Document:

EXHIBIT
10.1

JONAH GAS
GATHERING COMPANY

(A
Wyoming General Partnership)

AMENDED
AND RESTATED

AGREEMENT
OF PARTNERSHIP

CERTAIN
RESTRICTIONS ON TRANSFERS OF INTERESTS

ARE SET FORTH
HEREIN

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  ORGANIZATION

  	
   

  	
  10

  
	
  Section 2.1.

  	
   

  	
  Formation

  	
   

  	
  10

  
	
  Section 2.2.

  	
   

  	
  Name, Place of Business and Office

  	
   

  	
  10

  
	
  Section 2.3.

  	
   

  	
  Purposes and Character of Business; Powers

  	
   

  	
  10

  
	
  Section 2.4.

  	
   

  	
  Term

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  PARTNERSHIP CAPITAL

  	
   

  	
  12

  
	
  Section 3.1.

  	
   

  	
  Initial Capital Accounts and Contributions of the
  Partners

  	
   

  	
  12

  
	
  Section 3.2.

  	
   

  	
  Additional Capital Contributions of the Partners

  	
   

  	
  12

  
	
  Section 3.3.

  	
   

  	
  Partnership Capital

  	
   

  	
  12

  
	
  Section 3.4.

  	
   

  	
  Liability of Partners

  	
   

  	
  13

  
	
  Section 3.5.

  	
   

  	
  Loans by Partners or Affiliates

  	
   

  	
  13

  
	
  Section 3.6.

  	
   

  	
  Capital Accounts

  	
   

  	
  13

  
	
  Section 3.7.

  	
   

  	
  Sharing Ratios

  	
   

  	
  14

  
	
  Section 3.8.

  	
   

  	
  No Right to Priority of Return of Capital

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  RIGHTS, POWERS AND DUTIES OF THE PARTNERS, THE
  MANAGEMENT COMMITTEE, THE PRESIDENT AND THE OTHER OFFICERS

  	
   

  	
  15

  
	
  Section 4.1.

  	
   

  	
  Management and Control of the Partnership

  	
   

  	
  15

  
	
  Section 4.2.

  	
   

  	
  Delegation to President

  	
   

  	
  18

  
	
  Section 4.3.

  	
   

  	
  Other Officers

  	
   

  	
  18

  
	
  Section 4.4.

  	
   

  	
  Authority of the Partners, the Management Committee
  Representatives or the President as to Third Persons

  	
   

  	
  20

  
	
  Section 4.5.

  	
   

  	
  Actions Requiring Consent of the Management
  Committee

  	
   

  	
  21

  
	
  Section 4.6.

  	
   

  	
  Restrictions on the Authority of the Management
  Committee

  	
   

  	
  21

  
	
  Section 4.7.

  	
   

  	
  Transactions or Disputes with Related Parties

  	
   

  	
  22

  
	
  Section 4.8.

  	
   

  	
  Compensation of the Management Committee
  Representatives, Officers and Partners; Reimbursement of Expenses

  	
   

  	
  22

  
	
  Section 4.9.

  	
   

  	
  Indemnification and Exculpation of the Partners, Management
  Committee Representatives, Officers and Employees

  	
   

  	
  22

  
	
  Section 4.10.

  	
   

  	
  Competition.

  	
   

  	
  24

  
	
  Section 4.11.

  	
   

  	
  Liability of the Management Committee
  Representatives and Partners

  	
   

  	
  24

  
	
  Section 4.12.

  	
   

  	
  Transactions with Related Parties

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  DISTRIBUTIONS AND ALLOCATIONS; TAX MATTERS

  	
   

  	
  26

  
	
  Section 5.1.

  	
   

  	
  Allocation of Profit and Loss

  	
   

  	
  26

  
	
  Section 5.2.

  	
   

  	
  Tax Provisions

  	
   

  	
  26

  
	
  Section 5.3.

  	
   

  	
  Regular Distributions

  	
   

  	
  30

  

 

 i
 

 

 

	
  ARTICLE 6

  	
   

  	
  TRANSFERABILITY OF PARTNER’S PARTNERSHIP INTEREST
  AND OTHER RESTRICTIONS

  	
   

  	
  31

  
	
  Section 6.1.

  	
   

  	
  Transfers to Affiliates

  	
   

  	
  31

  
	
  Section 6.2.

  	
   

  	
  Transfers to Parties Other Than Affiliates

  	
   

  	
  32

  
	
  Section 6.3.

  	
   

  	
  Changes in Control

  	
   

  	
  34

  
	
  Section 6.4.

  	
   

  	
  General Conditions of Transfers

  	
   

  	
  34

  
	
  Section 6.5.

  	
   

  	
  Limitation on Dispositions to Avoid Termination

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  BOOKS AND RECORDS; ACCOUNTING; REPORTING; TAX
  ELECTIONS; ETC.

  	
   

  	
  35

  
	
  Section 7.1.

  	
   

  	
  Books and Records

  	
   

  	
  35

  
	
  Section 7.2.

  	
   

  	
  Accounting Basis for Tax Reporting Purposes; Fiscal
  Year

  	
   

  	
  35

  
	
  Section 7.3.

  	
   

  	
  Accounts

  	
   

  	
  35

  
	
  Section 7.4.

  	
   

  	
  Reports

  	
   

  	
  36

  
	
  Section 7.5.

  	
   

  	
  Valuation of Contributions for Financial Purposes

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  DISSOLUTION, LIQUIDATION AND TERMINATION OF THE
  PARTNERSHIP

  	
   

  	
  36

  
	
  Section 8.1.

  	
   

  	
  Events Causing Dissolution

  	
   

  	
  36

  
	
  Section 8.2.

  	
   

  	
  Liquidation and Termination

  	
   

  	
  38

  
	
  Section 8.3.

  	
   

  	
  Provision for Contingent Claims

  	
   

  	
  39

  
	
  Section 8.4.

  	
   

  	
  Partner’s Purchase of Property

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  POWER OF ATTORNEY

  	
   

  	
  40

  
	
  Section 9.1.

  	
   

  	
  Appointment of the President as Attorney-in-Fact

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  MISCELLANEOUS PROVISIONS

  	
   

  	
  41

  
	
  Section 10.1.

  	
   

  	
  Address for Notices

  	
   

  	
  41

  
	
  Section 10.2.

  	
   

  	
  Additional Documents and Acts

  	
   

  	
  41

  
	
  Section 10.3.

  	
   

  	
  Assumed Name

  	
   

  	
  41

  
	
  Section 10.4.

  	
   

  	
  Qualification in Foreign Jurisdictions

  	
   

  	
  41

  
	
  Section 10.5.

  	
   

  	
  Application of Wyoming Law

  	
   

  	
  41

  
	
  Section 10.6.

  	
   

  	
  No Action for Partition

  	
   

  	
  42

  
	
  Section 10.7.

  	
   

  	
  Creditors Not Benefited

  	
   

  	
  42

  
	
  Section 10.8.

  	
   

  	
  Benefits of Agreement Restricted to Partners

  	
   

  	
  42

  
	
  Section 10.9.

  	
   

  	
  Headings and Sections

  	
   

  	
  42

  
	
  Section 10.10.

  	
   

  	
  Reservation of Rights

  	
   

  	
  42

  
	
  Section 10.11.

  	
   

  	
  Principles of Construction and Interpretation

  	
   

  	
  42

  
	
  Section 10.12.

  	
   

  	
  Amendment of Agreement

  	
   

  	
  43

  
	
  Section 10.13.

  	
   

  	
  Acknowledgment

  	
   

  	
  43

  
	
  Section 10.14.

  	
   

  	
  Gender

  	
   

  	
  43

  
	
  Section 10.15.

  	
   

  	
  Binding Effect

  	
   

  	
  43

  
	
  Section 10.16.

  	
   

  	
  Severability

  	
   

  	
  43

  
	
  Section 10.17.

  	
   

  	
  No Waiver

  	
   

  	
  44

  
	
  Section 10.18.

  	
   

  	
  Exhibits and Schedules

  	
   

  	
  44

  
	
  Section 10.19.

  	
   

  	
  Prior Agreement is Superseded; Entire Agreement

  	
   

  	
  44

  
	
  Section 10.20.

  	
   

  	
  Additional Remedies

  	
   

  	
  45

  

 

 ii
 

 

 

	
  Section 10.21.

  	
   

  	
  Counterparts

  	
   

  	
  45

  
	
  Section 10.22.

  	
   

  	
  Approvals

  	
   

  	
  45

  
	
  Section 10.23.

  	
   

  	
  Dispute Resolution

  	
   

  	
  45

  
	
  Section 10.24.

  	
   

  	
  Confidentiality

  	
   

  	
  45

  

 

SCHEDULES AND EXHIBITS

	
  EXHIBIT A

  	
   

  	
  Names, Addresses, Capital Contributions and Sharing
  Ratios of the Partners

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3.2

  	
   

  	
  Capital Contributions

  
	
  SCHEDULE 4.2

  	
   

  	
  Management Authorization Policy

  
	
  SCHEDULE 5.2

  	
   

  	
  Tax Matters

  
	
  SCHEDULE 6.1

  	
   

  	
  Financial Responsibility Requirements

  
	
  SCHEDULE 10.23

  	
   

  	
  Dispute Resolution Procedures

  

 

 iii

 

 

JONAH GAS
GATHERING COMPANY

AMENDED
AND RESTATED

AGREEMENT
OF PARTNERSHIP

 

This Amended and
Restated Agreement of Partnership (the “Agreement”) of Jonah Gas
Gathering Company, dated effective as of the 1st day of August, 2006 (the “Effective Date”),
is made and entered into by and among Enterprise Gas Processing, LLC, a
Delaware limited liability company (hereinafter sometimes referred to as “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”), each as a Partner of the Partnership.

WHEREAS, the
Partnership 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 the Partnership;

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

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, on February 13, 2006, Enterprise Products
Operating L.P., a Delaware limited partnership (“Enterprise Products”)
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;

WHEREAS, prior to
the date of this Agreement, Enterprise Products has funded certain portions of
the expansion of the Jonah Gas Gathering System held by the Partnership on
behalf of Enterprise and in contemplation of Enterprise entering into this
Agreement on the terms herein set forth;

WHEREAS, prior to the Effective Date, all intercompany
accounts payable of Jonah to TEPPCO Partners, L.P. and 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;

 

 

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

WHEREAS, on the
Effective Date, Enterprise and the TEPPCO Parties have made and agree to make
certain Capital Contributions to the Partnership as more particularly set forth
in the Contribution Agreement and Exhibit A hereto and Enterprise shall
be admitted as a Partner with all of the rights and obligations set forth in
this Agreement;

WHEREAS, on the
Effective Date, TMC intends to acquire the Partnership Interest owned by TGP so
that TGP will no longer hold a Partnership Interest and thus will no longer be
a Partner;

WHEREAS, the
Partnership is a continuation of the Partnership in all respects, including the
ownership and operations of its business and assets under applicable state and
local law and for federal tax purposes; and

WHEREAS, the
Partners have agreed to amend and restate the Original Agreement in its
entirety and the Partnership shall be governed by this Agreement as of the
Effective Date.

NOW, THEREFORE, in
consideration of the mutual promises made herein, the parties, intending to be
legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

The definitions
used in this Agreement shall, unless the context otherwise requires, have the
meanings specified in this Article 1. 
Other terms defined in this Agreement shall have such meaning assigned
to such term in the applicable provisions of this Agreement.

1.             “Act”
means the Wyoming Uniform Partnership Act, as amended from time to time.

2.             “Action”
means any actual, threatened or potential Claims, causes of action, actions,
suits, proceedings, or Governmental Authority investigations or Orders.

3.             “Additional
Capital Contribution” means, as to any Partner, any amount contributed,
required to be contributed or deemed to be contributed to the capital of the
Partnership by the Partner pursuant to Section 3.2.

 2
 

 

 

4.             “Additional
Expansion” means an expansion of the Jonah Gas Gathering System
beyond the Jonah Expansion which is approved by the Management Committee and
which is not an EnCana Expansion.

5.             “AFE”
means Authorization for Expenditure.

6.             “Affiliate”
means any Person who directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with the Person to whom
reference is made; provided that, (i) any Person who is a direct or indirect
subsidiary of Enterprise Products Partners L.P. shall not be considered an
Affiliate of TGP or TMP and any person who is a direct or indirect subsidiary
of TEPPCO Partners, L.P. shall not be considered an Affiliate of Enterprise and
(ii) no Partner will be deemed to be an Affiliate of another Partner solely
because of their ownership of Partnership Interests.

7.             “Agreement”
means this Amended and Restated Agreement of Partnership of the Partnership.

8.             “Applicable
Law” means all applicable and valid laws, rules, regulations,
statutes, codes, ordinances, or other requirements of the United States or any
regional, state or local government, whether such applicable laws now exist or
hereafter come into effect (unless otherwise provided in this Agreement).

9.             “Available
Cash” means unrestricted cash and cash equivalents of the
Partnership less reasonable cash reserves set aside pursuant to Section 5.3.

10.           “Business”
means to (a) hold, improve, develop, and operate the Jonah Gas Gathering System
and such other facilities as may be useful for the gathering, treating,
processing, and transportation of natural gas and the various products derived
therefrom from wells located in the Jonah Field Area (said area comprising: all of
Townships 27 North through 30 North, Range 107 West; all of Townships 27 North
through 29 North, Ranges 108 and 109 West; all of Township 30 North, Range 109
West; and all of Section 36 in Township 30 North, Range 108 West), Sublette
County, Wyoming, to one or more delivery points owned by parties other than the Partnership, (b)
perform the Jonah Expansion, the EnCana Expansion and the Additional
Expansion, as the case may be, and (c) perform or cause to be performed any
other activities necessary to, in connection with, or incidental to the
accomplishment of the foregoing business activities.

11.           “Business
Day” means any day except a Saturday, Sunday or other day on
which commercial banking institutions in Houston, Texas are authorized to
close.

12.           “Capital
Contributions” means the total of all capital contributions of
the Partners pursuant to Sections 3.1 and 3.2 including, but not
limited to, the Initial Capital Contributions, the Additional Capital
Contributions and the amounts set forth on Schedule 3.2.

 3
 

 

 

13.           “Capital
Expenditures” shall mean all expenditures necessary for the
construction of enlargements or additions to any of the assets or facilities
owned by the Partnership or for any other acquisitions or improvements thereto
of a capital nature, including, without limitation, expenditures for materials,
labor, equipment, permits, consulting fees, accounting and legal fees,
insurance costs, contractors’ fees, and land and easement costs.

14.           “Change
of Control” means, with respect to any Partner, a change in the
Person or Persons that ultimately controls such Partner including, the
acquisition by any Person or two or more Persons acting in concert, other than
the management or the shareholders of such controlling Person or Persons
immediately prior to the change, of beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 50% or
more of the issued and outstanding shares of voting stock of such Controlling
Person or Persons.

15.           “Claim”
means any and all claims, demands, suits, actions, causes of action, losses,
damages, Liabilities, judgments, fines, penalties, costs (including reasonable
attorneys’ fees and costs of mediation, arbitration or litigation),
investigations or orders.

16.           “Code”
means the Internal Revenue Code of 1986, as amended.

17.           “Contemplated
Total Expansion Capital” means an amount equal to $415.2
million.

18.           “Contribution
Agreement” means that certain Contribution Agreement dated as of
the date hereof, among Enterprise, TGP, TMC and the Partnership.

19.           “Contribution Date Value” has the
meaning set forth in Section 5.2(c) and is equal to the Gross Asset
Value of the Partnership Assets immediately before the Effective Date and
admission of Enterprise as a Partner in the Partnership.  The Management Committee shall approve the
allocation of increase in the Gross Asset Value of the Assets of the
Partnership and future Depreciation on same, on a basis consistent with GAAP
and applicable Regulations and the Code.

20.           “Depreciation”
means, for each Fiscal Year or other period, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes, as described in Regulations Section 1.704-1(b)(2)(iv)(g), at the
beginning of such year or other period, Depreciation shall be an amount which
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization, or other cost recovery deduction for such year
or other period bears to such beginning adjusted tax basis; provided, however, that
if the federal income tax depreciation, amortization, or other cost recovery
deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the Partners.

 4
 

 

 

21.           “Disposition,”
“Disposing,” “Dispose” or “Disposed” means, with respect
to any asset (including Partnership Interests or any portion thereof), a sale,
assignment, transfer, conveyance, gift, exchange or other disposition of such
asset.

22.           “EnCana
Agreement” means that certain Gas Gathering Agreement dated as
of February 1, 2006, between EnCana Oil & Gas (USA) Inc. and the
Partnership.

