EXHIBIT 10.2


CONTRIBUTION AGREEMENT


This
Contribution Agreement (this “Agreement”),
dated as of August 1, 2006 (the “Effective Date”),
is entered into by and among Enterprise Gas Processing, LLC, a Delaware limited
liability company (“Enterprise”), TEPPCO GP, Inc., a Delaware corporation (“TGP”) and TEPPCO Midstream Companies, L.P., a Delaware
limited partnership (“TMC” and
together with TGP, the “TEPPCO Parties”),
and Jonah Gas Gathering Company,
a Wyoming general partnership and an affiliate of the TEPPCO Parties (“Jonah”).


RECITALS


WHEREAS,
Jonah was formed on June 20, 1996 by the execution of the Agreement of
Partnership (“Original Agreement”) by and
between Green River Pipeline LLC, a Wyoming limited liability company (“Green River”), and Jonah Pipeline Company, a Michigan
corporation.


WHEREAS,
McMurray Oil Company, a Wyoming corporation (“MOC”)
acquired the Partnership Interest of Jonah Pipeline Company in Jonah;


WHEREAS,
on September 28, 2001, (i) TGP acquired from MOC and Green River, 0.001% of
their respective Partnership Interests in Jonah and (ii) TMC acquired from MOC
and Green River, 99.999% of their respective Partnership Interests in Jonah;


WHEREAS,
immediately prior to the execution of this Agreement, TGP held a 0.001%
Partnership Interest and TMC held a 99.999% Partnership Interest;


WHEREAS,
Jonah owns and operates a gas gathering system in Lincoln, Sublette and
Sweetwater Counties, Wyoming, which gathers gas from the Jonah Field and the
Pinedale Anticline Field to points of interconnection with various other
facilities, together with its lines of pipe, valves, tanks, interconnections,
buildings, machinery, equipment, parts, tools, supplies and other related
assets (collectively, the “Jonah Gas Gathering System”);


WHEREAS,
on February 13, 2006, Enterprise Products Partners L.P., a Delaware limited
partnership and TEPPCO Partners, L.P., a Delaware limited partnership (“TEPPCO
Partners”) entered into a letter of intent relating to the formation of a
joint venture with respect to the Partnership which letter of intent is
superseded and replaced upon execution of this Agreement and the Partnership
Agreement (defined below);


WHEREAS, prior to the Effective Date, Enterprise
Products has funded certain portions of an expansion of the Jonah Gas Gathering
System, which expansion when completed shall consist of the installation of new
compression, related new piping and certain related facilities, all as more
particularly described in Section 4 of that certain Gas Gathering Agreement
dated as of February 1, 2006, between EnCana Oil & Gas (USA) Inc. and Jonah
(the “Jonah Expansion”), on behalf
of Enterprise and in contemplation of Enterprise entering into this Agreement
on the terms herein set forth;









 



 


WHEREAS,
the Jonah Expansion is to be completed pursuant to a joint venture on the terms
and conditions set forth in this Agreement and Jonah’s Amended and Restated
Agreement of Partnership (“Partnership Agreement”),
which amends and restates the Original Agreement in its entirety, such
Partnership Agreement to be executed and delivered by Enterprise and the TEPPCO
Parties concurrent with this Agreement;


WHEREAS,
on the Effective Date, TMC will contribute all of its interest in Jonah Gas
Marketing, LLC to the Partnership pursuant to this Agreement and after such contribution
the Partnership will own 100% of the outstanding membership interests in Jonah
Gas Marketing, LLC;


WHEREAS,
prior to the Effective Date, all intercompany accounts payable by Jonah to
TEPPCO Partners, L.P. or its Affiliates have been converted into Partners’
capital so that on the Effective Date Jonah does not have any amounts which are
payable to any of its Partners or Affiliates; and


WHEREAS, capitalized terms not otherwise defined
herein shall have the meanings given to them in the Partnership Agreement.


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual promises
contained herein and in the Partnership Agreement, the benefits to be derived
by each party hereunder and thereunder, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


ARTICLE 1

CONTRIBUTION


Section
1.1.           Contribution. 
Subject to the terms and conditions hereof, Enterprise hereby
irrevocably commits to fund the Jonah Expansion (net of those amounts
previously funded by Enterprise and subject to the TEPPCO Parties’ related
sharing and reimbursement obligations), all as more particularly described in
the Partnership Agreement, in exchange for the issuance of a certain Partnership
Interest and Sharing Ratio in Jonah, the terms of which are detailed in the
Partnership Agreement, specifically Exhibit A attached thereto.


Section
1.2.           Enterprise Partnership
Interest and Sharing Ratio.  Upon execution and delivery of
this Agreement and the Partnership Agreement (which is being executed and
delivered simultaneously herewith), Jonah shall issue, and Enterprise shall
have, its Partnership Interest and Sharing Ratio in Jonah as set forth in Exhibit
A to the Partnership Agreement.


