently valued the Derivative Action and, thereafter, EPD increased the
Merger consideration; and
     WHEREAS, subject to market conditions, EPD expects to be able to continue
its practice of increasing its distribution each quarter through 2011 by the
higher of $0.0075 ($0.03 annualized) per common unit or 1.25% (5% annualized);
and
     WHEREAS, each defendant denies having committed or having attempted to
commit any violation of law or breach of duty, or otherwise having acted in any
improper manner; and
     WHEREAS, counsel for the parties have engaged in arm’s-length negotiations
concerning a possible settlement of the Actions; and
     WHEREAS, counsel for Plaintiffs intend to apply for an award of fees and
reimbursement of expenses in connection with the Actions based upon the value of
the benefits the Derivative Action provided to TEPPCO. In his retainer with
Derivative Plaintiff’s attorneys, Derivative Plaintiff agreed that such
attorneys could apply to the Court for an award of thirty percent of the benefit
obtained plus reimbursement of expenses; and
     NOW, THEREFORE, the aforesaid negotiations between the parties having
resulted in an agreement in principle providing for the settlement of the
Actions on the terms and conditions set forth below (the “Settlement”):
     1. Merger Consideration and Vote. EPD will, in the Merger, exchange 1.24
EPD Common Units for each outstanding limited partnership unit of TEPPCO (the
“Merger Consideration”), other than the Designated TEPPCO Common Units defined
below. Further, one or more privately-held affiliates of EPCO shall receive in
the Merger in exchange for 3,645,509 limited partnership units of TEPPCO held by
such affiliate or affiliates (“Designated TEPPCO

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Common Units”) 4,520,431 Class B units of EPD, which Class B units, by their
terms, will receive no cash distributions for sixteen quarters following the
closing date of the Merger. The board of directors of TEPPCO’s general partner
shall recommend to TEPPCO’s unitholders that they approve the Merger and shall
take all necessary steps to seek unitholder approval as soon as practicable,
including providing proxy materials to TEPPCO’s unitholders, which shall include
a description of the Settlement, and scheduling a unitholder vote. Approval of
the Merger shall require, in addition to votes required under the TEPPCO
partnership agreement, the affirmative vote of at least a majority of the votes
cast by the holders of outstanding limited partnership units of TEPPCO,
excluding those held by defendants to the Derivative Action and their
affiliates.
     2. The Derivative Action was considered by the Special Committee to be a
significant asset of TEPPCO for which fair value was sought and obtained in the
merger consideration. The derivative claims and the presentation by Derivative
Plaintiff, his counsel and their experts provided substantial assistance to the
Special Committee in negotiating the increase in the merger consideration.
During the negotiations, the Special Committee advised EPD that EPD had not
sufficiently valued the Derivative Action and, thereafter, EPD increased the
Merger consideration.
     3. The parties to the Actions will, within thirty (30) days from the date
of this MOU, in good faith attempt to agree upon and execute an appropriate
Stipulation of Settlement (the “Stipulation”) and such other documentation as
may be required to obtain final Court approval of the Settlement, and the
dismissal of the Actions upon the terms outlined in this Memorandum of
Understanding (collectively, the “Settlement Documents”).
          The Stipulation of Settlement shall provide, among other things:

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          a. for the conditional certification of the Class Action, for
settlement purposes only, as a class action pursuant to Chancery Court Rules 23
(b)(1) and (b)(2) on behalf of a class consisting of all record and beneficial
owners of limited partnership units of TEPPCO during the period beginning on and
including the close of business on March 9, 2009 (the date of the initial Merger
Proposal) through and including the date of the closing of the Merger, including
any and all of their respective successors in interest, predecessors,
representatives, trustees, executors, administrators, heirs, assigns or
transferees, immediate and remote, and any person or entity acting for or on
behalf of, or claiming under any of them, and each of them (the “Class”);
          b. for the complete discharge, dismissal with prejudice, settlement
and release of, and an injunction barring, all claims, demands, rights, actions
or causes of action, rights, liabilities, damages, losses, obligations,
judgments, suits, matters and issues of any kind or nature whatsoever, whether
known or unknown, contingent or absolute, suspected or unsuspected, disclosed or
undisclosed, hidden or concealed, matured or unmatured, that have been, could
have been, or in the future can or might be asserted in the Class Action or
Derivative Action or in any court, tribunal or proceeding (including, but not
limited to, any claims arising under federal or state law relating to alleged
fraud, breach of any duty, negligence, violations of the federal securities laws
or otherwise) by or on behalf of any member of the Class, TEPPCO and TEPPCO’s
unitholders that owned securities of TEPPCO continuously from the time the
claims in the Derivative Action arose through to the present, whether
individual, class, derivative, representative, legal, equitable or any other
type or in any other capacity against defendants (or any one of them) in the
Actions or any of their families, parent entities, associates, affiliates, or
subsidiaries and each and all of their respective past, present or future
officers, directors, unitholders, partners, members, representatives, employees,
financial or investment advisors,