23.           “EnCana
Expansion” means such expansion of the Jonah Gas Gathering
System which is not the Jonah Expansion but which is requested by EnCana
pursuant to Section 6 of the EnCana Agreement and which the Partnership is
required to complete pursuant thereto.

24.           “Enterprise Parent Entity” means
Enterprise Products Operating L.P., Enterprise Products Partners L.P. and any
controlling Person or group of controlling Persons of either of such Persons.

25.           “Entity”
means any Person other than a natural person.

26.           “Excess
Expansion Costs” means the amount by which the Qualified Costs
exceed the Contemplated Total Expansion Capital.

27.           “Fiscal
Year” means the fiscal year of the Partnership as established in
Section 7.2 hereof.

28.           “GAAP”
means generally accepted accounting principles, consistently applied.

29.           “Governmental
Authority” means any foreign governmental authority, the United
States of America, any State of the United States, any local authority and any
political subdivision of any of the foregoing, any multi-national organization
or body, any agency, department, commission, board, bureau, court or other
authority thereof, or any quasi-governmental or private body exercising, or
purporting to exercise, any executive, legislative, judicial, administrative,
police, regulatory or taxing authority or power of any nature.

30.           “Gross
Asset Value” means, with respect to any asset, the asset’s
adjusted basis for federal income tax purposes, except as follows:

(i)            The
initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset as determined by
the contributing Partner and the Management Committee;

(ii)           The
Gross Asset Value of all Partnership assets shall be adjusted to equal their
respective gross fair market values, as determined by the Management Committee,
and in accordance with Regulations Section 1.704-1(b)(2)(iv)(f) and
1.704-1(b)(2)(iv)(g), as of the following times: (a) the acquisition of an
additional Partnership Interest by any new or existing Partner in exchange for
more than a de minimis Capital Contribution; (b) the distribution by the
Partnership to a Partner of more than a de minimis amount of

 5
 

 

 

Partnership
property as consideration for a Partnership Interest; and (c) the liquidation
of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g);

(iii)         The
Gross Asset Value of any Partnership asset distributed to any Partner shall be
the gross fair market value of such asset on the date of distribution; and

(iv)        The
Gross Asset Values of Partnership assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations Section 1.704-l(b)(2)(iv)(m) and Section 3.6(d) hereof;
provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (iv) to the extent the Management Committee determines that
an adjustment to subparagraph (ii) hereof is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (iv).  If
the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (i), (ii) or (iv) hereof, such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to such asset
for purposes of computing Profits and Losses.

31.           “Guaranteed Payment” means a payment by the
Partnership to a Partner as provided under Regulations Section 1.707-1(c).  Such payment is to be determined without
regard to the income of the Partnership and is considered as made to a Partner
who is not acting in its capacity as a Partner.

32.           “Initial
Capital Contribution” means, as to any Partner, any amount
contributed or required to be contributed to the capital of the Partnership by
a Partner pursuant to Section 3.1 and as contemplated by Exhibit A.

33.           “Initial
Commencement Date” means, the date that any pipeline portion of
the Jonah Expansion is placed in service.

34.           “Jonah
Expansion” means the installation of new compression, related
new piping and certain related facilities, all as more particularly described
in Section 4 of the EnCana Agreement. 
The construction of the Jonah Expansion is contemplated to be completed
in two phases, being phase I of the Jonah Expansion and phase II of the Jonah
Expansion, each as described in Sections 4.2 and 4.3 of the EnCana Agreement.

35.           “Jonah
Gas Gathering System” means the gas gathering system known as
the “Jonah Gas Gathering System” which is owned and operated by the
Partnership.

36.           “Liability”
or “Liabilities” means any debt, obligation, duty or
liability of any nature (including any undisclosed, unfixed, unliquidated,
unsecured, unmatured, unaccrued, unasserted, contingent, conditional, STRICT LIABILITY, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with GAAP.

 6
 

 

 

37.           “Management
Committee” means the Persons appointed to manage the operations
and affairs of the Partnership as provided in Section 4.1.

38.           “Nonrecourse Deductions” has the
meaning set forth in Regulations Section 1.704-2(b).  The amount of Nonrecourse Deductions for a
Partnership Fiscal Year is determined in accordance with Regulations Section
1.704-2(c) and equals the net increase in Partnership Minimum Gain during the
year, reduced (but not below zero) by the aggregate distributions made during
the year of proceeds of a Nonrecourse Liability that are allocable to an
increase in Partnership Minimum Gain; provided that increases in Partnership
Minimum Gain resulting from conversions, refinancing, or other changes to a
debt instrument described in Regulations Section 1.704-2(g)(3) shall not
generate Nonrecourse Deductions.

39.           “Nonrecourse Liabilities” has the
meaning set forth in Regulations Section 1.752-1(a)(2) or 1.704-2(b)(3).

40.           “Order”
means any judgment, order, requirement, injunction, ruling, writ or decree of a
Governmental Authority.

41.           “Partner”
means Enterprise, TMP or TMC for so long as such Person remains a Partner under
the Agreement, or any party admitted as an additional or substituted Partner in
accordance with this Agreement and the Act for so long as such Person remains a
Partner under the Agreement, each in the capacity as a Partner of the
Partnership.  “Partners” means such Persons collectively.

42.           “Partner
Nonrecourse Debt” or “Partner
Nonrecourse Liability” as set forth in Regulations Section
1.704-2(b)(4), means any Partnership Liability to the extent that the Liability
is nonrecourse for purposes of Regulations Section 1.1001-2, and a Partner (or
related person within the meaning of Regulations Section 1.752-4(b)) bears the
economic risk of loss within the meaning of Regulations Section 1.754-2.

43.           “Partner
Nonrecourse Debt Minimum Gain” means an amount, with respect to
each Partner Nonrecourse Debt, determined in accordance with Regulations
Sections 1.704-2(i)(2) and 1.704-2(i)(3).

44.           “Partner
Nonrecourse Deductions,” as set forth in Regulations Section
1.704-2(i)(2) and 1.704-2(i)(3), means for any Partnership taxable year, the
net increase during the year in Partner Nonrecourse Debt Minimum Gain, reduced
(but not below zero) by the proceeds of the Liability distributed during the
year to the Partner bearing the economic risk of loss for the Liability that is
both attributable to the Liability and allocable to an increase in the Partner
Nonrecourse Debt Minimum Gain.

45.           “Partnership”
means Jonah Gas Gathering Company, a Wyoming general partnership.

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46.           “Partnership
Interest” means with respect to any Partner, all of such Partner’s
ownership interest as a partner in the Partnership at any particular time,
including but not limited to the right to any allocations of Profits and Losses
and the right to receive distributions and any obligation to make Capital
Contributions under this Agreement.

47.           “Partnership
Minimum Gain” has the meaning set forth in Regulations Sections
1.704-2(b)(2) and 1.704-2(d).

48.           “Person”
or “person” means an
individual, a corporation, a sole proprietorship, a partnership, a limited
liability company, an association, a trust, a joint venture or any other entity
or organization.

49.           “Phase
I Commencement Date” means the date that the Bridger Compression
Station (as defined in the EnCana Agreement) is placed in service.

50.           “Phase
II Commencement Date” means the date of the completion of the
Jonah Expansion.

51.            “Profits and
Losses” means, for each Fiscal Year or other period, an amount
equal to the Partnership’s taxable income or loss for such year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant
to Code Section 703(a)(1) shall be included in taxable income or loss), with
the following adjustments:

(i)            Any
income described in Code Section 705(a)(1)(B) of the Partnership that is exempt
from federal income tax and not otherwise taken into account in computing Profits
and Losses pursuant to this definition shall be added to such taxable income or
loss;

(ii)           Any
expenditures of the Partnership described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses pursuant to this definition, shall be subtracted from such
taxable income or loss;

(iii)          In
the event the Gross Asset Value of any Partnership property is adjusted pursuant
to subparagraph (ii) or subparagraph (iii) of the definition of Gross Asset
Value, the amount of such adjustments shall be taken into account as gain or
loss from the Disposition of such asset for purposes of computing Profits and
Losses;

(iv)          Gain
or loss resulting from any Disposition of Partnership property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property Disposed of,
notwithstanding that the adjusted tax basis of such property may differ from
its Gross Asset Value;

 8
 

 

 

(v)           In
lieu of the depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account depreciation for such Fiscal Year or other period, computed
in accordance with the definition of “Depreciation”; and

(vi)          Notwithstanding
any other provisions of this definition, any items which are specially
allocated pursuant to Section 5.2(d)(2) or Section 5.2(d)(3)
shall not be taken into account in computing Profits or Losses.

52.           “Qualified
Costs” means the project costs associated with the Jonah
Expansion as approved by the Management Committee or each of Enterprise and the
TEPPCO Parties as necessary to complete the Jonah Expansion and shall include,
without limitation but also without duplication, (a) all funds actually paid or
costs incurred by Enterprise in connection with the Jonah Expansion, including
any costs or expenses paid or incurred (whether internally or to a third party)
by Enterprise in planning, engineering, constructing or completing the Jonah
Expansion, (b) an amount equal to Enterprise’s cost of capital in funding the
Jonah Expansion through August 31, 2006 for expenses actually paid by Enterprise
prior to the Effective Date with such cost of capital to be equal to Enterprise’s
borrowing cost under its senior credit facility and irrespective of whether
Enterprise has actually incurred borrowings or made related payments under such
facility (the “Enterprise Cost of Capital”), (c) amounts that Enterprise
is required to pay for orders for equipment, raw materials and similar
materials for the Jonah Expansion to the extent that Enterprise uses such
materials in connection with the Jonah Expansion, or if such materials are not
ultimately used in the Jonah Expansion, for those orders which Enterprise is
unable to cancel and thus would be required to make payments thereon, or for
cancellation fees and penalties on those orders which Enterprise is able to
cancel only upon payment of a cancellation fee or penalty, and (d) the costs
incurred by Enterprise relating to AFE No’s. P11062, P12084, P12085 and P12086
in the respective amounts of $334,000,000, $2,006,609, $12,003,571 and
$65,039,223 and pursuant to which Enterprise has previously incurred (or
expects to incur) costs relating to the Jonah Expansion (which AFEs shall be
deemed to have been approved by the TEPPCO Parties and Enterprise, it being
understood that further amendments to the AFEs will be subject to Management
Committee approval and that any non-approval of such further amendment shall
not be deemed to be a non-approval of the original AFE).

53.           “Regulations” means the Income Tax
Regulations promulgated under the Code as amended from time to time, including
the corresponding provisions of any succeeding regulations.

54.            “Sharing
Ratio” means the percentage of ownership interest of a Partner
in the Partnership as stated on Exhibit A attached hereto, as such
Sharing Ratio may be adjusted from time to time as provided in this Agreement.

55.           “Tax Matters Partner” means
Enterprise and the Tax Matters Partner shall take such actions on behalf of the
Partnership as set forth in Schedule 5.2.

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56.           “Third
Party” means any Person other than the Partnership, any Partner,
any Affiliate of a Partner, or any permitted successor or assignee of a
Partner.

57.           “TEPPCO Parent Entity” means TEPPCO
Partners, L.P., TEPPCO Midstream Companies, L.P. and any controlling Person or
group of controlling Persons of either of such Persons.

ARTICLE 2

ORGANIZATION

Section
2.1.  Formation

The Partnership was formed on June 20, 1996 by the
execution of the Original Agreement and such other applicable filings for the
Partnership pursuant to the Act.

Section
2.2.  Name, Place of Business and Office

(a)           The Business shall be conducted under
the name and style of Jonah Gas Gathering Company, although the Business may be
conducted under any other name as may be allowed by local law and approved by
the Management Committee.  The
Partnership shall maintain its principal office at 1100 Louisiana, Suite 1300,
Houston, Texas 77002, as the same may be changed from time to time by the
Management Committee.  The Management
Committee shall promptly give the Partners written notice of any change in
location of the principal office of the Partnership.

(b)           The Management Committee shall take
such steps as are necessary to qualify the Partnership to conduct the Business
in any states in which the Partnership conducts the Business as required by
local law.

Section
2.3.  Purposes and Character of Business;
Powers

(a)           The purpose of the Partnership is to
engage, either directly or through any Entity in which it has an interest, in
the Business and any other business or activity that now or hereafter may be
necessary, incidental, proper, advisable or convenient to accomplish the
foregoing purpose and that is not forbidden by the Act or by Applicable
Law.  The Partnership may also pursue
other business purposes by expanding its businesses and activities beyond those
described in the immediately preceding sentence; provided that any such other
business purposes or expanded businesses or activities (1) are not forbidden by
the Act or by Applicable Law and (2) are approved by the Management Committee.

(b)           Notwithstanding the foregoing, unless
otherwise approved by the Management Committee (and such action is not
forbidden by the Act or Applicable Law), the Partnership will not engage in any
activities that would cause the Partnership, the Partners, or

 10

 

 

any of their respective Affiliates to become
subject to regulation as a non-exempt holding company under the Public Utility
Holding Company Act of 1935, as amended.

(c)           Subject to the terms of this
Agreement, the Partnership shall have any and all powers which are necessary or
desirable to carry out the purposes of the Partnership, including, but not
limited to, the power to do the following:

(1)           to
hold, lease, manage, own, develop, Dispose of or improve all or any portion of
the assets contributed to the Partnership under the Contribution Agreement,
this Agreement or otherwise owned by the Partnership;

(2)           to
establish, acquire or invest in, either singularly or with other parties, other
Entities;

(3)           to
acquire, hold, lease, own, develop or improve all or any portion of any
property required in connection with the Business or any other business
permitted by this Agreement in which the Partnership may be engaged, including,
but not limited to, any equity interests or debt instruments in any Entity;

(4)           to
purchase or otherwise acquire an interest in all or any portion of an interest
in any other assets or properties, whether real, personal, mixed, tangible or
intangible;

(5)           to
borrow money, including, but not limited to, incurring financing to acquire,
hold, manage or operate any assets or properties of the Partnership and to
renew, extend, modify, rearrange or refinance such Partnership borrowings from
time to time;

(6)           to
mortgage, pledge, assign, encumber or grant security interests in Partnership
assets, revenues and/or income;

(7)           to
lease, sublease, or otherwise Dispose of all of the assets and properties of
the Partnership, or any portion thereof or interest therein;

(8)           to
make any investment or expenditure, to borrow money and to take any and all other
actions which are incidental or reasonably related to any of the specific
purposes recited above; and

(9)           to
do any and all other things necessary or desirable to carry out the purpose of
the Partnership and any other activity contemplated by this Agreement.

Section
2.4.  Term

The
Partnership term commenced as of June 20, 1996 and shall continue until
December 31, 2026 unless (i) the Partners unanimously agree to extend the
term of the Partnership for a longer duration or (ii) the Partnership is
earlier dissolved pursuant to the provisions hereof.

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ARTICLE 3

PARTNERSHIP CAPITAL

Section
3.1.  Initial Capital Accounts and
Contributions of the Partners

(a)           The TEPPCO Parties have previously
contributed (whether through actual contributions or as a result of their
acquisition of their Partnership Interests from MOC and Green River) to the
Partnership those assets which are currently listed as assets of the
Partnership on the Partnership’s books and records. The Capital Account of the
TEPPCO Parties on the Effective Date shall be equal to the Contribution Date
Value.

(b)           Enterprise and the TEPPCO Parties
shall contribute to the Partnership those assets described in Schedule 3.2.  Upon making such contribution, or due to such
contribution, as the case may be, each Partner has received or shall receive
its respective Partnership Interest and its Sharing Ratio as set forth in Exhibit
A.

Section
3.2.  Additional Capital Contributions of
the Partners

(a)           Except as set forth in Section
3.2(b) below, no Partner shall be required to make Additional Capital
Contributions to the Partnership, nor shall any Partner be obligated to satisfy
any deficit in its Capital Account and no Partner shall be permitted to make an
Additional Capital Contribution without the approval of the other
Partners.  Except as provided in Section
3.1 or this Section 3.2, no Partner shall be required to make
Capital Contributions to the Partnership except as required by law or as
otherwise provided in this Agreement.  No
Partner shall ever be required to contribute any amounts to the Partnership for
the benefit of any creditor or other Third Party.

(b)           Notwithstanding any other provision
hereof, the Partners shall make the respective Additional Capital Contributions
in such amounts and at such times as described in Schedule 3.2.

Section
3.3.  Partnership Capital

(a)           Except to the extent that interest
income to the Partnership is allocated to a Partner, no Partner shall be
entitled to interest on any Capital Contribution (other than interest, if
applicable, contemplated by subparagraph (b) in the definition of Qualified
Costs) to the Partnership or any Capital Account balance.

(b)           No Partner shall have the right to
withdraw all or any part of its Capital Contribution or to receive any return
on any portion of its Capital Contribution, except as may be otherwise
specifically provided in this Agreement.

