exv10w11



 





Exhibit 10.11




PIPELINE LEASE AGREEMENT




     THIS PIPELINE LEASE AGREEMENT (“Lease”) is entered into the 8th day of November, 2006 to be
effective November 1, 2006, by and between TE Products Pipeline Company, Limited
Partnership, a Delaware limited partnership, hereinafter referred to as “Lessor”, and
Enterprise GC, L.P., a Delaware limited partnership, hereinafter referred to as “Lessee”. Lessor
and Lessee may be referred to singularly as “Party” or collectively as “Parties”.



     WHEREAS, Lessor is the owner of a certain pipeline known as the P-8 Pipeline, located in
Harris County, Texas, and related valves and equipment (“Pipeline”), as well as rights-of-way,
easements, licenses, permits and/or surface sites attributable to the Pipeline (referred to as the
“Rights-of-Way”), all as described in Exhibit “A” attached hereto and made a part hereof
(collectively, the “Property”); and



     WHEREAS, Lessor desires to lease to Lessee and Lessee desires to lease from Lessor
approximately 11.6 miles of the Property upon the terms set forth herein.



     NOW, THEREFORE, for and in consideration of the mutual covenants and promises herein
contained, the sufficiency of which are hereby acknowledged, the Parties hereto do mutually
covenant and agree as follows:




	1.	 	Property Leased. Lessor leases to Lessee, and Lessee leases from Lessor, the
Property, and Lessor grants to Lessee for the term of this Lease, the non-exclusive right to
use the Rights-of-Way associated with the Property, subject to any approvals required pursuant
to Section 4b.
	 
	2.	 	Term of Lease. The term of this Lease shall commence the later of the date that
Lessor no longer requires the lines for its use and Lessee is ready to use the lines
for its purposes, which is projected to be December 15, 2006 (“Effective Date”), and continue
for a period of nine (9) months from the Effective Date (“Primary Term”) and month to month
thereafter until either Party gives the other Party at least sixty (60) days prior written
notice of termination.
	 
	3.	 	Consideration for Lease. In consideration for the Lease of the Property, Lessee
agrees to pay Lessor a pipeline lease fee of $9,000 per month, payable by the 10th
day of each month (or if not a business day then on the next business day following the 10th)
during the term of the Pipeline Lease Agreement.




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	4.	 	Ownership of Property.






	 	a.	 	Lessee shall have no right or interest in the Property except
as expressly set forth in this Lease. Warranties made by the
seller or manufacturer of any of the Property shall be
assigned, for the term of this Lease, by Lessor to Lessee.
	 
	 	b.	 	It is understood that Lessor does not own the majority of the
land on which the Pipeline is located in fee, and that
Lessor’s rights in the Rights-of-Way may be subject to
conditions imposed by the fee owner of the land on which the
Pipeline is located. Such conditions may include, but are
not limited to, obtaining consent of the landowner of lease
of the Property (the “Consents”). Lease of the Property to
Lessee is contingent on Lessor successfully obtaining all
Consents, and this Lease is subject to all conditions set
forth in the Rights-of-Way documents.
	 
	 	c.	 	To the extent the Parties consummate the transactions contemplated hereby prior to
obtaining a Consent required in connection with the lease of any Property (a “Non-Leased
Asset”), such Non-Leased Asset shall be deemed to be held by Lessor at all times in
accordance with this Section 4(c). Lessor shall provide Lessee with the economic
benefits and risks associated with leasing the Non-Leased Asset, (b) Lessor shall
continue to use commercially reasonable efforts to obtain the Consent(s) related to such
Non-Leased Asset, and (c) upon Lessee’s request, Lessor shall enforce, at Lessee’s sole
cost and expense, any and all rights of Lessor against third parties with respect to such
Non-Leased Asset. Lessee shall indemnify and hold harmless Lessor from and against any
damage, loss or liability that Lessor may suffer resulting from, arising out of, relating
to, or caused by, Lessee’s performance, breach or default under, operation of, or
conditions existing, arising or occurring with respect to, any Non-Leased Asset. Upon
receipt of the Consent related to a Non-Leased Asset, the assignment of such Non-Leased
Asset shall automatically become effective without the need for any further action on the
part of the Parties.