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consultants, accountants, attorneys, investment bankers, commercial bankers,
advisors or agents, heirs, executors, trustees, general or limited partners or
partnerships, personal representatives, estates, administrators, predecessors,
successors and assigns (collectively, the “Released Persons”) which have arisen,
could have arisen, arise now or hereafter arise out of, or relate in any manner
to, the allegations, facts, events, transactions, acts, occurrences, statements,
representations, misrepresentations, omissions or any other matter, thing or
cause whatsoever, or any series thereof, embraced, involved, set forth or
otherwise related to, the Class Action or Derivative Action, or any allegations
in the complaints or amended complaints in the Actions, to the Merger or the
consideration or implementation of the Merger, or to any proxy statement, any
supplement thereto, or any disclosures contained therein issued in connection
with the Merger (provided that plaintiffs are provided with a draft of the proxy
statement and the opportunity to comment on any proposed disclosures) (the
“Settled Claims”), provided however, that Settled Claims shall not include any
claims to enforce the Settlement;
          c. for the release by defendants of each other defendant of any legal
or equitable claims or rights of recovery from the other defendants related to
the Actions, whether arising under 10 Del. C. § 6301, et. seq., or otherwise,
excepting only such claims for advancement and/or indemnification for attorneys’
fees and expenses as any individual defendant may have;
          d. that in the event the Merger is not consummated or the settlement
does not become final for any reason the parties will be placed in the positions
they held on June 22, 2009, and the defendants reserve the right to oppose
certification of the Class in future proceedings; and

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          e. that defendants have denied and continue to deny they have
committed or attempted to commit any violations of law or breached any duty owed
to TEPPCO or its unitholders.
     4. Pending final approval of this Settlement, Plaintiffs and their counsel
will not file any motion for a preliminary injunction or other interim equitable
relief relating to the Merger. All proceedings in the Actions shall be stayed
except as provided in this agreement.
     5. Plaintiffs and defendants shall agree on the terms of a proposed Notice
of the Proposed Settlement, which shall be provided to TEPPCO unitholders by
TEPPCO at its expense. This requirement shall be satisfied via a notice of
settlement which will be printed and mailed by defendants, at TEPPCO’s expense,
to all unitholders of TEPPCO pursuant to Chancery Court Rules 23(e) and 23.1(c).
     6. Plaintiffs’ agreement to settle the Derivative Action and the Merger
Litigation, including their agreement to the fairness of the proposed terms and
process of the Merger negotiations, shall be subject to confirmatory discovery
following the execution of this MOU and proposed Merger agreement, including
appropriate document and deposition discovery.
     7. This settlement is subject to: (a) the drafting and execution of the
Settlement Documents; (b) satisfactory confirmatory discovery confirming the
fairness of the merger, (c) approval of the Court and the mailing of a Notice of
Settlement which sets forth the terms of the settlement to TEPPCO unitholders;
(d) consummation of the Merger; and (e) final Court certification of the Class,
approval of the Settlement, and dismissal of the Actions with prejudice and
without awarding costs to any party except as determined in paragraph 9. This
Memorandum of Understanding shall be null and void and of no force and effect
should any of the