(c)           Other than in a liquidation as
contemplated by Article 8, under circumstances involving a return of any
Capital Contribution, no Partner shall have the right to receive property other
than cash.

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Section
3.4.  Liability of Partners

(a)           No Partner shall be liable for the
debts, Liabilities, contracts or any other obligations of the Partnership,
except to the extent expressly provided herein or in the Act.  No Partner shall be liable for the debts or
Liabilities of any other Partner except as provided in the Act.

(b)           No Partner shall be required to loan
or contribute to the Partnership any funds other than as expressly required in
this Agreement.

(c)           No Partner shall be liable for the
return of all or any portion of the Capital Contributions of any other Partner.

Section
3.5.  Loans by Partners or Affiliates

Subject
to obtaining any approvals required under this Agreement for the Partnership to
borrow funds, any Partner or its Affiliate may (but shall not be obligated to)
at any time, upon obtaining the consent of the Management Committee, loan money
to the Partnership or guarantee a loan of funds to the Partnership to finance
Partnership operations, to finance or refinance Partnership property, to pay
the debts and obligations of the Partnership, or for any other Partnership
purpose.  If any Partner or its Affiliate
lends funds or guarantees a loan of funds to the Partnership, such Partner or
Affiliate shall be entitled to receive interest on such loan, or a fee
associated with any such loan or guaranty, at an interest rate or fee to be
agreed upon by such Partner or Affiliate and the Management Committee.  Each Partner acknowledges and agrees that any
loan from any Partner to the Partnership shall not be a Capital Contribution
and shall not result in any change in the Capital Accounts or the Sharing
Ratios of the Partners.

Section
3.6.  Capital Accounts

(a)           A Capital Account shall be
established and maintained for each Partner. 
The Capital Account of the TEPPCO Parties on the Effective Date will be
equal to the Contribution Date Value.

(b)           A Partner’s Capital Account shall be
increased by (i) the amount of cash and the initial Gross Asset Value of any
property contributed by such Partner to the Partnership including the Capital
Contributions funded pursuant to Schedule 3.2, (ii) such Partner’s allocable
share of Profits, income and gain and (iii) the amount of any Partnership
Liabilities that are expressly assumed by such Partner or that are solely
secured by any Partnership property distributed to such Partner.

(c)           A Partner’s Capital Account shall be
decreased by (i) the amount of cash and the Gross Asset Value of any
Partnership property distributed to such Partner pursuant to any provision of
this Agreement, (ii) such Partner’s allocable share of Losses, deductions and
other losses and (iii) the amount of any Liabilities of such Partner that are
expressly assumed by the Partnership or that are solely secured by any property
contributed by such Partner to the Partnership.

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(d)           Upon the occurrence of certain events
(as described in Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) and
1.704-2), the Management Committee may agree to increase or decrease the
Capital Accounts of the Partners to reflect a revaluation of Partnership
property on the Partnership’s books.

(e)           The Capital Account of each Partner
shall be determined after giving effect to all transactions which have been
effected prior to the time when such determination is made giving rise to the
allocation of Profits and Losses and to all contributions and distributions
theretofore made.  Any Person who
acquires a Partnership Interest directly from a Partner, or whose Partnership
Interest shall be increased by means of a Disposition to it of all or part of
the interest of another Partner, shall have a Capital Account which includes
the Capital Account balance of the Partnership Interest so acquired or Disposed
of.

(f)            Any fees, salary or similar compensation
payable to a Partner pursuant to this Agreement shall be deemed a Guaranteed
Payment for federal income tax purposes and not a distribution to such Partner
for such purposes.  Such payments to a
Partner shall not reduce the Capital Account of such Partner, except to the
extent of its distributive share of any Losses or other downward capital
adjustment resulting from such payment.

(g)           From time to time the Management
Committee may make such modifications to the manner in which the Capital
Accounts are computed to comply with Regulations Sections 1.704-1(b) and
1.704-2 provided that such modification is not likely to have a material effect
on the amounts distributable to any Partner pursuant to this Agreement.

(h)           The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and
shall be interpreted and applied in a manner consistent with such Regulations.

(i)            Except as otherwise provided herein
or as required by the Code or Regulations, all items of income, gain, loss,
deduction, credit, and any other items of the Partnership shall be allocated
among the Partners for federal and state income tax purposes as they share the corresponding
Capital Account items pursuant to this Section 3.6.

(j)            With respect to any property
contributed to the Partnership by any Partner the value of which differs from
the adjusted basis of the property for federal income tax purposes, all items
of income, gain, loss, deduction, credit or any other tax items, as computed
for federal income tax purposes, shall be allocated among the Partners so as to
take account of such difference in accordance with the terms hereof.

Section
3.7.  Sharing Ratios

The Sharing
Ratio (or the calculation thereof) of each Partner is set forth on Exhibit A,
attached hereto and hereby made a part hereof. 
Except as otherwise provided in this Agreement and on Exhibit A,
the Sharing Ratios may only be adjusted with the consent of the Management
Committee and the Management Committee shall have the full authority to amend Exhibit
A to

 14
 

 

 

reflect any such
adjustments to the Sharing Ratios; provided that no adjustments to the Sharing
Ratios shall be made prior to the Initial Commencement Date.  Enterprise shall begin receiving
distributions from the Partnership based on its Sharing Ratio effective on the
Initial Commencement Date in accordance with Exhibit A.  Thereafter the Sharing Ratios shall be
subject to any adjustments of the Partnership Interests as set forth in this
Agreement and on Exhibit A.

Section
3.8.  No Right to Priority of Return of
Capital

No
Partner shall have any priority over any other Partner as to the return of its
contributions to capital or as to compensation by way of income.

ARTICLE 4

RIGHTS, POWERS AND DUTIES OF THE PARTNERS, THE
MANAGEMENT

COMMITTEE, THE PRESIDENT AND THE OTHER OFFICERS

Section
4.1.  Management and Control of the
Partnership

(a)           The powers of the Partnership shall
be exercised by or under the authority of, and the Business and affairs of the
Partnership shall be managed under the direction of, Enterprise and the TEPPCO
Parties; provided that the Partners may delegate all or any portion of their
rights, powers and obligations to the President as provided in Section 4.2.  Any Partner shall be entitled to bring
advisors or other persons as they deem appropriate to any meeting of the
Partners.

(b)            The Partners agree to act through a
Management Committee comprised of principal representatives (the “Management
Committee Representatives”) appointed by each of the Partners.  The Management Committee will consist of four
(4) Management Committee Representatives and will provide management oversight
and executive level supervision for all financial, commercial and operating
functions of the Partnership.  Enterprise
shall have the right to appoint two Management Committee Representatives and
the TEPPCO Parties shall have the right to collectively appoint two Management
Committee Representatives.  A Management
Committee Representative appointed by a Partner is not required to be an
employee of the appointing Partner or any of its Affiliates and shall be
designated by notice to the other Partner. 
Each Management Committee Representative shall serve until his successor
is designated by the Partner that appointed such Management Committee
Representative.  Each Management
Committee Representative shall have one vote. 
Any Management Committee Representative may be removed at any time by
the Partner appointing such Management Committee Representative and shall be
replaced by such Partner at such time as determined by such appointing
Partner.  The Management Committee
Representatives shall receive no compensation from the Partnership for their
service on the Management Committee. 
Each Partner shall be responsible for all costs associated with its
representatives’ participation on the Management Committee.  As of the Effective Date, the Management
Committee will consist of (i) A.J. Teague and Allen C. Capps each designated by
Enterprise and (ii) William G. Manias and John N.

 15
 

 

 

Goodpasture each designated by the TEPPCO
Parties.  The Management Committee may
form additional committees as the Partners or the Management Committee may
desire from time to time.

(c)           Each Management Committee
Representative shall vote, and shall take all other necessary or desirable
actions within such Management Committee Representative’s control (including,
without limitation, attendance at meetings in person or by proxy and for
purposes of the execution of written consents in lieu of meetings), to ensure
compliance with this Section 4.1.

(d)           Unless
otherwise expressly provided in a written notice issued by the Secretary of the
Partnership, an annual meeting of the Management Committee for the transaction
of such business as may properly come before such meeting shall be held at the
principal office of the Partnership at 9:00 a.m. on the second Tuesday in the
month of August.  Regularly scheduled,
periodic meetings of the Management Committee may be held at such times and
places as shall from time to time be determined by resolution of the Management
Committee and communicated to all Management Committee Representatives or their
representatives.  Each Management
Committee Representative shall inform the other Management Committee
Representatives of any business matters that it intends to raise at any regular
meeting of the Management Committee within a reasonable time prior to such
meeting.  The business matters to be
acted upon at any such meeting shall be limited to the matters disclosed by a
Management Committee Representative or its representative(s) prior to such
meeting.

(e)           Any Management Committee
Representative shall have the right to call a special meeting of the Management
Committee upon at least 24 hours written notice.  Each notice of a meeting shall state the time
and place of the meeting, the agenda and any matters which are being submitted
for approval.  The business matters to be
acted upon at any such meeting shall be limited to the matters set forth in the
notice delivered with respect to such meeting.

(f)            All meetings of the Management
Committee or other committees of the Partnership shall be presided over by a
chairman of the meeting, who shall be a Management Committee Representative and
shall be initially designated by Enterprise; provided that, the chairman
appointed by Enterprise shall serve as chairman of the Management Committee for
a term of one year and upon the one year anniversary of such chairman’s
appointment, TMC shall have the right to appoint the chairman for the next one
year period with such right of appointment alternating between TMC and
Enterprise so that upon each one year anniversary of the then serving chairman,
the Partner who was not entitled to appoint the chairman for the previous year
will have the right to appoint the chairman for the next year.  The
chairman of any meeting shall determine the order of business and the procedure
at the meeting, including regulation of the manner of voting and the conduct of
discussion.

(g)           Unless
otherwise restricted by Applicable Law or this Agreement, the Management
Committee or other committees may hold a meeting by means of conference
telephone or other communications equipment by means of which all Persons
participating in the

 16
 

 

 

meeting can effectively
communicate with each other.  Such
participation in a meeting shall constitute presence in person at the meeting,
except where a Person participates in the meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.  

(h)           Management Committee Representatives
may vote either in person or by proxy executed in writing.  A photographic, photostatic, facsimile or
similar reproduction of a writing executed by the Management Committee
Representative shall be treated as an execution in writing for purposes of this
Section 4.1(h).  Proxies for use
at any meeting of the Management Committee or other committee of the
Partnership shall be filed with the Partnership before or at the time of the
meeting.  All proxies, written consents
and ballots shall be received and taken charge of and canvassed by an inspector
or inspectors appointed by the President who shall decide all questions
touching upon voting matters.

(i)            Except
as otherwise provided by Applicable Law, any action required or permitted to be
taken at any meeting of the Management Committee or other committee of the
Management Committee may be taken without a meeting and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders or representatives of not less than the minimum
percentage of votes that would be necessary to take such action at a meeting at
which the Management Committee Representatives entitled to vote on the action
were present and voted; provided, however, that no such written consent shall
be effective unless each such Management Committee Representative entitled to
vote on such action has been provided with at least three (3) Business Days
prior written notice of such consent to be sought or has waived the requirement
of such notice.  To the extent required
by Applicable Law, every written consent shall bear the date of signature of
each Management Committee Representative who signs the consent.  To the extent required by Applicable Law, no
written consent shall be effective to take the action that is the subject to
such consent unless, within sixty (60) days after the date of the earliest
dated consent delivered to the Partnership in the manner required by this Section
4.1, a consent or consents signed by the holder or holders of not less than
the minimum percentage of votes that would be necessary to take the action that
is the subject of the consent are delivered to the Partnership by delivery to
its registered office or its principal place of business.  A photographic, photostatic, facsimile or
similar reproduction of a writing signed by a Management Committee Representative
shall be regarded as signed by the Management Committee Representative for
purposes of this Section 4.1. 
Prompt written notice of the taking of any action by the Management
Committee or committees of the Management Committee without a meeting by less
than unanimous written consent shall be given to those Management Committee
Representatives who did not consent in writing to the action.

(j)            A quorum shall be present at a
meeting of the Management Committee or other committee if the holders of at
least a majority of all Management Committee Representatives are represented at
the meeting in person or by proxy.  The
voting interest of any Management Committee Representative failing or declining
to vote within the time allowed on any matter shall be counted against the
proposal.

 17
 

 

 

(k)           Except
as otherwise provided for in this Agreement, action on any matter provided for
in this Agreement where the approval of the Management Committee is required or
contemplated, shall require the affirmative vote of at least a majority of the
Management Committee Representatives entitled to vote.  Any unresolved differences (i.e.
matters for which a majority of the Management Committee Representatives do not
agree to approve or reject) may be submitted by any Partner to the Dispute
Resolution Procedure set forth on Schedule 10.23 and upon resolution of
such matter in accordance with the provisions set forth on Schedule 10.23,
such matter shall be deemed to have been approved by the Management Committee.

(l)            The Management Committee will
review, determine and approve the amount of all Qualified Costs incurred in
connection with the Jonah Expansion in accordance with the terms of the
definition of Qualified Costs in Article I of this Agreement.  Such review, determination and approval may
be made either prior to or after the incurrence of such Qualified Costs but in
any event, the Management Committee shall (i) as of the Phase I Commencement
Date, make such determination as of the Phase I Commencement Date and (ii)
after the Phase I Commencement Date and prior to the Phase II Commencement
Date, make such determination as of the first day of each such month.

Section
4.2.  Delegation to President

To the
fullest extent permitted by Applicable Law, except as otherwise provided in Section
4.5 and Section 4.6, the Management Committee hereby expressly
delegates to the President the full authority of a Senior Vice President as set
forth in the Management Authorization Policy attached hereto as Schedule 4.2
and applied in the same manner as if the Partnership were considered to be a
subsidiary of Enterprise Products GP, LLC, Enterprise Products Partners L.P. or
Enterprise Products Operating L.P. (collectively, the “EP Parties”), as
the same may be amended from time to time by the EP Parties, to manage and
control the affairs of the Partnership and to make all decisions affecting the
Business, and such other duties as the Management Committee may from time to
time establish which may be a reduction of or an addition to those duties
enumerated on Schedule 4.2.  Bill
Ordemann is hereby appointed president (“President”) of the
Partnership.  Enterprise shall have the
right to remove and/or replace the President and any other officers in its sole
discretion, subject to the rejection rights of TMC set forth in Section 4.3(c).

Section
4.3.  Other Officers

(a)           Number.  Other than the President, the officers of the
Partnership shall consist of one or more Vice Presidents, the Secretary, the
Treasurer, and such other officers and assistant officers and agents as may be
deemed necessary and elected or appointed by the Management Committee, or
chosen in such other manner as may be prescribed by this Agreement, at such
time and in such manner and for such terms as the Management Committee may
prescribe (the “Officers”).  Any
two or more offices may be held by the same Person.  Persons other than Management Committee
members (unless otherwise agreed by all the Partners) may serve as Officers.

 18
 

 

 

(b)           General Duties.  All Officers and agents of the Partnership,
as between themselves and the Partnership, shall have such authority, perform
such duties and manage the Partnership as may be provided in this Agreement or
as may be determined by the Management Committee not inconsistent with the
terms of this Agreement.

(c)           Election, Term of Office and Qualifications.  The Officers shall be chosen by the members
of the Management Committee appointed by Enterprise; provided that, TMC shall
have the right to reject such Officer’s appointment within two Business Days of
such appointment, in which case Enterprise shall appoint another Officer to so
serve, subject again to TMC’s right to continue to reject such appointment
within two Business Days of such appointment. 
Each Officer shall hold office until a successor is chosen and qualified
or until the death, resignation, or removal of such Officer.  Designation of an Officer as such shall not
of itself create any contractual rights between the Partnership and such
Officer.

(d)           Removal.  Any Officer or agent may be removed (with or
without cause) by the Management Committee, but such removal shall be without
prejudice to the contract rights, if any, of the Person so removed.

(e)           Resignation.  Any Officer may resign at any time by giving
written notice to any Management Committee Representative, the President or the
Secretary.  Such resignation shall take
effect at the time specified in the notice, and, unless otherwise specified in
the notice, the acceptance of such resignation shall not be necessary to make
it effective.  Such resignation shall be
without prejudice to the contract rights, if any, of the Partnership.

(f)            Vacancies.  Any vacancy in any office because of death,
resignation, removal or any other cause shall be filled for the unexpired
portion of the term in the manner prescribed in this Agreement for election or
appointment to such office.

(g)           The Vice Presidents.  Each Vice President shall have such powers
and perform such duties as the Management Committee may from time to time
prescribe or as the President (subject to such authority limits as the Management
Committee may from time to time prescribe) may from time to time delegate to
him or her.  At the request of the
President, any Vice President may temporarily act in place of the President.  In the case of the death, absence, or
inability to act of the President, the Management Committee may designate any
Vice President to perform the duties of the President in accordance with the
terms of this Agreement.