ARTICLE 2

REPRESENTATIONS AND WARRANTIES


Section
2.1.           Representations and
Warranties of the TEPPCO Parties.  Each of the TEPPCO Parties,
jointly and severally, represent and warrant to Enterprise as follows:



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(a)           Organization and
Qualification.  TGP is a
Delaware corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with full power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as currently being conducted. 
TMC is a Delaware limited partnership duly formed, validly existing and
in good standing under the laws of the State of Delaware with full partnership
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as currently being conducted.  Jonah is a Wyoming general partnership duly
formed, validly existing and in good standing under the laws of the State of
Wyoming with full partnership power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as currently
being conducted.  Each of the TEPPCO
Parties and Jonah is duly qualified as a foreign organization, in good
standing, in each jurisdiction requiring such qualification, except where the
failure to have such qualification would not have material adverse effect on
its business, operations, prospects or condition (financial or otherwise) (a “Material Adverse Effect”).


(b)           Authority; Consents;
No Conflicts.  Each of the
TEPPCO Parties and Jonah has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement and the
Partnership Agreement, as applicable, and to perform its obligations hereunder
and thereunder.  The execution and
delivery of this Agreement and the Partnership Agreement and the transactions
contemplated hereby and thereby have been duly and validly authorized and
approved by all requisite action on the part of each of the TEPPCO Parties and
Jonah and will not (i) require any consent, authorization or approval of, or
exemption by, or filing under any provision of any law, statute, rule or
regulation to which the TEPPCO Parties, Jonah or the Jonah Gas Gathering System
are subject, (ii)  violate any provision
of the TEPPCO Parties’ or Jonah’s certificate of incorporation, bylaws,
partnership agreement or other governing documents, (iii) violate any judgment,
order, writ or decree of any court applicable to the TEPPCO Parties, Jonah or
the Jonah Gas Gathering System, (iv) conflict with, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under any agreement, contract, commitment, lease or other instrument, document
or undertaking to which the TEPPCO Parties or Jonah is a party or by which the
TEPPCO Parties, Jonah or any part of the Jonah Gas Gathering System is bound or
(v) result in the creation or imposition of any Encumbrance upon Jonah or the
Jonah Gas Gathering System, except in the case of clauses (i), (iv) and (v) as
would not have a Material Adverse Effect.


(c)           Execution;
Enforceability.  This
Agreement and the Partnership Agreement have been duly executed and delivered
on behalf of each of the TEPPCO Parties and Jonah, as appropriate, and
constitute legal, valid and binding obligations of each of the TEPPCO Parties
and Jonah enforceable against each of the TEPPCO Parties and Jonah in
accordance with their terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws presently
or hereafter in effect relating to or affecting the enforcement of creditors’
rights generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).



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(d)           Payment of Taxes.  Jonah has paid in full all Taxes and
assessments due against the Jonah Gas Gathering System to the applicable Taxing
authority, except for Taxes being contested in good faith.  All Tax returns and reports required by
applicable law or governmental regulations have been filed by Jonah, and such
returns and reports are true, correct and complete and present fairly and
accurately the information required to be shown therein.  There are no Tax deficiencies that have been
assessed, or are proposed or threatened, and no audit of Jonah by any federal,
state or local authority is in progress, proposed or, to the knowledge of the
TEPPCO Parties and Jonah, threatened. 
There are no Tax liens upon the Jonah Gas Gathering System other than
for Taxes not yet due.


(e)           Information.  The TEPPCO Parties and Jonah have provided
Enterprise with information relating to the Jonah Gas Gathering System that is
complete and accurate in all material respects. 
No representation or warranty of either the TEPPCO Parties or Jonah
contained in this Agreement contains any untrue statement of material fact, or
omits to state any material fact necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.  All contracts, permits and other documents
and instruments furnished or made available to Enterprise by the TEPPCO Parties
and Jonah, including but not limited to operational information and the
Easements, Gas Contracts, Permits and Records, are true, complete and accurate
originals or copies of originals and include all amendments, supplements,
waivers and modifications thereto.  There
is no fact, development or threatened development (excluding general economic
factors affecting business in general) that either the TEPPCO Parties or Jonah
has not disclosed to Enterprise in this Agreement or the schedules hereto that
may have a Material Adverse Effect or, so far as either the TEPPCO Parties or
Jonah can now foresee, may in the future have a Material Adverse Effect on the
Jonah Gas Gathering System or the Partnership.


(f)            Capitalization.  The TEPPCO Parties own all of the issued and
outstanding Partnership Interests of Jonah, which interests are set forth in
the recitals to this Agreement, and own such interests free and clear of all
Encumbrances of any nature whatsoever. 
Jonah has no other outstanding equity interests and there are no
outstanding contracts, agreements, subscriptions, options, rights, warrants or
other commitments of any nature whatsoever relating to the issuance, sale,
transfer, exchange or conversion of any equity, debt or other securities of
Jonah.  Jonah does not own any equity or
other interest in any other Person; provided that, on the Effective Date and
simultaneously with the signing of this Agreement and the Partnership
Agreement, TMC will contribute all of its interest in Jonah Gas Marketing, LLC
to the Partnership and after such contribution the Partnership will own 100% of
the outstanding membership interests in Jonah Gas Marketing, LLC.