	5.	 	Use, Care, Operation and Maintenance of Property.






	 	a.	 	Lessee shall use the Pipeline for transporting natural gas liquids (“NGLs”)
that are of a quality customarily accepted in its NGL pipeline business. Lessee shall
operate the Pipeline in accordance with customary and then current good operating
practices in the NGL pipeline industry.
	 
	 	b.	 	Lessee shall comply with all laws, rules, orders and regulations prescribed by
any governmental authority having jurisdiction over the Property, and Lessee agrees to
indemnify Lessor for any violation of any such law, rule, order or regulation




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	 	 	 	pursuant to the terms of Section 9. In addition, Lessee will maintain all required
plans, procedures and records to ensure compliance with all applicable laws, rules,
orders and regulations. Lessor shall have the right, but not the obligation, to
review all plans, records and other documentation required to be kept by Lessee to
(i) maintain compliance with any federal, state and local laws, regulations and
orders, or (ii) maintain compliance with Lessee’s obligations hereunder.
	 
	 	c.	 	During the term hereof, Lessee shall operate and maintain the Property at its
sole cost, except that Lessor shall be responsible for maintaining Rights-of-Way.
During the term hereof, Lessee shall also perform, or cause to be performed, at its
sole risk, cost and expense, any and all maintenance and repair necessary, in Lessee’s
reasonable judgment, to keep the Property in safe operating order and in compliance
with all applicable laws and regulations of any local, state or federal agencies having
jurisdiction thereof. Maintenance and repair costs shall be subject to the limits
contained in Section 14.
	 
	 	e.	 	Lessee shall bear the full cost of making the Property operational to fit
Lessee’s needs.
	 
	 	f.	 	Lessee will perform at its expense any necessary aerial patrol of the
Rights-of-Way associated with the Property.
	 
	 	g.	 	Lessee will respond to all one-call notifications and all notices of odor,
leaks or possible failures of the Pipeline. Lessee will immediately notify Lessor of
any reported leak or failure (“Failure”). In addition, Lessee shall make all required
notifications to the appropriate federal, state or local governmental bodies or
agencies of any Failures. Lessor shall have the right, but not the obligation, to
respond in cooperation with Lessee to any reported or suspected Failure with Lessor’s
personnel and clean-up contractors. Lessee shall be responsible for and shall direct
and control any clean-up and repair of the Pipeline following any Failure; provided,
however, Lessor may respond to any Failure without Lessee’s direction and control but
at Lessee’s cost if Lessor determines, in its good faith discretion, that Lessee is not
properly responding to such Failure.






	6.	 	Alterations to the Property. Lessee may perform alterations to the Property, at its
sole risk and expense, only upon the prior written consent of Lessor, which consent shall not
be unreasonably withheld. Any tests to the Pipeline made by Lessee, for any reason, shall be
at the sole cost and risk of Lessee. Lessee shall have the right to remove any alteration or
addition installed by Lessee within ninety (90) days of the termination date of this Lease;
provided, however, Lessee shall restore and repair any damage caused to the Property as a
result of the installation, use or removal of Lessee’s alterations or additions. Any of
Lessee’s alterations or additions not removed from the Property within




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ninety (90) days of the termination of this Lease shall upon Lessor’s election, in its sole
discretion, become the property of Lessor without compensation or reimbursement of any kind
to Lessee.




	7.	 	Damage to or Destruction of Property. In the event of damage to the Pipeline during
the term of this Lease, Lessee agrees to repair the Pipeline at Lessee’s sole cost and expense
as soon as practicable, such repair to be carried out in accordance with industry standards
and in compliance with all applicable local, state and federal regulations.
	 
	8.	 	As Is, Where Is. Notwithstanding any other provision of this Lease or any instrument
executed pursuant hereto, the Property is leased to Lessee “AS IS, WHERE IS” with all faults.
Lessor hereby expressly disclaims and negates to Lessee and all third parties all warranties,
express or implied, as to any matter whatsoever, including without limitation any implied or
express warranty of merchantability; fitness for a particular purpose; design; performance;
condition; class; maintenance or specification; quality of material or workmanship of the
Property; and the conformity of the Property to the provisions and specifications of any
purchase orders, contracts, or any laws or regulations of any government or governmental
agency. Lessee hereby agrees to assume all risks associated with its operation and maintenance
of the Property throughout the term of this Lease.
	 