(h)           The Secretary.  The Secretary shall keep or cause to be kept
in books provided for that purpose, minutes of the meetings of the Partners;
shall see that all notices are duly given in accordance with the provisions of
this Agreement and as required by law; shall be custodian of the records and,
in general, shall perform all duties incident to the office of the secretary
and such other duties as may from time to time be assigned by the Management
Committee or by the President.

(i)            Assistant
Secretary.  At the request of the Secretary or in the
Secretary’s absence or inability to act, the Assistant Secretary, if any, shall
perform part or all of the Secretary’s duties.

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(j)            The Treasurer.  The Treasurer shall be the principal
financial officer of the Partnership; shall have charge and custody of and be
responsible for all funds of the Partnership and deposit all such funds in the
name of the Partnership in such banks, trust companies or other depositories as
shall be selected by the Management Committee; shall receive and give receipts
for moneys due and payable to the Partnership from any source; and, in general,
shall perform all the duties incident to the office of treasurer and such other
duties as from time to time may be assigned by the Management Committee or by
the President.  The Treasurer shall
render to the President and the Management Committee, whenever the same shall
be required, an account of all transactions accomplished as treasurer and of
the financial condition of the Partnership.

(k)           Assistant
Treasurer.  At the request of the Treasurer or in the
Treasurer’s absence or inability to act, the Assistant Treasurer, if any, shall
perform part or all of the Treasurer’s duties.

(l)            Devotion of Time.  Each Officer shall devote such time, effort,
and skill to the Partnership’s business affairs as he or she deems necessary
and proper for the Partnership’s welfare and success.

Section
4.4.  Authority of the Partners, the
Management Committee Representatives or the President as to Third Persons

Any Person dealing with
the Partnership, a Partner, a Management Committee Representative or the
President may rely upon a certificate signed by the Secretary or Assistant
Secretary, thereunto duly authorized, concerning:

(a)           the identity of the President, Vice
President, Secretary, Management Committee Representative or any Partner;

(b)           the existence or nonexistence of any
fact or facts that constitute conditions precedent to acts by a Management
Committee Representative, the President or any Officer of the Partnership who
has been delegated authority to act on behalf of the Partnership, or in any
other manner germane to the affairs of the Partnership;

(c)           the Person or Persons who are
authorized to execute and deliver any instrument or document of the
Partnership; or

(d)           any act or failure to act by the
Partnership or concerning any other matter whatsoever involving the
Partnership, a Management Committee Representative or any Partner as it regards
the Business or any other business permitted by this Agreement in which the
Partnership may be engaged.

 20

 

Section
4.5.  Actions Requiring Consent of the
Management Committee

The
President shall not have the authority to take any action except as provided in
Section 4.2 or as otherwise approved by the Management Committee.

Section
4.6.  Restrictions on the Authority of
the Management Committee

Notwithstanding
anything to the contrary contained in this Agreement, without the consent of
each Partner, neither the Management Committee nor the President shall have the
power or authority:

(a)           to lease or Dispose of all or
substantially all of the assets of the Partnership;

(b)           to dissolve and wind up the
Partnership;

(c)           unless otherwise provided in this
Agreement, to amend this Agreement;

(d)           to merge, convert, or consolidate the
Partnership with or into any Entity;

(e)           to admit one or more additional or
substituted Partners or to issue additional Partnership Interests, except as
may otherwise be permitted in Article 6;

(f)            to file a voluntary petition in
bankruptcy on behalf of the Partnership;

(g)           to possess Partnership property, or
assign, pledge or hypothecate its rights in specific Partnership assets other
than for a Partnership purpose;

(h)           to make any tax election for the
Partnership;

(i)            to sustain or enter into any
contract or agreement that would bind any Affiliate (other than the
Partnership) of any Partner;

(j)            to assign any of the property of the
Partnership in trust for the benefit of creditors, or to make or file or
acquiesce in the making or filing by any other person, of a petition or other
action requesting the reorganization or liquidation of the Partnership; or

(k)           to act on any other matter that is
subject to the agreement, consent or approval of the Partners hereunder.

If the Partners
are unable to agree as to any of the items set forth in this Section 4.6,
the matter may be submitted to the Dispute Resolution Procedure set forth on Schedule
10.23 and upon resolution of such matter in accordance with the provisions
set forth on Schedule 10.23, such matter shall be deemed to have been
approved by all of the Partners.

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Section
4.7.  Transactions or Disputes with
Related Parties

Upon
approval of the Management Committee, the Partnership may agree, contract, or
arrange with any Partner or any Affiliates of any Partner in the name and on
behalf of the Partnership, for the performance of services for the Partnership,
and the payment of compensation therefor, in carrying out the Business as if
such Partner or Affiliate were an independent contractor.

Section
4.8.  Compensation of the Management
Committee Representatives, Officers and Partners; Reimbursement of Expenses

The
management, administrative and operating functions of the Partnership will be
performed by employees of EPCO, Inc. pursuant to the administrative services
agreement to which TEPPCO Partners, L.P. and TEPPCO GP, Inc. are parties, which
was effective on February 24, 2005.  The
Partnership will reimburse EPCO, Inc. in accordance with such agreement for the
allocated costs of its employees who perform operating, management and other
administrative functions for the Partnership, including those of any Management
Committee Representative, Officer or Partner.

Section
4.9.  Indemnification and Exculpation of
the Partners, Management Committee Representatives, Officers and Employees

(a)           No Partner, Management Committee
Representative, Officer or employee of the Partnership or any authorized
representative of a Partner or Management Committee Representative
(collectively “Indemnified Persons” or singularly “Indemnified Person”)
shall have any Liability to the Partnership or the Partners for any loss
sustained or Liabilities incurred as a result of any act or omission of such
Indemnified Person if (1) the Indemnified Person acted in good faith in a
manner he, she or it reasonably believed to be in, or not opposed to, the best
interests of the Partnership, and (2) the conduct of the Indemnified Person did
not constitute actual fraud, gross negligence, bad faith or willful misconduct.

(b)           The Partnership shall indemnify an
Indemnified Person from and against any and all losses, Claims, damages,
Liabilities, joint or several, expenses (including reasonable legal fees and
expenses), judgments, fines, settlements, and other amounts arising from any
and all Claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which an Indemnified Person may
be involved, or is threatened to be involved, as a party or otherwise,
REGARDLESS OF WHETHER ARISING FROM ANY ACT OR OMISSION WHICH CONSTITUTED THE
SOLE, PARTIAL OR CONCURRENT NEGLIGENCE (WHETHER ACTIVE OR PASSIVE) OF THE
INDEMNIFIED PERSON, if (1) the Indemnified Person acted in good faith in a
manner he, she or it reasonably believed to be in, or not opposed to, the best
interests of the Partnership and (2) the conduct of the Indemnified Person did
not constitute actual fraud, gross negligence, bad faith or willful
misconduct.  The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnified Person did not meet the requisite standard of conduct set forth
in this Section 4.9(b).  Any

 22
 

 

 

indemnification pursuant to this Section
4.9 shall be made only out of the assets of the Partnership, including
insurance proceeds, if any.

(c)           Promptly
after receipt by an Indemnified Person of notice of any pending or threatened
Action made or instituted against such Indemnified Person by a Person other
than another Indemnified Person (a “Third Party Action”), such Indemnified
Person shall, if a Claim in respect thereof is to be made by such Indemnified
Person against the Partnership, give notice thereof to the Partnership and each
Partner.  The Partnership, at its own
expense, may elect to assume the defense of any such Third Party Action through
its own counsel on behalf of the Indemnified Person (with full right of
subrogation to the Indemnified Person’s rights and defenses).  The Indemnified Person may employ separate
counsel in any such Third Party Action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
Indemnified Person unless the Indemnified Person shall have been advised by its
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Partnership.  In such case the Partnership shall not have
the right to assume the defense of such Third Party Action on behalf of the
Indemnified Person, it being understood, however, that the Partnership shall
not, in connection with any one Action or separate but substantially similar or
related Actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
the Indemnified Person, and such firm shall be designated in writing by the
Indemnified Person.  All fees and
expenses for any such separate counsel shall be paid periodically as incurred.  The Partnership shall not be liable for any
settlement of any such Third Party Action effected without its consent unless
the Partnership shall elect in writing not to assume the defense thereof or
fails to prosecute diligently such defense and fails after written notice from
the Indemnified Person to promptly remedy the same, in which case, the
Indemnified Person without waiving any rights to indemnification hereunder may
defend such Third Party Action and enter into any good faith settlement thereof
without the prior written consent of the Partnership.  The Partnership shall not, without the prior
written consent of the Indemnified Person, effect any settlement of any such
Third Party Action unless such settlement includes an unconditional release of the
Indemnified Person from all Claims and Liabilities that are the subject of such
Third Party Action.  The Partners agree
to cooperate in any defense or settlement of any such Third Party Action and to
give each other reasonable access to all information relevant thereto.  The Partners will similarly cooperate in the
prosecution of any Claim or lawsuit against any Third Party.  If, after the Partnership elects to assume
the defense of a Third Party Action, it is determined pursuant to the dispute
resolution procedures described in Section 10.23 and Schedule 10.23
or otherwise determined in a related binding legal proceeding that the
Indemnified Person is not entitled to indemnification with respect thereto, the
Partnership shall discontinue the defense thereof, and if any fees or expenses
for separate counsel to represent the Indemnified Person were paid by the
Partnership, the Indemnified Person shall promptly reimburse the Partnership
for the full amount thereof.

(d)           The indemnification provided by this Section
4.9 shall be in addition to any other rights to which the Indemnified
Persons may be entitled under any agreement, as a matter of law or otherwise.

 23
 

 

 

(e)           The Partnership may purchase and
maintain insurance on behalf of the Indemnified Persons and the employees, as
the Management Committee shall determine, against any Liability that may be
asserted against or expenses that may be incurred by the Indemnified Persons or
the employees in connection with the Partnership’s activities, regardless of
whether the Partnership would have the power to indemnify the Indemnified
Persons or employees against such Liability under the provisions of this
Agreement.

(f)            In no event may the Indemnified
Persons or the employees of the Partnership subject the Partners to personal
Liability by reason of the indemnification provisions set forth in this
Agreement except as may be required under the Act.

(g)           The Indemnified Persons shall not be
denied indemnification in whole or in part under this Section 4.9
because an Indemnified Person had an interest in the transaction with respect
to which the indemnification applies if the transaction was otherwise permitted
by the terms of this Agreement.

(h)           The provisions of this Section 4.9
are for the benefit of the Indemnified Persons and their respective permitted
successors and assigns, and shall not be deemed to create any rights for the
benefit of any other Persons.

Section
4.10.  Competition.

Each
Partner, in its individual capacity or otherwise, and its respective principals
and Affiliates, shall be free to engage and conduct or participate in any
business or activity whatsoever, including, without limitation, the Business,
without any accountability or obligation whatsoever to the Partnership or to
any other Partner and each Partner waives any right or Claim it may have
against any Partner with respect to any competing business or activity or the
income or profits therefrom.

Section
4.11.  Liability of the Management
Committee Representatives and Partners

It is
the intent of this Section 4.11 to restrict the Liability and fiduciary
duties of the Partners to the maximum extent permitted under Applicable
Law.  Neither the Partnership nor any
Partner shall have any Claim against any Management Committee Representative or
Partner by reason of any act or omission of such Management Committee
Representative or Partner, provided that such act or omission was performed by
the Management Committee Representative or Partner in the belief that the
Management Committee Representative or Partner was acting within the scope of
its authority under this Agreement and that such act or omission did not
involve the Management Committee Representative’s or Partner’s bad faith, gross
negligence, willful misconduct or fraud, REGARDLESS OF WHETHER SUCH ACT OR
OMISSION CONSTITUTED THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE (WHETHER ACTIVE
OR PASSIVE) OF THE MANAGEMENT COMMITTEE REPRESENTATIVE OR PARTNER.  Notwithstanding the above, a Management
Committee Representative or Partner shall have no Liability hereunder for
failing to act if such act required the consent of some or all of the
Management Committee Representatives or Partners and the required consent to
such action was not granted.  Any
amendment, modification or repeal of this

 24
 

 

 

Section 4.11
or any provision in this Section 4.11 shall be prospective only and
shall not in any way affect the limitations on the Management Committee
Representative’s or Partner’s Liability to the Partnership and the Partners
under this Section 4.11 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when
Claims relating to such matters may arise or be asserted.  In furtherance of this limitation of
fiduciary duties of the Management Committee Representatives and Partners, but
not by way of limitation, the following provisions shall apply:

(a)           It will not constitute a breach of
fiduciary or other duty for a Management Committee Representative, a Partner or
any of its respective Affiliates to engage in any business activity, including,
without limitation, activities of the type conducted by the Partnership, even
if in direct competition with the Partnership;

(b)           It will not constitute a breach of
fiduciary or other duty for the Management Committee Representatives or
Partners to resolve any conflicts of interest in accordance with the terms of
this Agreement or an agreement with the other Management Committee
Representatives or Partners;

(c)           It will not constitute a breach of
fiduciary or other duty for the Management Committee Representatives or
Partners to engage attorneys, accountants and other advisors on behalf of the
Partnership even though such Persons may also be retained from time to time by
a Management Committee Representative or Partner or any of a Management
Committee Representative’s or Partner’s officers, directors, shareholders,
members or partners, and such Persons may be engaged with respect to any matter
in which the interest of the Partnership and a Management Committee
Representative or Partner may differ, or may be engaged by both the Partnership
and a Management Committee Representative or Partner with respect to any other
matter.  Neither the Management Committee
Representatives nor the Partners shall be responsible for any misconduct or
negligence on the part of any such attorney, accountant or other advisors; and

(d)           Subject to the restrictions in Section
4.12, it will not constitute a breach of fiduciary or other duty for a
Management Committee Representative or Partner to contract or enter into any
agreement or arrangement with the Partnership with respect to any Partnership
property or any aspect of the operations of the Partnership.

Section
4.12.  Transactions with Related Parties

(a)           A Partner (with the consent of the
Management Committee) may agree, contract or arrange with any of its Affiliates
(including any Partner), or any Affiliate of any Partner, in the name and on
behalf of the Partnership, for the purchase of products or services for the
Partnership, and the payment therefor, in carrying out the Business as if such
parties were independent contractors.

 25
 

 

 

(b)           Any contract or agreement between the
Partnership and a Partner or its Affiliates shall require the prior written
consent of the Management Committee which consent shall not be unreasonably
withheld.

Section
4.13.        Operating Matters

The
Partners acknowledge that an Affiliate of Enterprise has heretofore assumed the
day-to-day responsibility for the operation and commercial management of the
Jonah Gas Gathering System and it is the intent of the Partners that such
Affiliate will continue such responsibility in accordance with past practice
until such time as a mutually agreeable Operating Agreement can be entered into
between the Partnership and such Affiliate (any such agreement, the “Operating
Agreement”).  The Partners agree to
use good faith in negotiating the terms of such an Operating Agreement but to
the extent that such Affiliate and the Partnership are unable to agree on such
terms, such Affiliate and its Affiliates (including Enterprise) will have no
obligation to continue assuming the day-to-day responsibility for the operation
and commercial management of the Jonah Gas Gathering System.

ARTICLE 5

DISTRIBUTIONS AND ALLOCATIONS; TAX MATTERS

Section
5.1.  Allocation of Profit and Loss

(a)           Allocation of Profits. After
first giving effect to the regulatory allocations set forth in Section
5.2(d)(1), and the special allocations in Section 5.2(d)(2), Profits
for each Fiscal Year of the Partnership shall be allocated to the Partners in
proportion to their respective Sharing Ratios as reflected on Exhibit A.

(b)           Allocation of Losses. After
first giving effect to the regulatory allocations set forth in Section
5.2(d)(1), and the special allocations in Section 5.2(d)(2), Losses
for each Fiscal Year of the Partnership shall be allocated to the Partners in
proportion to their respective Sharing Ratios as reflected on Exhibit A.

Section
5.2.  Tax Provisions

(a)           Status of Partnership.  The
Partners intend that, pursuant to the provisions of Subchapter K of Chapter 1
of Subtitle A of the Code, the Partnership will be treated as a Partnership for
federal, state, and local income tax purposes, and each Partner agrees not to
elect to be excluded from the application of all or any part of Subchapter K of
the Code or any corresponding provisions of state or local law.

(b)           Tax Returns, Proceedings and
Elections.  Tax returns, proceedings
and elections shall be governed by the provisions of Schedule 5.2
attached.  The provisions of Schedule
5.2 may be amended from time to time by vote of the Partners as provided in
Section 4.6(h).