(g)           Financial Statements;
Records.  The TEPPCO
Parties and Jonah have delivered to Enterprise: the March 31, 2006 balance
sheet (the “Balance Sheet”) of
Jonah and the statement of operations for the three months ended March 31,
2006. Such financial statements and notes fairly present the financial
condition and results of operations of Jonah and



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the Jonah Gas Gathering System as at the respective dates of and for
the periods referred to in such financial statements and reflect the consistent
application of the accounting principles applied thereto.  The Records of Jonah and the Jonah Gas
Gathering System, all of which have been made available to Enterprise, are
complete and correct in all material respects and have been prepared and
maintained in accordance with sound business practices and, where applicable,
in conformity with generally accepted accounting principles and in compliance
in all material respects with applicable laws and regulations.


(h)           No Undisclosed
Liabilities; Release of Guarantee.  Except as set forth on Schedule 2.1(h),
Jonah and the Jonah Gas Gathering System have no liabilities or obligations of
any nature (whether known or unknown and whether absolute, accrued, contingent
or otherwise) except for liabilities or obligations reflected or reserved
against in the Balance Sheet and current liabilities incurred in the ordinary
course of business.  Jonah (i) has
obtained a release from that certain guarantee granted by Jonah to Wachovia
Bank, National Association pursuant to the provisions of Section 14.04 of the
Indenture between TEPPCO Partners, L.P., as issuer, TE Products Pipeline
Company Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and
Jonah, each as subsidiary guarantors and Wachovia Bank, National Association,
as trustee and (ii) has obtained a similar release of its subsidiary guarantee
under the Amended and Restated Credit Agreement of TEPPCO Partners, L.P.


(i)            Absence of Changes.  Except as and to the extent set forth on
Schedule 2.1(i) or as contemplated by this Agreement or the Partnership
Agreement, since March 31, 2006, Jonah has not, directly or indirectly:


(1)           made any amendment
to its partnership agreement or other organizational documents, or changed the
character of its business in any material manner;


(2)           experienced any
event, development or condition of any character that had or could reasonably
be expected to have a Material Adverse Effect on Jonah or the Jonah Gas
Gathering System;


(3)           entered into any
agreement or transaction outside the ordinary course of business, except in
connection with the Jonah Expansion; or


(4)           made any capital
expenditure or commitment other than in the ordinary course of business and
except in connection with the Jonah Expansion.


(j)            Condition of System,
Legality of Use, Title, Sufficiency of Assets.


(1)           The Jonah Gas
Gathering System is in good and serviceable condition (normal wear and tear
excepted) and suitable for the uses for which it is intended and has been
maintained in accordance with industry practices regarding gathering systems of
similar size and operating in substantially the same geographic area.



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The
Jonah Gas Gathering System and its uses conform in all material respects to all
applicable laws.  Jonah has complied in
all material respects with all laws, rules, regulations, ordinances and orders
of all federal, state, county, municipal, local and other governmental bodies,
authorities and agencies having jurisdiction over the Jonah Gas Gathering
System.  No portion of the Jonah Gas
Gathering System has been found to be subject to the jurisdiction of the
Federal Energy Regulatory Commission under the Natural Gas Act of 1938, the
Natural Gas Policy Act of 1978 or the Interstate Commerce Act.


(2)           Jonah has good and
marketable title to the Jonah Gas Gathering System.  For purposes of this Agreement, “good and
marketable” title shall mean that title which grants the title holder all
right, title and interest in and to the Jonah Gas Gathering System, free and
clear of all Encumbrances (other than those set forth in Schedule 2.1(j)).  Except as set forth on Schedule 2.1(j),
except for Permitted Encumbrances, there are no indebtedness, borrowings, loan agreements, promissory notes,
pledges, mortgages, guarantees, and similar liabilities (direct and indirect)
that are secured by or constitute an Encumbrance on the Jonah Gas Gathering
System, and there are no preferential or similar rights to purchase any portion
of the Jonah Gas Gathering System.  The
TEPPCO Parties and Jonah have given Enterprise access to all title information
in their possession relating to the Jonah Gas Gathering System, including
without limitation the following:


(i)            copies of all title
opinions and reports pertaining to the Jonah Gas Gathering System;


(ii)           all abstracts of
title and status reports pertaining to the Jonah Gas Gathering System;


(iii)          copies of all
Easements, prior conveyances of interests created thereby, unitization, pooling
and operating agreements, division and transfer orders, mortgages, deeds of
trust, security agreements, chattel mortgages, financing statements and other
Encumbrances affecting the title to or the value of the Jonah Gas Gathering
System and copies of all other contracts and documents affecting the title to
or the value of the Jonah Gas Gathering System;


(iv)          evidence that all
rentals, royalties and other payments due under the Easements and contracts
pertaining to the Jonah Gas Gathering System have been paid and accepted;


(v)           evidence that all ad
valorem, property, production, severance, excise and similar Taxes and
assessments based on or measured by the ownership of the Jonah Gas Gathering
System have been



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properly
and timely paid;


(vi)          ownership maps and
surveys relating to the Jonah Gas Gathering System;


(vii)         copies of all lease
records and data sheets and to bonuses, rentals and royalties payable
thereunder; and


(viii)        UCC search
certificates and other certificates and title information.