	9.	 	Release and Indemnification By Lessee. Lessee shall release, indemnify, defend and
hold harmless Lessor, its officers, agents and employees from any and all claims, demands,
causes of action, expenses (including, but not limited to, attorneys fees, court costs and
expenses), losses or liability of any nature resulting from damage to the environment,
property (including, but not limited to, that of the Parties), injuries to or death of persons
(including, but not limited to, employees, contractors and agents of the Parties), or fines
levied by governmental entities where such claim, demand, cause of action, expense, loss,
liability, damage, injury, death or fine arises, directly or indirectly, in connection with
Lessee’s lease, use, operation, maintenance, repair, modification or addition to or of the
Property, except to the extent caused by the sole negligence or willful misconduct of Lessor,
its agents, servants, employees or contractors.
	 
	10.	 	Release and Indemnification By Lessor. Lessor shall release, indemnify, defend and
hold harmless Lessee, its officers, agents and employees from any and all claims, demands,
causes of action, expenses (including, but not limited to, attorneys fees, court costs and
expenses) losses or liability of any nature resulting from damage to the environment, property
(including but not limited to, that of the Parties), injuries to or death of persons
(including but not limited to, employees, contractors and agents of the Parties), or fines
levied by governmental entities where such claim, demand, cause of action, expense, loss,
liability, damage, injury, death or fine arises, directly or indirectly (a) in connection with
Lessor’s ownership and operation of the Property prior to the Effective Date of this Lease,
except to the extent caused by the negligence or willful misconduct of Lessee, its




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	 	 	agents, servants, employees or contractors, and (b) to the extent caused by the sole negligence or
willful misconduct of Lessor, its agents, servants, employees or contractors after the
Effective Date of this Lease.
	 
	11.	 	Taxes and Fees. Lessor shall pay all real property taxes levied against the
Property, as well as all personal property taxes except for any relating to Lessee’s
modifications or additions to the Property (including, without limitation, any compression
facilities) which shall be paid by Lessee. Lessee shall pay any use or occupation tax or
license or permit fees that may be payable because of Lessee’s use of or operations conducted
on the Property. Lessee shall pay any and all applicable taxes (including but not limited to
ad valorem taxes, excise taxes, sales taxes and value added taxes), fees, assessments and
charges with respect to the delivery, ownership, receipt, handling, use, and storage of
product in or moving through the Pipeline. In the event that either Lessor or Lessee fails
to pay the any taxes properly levied against, and such taxes levied upon, assessed against,
collected from or otherwise imposed upon the other Party, the Party responsible for such taxes
shall immediately indemnify, protect, defend and hold the other harmless from and against all
such indemnified taxes, including any interest or penalties associated therewith.
	 
	12.	 	Insurance.






	 	a.	 	It is expressly understood and agreed that Lessor shall have no obligation to
carry any insurance of any kind with respect to the Property or the commodities carried
therein. Unless the Parties hereto agree otherwise in writing, Lessee will, at all
times during the term of this lease, at is own expense, carry and maintain or cause to
be carried or maintained with reputable insurance companies reasonably acceptable to
Lessor, the following insurance coverages and limits, at minimum:





	 	 	 	 	 	 	 	 	 
	 	 	Type of Insurance	 	 	 	Limits	 	 
	 
	 	 	 	 	 	 	 	 
	I.

	 	Worker’s Compensation
Employer’s Liability
	 	 
	 	Statutory Minimum Limits,

But not less than $500,000
	 	 
	 
	 	 	 	 	 	 	 	 
	II.

	 	Commercial General Liability

including:
	 	 	 	Combined Single Limit

$3,000,000 per occurrence	 	 
	 

	 	(a) Contractual Liability	 	 	 	 	 	 
	 

	 	(b) Property damage arising from

losses resulting from explosion,

collapse or underground damage	 	 	 	 	 	 
	 

	 	(c) Products and completed
operations	 	 	 	 	 	 
	 

	 	(d) Environmental Impairment	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 






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	III.

	 	Comprehensive Auto

Liability
	 	 	 	Combined Single Limit

$3,000,000	 	 
	 
	 	 	 	 	 	 	 	 
	IV.