 26
 

 

 

(c)           Agreed Gross Asset Value of
Partnership Assets at Effective Date. 
The Partners, hereby agree that the Gross Asset Value of the assets of
the Partnership effective immediately before the admission of Enterprise as a
Partner is equal to $657.1 million, which amount represents the sum of the
Agreed Base Amount of $641.9 million, the 2006 Well Connect Capital of $4.1
million and the Phase IV Capital Contribution of $11.1 million (the “Contribution
Date Value”).  For the avoidance of
doubt, the Jonah Gas Marketing Contribution and the Intercompany Debt
Contribution are included in the Agreed Base Amount of $641.9 million.

(d)           Regulatory Allocations.  The
following regulatory allocations shall be made for the purpose of complying
with Code Section 704(b) and the Regulations thereunder in the following order:

(1)           (A)          Minimum Gain Chargeback.  Except
as otherwise provided in Regulations Section 1.704-2(f), and
notwithstanding any other provision of this Section 5.2, if there is a
net decrease in Partnership Minimum Gain during any Partnership Fiscal Year,
each Partner shall be specially allocated items of Partnership income and gain
for such year (and, if necessary subsequent years) equal to such Partner’s
share of the net decrease in Partnership Minimum Gain, determined in accordance
with Regulations Section 1.704-2(g); provided that a Partner shall not be
subject to this Section 5.2(d)(1)(A) to the extent that an exception is
provided by Regulations Sections 1.704-2(f)(2), (3) and (4), and any Revenue
Rulings issued pursuant to those Regulations. 
Any Partnership Minimum Gain allocated pursuant to this Section
5.2(d)(1)(A) shall consist of first, gains recognized from the Disposition
of Partnership property subject to one or more Partnership Nonrecourse
Liabilities, and second, if necessary, a pro rata portion of the Partnership’s
other items of income or gain for such Fiscal Year. This Section
5.2(d)(1)(A) is intended to comply with the minimum gain chargeback
requirement in Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.  The Capital
Accounts of the Partners may be restated pursuant to Regulations Section
1.704-1(b)(2)(iv)(f) in connection with a termination of the Partnership under
Code Section 708(b)(1)(B).

(B)           Partner
Nonrecourse Debt Minimum Gain Chargeback.  Except as otherwise
provided in Regulations Section 1.704-2(i)(4), and notwithstanding any other
provision of this Section 5.2 except Section 5.2(d)(1)(A), if
there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership Fiscal Year, each Partner
who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to
such Partner Nonrecourse Debt (determined in accordance with Regulations
Section 1.704-2(i)(5)) as of the beginning of the Fiscal Year shall be
specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) equal to such Partner’s share of the net decrease
in Partner Nonrecourse Debt Minimum Gain attributable to such Partner
Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i).  A Partner’s share of the net decrease in
Partner Nonrecourse Debt Minimum Gain shall be determined in accordance with
Regulations Section 1.704-2(i)(5); provided that a Partner shall not be subject
to this Section 5.2(d)(1)(B) to the extent that an exception is provided
by Regulations Section 1.704-2(i)(4) and any Revenue Rulings issued thereunder.
Any Partner Nonrecourse Debt Minimum Gain allocated pursuant to this Section
5.2(d)(1)(B) shall consist of first, gains recognized from the Disposition
of Partnership property subject to the Partner Nonrecourse Debt, and second, if
necessary, a pro rata portion of the Partnership’s other items of income or
gain for that year.  This Section 5.2(d)(1)(B)

 27
 

 

is intended to comply with the minimum gain chargeback
requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.

(C)           Nonrecourse
Deductions.  Nonrecourse Deductions for any Fiscal Year or other
period shall be allocated to the Partners in proportion to their respective
Sharing Ratios.

(D)          Partner
Nonrecourse Deductions.  Any Partner
Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Regulations Section 1.704-2(h).

(E)           Section
754 Adjustment.  To the extent an adjustment to the adjusted tax
basis of any Partnership property pursuant to Code Section 734(b) or Code Section
743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such section of the Regulations.

(2)           Special
Allocations.

(A)          Allocation
of Inherent Gain.  If during the term of the Partnership, the
Capital Accounts of the Partners are not restated pursuant to Regulations
Section 1.704-1(b)(2)(iv)(f), then except as required by the Regulatory
Allocations, gain on Disposition of the Partnership’s assets as of the date of
this Agreement and their adjusted tax basis as of such date shall be allocated
to the Partners in proportion to their Sharing Ratios.

(B)           Curative
and Remedial Allocations.  The allocations set forth in Section
5.2(d)(1)(A) — (E) hereof (the “Regulatory Allocations”) are
intended to comply with certain requirements of Regulations Section
1.704-1(b).  It is the intent of the
Partners that to the extent possible, all Regulatory Allocations shall be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss, and deduction pursuant to this Section
5.2(d)(2)(B).  Therefore,
notwithstanding any other provision of this Section 5.2 (other than the
Regulatory Allocations), the Partners hereby authorize offsetting special
allocations of income, gain, loss, or deductions either through curative or
remedial allocations, as appropriate, so that, after such offsetting
allocations are made, each Partner’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have had if
the Regulatory Allocations had not occurred.

 28
 

 

(C)           Deduction
or Loss Attributable to Capital Contributions.  Except as
required by the Regulatory Allocations, all items of deduction or loss
attributable to a Partner’s Capital Contribution to the Partnership shall be
allocated to the contributing Partner in accordance with each Partner’s Sharing
Ratio.

(3)           Other
Allocation Rules.

(A)          The
provisions of this Section 5.2 are intended to comply with Code Section
704 and the Regulations thereunder.

(B)           For
purposes of determining the Profits, Losses, or any other items allocable to
any period, Profits, Losses, and any such other items shall be determined on a
daily, monthly, or other basis, as determined by the Management Committee using
any permissible methods under Code Section 706 and the Regulations thereunder.

(C)           Except
as otherwise provided in this Agreement, all items of Partnership income, gain,
loss, deduction, and any other allocations not otherwise provided for shall be
divided among the Partners in the same proportions as they share Profits or
Losses, as the case may be, for the Fiscal Year.

(D)          If
any Partnership Interest is Disposed of during any accounting period, Profits,
Losses, each item thereof and all other items attributable to the Disposed
Partnership Interest for such period shall be divided and allocated between the
transferor and the transferee by taking into account their varying interests
during the period in accordance with Code Section 706(d), using any conventions
permitted by law and selected by the Management Committee.  All distributions on or before the date of
such Disposition shall be made to the transferor and all distributions
thereafter shall be made to the transferee.

(E)           For
purposes of Regulations Section 1.752-3(1)(3), the Partners agree that
nonrecourse liabilities of the Partnership in excess of the sum of (A) the amount
of Partnership Minimum Gain, and (B) the total amount of built-in gain (as
described in Regulation Section 1.752-3(a)(2)), shall be allocated among the
Partners in accordance with their respective Sharing Ratios.

(F)           Code
Section 704(c).  In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take into account any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Gross Asset Value (computed in
accordance with the definition of Gross Asset Value) including, but not limited
to, special allocations to a contributing Partner that are required under Code
Section 704(c) to be made upon distribution of such property to any of the non-contributing
Partners.  In the event the Gross Asset
Value of any Partnership property is adjusted pursuant to subparagraph (ii) of
the definition of Gross Asset Value, subsequent allocations of income, gain,
loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Code Section
704(c) and the Regulations thereunder. 
Any elections or other decisions relating to such

 29
 

 

 

allocations shall be made by the Management Committee
in any manner that reasonably reflects the purpose and intention of the
Agreement; provided, however, the Partnership shall select the remedial method
of allocation provided under Regulations Section 1.704-3(d).  Allocations pursuant to this Section
5.2(d)(3)(F) are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing any Partner’s
book Capital Account or share of Profits, Losses, other items, or distributions
pursuant to any provision of this Agreement. 
It is also the intent of the Partners that the foregoing special
allocation provided in this Section 5.2(d)(3)(F) shall be prospective
and shall not affect allocations on assets contributed prior to the adoption of
the amendment to this Section 5.2(d)(3)(F).

(e)           Allocation of Profits and Losses
for Tax Purposes.  Profit and loss
shall be allocated for federal income tax purposes in a manner consistent with
the allocations of Profits and Losses under Section 5.1, except as
required to comply with the curative and remedial allocations contained in this
Section 5.2, particularly allocations under Code Section 704(c) and
Code Section 734(b) or Code Section 743(b).

(f)            Wholly-Owned Limited Liability
Companies. Upon the Effective Date and in the future, the Partnership may
own wholly owned limited liability companies (“LLCs”) to hold certain
assets on behalf of the Partnership.  The
Partners recognize that under Regulations Section 301.7701-2(c)(2)(i), any such
LLC will be disregarded as an Entity separate from the Partnership and agree
that the tax provisions set forth in this Article 5 will apply to any
such LLCs that may be formed.  To the
extent any Partnership assets are contributed to a wholly-owned LLC, such
assets will continue to be classified and treated for tax purposes as though
they continued to be owned by the Partnership.

Section
5.3.  Regular Distributions

(a)           Regular Distributions.  Subject to the provisions of Section 8.2,
the Partnership will distribute within 20 days following the end of each month,
its Available Cash to the Partners who were holders of record as of the record
date for such distribution in accordance with their respective Sharing Ratios
determined at the time of such distribution.

(b)           Available Cash.  “Available Cash” means the
unrestricted cash and cash equivalents of the Partnership net of such sum or
sums as the Management Committee from time to time determines proper as a cash
reserve or reserves to meet working capital, other obligations and
contingencies, for repairing or maintaining any property of the Partnership, or
for such other purpose as the Management Committee determines to be
appropriate; and the Management Committee may modify or abolish any such cash
reserve in the manner in which it was created.

(c)           Distribution of Capital
Contributions.  Distributions under
this Section 5.3 are intended to constitute operating cash flow
distributions pursuant to Regulations Section 1.707-4(b) or otherwise not
constitute amounts which would give rise to a disguised sale within the meaning
of the Code.  The Management Committee
will specifically identify and notify the Partners of any distributions which
do not qualify for one or more exceptions to the disguised sale rules of the
Code.  It is the intention of the
Partners and the Partnership to utilize

 30

 

all Capital Contributions funded pursuant to
Schedule 3.2 to construct, improve and acquire property and assets of the
Partnership.

ARTICLE 6

TRANSFERABILITY OF PARTNER’S PARTNERSHIP INTEREST
AND OTHER RESTRICTIONS

Section
6.1.  Transfers to Affiliates

(a)           Subject to Section 6.1(b), a
Partner may, at any time upon written notice to the Partnership and all other
Partners, Dispose of all or any part of its Partnership Interest to any
Affiliate or Affiliates.  After complying
with the requirements of Section 6.4 and subject to the restrictions in Section
6.5, any Affiliate transferee shall automatically become a substituted
Partner in accordance with the provisions of this Agreement without any
requirement of an affirmative vote by the other Partners.  In addition to the requirements set forth in Section
6.4, a Disposition to an Affiliate shall be further conditioned upon the
transferor remaining responsible, as a guarantor, for compliance by the
transferee with the requirements of this Agreement unless the transferor
submits a Disposition Notice with respect to such Affiliate Disposition as
described in Section 6.1(c) and receives the consent of the other
Partners pursuant to Section 6.1(c).

(b)           Notwithstanding anything in this
Agreement to the contrary, a Partner may, upon written notice to the other
Partners, at any time Dispose of all or part of its Partnership Interest to Dan
L. Duncan, his spouse or any of his descendants (or any trust for the benefit
of Dan L. Duncan, his spouse or any of his descendants) in which event such
transferee shall become a substituted Partner in accordance with the provisions
of this Agreement without any requirement of an affirmative vote or other
action by the other Partners.

(c)           In requesting a consent to a
Disposition of all or a part of a Partner’s Partnership Interest pursuant to Section
6.1(a), such Disposing Partner shall give written notice (the “Disposition
Notice”) to each other Partner not less than thirty (30) days prior to the
effective date of such Disposition, stating the interest to be sold or
transferred, who the interest will be sold or transferred to (the “Proposed
Transferee”) and shall include with such notice information sufficient to
demonstrate to the other Partners that the Proposed Transferee has adequate financial
capability to fulfill the obligations of a Partner hereunder as set forth in Schedule
6.1 (Financial Responsibility Requirements), which such Proposed Transferee
will assume in the event of such Disposition. The other non-Disposing Partners
shall have a period of twenty (20) days from its or their receipt of the
Disposition Notice to evaluate the financial capabilities of the Proposed
Transferee. Within such twenty (20) day period, each of the other Partners
shall deliver to all other Partners its reasonable and good faith opinion as to
whether the adequate financial capability of the Proposed Transferee has been
demonstrated.  If any Partner fails to
deliver such an opinion, it shall be deemed to have determined that the
adequate financial capability of the Proposed Transferee has been
demonstrated.  During such twenty (20)
day consideration period, any Partner may request of the Transferring Partner,
and the Transferring

 31
 

 

 

Partner shall provide, such supplemental
information concerning the Proposed Transferee as may be reasonably necessary
for the requesting Partner to make such evaluation.

Section
6.2.  Transfers to Parties Other Than
Affiliates

(a)           Except with respect to an Affiliate
Disposition permitted under Section 6.1(a) or a Disposition permitted
under Section 6.1(b), any Partner desiring to Dispose of all or any part
of its Partnership Interest (a “Transferring Partner”) to a ready,
willing and able Transferee (“Proposed Transferee”) (or Disposing of all
or any portion of such interest by operation of law or otherwise) must first
offer to Dispose the portion of such interest that it desires to Dispose
(collectively, the “Subject Interest”) to the other Partners (the “Non-Transferring
Partners”) as a group based upon the same terms and conditions (with
respect to representations, warranties and indemnities) as those under which,
and for the same value that, the Transferring Partner desires to Dispose the
Subject Interest to such Proposed Transferee. 
Such offer will be made by a good faith written offer (the “Offer
Notice”) to transfer all of the Subject Interest and must contain a
complete description of the transaction, including any other transactions on
which such transaction is contingent (the “Proposed Transaction”), in
which the Transferring Partner proposes to Dispose the Subject Interest,
including the name of the Proposed Transferee (including, if applicable, the
name of the Person ultimately controlling such transferee), the known or
anticipated closing date of the Proposed Transaction, the consideration
specified for the Subject Interest, and any other material terms and conditions
of the Proposed Transaction (including the terms of any other transactions
contingent on such transaction).  Each Non-Transferring
Partner will have 30 days (as extended pursuant to Sections 6.2(d) and (e),
the “Option Period”) after its receipt of the Offer Notice within which
to elect to acquire all of such Subject Interest upon the terms and conditions
contained in the Offer Notice or determined in accordance with Sections
6.2(d) and (e).  If, within
the Option Period, one or more Non-Transferring Partners elects to acquire such
Subject Interest, then (1) such Non-Transferring Partner(s) will each deliver
its own separate written notice to the Transferring Partner and to the other
Non-Transferring Partner(s) during such period that expresses such desire to
purchase the Subject Interest (each, an “Acceptance Notice”) and (2)
such Non-Transferring Partner(s) and the Transferring Partner will use good
faith commercially reasonable efforts to close such transaction no later than
the later to occur of (x) the known or anticipated closing date set forth in
the Offer Notice or (y) 60 days after the last day of the Option Period.  If the Non-Transferring Partners and the
Transferring Partner each used good faith, commercially reasonable efforts to
promptly close such transaction, but they do not close such transaction within
90 days after the last day of the Option Period, the Transferring Partner may
proceed with the closing of the Proposed Transaction.

(b)           If any Non-Transferring Partner does
not elect to acquire its proportionate share of the Subject Interest, each of
the remaining Non-Transferring Partners will have the right to acquire, under
the terms and conditions set forth in this Section, a proportionate portion of
the remaining Subject Interest based on the relation of its Partnership
Interest to the Partnership Interests of all Non-Transferring Partners desiring
to acquire a portion of such share of the Subject Interest.  The right herein created in favor of the
Non-Transferring Partners as a group is an option to acquire all, or none, of
the Subject Interest offered for sale by the Transferring

 32
 

 

 

Partner. 
If all the Non-Transferring Partners elect to purchase the Subject
Interest, unless otherwise agreed, each such Non-Transferring Partner will
purchase a pro-rata portion of the Subject Interest based on its respective
Partnership Interest. If the Non-Transferring Partners as a group decline to
acquire all of the Subject Interest of the Transferring Partner in accordance
with this Section or if the Option Period has expired without delivery by any
Non-Transferring Partner of an Acceptance Notice, the Transferring Partner may
Dispose such Subject Interest to the Proposed Transferee named in the Offer
Notice delivered to the Non-Transferring Partners upon the terms described in
such Offer Notice. If such Disposition does not occur substantially in
accordance with the terms of such Offer Notice, such Disposition will have been
in violation of this Section be null and void ab initio and the Transferring
Partner and the Subject Interest will again be subject to the provisions of
this Section.