(3)           Except as set forth
on Schedule 2.1(j), Jonah’s assets, including the Jonah Gas Gathering System,
are sufficient for the continued conduct of Jonah’s business after the Closing
in the same manner as conducted prior to the Closing.


(k)           Contract Obligations.  All contracts (including, without limitation,
all Easements and all Gas Contracts) pertaining to the Jonah Gas Gathering
System are in full force and effect, are valid and subsisting, and, as to the
Easements, cover the entire estates or rights that they purport to cover.  Enterprise has been provided with access to
all such contracts and there are no other written or, to the knowledge of the
TEPPCO Parties oral, agreements, contracts, commitments or arrangements which
affect the Jonah Gas Gathering System in a material way other than such
contracts so described.  All payments due
under such contracts have been made and accepted, and all conditions necessary
to keeping such contracts in full force and effect have been performed.  Jonah has never been advised, directly or
indirectly, by any other party of a default under any such contract which claim
of default has not been resolved.  No
other party to any such contract has overtly threatened termination thereof or,
to the knowledge of Jonah, is in material default thereunder.  Jonah has not received written notice that it
is in current default under any such contract and no event has occurred which
would constitute such a default.


(l)            Legal Proceedings.  Except as set forth on Schedule 2.1(l),
there is no suit, action, investigation, examination or other proceeding, or
any change in any zoning or building ordinances, pending, instituted or, to the
knowledge of the TEPPCO Parties or Jonah, threatened before any court or
governmental body, authority or agency and, to the knowledge of the TEPPCO
Parties or Jonah, no cause of action exists that relates to the Jonah Gas
Gathering System.  Jonah is not a party
to or subject of any injunction, judgment or order of any court or governmental
body, authority or agency, nor is it a party to or a subject of any proceeding,
appeal or notice of appeal of any of the foregoing.


(m)          Environmental.


(1)           Jonah is and, at all
times during the time for which any of the TEPPCO Parties have been a Partner
of Jonah and to the knowledge of the TEPPCO Parties prior to such time, has
been at all times in compliance in all material respects with



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all
applicable Environmental Laws relating to the Jonah Gas Gathering System and
the use thereof and no Environmental Activity has occurred in violation of, or
so as to impose any material liability under, any applicable Environmental
Laws.  Jonah and the Jonah Gas Gathering
System have all permits, licenses, variances, and other authorizations
necessary under Environmental Laws for the ownership, use, and/or operation of
the Jonah Gas Gathering System in the manner currently conducted, except where
such failure would not have a Material Adverse Effect.


(2)           No investigations,
inquiries, orders, hearings, actions or other proceedings by or before any
court or governmental agency are pending or, to the knowledge of the TEPPCO
Parties or Jonah, threatened in connection with any Environmental Activity or
alleged Environmental Activity or actual or alleged violations of, or
liabilities under, Environmental Laws, which relate to Jonah or the Jonah Gas
Gathering System.


(3)           No written or, to the
knowledge of the TEPPCO Parties oral, claim, demand, notice, order, directive,
complaint or other communication has been made or issued or, to the knowledge
of the TEPPCO Parties or Jonah, is threatened by any government agency or third
party against or with respect to the Jonah Gas Gathering System relating to
damage, contribution, cost recovery, compensation, loss or injury resulting
from any Hazardous Substances or actual or alleged violations of, or
liabilities under, Environmental Laws.


(n)           Compliance.  Except as disclosed on Schedule 2.1(n),
the Jonah Gas Gathering System has in all material respects been operated in
compliance with any and all applicable laws, orders, rules, regulations,
judgments or decrees of any governmental authority, including the common or
civil law, including, but not limited to, those relating to occupational safety
and health, consumer product safety, employee benefits, environmental laws,
zoning laws or regulations and laws and regulations pertaining to oil and gas
operations, pipelines, and the gathering, storage and transportation of
hydrocarbons.  Except as disclosed on Schedule
2.1(n), Jonah has obtained all necessary and appropriate franchises,
licenses, leases and permits to own and operate the Jonah Gas Gathering System
and to conduct Jonah’s business as currently being conducted and in accordance
with all rules and regulations of any governmental authority as would be
obtained by a prudent operator, except where the failure to obtain such items
would not have a Material Adverse Effect.


(o)           Insurance.  Jonah maintains (either directly or
indirectly through its Affiliates) insurance with reputable insurers with
respect to the Jonah Gas Gathering System against all risks normally insured
against and in amounts normally carried by entities of similar size engaged in
similar lines of business.  All such
insurance policies are in full force and effect.


(p)           Intercompany Payables.     Prior to the Effective Date, the TEPPCO
Parties have caused all intercompany accounts payable of Jonah to TEPPCO
Partners, L.P.



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and/or its Affiliates to be contributed to the capital of Jonah without
payment or further obligation by Jonah.


Section
2.2.           Representations and
Warranties of Enterprise.  Enterprise represents and warrants to each of
the TEPPCO Parties and Jonah as follows:


(a)           Organization and
Qualification.  Enterprise
is a Delaware limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware.