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conditions set forth herein not be met; in such event, this Memorandum of
Understanding shall not be deemed to prejudice in any way the positions of the
parties with respect to the Actions nor to entitle any party to the recovery of
costs and expenses intended to implement this Memorandum of Understanding
(except as provided in paragraph 5 hereof for the costs of notice).
     8. The Stipulation of Settlement shall provide a statement that (i) the
release contemplated by the stipulation shall extend to the claims that the
parties granting the release (the “Releasing Parties”) do not know or suspect to
exist at the time of the release, which if known, might have affected the
Releasing Parties decision to enter into the release, (ii) the Releasing Parties
shall be deemed to relinquish, to the extent applicable, and to the full extent
permitted by law, the provisions, rights and benefits of Section 1542 of the
California Civil Code, and (iii) the Releasing Parties shall be deemed to waive
any and all provisions, rights and benefits conferred by any law of any state or
territory of the United States, or principle of common law, which is similar,
comparable or equivalent to California Civil Code Section 1542.
     9. Plaintiffs and their counsel intend to petition the Court for a
reasonable award of reasonable fees, reimbursement of reasonable expenses, and a
special award for plaintiffs, in connection with the Actions (the “Fee
Application”). The parties in the Actions shall negotiate in good faith the
amount of the Fee Application. Defendants in the Actions reserve all rights to
oppose the Fee Application. Final resolution by the Court of the Fee Application
shall not be a precondition to the dismissal of the Actions in accordance with
the Stipulation, and the Stipulation shall provide that the Fee Application may
be considered separately from the proposed Settlement of the Actions. Fees and
expenses awarded by the Court in the Actions to Plaintiffs’ counsel in the
Actions shall be paid by TEPPCO and/or any insurer for any of the Defendants

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within ten (10) business days after the later of (1) fulfillment of all of the
conditions to the Settlement or (2) the date of the Court’s order approving the
Fee Application.
     10. While retaining their right to deny liability, the Actions are being
settled voluntarily by defendants after consultation with competent legal
counsel. The releases between the parties will include releases of all counsel
in the Actions.
     11. The parties agree to take all reasonable and necessary steps to
expeditiously implement the terms of this agreement and to complete the
Settlement.

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ROSENTHAL, MONHAIT & GODDESS, P.A.
      MORRIS, NICHOLS, ARSHT & TUNNELL LLP
 
       
/s/ Joseph A. Rosenthal
 
Joseph A. Rosenthal (#234)
      /s/ A. Gilchrist Sparks, III
 
A. Gilchrist Sparks, III (#467)
Norman M. Monhait (#1040)
      William M. Lafferty (#2755)
919 Market Street, Suite 1401
      Thomas W. Briggs, Jr. (#4076)
P.O. Box 1070
      1201 North Market Street
Wilmington, DE 19899
      P.O. Box 1347
(302) 656-4433
      Wilmington, DE 19899
Attorneys for Peter Brinckerhoff
      (302) 658-9200
and Renee Horowitz
     
Attorneys for Defendants Enterprise Products Partners, L.P., Enterprise Products
GP, LLC, W. Randall Fowler, Michael A. Creel and Richard H. Bachmann
 
       
PROCTOR HEYMAN, LLP
      RICHARDS LAYTON & FINGER, P.A.
 
       
/s/ Vernon R. Proctor
 
Vernon R. Proctor (#1019)
      /s/ Gregory P. Williams
 
Gregory P. Williams (#2168)
Kurt M. Heyman (#3054)
      Anne C. Foster (#2513)
1116 West Street
      Rudolf Koch (#4947)
Wilmington, DE 19801
      Jennifer J. Veet (#4929)
(302) 472-7300
      One Rodney Square
Attorneys for Nominal Defendant
      920 North King Street
TEPPCO Partners, L.P.
      Wilmington, DE 19801
 
      (302) 651-7700
 
     
Attorneys for Defendants Richard S. Snell, Michael B. Bracy, Murray H.
Hutchison, Jerry E. Thompson and Texas Eastern Products Pipeline Company, LLC
 
       
Dated: 06/28/09
       

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ASHBY & GEDDES
      POTTER ANDERSON & CORROON LLP
 
       
/s/ Lawrence C. Ashby
 
Lawrence C. Ashby (#468)
      /s/ Donald J. Wolfe, Jr.
 
Donald J. Wolfe, Jr. (#285)
Richard D. Heins (#3000)
      Brian C. Ralston (#3770)
Richard L. Renck (#3893)
      1313 N. Market Street
500 Delaware Avenue, 8th Floor
      P.O. Box 951
P. O. Box 1150
      Wilmington, DE 19899-0951
Wilmington, DE 19899-1150
      (302) 984-6015
(302) 654-1888
     
Attorneys for Defendants Donald H. Daigle, Duke R. Ligon and Irvin Toole, Jr.
Attorneys for Defendants Dan L. Duncan and EPCO, Inc.
   
 
 
       
Dated: 06/28/09
       

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