(c)           Upon consummation of any Disposition
made in accordance with this Section 6.2 (whether to a Partner or any
other Person), such Transferee and its Partnership Interest will automatically
become a party to and be bound by this Agreement and will thereafter have all
of the rights of a Partner and the obligations of a Partner hereunder;
provided, however, that notwithstanding the foregoing, all Dispositions
pursuant to this Section must also comply with and be governed by the other
provisions of this Agreement, including any restrictions on Dispositions herein
and on any Transferee becoming a substituted Partner, for such Transferee to
have all of the rights of a Partner hereunder.

(d)           If (i) the Proposed Transaction (and
any other transaction that is contingent upon the Proposed Transaction, and any
other transaction on which the Proposed Transaction is contingent) contemplates
the transfer of any asset, property, interest or right in addition to the
Subject Interest to the Proposed Transferee or its Affiliate or (ii) any
portion of the consideration set forth in the Offer Notice is to be paid in a
form other than cash or cash equivalents (including real or personal property,
promissory notes, securities, contractual benefits, assumption of liabilities
or anything else of value), then the Transferring Partner must include in its Offer
Notice its good faith determination of the Fair Market Value of the Subject
Interest, which will be the consideration for which the Subject Interest is
offered to the Non-Transferring Partners. 
If any of the Non-Transferring Partners disagrees with such
determination, they will notify the Transferring Partner of such disagreement
within 20 Business Days of receiving the Offer Notice.  If such disagreement is not resolved within
20 Business Days after such notice to the Transferring Partner, any Partner may
cause such disagreement to be resolved by delivering a Value Disagreement
Notice to the Transferring Partner and the other Partners. If more than one
Partner delivers a Value Disagreement Notice, all such Notices shall be
aggregated into one.  The Value
Disagreement Notice must include the names of three Appraisers (each of which
must be independent from the Partnership, the Partners and their respective
Affiliates) proposed by the delivering Partner. If more than one Partner
delivers a Value Disagreement Notice, such Partners must together identify
three Appraisers.  The Transferring
Partner must, within ten days after receipt of the Value Disagreement Notice,
choose one of the Appraisers listed on the Value Disagreement Notice to
determine the Appraised Value. Subject to the provisions of Section 6.2(e),
the Partners delivering the Value Disagreement Notice(s) and the Transferring
Partner will share on an equal basis the costs of the designated
Appraiser.  The Transferring Partner and
each applicable Non-Transferring Partner

 33
 

 

 

will promptly provide such Appraiser with all
information necessary or appropriate to determine the Appraised Value, and such
Appraiser shall determine the Appraised Value within 30 Days after receipt of
all such information. If a Value Disagreement Notice is delivered, the Option
Period will be extended until the date that is five Business Days after the
disagreement described in such Value Disagreement Notice is resolved.  The consideration to be paid by the
applicable Non-Transferring Partners for the Subject Interest then will be a
cash amount equal to the Appraised Value of the Subject Interest, as determined
by the Appraiser.

(e)           Any Transferring Partner may withdraw
its offer altogether (including to the original offeror) if the Appraised Value
is less than 90% of the Fair Market Value stated in the Offer Notice, provided
that in such case the Transferring Partner will be solely responsible for the
costs of the designated Appraiser.  Absent
fraud or manifest error, the Appraised Value determination will be final and
binding and not subject to further appeal.

Section
6.3.  Changes
in Control

A
change in control of an Enterprise Parent Entity or any TEPPCO Parent Entity,
or the merger or sale thereof of such an Enterprise Parent Entity or any TEPPCO
Parent Entity to a previously unrelated Third Party, shall not be considered a
Disposition of the Partnership Interest by the affected Partner and the other
Partner’s rights under this Article 6 shall not be considered to be
activated or applicable.

Section
6.4.  General Conditions of Transfers

Every
Disposition of all or any part of a Partner’s Partnership Interest under any
provision of this Agreement shall be conditioned upon it being effective only
when (i) the party receiving such Partnership Interest agrees in writing to be
bound by this Agreement and to assume all obligations, Liabilities and duties
with respect to that Partnership Interest to which the prior holder was bound
and that the Disposition shall not cause or create any right on the part of any
Person to cause a winding up or dissolution of the Partnership that is
inconsistent with the provisions of this Agreement and (ii) a true copy of the
document or instrument evidencing the Disposition of all or any part of such Partner’s
Partnership Interest, certified as such by a duly authorized representative of
the Disposing Partner, is furnished to the Partnership (a copy of which will be
furnished to each Partner upon written request).

Section
6.5.  Limitation on Dispositions to Avoid
Termination

Notwithstanding
anything in this Agreement to the contrary, a Partner’s right to Dispose of all
or a part of its Partnership Interest shall not be allowed if (i) when
aggregated with the total of all other Dispositions of Partnership Interests
within the preceding twelve (12) months, said Disposition results in the
Partnership being considered to have terminated within the meaning of Code
Section 708(b)(1)(B), (ii) would otherwise cause the Partnership to lose its
status as a partnership for federal income tax purposes; or (ii) would violate
any federal securities laws or any applicable state securities laws (including
suitability standards).  Any Partner
Disposing of

 34
 

 

 

all or any portion
of its Partnership Interest shall promptly notify the Tax Matters Partner of
such Disposition.

ARTICLE 7

BOOKS AND RECORDS; ACCOUNTING; REPORTING; TAX
ELECTIONS; ETC.

Section
7.1.  Books and Records

The
books and records of the Partnership shall be maintained by the Partnership at
the principal office of the Partnership and shall be available for examination
at such office by any Partner or its duly authorized representatives during
regular business hours.  Any Partner, at
its own expense, may cause an audit of the books and records of the Partnership
during regular business hours and shall furnish a written report thereof to the
other Partners.

Section
7.2.  Accounting Basis for Tax Reporting
Purposes; Fiscal Year

The books and records of
the Partnership shall be kept on the accrual method of reporting for tax and
financial reporting purposes.  The Fiscal
Year of the Partnership shall be the calendar year.

Section
7.3.  Accounts

The
Officers of the Partnership shall establish and maintain one or more separate
bank and investment accounts and arrangements for Partnership funds in the
Partnership’s name with financial institutions and firms that Officers of the
Partnership may determine.  The
Partnership may not commingle the Partnership’s funds with the funds of any
other Person.  All such accounts shall be
and remain the property of the Partnership and all funds shall be received,
held and disbursed for the purposes specified in this Agreement.  The Officers of the Partnership may invest
the Partnership funds only in (i) readily marketable securities issued by
the United States or any agency or instrumentality thereof and backed by the
full faith and credit of the United States maturing within three months or less
from the date of acquisition, (ii) readily marketable securities issued by
any state or municipality within the United States of America or any political
subdivision, agency or instrumentality thereof, maturing within three months or
less from the date of acquisition and rated “A” or better by any recognized
rating agency, (iii) readily marketable commercial paper rated “Prime-1”
by Moody’s or “A-1” by Standard and Poor’s (or comparably rated by such
organizations or any successors thereto if the rating system is changed or
there are such successors) and maturing in not more than three months after the
date of acquisition or (iv) certificates of deposit or time deposits
issued by any incorporated bank organized and doing business under the Laws of
the United States of America which is rated at least “A” or “A2” by
Standard and Poor’s or Moody’s, and which matures within three (3) months
or less from the date of acquisition.

 35
 

 

Section 7.4. 
Reports

(a)           The Management Committee shall cause
the Partnership to have an annual audit, with such auditor’s report with
respect to a Fiscal Year to be delivered by May 1 of the following Fiscal Year.

(b)           Within ten (10) calendar days after
the end of each fiscal quarter, the Management Committee shall cause the
Partnership to send to each Partner an estimate of such Partner’s share of
Partnership income to date for such Fiscal Year and an estimate of such Partner’s
share of Partnership Profits or Losses for all of such Fiscal Year.

(c)           Within thirty (30) calendar days
after the end of each fiscal month, the Management Committee shall cause the
Partnership to send to each Partner a copy of an unaudited balance sheet as of
the last day of such month and related statement of income and cash flows for
the one month and Fiscal Year to date periods then ended.

(d)           The President, or such Officer
designated by the President, shall prepare and deliver to the Partners such
other financial statements and reports of the Partnership as the Management
Committee deems appropriate from time to time.

(e)           Any financial statements and reports
prepared and distributed to the Partners shall be prepared in accordance with
GAAP.

Section
7.5.  Valuation of Contributions for
Financial Purposes

For financial
purposes, the value of the Capital Contributions described on Exhibit A
and the Contribution Date Value are valued as of the Effective Date.

ARTICLE 8

DISSOLUTION, LIQUIDATION AND TERMINATION OF THE
PARTNERSHIP

Section
8.1.  Events Causing Dissolution

(a)           The Partnership shall be dissolved
upon the first of the following to occur:

(1)           the entry of a final judgment, order
or decree of a court of competent jurisdiction adjudicating the Partnership to
be bankrupt, and the expiration without appeal of the period, if any, allowed
by Applicable Law in which to appeal therefrom;

(2)           the dissolution or bankruptcy of a
Partner or any other withdrawal event of a Partner;

(3)           the condemnation or other Disposition
of all or substantially all of the assets of the Partnership;

 36
 

 

 

(4)           the election to dissolve the
Partnership by each of the Partners; or

(5)           the entry of a decree of judicial
dissolution under the Act.

(b)           Dissolution of the Partnership shall
be effective as of the day on which the event occurs giving rise to the
dissolution, but the Partnership shall not terminate until there has been a
winding up of the business and affairs, and the assets of the Partnership have
been distributed as provided in Section 8.2.

(c)           Notwithstanding anything in Section
8.1(a) to the contrary, if a dissolution of the Partnership would otherwise
occur due to the occurrence of an event of dissolution under Section
8.1(a)(1) or (a)(2), the Partnership may be reconstituted if there
remains at least two (2) Partners and such remaining Partners elect to continue
the business of the Partnership.

(d)           Upon dissolution of the Partnership
upon an event occurring to a Partner described in Section 8.1(a)(2) (the
“Withdrawing Partner”), then within thirty (30) days after the
Partnership delivers notice of such event to the Partners, at least fifty
percent (50%) of such other Partners (by Sharing Ratio and excluding the
Sharing Ratio of the Withdrawing Partner) may elect to reconstitute the
Partnership and continue the business of the Partnership on the same terms and
conditions set forth in this Agreement by forming a new partnership on terms
identical to those set forth in this Agreement and, as necessary, admitting an
additional Partner chosen by such other Partners.  Such other Partners shall be deemed to have
voted for and consented to such reconstitution unless a written statement
objecting to the reconstitution shall have been received by the Partnership
within thirty (30) days after notice of dissolution was made to such
Partner.  Upon any such election to
reconstitute by at least fifty percent (50%) of such other Partners (determined
by the Sharing Ratios of the Partners and excluding the Sharing Ratio of the
Withdrawing Partner), all Partners, the Withdrawing Partner, and successors
shall be bound thereby and shall be deemed to have approved thereof.  Unless such an election to reconstitute is
made within the applicable time period as set forth above, the Partnership
shall conduct only activities necessary to wind up its affairs.  If such an election is so made, then:

(1)             the reconstituted Partnership shall
continue until dissolved in accordance with Section 8.2;

(2)             the interest of the Withdrawing
Partner shall be treated thenceforth as the interest of a transferee that has
not been admitted as a substitute Partner hereunder; and

(3)             all necessary steps shall be taken
to cancel this Agreement and to enter into and, as necessary, to file new
organizational documents; provided that the right to reconstitute and to
continue the business of the Partnership shall not exist and may not be
exercised unless the Partnership has received an opinion of counsel that the
Partnership would not become taxable as a corporation or otherwise be taxed as
an association for federal income tax purposes upon the exercise of such right
to continue.

 37
 

 

 

Section
8.2.  Liquidation and Termination.

Subject
to Section 8.1, upon dissolution of the Partnership, a representative of the
Partnership selected by all of the Partners (not including any Partner in
breach of any provision of this Agreement at the time of dissolution) shall act
as a liquidator or may appoint one or more Partners as liquidator (“Liquidator”).  The Liquidator shall proceed diligently to
wind up the affairs of the Partnership and make final distributions as provided
herein and in the Act.  The costs of
liquidation shall be borne as a Partnership expense.  Until final distribution, the Liquidator shall
continue to operate the facilities owned by the Partnership with all of the
power and authority of the Partners for a reasonable period of time to allow
for the sale of all or a part of the assets of the Partnership.  The steps to be accomplished by the
Liquidator are as follows:

(a)           as promptly as possible after
dissolution and again after final liquidation, the Liquidator shall cause a
proper accounting to be made of the Partnership’s assets, Liabilities, and
operations through the last day of the calendar month in which the dissolution
occurs or the final liquidation is completed, as applicable;

(b)           the Liquidator shall cause any
notices required by Applicable Law to be mailed to each known creditor of and
claimant against the Partnership in the manner described by such Applicable
Law;

(c)           subject to the terms and conditions
of this Agreement and the Act, the Liquidator shall distribute the assets of
the Partnership in the following order:

(1)           the
Liquidator shall pay, satisfy or discharge from Partnership funds all of the
Liabilities of the Partnership, including, without limitation, all expenses
incurred in liquidation or otherwise make adequate provision for payment and
discharge thereof (including, without limitation, the establishment of a cash escrow
fund for contingent Liabilities in such amount and for such term as the
Liquidator may reasonably determine). 
The Liabilities of the Partnership shall include any Liabilities owing
to a Partner under any contracts entered into between the Partnership and such
Partner; and

(2)           all
remaining assets of the Partnership shall be distributed to the Partners as
follows:

(A)          the
Liquidator may sell any or all Partnership assets, including to one or more of
the Partners (other than any Partner in breach of any provision of this
Agreement at the time of dissolution), and any resulting gain or loss from each
sale shall be computed and allocated to the Capital Accounts of the Partners;

(B)           with
respect to all Partnership assets that have not been sold, the fair market
value of those assets (as determined by the Liquidator using any method of
valuation as it, using its best judgment, deems reasonable) shall be determined
and the Capital Accounts of the Partners shall be adjusted to reflect the
manner in which the unrealized Profits, Losses, income, gain, loss, and
deduction inherent in assets that have not been reflected in the Capital
Accounts previously would be allocated among the Partners if there were a
taxable

 38
 

 

 

Disposition of those assets for the fair market value
of those assets on the date of distribution; and

(C)           Partnership
assets shall be distributed among the Partners ratably in proportion to each
Partner’s positive Capital Account balances, as determined after taking into
account all Capital Account adjustments for the taxable year of the Partnership
during which the liquidation of the Partnership occurs (other than those made
by reason of this clause (2)); and in each case, those distributions shall be
made by the end of the taxable year of the Partnership during which the
liquidation of the Partnership occurs (or, if later, ninety (90) days after the
date of the liquidation).

(D)          All
distributions in kind to the Partners shall be made subject to the Liability of
each Partner for Liabilities theretofore incurred under the terms of this
Agreement or for which the Partnership has committed prior to the date of
dissolution.  The distribution of cash
and/or other assets of the Partnership to a Partner in accordance with the
provisions of this Section 8.2 constitutes a complete return to the
Partner of its Capital Contributions and a complete distribution to the Partner
of its Partnership Interest.  To the
extent that a Partner returns funds to the Partnership, it has no Claim against
any other Partner for those funds.

Section
8.3.  Provision for Contingent Claims

(a)           The Liquidator shall make a
reasonable provision to pay all Liabilities actually known to the Partnership
but for which the identity of the claimant is unknown; and

(b)           If there are insufficient assets to
both pay the creditors pursuant to Section 8.2 and to establish the
provision contemplated by Section 8.3(a), the Liabilities shall be paid
as provided for in accordance to their priority, and, among Liabilities of
equal priority, ratably to the extent of assets therefor.

Section
8.4.  Partner’s
Purchase of Property

In
connection with the winding up of the Partnership, any Partner or its Affiliate
may bid in any open bidding process held by the Liquidator and, if its bid is
determined to be the best, it may purchase any assets of the Partnership upon
dissolution.  The Liquidator shall notify
each Partner in writing of any Third Party offers it receives to purchase any
Partnership assets.  Each Partner shall
have the preferential right to purchase any Partnership assets for the same
price and on the same terms and conditions offered in writing by any Third
Party.  The rights available to the
Partners as set forth in this Section 8.4 shall be exercised by written
election delivered to the Liquidator within thirty (30) Business Days after
such Partner has received notice of the Third Party offer and the failure to
respond to a notice of a Third Party offer shall be deemed a waiver of the
rights under this Section.  If more than
one Partner submits a bid, the Liquidator shall notify each Partner who
submitted a bid of such fact and each such Partner shall be given the
opportunity to submit a second bid on such Partnership assets which must be
higher than the amount bid by the Third Party. 
The Partner who submits the highest second bid shall have the right to
purchase the assets.  Any Partner
entitled to purchase an asset may elect to have part or

 39
 

 

 

all of such asset
distributed to the Partner in kind to the extent of its Capital Account balance
and/or in exchange for the assumption of Liabilities of the Partnership.