(b)           Authority; Consents;
No Conflicts.  Enterprise
has all requisite power and authority to carry on its business as presently
conducted, to enter into this Agreement and the Partnership Agreement, and to
perform its obligations hereunder and thereunder.  The execution and delivery of this Agreement
and the Partnership Agreement and the transactions contemplated hereby and
thereby have been duly and validly authorized and approved by all requisite
action, on the part of Enterprise, and will not (i) require any consent,
authorization or approval of, or exemption by, or filing under any provision of
any law, statute, rule or regulation to which Enterprise is subject, (ii)  violate any provision of Enterprise’s limited
liability company agreement or other governing documents, (iii) violate any judgment,
order, writ or decree of any court applicable to Enterprise, (iv) conflict
with, result in a breach of, constitute a default under, or accelerate or
permit the acceleration of the performance required by, or require any consent,
authorization or approval under any agreement, contract, commitment, lease or
other instrument, document or undertaking to which Enterprise is a party or by
which Enterprise is bound or (v) result in the creation or imposition of any
Encumbrance (other than as contemplated by this Agreement) upon the Jonah Gas
Gathering System, except in the case of clauses (i), (iv) and (v) as would not
have a Material Adverse Effect on Enterprise or the Partnership.


(c)           Execution;
Enforceability.  This Agreement and the Partnership Agreement
have been duly executed and delivered on behalf of Enterprise, and constitute
legal, valid and binding obligations of Enterprise enforceable against
Enterprise in accordance with their terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws presently or hereafter in effect relating to or affecting the
enforcement of creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).


ARTICLE 3

CLOSING


Section
3.1.           Transaction Documents. 
Simultaneously with the execution of this Agreement, the parties shall
execute, acknowledge and deliver, as appropriate, the following documents:


(a)           The Partnership Agreement;



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(b)           The assignment by TMC of all of its interest in Jonah Gas
Marketing, LLC to the Partnership so that after such contribution the
Partnership will own 100% of the outstanding membership interests in Jonah Gas
Marketing, LLC;


(c)           The release of guarantees obtained
from Wachovia Bank, National Association under the Amended and Restated Credit
Agreement of TEPPCO Partners, L.P. and under the Indenture referred to in
Section 2.1(h); and


(d)           Such other documents as the parties may reasonably request
for the purpose of facilitating the transactions contemplated by this Agreement
and the Partnership Agreement.


Section
3.2.           Closing.  The
execution and delivery of this Agreement and the Partnership Agreement and the
consummation of the transactions contemplated herein may sometimes be referred
to herein as the “Closing.”


ARTICLE 4

INDEMNIFICATION


Section 4.1.           TEPPCO Parties’ Obligation
to Indemnify.  Each of the TEPPCO Parties shall, jointly and
severally, defend, indemnify and hold harmless Enterprise, its officers,
directors, employees, agents, partners and affiliated companies, from any and
all losses, claims, demands, suits, liability, damages, costs and expenses
arising out of or related to (i) the breach by the TEPPCO Parties of any of
their respective representations, warranties or covenants under this Agreement
or the Partnership Agreement, (ii) Jonah’s ownership or operation of the Jonah
Gas Gathering System prior to Closing, except to the extent such losses,
claims, demands, suits, liabilities, damages, costs and expenses relate to the
willful misconduct of Enterprise or its Affiliates in operating the Jonah Gas
Gathering System prior to the Closing, or (iii) any Environmental Activity, or
violation of or liability under Environmental Laws, arising from activities
with respect to, or the condition of, the Jonah Gas Gathering System prior to
Closing, including but not limited to the exposure of any person to any such
Environmental Activity and regardless of whether such Environmental Activity or
any related condition or violation of or liability under Environmental Laws is
discovered on, before or after the date hereof and regardless of whether
arising from Enterprise’s strict liability with respect to the same (items (i),
(ii) and (iii) above are collectively referred to as “Enterprise Losses”).


Section
4.2.           Enterprise’s Obligation to
Indemnify. 
Enterprise shall defend, indemnify and hold harmless each of the TEPPCO
Parties, and their respective officers, directors, employees, agents, partners
and affiliated companies, from any and all losses, claims, demands, suits,
liability, damages, costs and expenses arising out of or related to the breach
by Enterprise of any of its representations, warranties or covenants under this
Agreement or the Partnership Agreement (“TEPPCO Losses”).



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Section
4.3.           Notice of Asserted
Liability, Opportunity to Defend.  Any person claiming
indemnification hereunder shall be referred to as the “Indemnified Party” and
any person against whom such claims are asserted hereunder is referred to as
the “Indemnifying Party.”


(a)                                  The
Indemnified Party shall give the Indemnifying Party reasonably prompt notice of
any claim for which indemnity is sought. 
To the extent the Indemnifying Party is prejudiced thereby, the failure
to provide reasonably prompt notice to the Indemnifying Party shall relieve the
Indemnifying Party from liability for such claims that it may have to the
Indemnified Party, but only to the extent the liability for such claims is
directly attributable to such failure to provide such prompt notice.