	 	Property Damage Insurance

For the Leased Pipeline
	 	 	 	Combined Single Limit

$4,000,000	 	 
	 
	 	 	 	 	 	 	 	 
	V.

	 	Umbrella Liability in Excess of
I, II, III and IV above
	 	 	 	Combined Single Limit

$10,000,000	 	 






Prior to the Effective Date, Lessee shall furnish shall furnish to Lessor a
certificate of insurance evidencing that such insurance is in force and contains all
the required endorsements.




	 	b.	 	All policies except for worker’s compensation in any way related to this Lease
or the Property shall be unqualifiedly endorsed specifically to name Lessor and its
affiliates as additional insureds and to provide that each underwriter waives its right
of subrogation against Lessor and its affiliates. All of the aforesaid policies shall
be further endorsed: (a) to provide that they are primary coverage and not in excess of
any other insurance available to Lessor and its affiliates, (b) to provide that they
are without rights of contribution from any other insurance available to Lessor and its
affiliates, (c) to contain cross liability and severability of interest provisions, and
to provide that no cancellation or termination thereof or material adverse change
therein, or any termination arising due to a lapse for nonpayment of premium shall be
effective against Lessor or its affiliates unless at least thirty (30) days prior
written notice has been given to Lessor. Evidence of such specific endorsements shall
be furnished with Lessee’s certificate of insurance. Should Lessee fail to procure or
to maintain in force the insurance specified herein, Lessor may secure such insurance,
and the cost thereof shall be borne by Lessee.
	 
	 	c.	 	Lessee’s compliance with the provisions of this Section 12 and the limits of
liability shown for each category of the insurance coverage to be provided by Lessee
shall not be deemed to constitute a limitation of Lessee’s liability for any claims or
actions or in any way limit, modify, or otherwise affect Lessee’s indemnification
obligations pursuant to this Lease. The insolvency, bankruptcy, or failure of any
insurance company carrying insurance for Lessee, for any subcontractor of any tier of
Lessee, or the failure of any insurance company to pay claims occurring shall not be
held to waive any of the provisions of the contract.
	 
	 	d.	 	Lessee shall provide that any contractor or subcontractor performing any work
related to this Lease or the Property, shall obtain insurance which complies in all
aspects with the provisions of this Section 12.





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	13.	 	Return of Property. On the expiration or termination of this Lease, Lessee agrees to
peacefully and quietly return and deliver possession to Lessor of the Property and associated
Rights-of-Way, (i) in good repair, condition, and working order, ordinary wear and tear
resulting from proper use excepted, and (ii) free from all liens and encumbrances created by,
through and under Lessee. Lessee shall transfer to Lessor all maintenance records, DOT or FERC
required records, records of spills, releases or environmental incidents, and any and all
other records required to be kept by an operator of a pipeline. Lessee shall promptly remove
from the Pipeline all product owned by it or its shippers. Prior to termination of this Lease
and after purging the Pipeline of all products, Lessee shall fill the Pipeline with nitrogen
or make some other arrangement acceptable to Lessor. If any such product is not removed
within ninety (90) calendar days following the termination of this Lease, Lessor may have such
product removed from the Pipeline and stored elsewhere at the sole cost and expense of Lessee
or otherwise sell such product at a public or private sale in accordance with the applicable
provisions of applicable Texas law, and all proceeds from such sale after deducting the cost
and expense of such sale and any amounts owing to Lessor shall be given to Lessee, subject to
any claims of third parties. No claim for damages against Lessor or its agents, contractors or
employees shall be created or made on account of such removal or sale.
	 
	14.	 	Limitation of Repair Obligation. Notwithstanding the provisions of Section 5c. and
7, or any other provision of this Lease, Lessee shall have no obligation to repair any damage
to the Property, or replace any portion of the Property, regardless of the cause of the damage
or destruction to the Property, when it reasonably estimates that the cost of the repair or
replacement would exceed $50,000 provided that this limitation shall not apply to the extent
that the damage was caused by the negligence or willful misconduct of Lessee or its contractor
or to the extent that the damage is covered by insurance proceeds. If Lessee elects not to
repair or replace the Property in such event, it may terminate this Lease upon thirty (30)
days written notice to Lessor.
	 