ARTICLE 9

POWER OF ATTORNEY

Section
9.1.  Appointment of the President as
Attorney-in-Fact

(a)           Each Partner, by the execution of
this Agreement, irrevocably constitutes and appoints the President as its true
and lawful agent and attorney-in-fact with full power and authority in its
name, place and stead to execute, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents, instruments and
conveyances that may be necessary or appropriate to carry out the provisions or
purposes of this Agreement, including without limitation:

(1)           all certificates and other
instruments, including, but not limited to, counterparts of this Agreement, and
any amendment thereof that the Management Committee deems appropriate to
qualify or continue the Partnership as a partnership, in the jurisdictions in
which the Partnership may conduct the Business;

(2)           any amendment, supplement or
restatement of this Agreement approved by the Partners in accordance with Section
10.12;

(3)           any amendment to this Agreement to
reflect the withdrawal, addition or substitution of a Partner pursuant to this
Agreement;

(4)           all instruments that the Management
Committee deems appropriate to reflect a change or modification of the
Partnership in accordance with the terms of this Agreement; and

(5)           all conveyances and other instruments
that the Management Committee deems appropriate to reflect the dissolution and
termination of the Partnership.

(b)           The appointment of the President by
each Partner as an agent and attorney-in-fact shall be deemed irrevocable and
to be a power coupled with an interest and shall survive the legal incapacity
of any Person hereby giving such power and the Disposition of all or any part of
the Partnership Interest of such Person; provided, however, that in the event
of the Disposition by a Partner of all its Partnership Interest, the foregoing
power of attorney shall survive such Disposition only until such time as the
transferee shall have been admitted to the Partnership as a Partner, and all
required documents and instruments shall have been duly executed, filed and
recorded to effect such substitution.

(c)           The Partners hereby expressly consent
to the delegation of any authority or power of the Partners to the President
and hereby consent to the power and authority granted

 40

 

 

to the President to act for and bind the Partnership as provided in
this Agreement and as approved by the Management Committee.

ARTICLE 10

MISCELLANEOUS PROVISIONS

Section 10.1.  Address
for Notices

All notices,
demands, consents and reports provided for in this Agreement shall be in
writing and shall be given to the parties at the addresses set forth on Exhibit
A or at such other addresses as the Partner may hereafter specify in
writing.  Such notices may be delivered
by email, hand or by telex or facsimile or may be mailed, postage prepaid, by
certified or registered mail, by a deposit in a depository for the receipt of
mail regu­larly maintained by the United States Postal Service.  All notices which are hand delivered or
delivered by telex, telegram or telecopy shall be deemed given on the date of
delivery.  Except as otherwise provided
herein, all notices which are mailed in the manner provided above shall be
deemed given upon receipt.

Section 10.2. 
Additional Documents and Acts

In connection with
this Agreement, as well as all transactions contemplated by this Agreement, the
Partners agree to execute such additional documents and papers, and to perform
and do such additional acts as may be necessary and proper to effectuate and
carry out all of the provisions of this Agreement.

Section 10.3.  Assumed
Name

The Partners or
any authorized Officer of the Partnership shall execute and file all assumed
name certificates necessary or appropriate to conduct the Business as required
by Applicable Law.

Section 10.4. 
Qualification in Foreign Jurisdictions

The Partners or
any authorized Officer of the Partnership shall take such steps as are
necessary or desirable to allow the Partnership to conduct business in any
jurisdiction in which the Partnership conducts the Business.

Section 10.5. 
Application of Wyoming Law

This Agreement,
the application or interpretation hereof and the rights of the Partners shall
be governed exclusively by and construed in accordance with the laws of the
State of Wyoming, without giving effect to conflict of law principles.  With respect to all matters not expressly
provided for in this Agreement, the Act and other applicable partnership laws
of the State of Wyoming shall apply and control.  In the event that any provision in this
Agreement conflicts with the Act, such provision in this Agreement shall
control and govern to the extent permitted by Applicable Law.

 41
  
 

 

 

Section 10.6.  No
Action for Partition

No Partner shall
have any right to maintain any action for partition with respect to the
property of the Partnership.

Section 10.7. 
Creditors Not Benefited

Nothing in this
Agreement is intended to nor shall it benefit any creditor of the
Partnership.  No creditor of the
Partnership will be entitled to require any Partner to solicit or accept any
loan or Additional Capital Contribution for the Partnership or to enforce any
right which the Partnership or any Partner may have against a Partner, whether
arising under this Agreement or otherwise except as required by the Act or
Applicable Law.

Section 10.8.  Benefits
of Agreement Restricted to Partners

Except
as otherwise provided in this Agreement, nothing in this Agreement, expressed
or implied, shall give or be construed to give any Person, other than the
Partners hereto and their permitted successors and assigns, any legal or
equitable right, remedy or Claim under or in respect to this Agreement or under
any covenant, condition or provision contained herein; and all such covenants,
conditions and provisions shall be for the sole benefit of the Partners.

Section 10.9.  Headings
and Sections

The headings in
this Agreement are inserted for convenience only and are in no way intended to
describe, interpret, define, or limit the scope, extent or intent of this
Agreement or any provision hereof.  Unless
the context requires otherwise, all references in this Agreement to Sections or
Articles shall be deemed to mean and refer to Sections or Articles of this
Agreement.

Section 10.10. 
Reservation of Rights

Except
as otherwise provided herein, each Partner reserves to itself all rights,
set-offs, counterclaims, and other remedies and/or defenses which such Partner
is or may be entitled to arising from or out of this Agreement or as otherwise
provided by Applicable Law.

Section 10.11. 
Principles of Construction and Interpretation

In
construing this Agreement, the following principles shall be followed:

(a)           no consideration shall be given to the fact or presumption
that one Partner had a greater or lesser hand in drafting this Agreement;

(b)           examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;

(c)           the word “includes” and its syntactical variants mean
“includes, but is not limited to” and corresponding syntactical variant
expressions; and

 42
  
 

 

 

(d)           the plural shall be deemed to include the singular and
vice versa, as applicable.

Section 10.12. 
Amendment of Agreement

Except as
otherwise expressly set forth in this Agreement, this Agreement may be amended,
supplemented or restated only by a written agreement executed by each of the
Partners.

Section 10.13. 
Acknowledgment

EACH OF THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGES
AND AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THAT IT IS
CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS HEREOF, AND THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT.  EACH PARTY HERETO FURTHER AGREES THAT IT WILL
NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS
AGREEMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISIONS OR THAT SUCH PROVISIONS ARE NOT “CONSPICUOUS”.

Section 10.14.  Gender

Where the context
so indicates, the masculine shall include the feminine and neuter and the
neuter shall include the masculine and feminine.

Section 10.15.  Binding
Effect

Except as herein
otherwise provided to the contrary, this Agreement shall be binding upon and
inure to the benefit of the Partners, their legal representatives, and
permitted successors and assigns.

Section 10.16. 
Severability

If any provision of this
Agreement is held to be illegal, invalid, or unenforceable and such invalidity
or unenforceability has or would have a material and substantial negative
impact on the rights, duties or obligations of any party, then
the parties shall meet to determine if such negative impact can be eliminated
or mitigated.  If such negative impact
can not be eliminated or mitigated to the satisfaction of the party affected
thereby, that party shall have the right to terminate this Agreement.  If any provision of this
Agreement is held to be illegal, invalid, or unenforceable and such invalidity
or unenforceability does not have a material and substantial negative impact on
the rights, duties or obligations of either party, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement, and (iii) the remaining provisions of this Agreement will remain in
full force and effect and will not be affected by the illegal, invalid, or

 43
  
 

 

 

unenforceable provision or by its severance
from this Agreement.  Furthermore, in
lieu of such illegal, invalid, or unenforceable provision, there will be added automatically
as a part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and as may be legal,
valid, and enforceable.  Such illegality,
invalidity or unenforceability shall not affect the validity or enforceability
in that jurisdiction of any other provision of this Agreement nor the validity
or enforceability in other jurisdictions of that or any other provision of this
Agreement.

Section 10.17.  No
Waiver

No waiver, express
or implied, by any Partner of any breach or default by any other Partner in the
performance by the other Partner of its obligations hereunder shall be deemed
or construed to be a waiver of any other breach or default under this
Agreement.  Failure on the part of any
Partner to complain of any act or omission of any other Partner, or to declare
such other Partner in default irrespective of how long such failure continues,
shall not constitute a waiver hereunder. 
No notice to or demand on a defaulting Partner shall entitle such
defaulting Partner to any other or further notice or demand in similar or other
circumstances.

Section 10.18. 
Exhibits and Schedules 

All
exhibits and schedules or descriptions referred to in this Agreement are
expressly incorporated herein by reference as if set forth in full, whether or
not attached hereto.  In the event of any
conflict between the terms and conditions of this Agreement and the terms and
conditions of any exhibit, schedule or other documents referenced herein, the
terms and conditions of this Agreement shall govern and control.

Section 10.19.  Prior
Agreement is Superseded; Entire Agreement

This
Agreement, including all exhibits, schedules and descriptions incorporated
herein and the Contribution Agreement, constitutes and contains the full and
final agreement of the Partners hereto relating to the matters described
herein, and unless otherwise specified herein, this Agreement supersedes and
replaces any and all prior agreements or understandings (whether written or
oral and including that certain letter of intent between Enterprise Products
and TEPPCO Partners, dated February 13, 2006) between or among the Partners
regarding the subject matter hereof and supersedes and replaces in its entirety
the Original Agreement.  It is the
express intention of the Partners that this Agreement and the Contribution
Agreement shall be the sole source of agreement of the parties with respect to
the Partnership and, except to the extent a provision of this Agreement
expressly incorporates federal income tax rules by reference to a section of
the Code or Regulations or is expressly prohibited or ineffective under the
Act, this Agreement shall govern, even when inconsistent with, or different
than, the provisions of the Act or any other law or rule.  The Partners hereby agree that each Partner
shall be entitled to rely on the provisions of this Agreement and no Partner
shall be liable to the Partnership or to any Partner for any action or refusal
to act taken in good faith reliance on the terms of this Agreement.  The Partners and the Partnership hereby agree
that the duties and obligations imposed on the Partners of the Partnership as
such shall be those set forth in this Agreement,

 44
  
 

 

 

which is intended
to govern the relationship among the Partnership and the Partners,
notwithstanding any provision of the Act or common law to the contrary.

Section 10.20. 
Additional Remedies

Unless the context
requires otherwise, the rights and remedies of the Partners hereunder shall not
be mutually exclusive so that the exercise of one or more of the provisions
hereof shall not preclude the exercise of any other provision hereof.

Section 10.21. 
Counterparts

This Agreement may
be executed in counterparts, each of which shall be deemed to be an original
and shall be binding upon the Partner who executed the same, but all of such
counterparts shall constitute one and the same agreement.

Section 10.22. 
Approvals

Except where
otherwise indicated, all approval, consent and other similar rights of the
Partners pursuant to this Agreement may be exercised by such Partners, and such
approvals and consents may be granted or denied by such Partners, in their sole
and absolute discretion.

Section 10.23.  Dispute
Resolution

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 attached hereto and made a part hereof.  The Partners covenant that they shall not
resort to court remedies prior to attempting to resolve such disputes in
accordance with the dispute resolution procedures set forth in Schedule
10.23, or for preliminary relief in aid thereof.  A Partner that fails to comply with the terms
and conditions set forth in Schedule 10.23 or this Section 10.23
shall pay all the legal costs incurred by the other Partners in connection with
the enforcement thereof.  

Section 10.24. 
Confidentiality

Each of the
Partners will maintain in confidence, and use reasonable efforts to cause its
employees, officers, directors, Affiliates, lenders, representatives and agents
to maintain in confidence, any written, oral or other information obtained in
confidence from the Partnership or another Partner in connection with this
Agreement or the transactions contemplated hereby unless such information is
already known to such Partner, is obtained from a person not otherwise bound by
a duty of confidentiality or unless such information becomes publicly available
through no breach of this Agreement by such Partner, unless the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the transactions
contemplated hereby, or unless the furnishing or use of such information is
required by any legal proceeding, rule, regulation or Applicable

 45
  
 

 

 

Law, provided that
prior to furnishing or using such information in connection with any legal
proceeding, rule, regulation or Applicable Law, the disclosing Partner shall
give the non-disclosing Partner prompt written notice in advance of the
required disclosure so that an appropriate protective order may be sought by
the non-disclosing Partner, if appropriate. The Partners will consult with each
other concerning the means by which the Partners’ respective employees,
customers and suppliers and others having dealings with the Partners will be
informed of the transactions contemplated hereby.  This Section 10.24 shall not affect
any other confidentiality agreement among the Partners or their respective
Affiliates and such agreements shall expire or terminate pursuant to the terms
of such agreements.

[Signature page follows]

 46
  

 

 

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

	
  

  	
  PARTNERS:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

  

 

 

 

EXHIBIT A

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS
GATHERING COMPANY

NAMES,
ADDRESSES, CAPITAL CONTRIBUTIONS AND 

SHARING
RATIOS OF THE PARTNERS

Names and
Addresses of the Partners:

TEPPCO GP, Inc. (“TGP”)

1100 Louisiana

Suite 1300

Houston, Texas 77002

Attn: Patricia Totten

Fax: (713) 381-3957

Email:  patotten@teppco.com

TEPPCO Midstream
Companies, L.P. (“TMC”
and collectively with TGP, the “TEPPCO Parties”)

1100 Louisiana

Suite 1300

Houston, Texas 77002

Attn: Patricia Totten

Fax: (713) 381-3957

Email:
patotten@teppco.com

Enterprise
Gas Processing, LLC (“Enterprise”)

1100 Louisiana

Suite 1800

Houston, Texas 77002

Attn: Stephanie
Hildebrandt

Fax: (713) 381-6570

Email:
shildebrandt@eprod.com

 

 

Capital
Contributions and Sharing Ratios of the Partners as of the Effective Date:

	
   

  	
   

  	
  Capital Contributions

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (A)

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (B)

  	
   

  	
  0

  	
  %

  

 

(A)          The Capital
Contributions of the TEPPCO Parties as of the Effective Date shall equal the
sum of (i) $657.1 million (which amount represents the agreed Capital
Contributions made by the TEPPCO Parties prior to the Effective Date other than
with respect to the Jonah Expansion and includes the Agreed Base Amount, the
2006 Well Connect Capital, the Phase IV Capital Contribution, the Jonah Gas
Marketing Contribution and the Intercompany Debt Contribution) (the “Initial TEPPCO Agreed Amount”) and (ii) 50%
of the total amount of Qualified Costs paid (or in the case of the Enterprise
Cost of Capital (defined in Schedule 3.2), which have been incurred) by or on
behalf of Enterprise as of the Effective Date which have been reimbursed (or
are reimbursable) to Enterprise pursuant to Schedule 3.2.

The term “Agreed
Base Amount” means $641.9 million, representing amounts expended by
the TEPPCO Parties prior to April 1, 2006 relating to various capital projects
related to the Jonah Gas Gathering System and which amount was based on the
March 31, 2006 balance sheet of the Partnership.

The term “Intercompany
Debt Contribution” means the conversion into capital of any amounts
payable by the Partnership to TMC, TGP and any of their Affiliates immediately
prior to the Effective Date hereof so that as of the Effective Date the
Partnership does not have any amounts which are payable to TMC, TGP or any of
their Affiliates.

The term “Jonah
Gas Marketing Contribution” means the contribution of Jonah Gas
Marketing, LLC to the Partnership by TMC which is occurring simultaneously with
the execution of this Agreement and will be deemed to have occurred immediately
prior to the Effective Date for purposes of this Agreement.

The term “Phase
IV Capital Contribution” means $11.1, which amount represents the
amounts paid prior by the TEPPCO Parties prior to the Effective Date and which
relate to the completion of the Phase IV Expansion and which amounts are not
already included in the Agreed Base Amount.

The term “2006
Well Connect Capital” means $4.1 million, which amount represents
the amount that was both incurred and paid in 2006 prior to June 30, 2006 by
the TEPPCO Parties and which relate to well connects used to connect additional
wells to the Jonah Gas Gathering System (but which excludes $3.3 million of
such well connect costs which are included in the Agreed Base Amount of $641.9
million).