(b)                                 The
Indemnifying Party shall have the right to defend, settle, and compromise any
proceedings involving claims for which indemnification is sought with counsel
of its own choosing (but reasonably satisfactory to the Indemnified Party);
provided that any such settlement, compromise or other resolution shall include
a full release of the Indemnified Party from such claims.  If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with Indemnifying Party and its counsel
in the defense or settlement of any such claim. 
All costs of any such defense shall be borne solely by the Indemnifying
Party.  At its own expense, the
Indemnified Party may obtain its own counsel to participate in or assist with
any settlement or defense, but the Indemnifying Party shall have full authority
to determine all action to be taken in any such defense or settlement.


Section
4.4.           Survival.  The
representations, warranties, covenants, agreements and indemnities included or
provided in this Agreement, or in any Exhibit, document, certificate or other
instrument delivered pursuant hereto, shall survive the Closing; provided that,
(A) the representations and warranties contained in Section 2.1 (e), (g), the
first sentence of (h), (i), (j), (k), (l), (m), (n), (o) and (p) shall survive
for a period of three years, (B) the representations and warranties contained
in Section 2(d) shall survive until the expiration of all applicable statutes
of limitations and (C) the representations and warranties contained in Sections
2.1(a), (b), (c), (f), the last sentence of (h), 2.2(a), (b) and (c) shall
survive indefinitely.


Section
4.5.           Limitations on Liability.


(a)           Other than with respect to a breach of the representation
contained in Section 2.1(f) or (p) by the TEPPCO Parties, no party will have
any liability (for indemnification or otherwise) with respect to the matters
described in Sections 4.1 or 4.2 until the total of all losses incurred or
suffered by an Indemnified Party with respect to such matters exceeds $1,000,000
and then such party will have liability for such Indemnified Party’s losses
from the



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first dollar thereof, subject to the other limitations contained in
this section.  Notwithstanding the
foregoing, the total aggregate amount for claims for Enterprise Losses shall
not exceed $100 million and the aggregate amount for claims for TEPPCO Losses
shall not exceed $100 million, except in the case of a breach of a
representation and warranty contained in Section 2.1(f) or (p) in which case
the aggregate amount of claims for Enterprise Losses shall not exceed $207.55
million.


(b)           In calculating the amount of any loss for which any
Indemnifying Party is liable under this Article, there shall be deducted the
amount of any insurance recoveries from third-party insurers which the
Indemnified Party actually receives as a direct consequence of the
circumstances to which the loss related or from which the loss resulted or
arose, except to the extent such insurance recoveries have or are reasonably
anticipated to result in future or retroactive premium increases.


(c)           Except as otherwise expressly provided in this Agreement,
the remedies of the parties specifically provided for by this Article shall be
the sole and exclusive remedies of the Parties for (i) any breach or inaccuracy
of the representations and warranties contained in this Agreement or in any
document furnished or delivered pursuant hereto, (ii) the failure to perform
any covenants, agreements or obligations contained in this Agreement or in any
document furnished or delivered pursuant hereto, or (iii) Jonah’s ownership or
operation of the Jonah Gas Gathering System prior to Closing.


(d)           Notwithstanding anything to the contrary in this
Agreement, in no event shall any party be liable to another party, except with
respect to a liability imposed as a result of a third-party claim or
allegation, for any exemplary, punitive, special, indirect, consequential,
remote, or speculative damages, EVEN IF CAUSED BY THE SOLE, JOINT, AND/OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF SUCH PARTY.


Section
4.6.           Pioneer Silica Gel Plant
Asset Sale.  Notwithstanding anything in this Agreement to
the contrary, after the date hereof, in the event Jonah shall become liable to
Enterprise Gas Processing, LLC pursuant to the indemnification provisions of
that certain Purchase and Sale Agreement by and between Jonah and Enterprise
Gas Processing, LLC dated as of March 31, 2006, the TEPPCO Parties or TEPPCO
Partners, L.P. (and not Jonah) shall directly pay to Enterprise Gas Processing,
LLC any amounts due from Jonah to Enterprise Gas Processing, LLC pursuant to
such agreement.  To the extent that the
TEPPCO Parties or TEPPCO Partners, L.P. is unable to directly pay or does not
pay Enterprise Gas Processing, LLC directly in accordance with the preceding
sentence, such non-payment will constitute a breach of this Agreement by the
TEPPCO Parties and TEPPCO Partners, L.P. 
In such event, Jonah shall make such payment to Enterprise Gas Processing,
LLC and will make an additional payment to Enterprise in an amount which
compensates Enterprise for the portion of the payment(s) made by Jonah which
are attributable to Enterprise’s Partnership Interest (with such amounts to be
further grossed up to reflect such additional payment in the same manner).



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ARTICLE 5

DEFINITIONS


Section
5.1.           Certain Defined Terms.  Capitalized terms used herein and not defined elsewhere in this
Agreement shall have the meanings given such terms as is set forth below.


 “Easements”
means all easements, licenses, surface leases, rights-of-way, servitudes and
other surface rights and interests used in the operation of the Jonah Gas
Gathering System.