	15.	 	Waiver. No delay or omission to exercise any right of one Party by the other Party
under this Lease shall be construed as a waiver of any such right or as impairing any such
right. Any waiver to one Party by the other Party of a single breach or default shall not be
construed as a waiver of any prior or subsequent breach or default.
	 
	16.	 	Binding Effect. This Lease shall be binding on the Parties and their respective
permitted successors and assigns, and all stipulations, terms, conditions, covenants,
provisions or agreements in the Lease shall be made and hereby are made covenants running with
the land or any and all real property included as part of the Property.




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	17.	 	Severability. If any provision of this Lease is held invalid by a court of competent
jurisdiction, it shall be considered deleted from this Lease, but such invalidity shall not
affect the other provisions that can be given effect in the absence of the invalid
provisions.
	 
	18.	 	Entire Agreement. This Lease constitutes the entire agreement between the Parties.
This Lease shall not be amended except by written agreement signed by both Parties.
	 
	19.	 	Headings. Headings or titles to sections or paragraphs of this Lease are solely for
the convenience of the Parties and shall have no effect whatsoever on the interpretation of
the provisions of this Lease.
	 
	20.	 	Governing Law. This Lease shall be governed by the laws of the State of Texas,
without regard to principles of conflicts of laws thereof.
	 
	21.	 	Inspection. Throughout the Term of this Lease, Lessee will permit, during normal
business hours, Lessor and its agents or representatives to inspect and examine the Property
and all records regarding Lessee’s use of the Property.
	 
	22.	 	Assignment.






	 	a.	 	Lessee shall not assign or otherwise transfer its interest and obligations
under this Lease without the express written consent of Lessor.
	 
	 	b.	 	If, for any reason, all or any portion of the right, title or interest of
Lessor in or to all or any portion of the Property is sold, assigned, transferred or
conveyed to any purchaser, assignee or transferee, this Lease shall remain in full
force and effect and the right, title and interest of said purchaser, assignee or
transferee in or to the Property shall be subject to all of the terms of this Lease.






	23.	 	Notices. All notices hereunder must be in and are effective upon receipt thereof at
the following addresses:





	 	 	 
	LESSOR:
 

 

 

 

LESSEE:

	 	TE Products Pipeline Company, Limited Partnership

1100 Louisiana Street, 10th Floor

Houston, Texas 77002

Attention: Vice-President, Refined Products
 

ENTERPRISE
GC, L.P.

1100 Louisiana Street, 10th Floor

Houston, Texas 77002

Attention: Vice-President, NGL Assets





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IN WITNESS WHEREOF, each Party has caused this Lease to be executed on the date indicated above.




	 	 	 	 	 
	 
	 	 	 	 
	TE Products Pipeline Company, Limited Partnership

By: TEPPCO GP, Inc., General Partner
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Enterprise GC, L.P.

By: Enterprise Holding III, LLC, its general partner	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





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	     STATE OF TEXAS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	     COUNTY OF HARRIS

	 	 	)	 	 	 
	 
	 	 	 	 	 	 




Before me
on this
             
day of November, 2006, personally appeared                     , known to me to be
the
                    
of TEPPCO GP, Inc., a Delaware corporation, acting in its capacity as general partner of TE Products
Pipeline Company, Limited Partnership, L.P., on behalf of said corporation, and acknowledged to me that he executed this Lease for the considerations and
purposes therein set forth.




     Given
under my hand and seal of office this
           
day of November, 2006.



	 	 	 	 	 	 	 
	MY COMMISSION EXPIRES:

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 


	 	 	 	NOTARY PUBLIC	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 	 	 
	     STATE OF TEXAS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	     COUNTY OF HARRIS

	 	 	)	 	 	 
	 
	 	 	 	 	 	 




Before me on this             day of November, 2006, personally appeared                      known to me to be the
                                        , of                     , a                     ,
on behalf of said                      and
acknowledged to me that he/she executed this Lease for the considerations and purposes therein set
forth.



     Given
under my hand and seal of office this
             day of November, 2006.




	 	 	 	 	 	 	 
	MY COMMISSION EXPIRES:

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 


	 	 	 	NOTARY PUBLIC	 	 






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EXHIBIT A



SEE
ATTACHED

 

 

 

 




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