“Encumbrance” means any liens, claims, burdens, title defect,
conflicting claim of ownership right of way, hypothecations, or other legal or
equitable encumbrance, limitation, order, decree, judgment, stipulation,
settlement, attachment, restriction, right of first refusal, covenant,
reservation, lease, pledge, option, charge, claim, security interest, mortgage
or any other right of any third party.


“Environmental Activity” means any actual or
threatened storage, holding, existence, release, emission, discharge,
generation, processing, abatement, removal, investigation, remediation,
monitoring, disposition, handling, transportation or disposal of any Hazardous
Substance at, from, under, into and/or on the Jonah Gas Gathering System or
otherwise relating to the Jonah Gas Gathering System or any use of the Jonah
Gas Gathering System which is regulated by or for which standards of conduct or
liability are imposed by any Environmental Laws.  As used in regards to Environmental Activity,
“release” means releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing, or dumping,
other than a release, spill, leak, pumping, pouring, emitting, emptying,
discharge, injection, escape, leach, disposal, or dumping of petroleum products
and byproducts which is permitted pursuant to Environmental Laws.


“Environmental Laws” means all laws
including but not limited to federal, state, municipal, county, local or other
statutes and regulations, authorizations, judgments, decrees, concessions,
grants, orders, franchises, permits, agreements and other restrictions and
requirements relating to any Hazardous Substances, Environmental Activity, the
environment, pollution, health, a community’s right to know, or worker
protection.


“Gas Contracts” means those certain gas
purchase, sales, gathering, transportation and/or treating agreements described
or identified on Exhibit A attached hereto.


“Hazardous Substances” includes any
pollutants, dangerous substances, toxic substances, hazardous wastes, solid
wastes, infectious wastes, regulated substances, contaminants, hazardous
materials, or hazardous substances as defined in or pursuant to the Resource
Conservation and Recovery Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, or any other
Environmental Laws; any



 13
 






 



 


material, waste,
or substance that is or becomes regulated or classified under Environmental
Laws; and any substance, material or waste which is or contains (i) petroleum,
oil, or any fraction thereof, (ii) explosives, or (iii) radioactive materials
(including naturally occurring radioactive materials).


“Permits” means all regulatory permits which
relate to the Jonah Gas Gathering System, Easements or Gas Contracts,
including, without limitation, those described or identified on Exhibit B
attached hereto.


“Permitted Encumbrances” means (i) liens for Taxes or
assessments not yet due and payable; (ii) terms and conditions of any leases
that have been fully disclosed to Enterprise on an appropriate schedule to this
Agreement; (iii) such liens, imperfections in title, charges, easements, restrictions,
encumbrances or other matters that are due to zoning or subdivision laws or
regulations (A) that do not materially and adversely affect the assets
comprising the Jonah Gas Gathering System for the uses to which such assets are
put or the ability to transfer or assign any such assets comprising the Jonah
Gas Gathering System and (B) which are of a nature that would be reasonably
acceptable to a prudent operator of natural gas assets and facilities of a type
similar to the assets comprising the Jonah Gas Gathering System; and (iv) such
other liens, imperfections in title, charges, easements, restrictions,
encumbrances or other matters (A) that do not materially and adversely affect
the assets comprising the Jonah Gas Gathering System for the use to which they
are put or the ability to transfer or assign any such assets and (B) which are
of a nature that would be reasonably acceptable to a prudent operator of
natural gas assets and facilities of a type similar to the assets comprising
the Jonah Gas Gathering System.


“Person” shall mean any individual, corporation, partnership,
joint venture, trust, unincorporated organization, other form of business or
legal entity.


“Records” means all pertinent and material
files, records and data relating to the Jonah Gas Gathering System, Easements,
Gas Contracts and Permits, including, without limitation, books of account and
other financial records, all management records, process safety management
plans, oil spill prevention plans and records, plant operating procedures and
records, title records, surveys, maps, drawings, construction x-rays, pipeline
certifications, reports and filings to and with all applicable federal and
state regulatory agencies.


“Taxes” means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code §59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not and including
any obligations to indemnify or otherwise assume or succeed to the Tax
liability of any other person.



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Section
5.2.           Other Definitional Provisions. 
References made in this Agreement, including use of a pronoun, shall be
deemed to include where applicable, masculine, feminine, singular or plural,
individuals, partnerships or corporations. 
As used in this Agreement, “party” shall mean any natural person,
corporation, partnership, trust, estate or other entity.  As used in this Agreement, “affiliate” of a
party shall mean any partnership, joint venture, corporation or other entity in
which such party has an interest or which controls, is controlled by or is
under common control with such party.


ARTICLE 6

MISCELLANEOUS


Section
6.1.           Expenses.  Except
as otherwise specifically provided in this Agreement, all fees, costs and
expenses incurred by the parties in negotiating this Agreement or in
consummating the transactions contemplated by this Agreement shall be paid by
the party incurring the same, including, without limitation, legal and
accounting fees, costs and expenses.


Section
6.2.           Publicity.  All
public announcements concerning the transactions contemplated by this Agreement
shall be jointly planned and coordinated by and among the parties.  Except as required by law, no party shall act
unilaterally in this regard without the prior written approval of the other
party, such approval not to be unreasonably withheld.


Section
6.3.           Notices.  All
notices and communications required or permitted under this Agreement shall be
in writing and any communication or delivery hereunder shall be deemed to have
been duly made if made or delivered in accordance with one or more of the
methods set forth in the Partnership Agreement, addressed as follows:


If to TGP, TMC or TEPPCO:


TEPPCO
Partners, L.P.


1100
Louisiana


Suite
1300


Houston,
Texas 77002


Attn:
Patricia Totten


Fax:  (713) 381-3957


Email:
patotten@teppco.com


If to Jonah:


Jonah
Gas Gathering Company


1100
Louisiana


Suite
1500



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Houston,
Texas 77002


Attn:
Bill Ordemann


Fax:  (713) 381-6960


Email:
bordemann@eprod.com


If to Enterprise:


Enterprise
Gas Processing, LLC


1100
Louisiana


Suite
1800


Houston,
Texas 77002


Attn:
Stephanie Hildebrandt


Fax:  (713) 381-6570


Email:
shildebrandt@eprod.com


Any
party may, by written notice so delivered to the other, change the address to
which delivery shall thereafter be made.


Section
6.4.           Amendment.  This
Agreement may not be altered or amended, or any rights hereunder waived, except
by an instrument in writing executed by the party or parties to be charged with
such amendment or waiver.  No waiver of
any term, provision or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as, a further or continuing
waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.


Section
6.5.           Assignment.  This
Agreement shall be binding upon, and shall inure to the benefit of the parties
hereto and, except as otherwise prohibited, their respective successors and
assigns, and nothing contained in this Agreement express or implied, is
intended to confer upon any other person or entity any benefits, rights or
remedies.  No party may assign its rights
or delegate its duties or obligations under the terms of this Agreement without
the prior written consent of the other parties hereto.


Section
6.6.           Headings.  The
headings of the Articles and Sections of this Agreement are for guidance and
convenience of reference only and shall not limit or otherwise affect any of
the terms or provisions of this Agreement.


Section
6.7.           Governing Law.  This
Agreement and the transaction contemplated hereby shall be construed in
accordance with, and governed by, the laws of the State of Texas, without
regard to conflict of law provisions which would apply the laws of another
jurisdiction.


Section
6.8.           Entire Agreement.  This
Agreement (including the Exhibits and Schedules hereto) and the Partnership
Agreement constitutes the entire understanding between the parties with respect
to the subject matter hereof superseding all negotiations, prior



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discussions and prior agreements and understandings relating to such
subject matter, including that certain letter of intent between Enterprise
Products and TEPPCO Partners dated February 13, 2006.  All of such Exhibits and Schedules are hereby
incorporated in this Agreement by reference and constitute a part of this
Agreement.  This Agreement may be
executed by the parties in any number of counterparts, each of which shall be
deemed an original counterpart but all of which together shall constitute one
and the same Agreement.  This Agreement
may be executed by the parties through an exchange of signed counterparts via
facsimile.


Section
6.9.           Disputes.  Any dispute, controversy or claim (whether sounding in contract, tort
or otherwise) arising out of or relating to this Agreement, including, without
limitation, the interpretation, validity, termination or breach thereof, will
be resolved in accordance with the dispute resolution procedures set forth in Schedule
10.23 of the Partnership Agreement and made a part hereof.  The parties covenant that they shall not
resort to court remedies without first complying with the provisions as
provided for in Schedule 10.23 of the Partnership Agreement, or for
preliminary relief in aid thereof.  A
party that fails to comply with the terms and conditions set forth in Schedule
10.23 of the Partnership Agreement or this Section 6.9 shall pay all the
legal costs incurred by the other Partners in connection with the enforcement
thereof.


[Signature
Page Follows]



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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above mentioned.


	
  

  	
  TEPPCO GP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ Jerry E. Thompson

  
	
   

  	
  Name:

  	
   

  	
  Jerry E. Thompson

  
	
   

  	
  Title:

  	
   

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TEPPCO MIDSTREAM COMPANIES, L.P.,

  
	
   

  	
  by TEPPCO GP, INC., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ Jerry E. Thompson

  
	
   

  	
  Name:

  	
   

  	
  Jerry E. Thompson

  
	
   

  	
  Title:

  	
   

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ENTERPRISE GAS PROCESSING, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ Jim Teague

  
	
   

  	
  Name:

  	
   

  	
  Jim Teague

  
	
   

  	
  Title:

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JONAH GAS GATHERING COMPANY,

  
	
   

  	
  by TEPPCO GP, INC., its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ Jerry E. Thompson

  
	
   

  	
  Name:

  	
   

  	
  Jerry E. Thompson

  
	
   

  	
  Title:

  	
   

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  For purposes of Section 4.6 and 6.9 hereof only:

  
	
   

  	
  AGREED AND APPROVED:

  
	
   

  	
   

  
	
   

  	
  TEPPCO PARTNERS, L.P.,

  
	
   

  	
  by Texas Eastern Products Pipe Company LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  /s/ Jerry E. Thompson

  
	
   

  	
  Name:

  	
   

  	
  Jerry E. Thompson

  
	
   

  	
  Title:

  	
   

  	
  President and CEO