 

(B)           The
Capital Contributions of Enterprise as of the Effective Date shall equal the
sum of the total amount of Qualified Costs paid (or in the case of the
Enterprise Cost of Capital, which have been incurred) by or on behalf of
Enterprise which are not reimbursable to Enterprise pursuant to Schedule 3.2.

Capital
Contributions and Sharing Ratios of the Partners as of first day of each month
after the Effective Date until the Initial Commencement Date:

	
   

  	
   

  	
  Capital Contributions

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (C)

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (D)

  	
   

  	
  0

  	
  %

  

 

(C)           The Capital Contributions of the TEPPCO
Parties as of the first day of each month after the Effective Date until the
Initial Commencement Date shall equal the sum of (i) the Initial TEPPCO Agreed
Amount and (ii) 50% of the total amount of Qualified Costs paid (or in the case
of the Enterprise Cost of Capital, which have been incurred) by or on behalf of
Enterprise as of each such measurement date which have been reimbursed (or are
reimbursable) to Enterprise pursuant to Schedule 3.2.

(D)          The Capital Contributions of
Enterprise as of the first day of each month after the Effective Date until the
Initial Commencement Date shall equal the sum of (i) the total amount of
Qualified Costs paid (or in the case of the Enterprise Cost of Capital, which
have been incurred) by or on behalf of Enterprise as of each such measurement
date which are not reimbursable to Enterprise pursuant to Schedule 3.2.

Capital
Contributions and Sharing Ratios of the Partners as of the Initial Commencement
Date and as of the first day of each month until the Phase I Commencement Date:

	
   

  	
   

  	
  Capital Contributions

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (E)

  	
   

  	
  (G)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (F)

  	
   

  	
  (H)

  	
   

  

(E)           The
Capital Contributions of the TEPPCO Parties as of the Initial Commencement Date
and as of the first day of each month until the Phase I Commencement Date shall
equal the sum of

 

(i) the Initial TEPPCO Agreed Amount and (ii) 50% of
the total amount of Qualified Costs paid (or in the case of the Enterprise Cost
of Capital, which have been incurred) by or on behalf of Enterprise as of each
such measurement date which have been reimbursed (or are reimbursable) to
Enterprise pursuant to Schedule 3.2.

(F)           The Capital Contributions of
Enterprise as of the Initial Commencement Date and as of the first day of each
month until the Phase I Commencement Date shall equal the sum of the total
amount of Qualified Costs paid (or in the case of the Enterprise Cost of
Capital, which have been incurred) by or on behalf of Enterprise as of each
such measurement date which are not reimbursable to Enterprise pursuant to
Schedule 3.2.

(G)           The Sharing Ratio of the TEPPCO
Parties as of the Initial Commencement Date and as of the first day of each
month until the Phase I Commencement Date shall be equal to one minus the
Enterprise Sharing Ratio determined in accordance with (H) below, such that the
TEPPCO Parties shall be entitled to receive 50% of all Incremental Cash Flow
and (ii) 100% of (a) Total Cash Flow minus (b) the Incremental Cash Flow, in
each case which occurs after the Initial Commencement Date until the Phase I
Commencement Date.  The term “Incremental Cash Flow” means the incremental cash flow of
the Partnership which is generated by the incremental revenue attributable to
those portions of the pipeline portion of the Jonah Expansion which have been
placed in service as of the applicable measurement date and prior to the Phase
I Commencement Date, all as determined by the Management Committee.  The term “Total Cash
Flow” shall mean the cash flow of the Partnership which is generated
by revenue other than the incremental revenue attributable to those portions of
the pipeline portions of the Jonah Expansion which have been placed in service
as of the applicable measurement date and prior to the Phase I Commencement
Date, all as determined by the Management Committee.

(H)          The Sharing Ratio of Enterprise as of
the Initial Commencement Date and as of the first day of each month until the
Phase I Commencement Date shall equal (i) 50% of the Incremental Cash Flow
divided by (ii) the Total Cash Flow, such that Enterprise shall be entitled to
receive 50% of the Incremental Cash Flow which occurs after the Initial
Commencement Date until the Phase I Commencement Date.

Capital
Contributions and Sharing Ratios of the Partners as of the Phase I Commencement
Date and as of the first day of each month until the earlier of the Phase II
Commencement Date and the Cost Sharing Date (defined in Schedule 3.2):

	
   

  	
   

  	
  Capital Contributions

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (I)

  	
   

  	
  (K)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (J)

  	
   

  	
  (L)

  	
   

  

(I)            The
Capital Contributions of the TEPPCO Parties as of the Phase I Commencement Date

 

 

and as of the
first day of each month until the earlier of the Phase II Commencement Date and
the Cost Sharing Date shall equal the sum of (i) the Initial TEPPCO Agreed
Amount and (ii) 50% of the total amount of Qualified Costs paid (or in the case
of the Enterprise Cost of Capital, which have been incurred) by or on behalf of
Enterprise as of such measurement date which have been reimbursed (or are
reimbursable) to Enterprise pursuant to Schedule 3.2.

(J)            The Capital Contributions of
Enterprise as of the Phase I Commencement Date and as of the first day of each
month until the earlier of the Phase II Commencement Date and the Cost Sharing
Date shall equal the sum of the total amount of Qualified Costs paid (or in the
case of the Enterprise Cost of Capital, which have been incurred) by or on
behalf of Enterprise as of such measurement date which are not reimbursable to
Enterprise pursuant to Schedule 3.2.

(K)          The Sharing Ratio of the TEPPCO
Parties as of the Phase I Commencement Date and as of the first day of each
month until the earlier of the Phase II Commencement Date and the Cost Sharing
Date shall equal one minus the Enterprise Sharing Ratio as determined in
accordance with (L) below as of each such applicable date.

(L)           The Sharing Ratio of Enterprise as of
the Phase I Commencement Date and as of the first day of each month until the
earlier of the Phase II Commencement Date and the Cost Sharing Date shall equal
(i) the total amount of Qualified Costs paid (or in the case of the Enterprise
Cost of Capital, which are incurred) by Enterprise as of the applicable
measurement date which are not reimbursable to Enterprise pursuant to Schedule
3.2 divided by (ii) the sum of (a) the Initial TEPPCO Agreed Amount and (b) the
total amount of Qualified Costs paid (or in the case of the Enterprise Cost of
Capital, which have been incurred), as of each such applicable measurement
date.

Capital
Contributions and Sharing Ratios of the Partners as of the earlier of the Phase
II Commencement Date and the Cost Sharing Date (defined in Schedule 3.2) and
thereafter until any Capital Contribution is made to the Partnership other than
in accordance with such Sharing Ratio:

	
   

  	
   

  	
  Capital Contributions

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (M)

  	
   

  	
  (O)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (N)

  	
   

  	
  (P)

  	
   

  

(M)         The
Capital Contributions of the TEPPCO Parties as of the earlier of the Phase II
Commencement Date and the Cost Sharing Date shall be calculated as of such date
and shall equal the sum of (i) the Initial TEPPCO Agreed Amount and (ii) 50% of
the total amount of Qualified Costs paid (or in the case of the Enterprise Cost
of Capital Contribution, which have been incurred) by or on behalf of
Enterprise as of such measurement date which have been

 

 

reimbursed (or are
reimbursable) to Enterprise pursuant to Schedule 3.2.

(N)          The Capital Contributions of
Enterprise effective upon the earlier of the Phase II Commencement Date and the
Cost Sharing Date shall be calculated as of the such date and shall equal the
total amount of Qualified Costs paid (or in the case of the Enterprise Cost of
Capital, which have been incurred) by or on behalf of Enterprise through such
date and which are not reimbursable to Enterprise pursuant to Schedule 3.2.

(O)          In the event that the Cost Sharing
Date occurs prior to the Phase II Commencement Date, the Sharing Ratio of the
TEPPCO Parties (the “TEPPCO Percentage”)
shall equal one minus the Enterprise Percentage (defined below).  In the event the Cost Sharing Date does not
occur prior to the Phase II Commencement Date, the Sharing Ratio of the TEPPCO
Parties shall equal one minus the Enterprise Phase II Percentage (defined
below).

(P)           In the event that the Cost Sharing
Date occurs prior to the Phase II Commencement Date, the Sharing Ratio of
Enterprise as of the Cost Sharing Date (the “Enterprise
Percentage”) shall equal
(x) $207.6 million divided by (y) the sum of (i) the Initial TEPPCO Agreed
Amount and (ii) $415.2 million.  In the
event the Cost Sharing Date does not occur prior to the Phase II Commencement
Date, the Sharing Ratio of Enterprise (the “Enterprise
Phase II Percentage”) shall equal (x) the total amount of Qualified
Costs paid (or in the case of the Enterprise Cost of Capital, which have been
incurred) by Enterprise which are not reimbursable to Enterprise pursuant to
Schedule 3.2 divided by (y) the JV Total Capital Investment.  The term “JV Total
Capital Investment” as of the applicable date shall mean the sum of
(i) the Initial TEPPCO Agreed Amount and (ii) the total amount of Qualified
Costs paid as of the date of the Phase II Commencement Date.  Notwithstanding the foregoing, in the event
that the Phase II Commencement Date occurs prior to the Cost Sharing Date and
to the extent Qualified Costs are incurred to complete the Jonah Expansion
which are not paid as of the Phase II Commencement Date, such costs, when they
become known shall be included with retroactive effect (and after giving effect
to the applicable reimbursement provisions of Schedule 3.2) in both the
numerator and denominator of the foregoing as if such Qualified Costs had been
paid as of the Phase II Commencement Date.

Sharing
Ratios of the Partners after the Phase II Commencement Date in the event that
any Capital Contributions are made to the Partnership other than in accordance
with the then current Sharing Ratio:

	
  

  	
   

  	
  Sharing Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TEPPCO Parties

  	
   

  	
  (Q)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Enterprise

  	
   

  	
  (R)

  	
   

  

(Q)          In
the event that any Capital Contributions are made to the Partnership other than
in accordance with the then current Sharing Ratio of the Partners and other
than as contemplated by

 

 

the Jonah
Expansion reimbursement provisions, the Sharing Ratio of the TEPPCO Parties
will be adjusted to a percentage determined by dividing (i) the sum of (a) the
Initial TEPPCO Agreed Amount and (b) the total Capital Contributions made from
the Effective Date to such date by the TEPPCO Parties by (ii) the sum (a)
$641.9 million (which amount represents the agreed Capital Contributions made by
the TEPPCO Parties prior to the Effective Date other than with respect to the
Jonah Expansion and includes the Agreed Base Amount of $641.9 million, the 2006
Well Connect Capital, the Phase IV Capital Contribution, the Jonah Gas
Marketing Contribution and the Intercompany Debt Contribution) and (b) all
Capital Contributions made by all of the Partners from the Effective Date to
such date, in each case after taking into account any modification necessary to
fairly and equitably reflect the percentage of participation elected by the
TEPPCO Parties relative to Enterprise.

(R)           In the event that any Capital
Contributions are made to the Partnership other than in accordance with the
then current Sharing Ratio of the Partners and other than as contemplated by
the Jonah Expansion reimbursement provisions, the Sharing Ratio of Enterprise
will be adjusted to a percentage determined by dividing (i) the total Capital
Contributions made as of such date by Enterprise by (ii) the sum (a) the
Initial TEPPCO Agreed Amount and (b) all Capital Contributions made by all of
the Partners from the Effective Date to such date, in each case after taking
into account any modification necessary to fairly and equitably reflect the
percentage of participation elected by the TEPPCO Parties relative to
Enterprise.

 

 

SCHEDULE
3.2

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS GATHERING COMPANY

CAPITAL CONTRIBUTIONS

1.             Enterprise
agrees to make such Capital Contributions to the Partnership which are
necessary to fund one hundred percent (100%) of the Qualified Costs payable on
or before the Effective Date and the TEPPCO Parties agree to reimburse
Enterprise for fifty percent (50%) of such payable Qualified Costs in
accordance with this Schedule 3.2. 
Enterprise agrees to fund (by Capital Contribution or otherwise) fifty
percent (50%) of the Qualified Costs which are payable on and after the
Effective Date and the TEPPCO Parties agree to fund (by Capital Contribution or
otherwise) fifty percent (50%) of the Qualified Costs which are payable on and
after the Effective Date up to the Contemplated Total Expansion Capital.  The Qualified Costs shall be reimbursed by
the TEPPCO Parties in accordance with the following schedule:

(i)                                     fifty
percent (50%) of the Qualified Costs actually incurred by Enterprise thru the
Effective Date (through August 31, 2006 in the case of the Enterprise Cost of
Capital), to be paid on September 1, 2006; and

(ii)                                  to
the extent that Enterprise makes Capital Contributions to the Partnership which
fund the Qualified Costs that are subject to reimbursement but have not been so
reimbursed (i.e., Qualified Costs payable prior to the Effective Date, which
are reimbursable but which were not previously reimbursed), the TEPPCO Parties
shall reimburse Enterprise for fifty percent (50%) of such Qualified Costs
within thirty (30) days from receipt of invoice(s) setting forth such Qualified
Costs.

Notwithstanding anything in this Schedule 3.2
to the contrary, in the event there are Excess Expansion Costs, Enterprise agrees
to fund the Enterprise Percentage (defined in Exhibit A) of such Excess
Expansion Costs and the TEPPCO Parties agree to fund the TEPPCO Percentage
(defined in Exhibit A) of such Excess Expansion Costs effective as of the date
(the “Cost Sharing Date”) of each payment in
excess of the Contemplated Total Expansion Capital.  For the avoidance of doubt, (i) amounts
funded by Enterprise (or its Affiliates) which are

 

 

subject to reimbursement by the TEPPCO Parties shall
be treated as a Capital Contribution on behalf of such parties even if such
reimbursement payment is made directly to Enterprise or any of its Affiliates
and (ii) amounts funded directly by Enterprise and the TEPPCO Parties pursuant
to this Schedule 3.2 shall be considered Capital Contributions on behalf
of such parties. For the further avoidance of doubt, after the Effective Date,
Enterprise and the TEPPCO Parties shall each directly fund (by Capital
Contribution to the Partnership or otherwise), 50% of the Qualified Costs
payable in connection with the Jonah Expansion up until the total amount of
Qualified Costs paid in connection with the Jonah Expansion exceed the
Contemplated Total Expansion Capital at which time Enterprise will directly
fund (by Capital Contribution to the Partnership or otherwise) the Enterprise
Percentage of the Excess Expansion Costs and the TEPPCO Parties will directly
fund (by Capital Contribution to the Partnership or otherwise) the TEPPCO
Percentage of the Excess Expansion Costs.

2.                                       If
there is an Additional Expansion, each of the Partners agree to fund such
Additional Expansion in proportion to their relative Sharing Ratios (or their
Final Ownership Interest (defined below) if such Additional Expansion were to
occur prior to the earlier of the Phase II Commencement Date or the Cost
Sharing Date in which event the contribution and reimbursement provisions set
forth below for well connect capital and other capital projects shall apply in
like manner).  It is expressly agreed
that any Partner may decline to fund its proportionate share of such Additional
Expansion, or to participate at less than its proportionate share of such
Additional Expansion.  In such event,
such Partner’s Partnership Interest shall be adjusted in accordance with the
applicable provisions of Exhibit A and as may further be determined by
the Management Committee to fairly and equitably reflect the Additional Capital
Contributions made by such Partners. Notwithstanding the foregoing, with
respect to well connects to the Jonah Gas Gathering System and other
non-expansion capital projects which are commenced after the Effective Date,
each of the TEPPCO Parties and Enterprise agree to fund such well connects and
other capital projects in proportion to their Final Ownership Interest, unless
otherwise agreed by the parties, it being further agreed that the TEPPCO
Parties will fund 100% of such costs up until the Phase I Commencement Date at
which time Enterprise will, within 30 days of receipt of an appropriate invoice
therefore which has been approved by the Management Committee, reimburse the
TEPPCO Parties for the percentage of such costs which equal Enterprise’s
Sharing Ratio as of the Phase I Commencement Date and that as of the earlier of
the Phase II Commencement Date and the Cost Sharing Date, Enterprise will in
like manner reimburse TEPPCO for the remainder of Enterprise’s portion of such
costs based on Enterprise’s Final Ownership Interest.  The term “Final
Ownership Interest” shall mean the Sharing Ratio of the respective
parties as of the earlier to occur of the Cost Sharing Date and the Phase II
Commencement Date; provided that if any of the parties make any Capital
Contribution which is not in proportion to their relative ownership interest
other than as contemplated with respect to the Jonah

 

 

Expansion, after the date of such Capital Contribution the cost sharing
for such projects shall be based on the Final Ownership Interest as may be
further adjusted pursuant to the terms of this Agreement.

3.             The TEPPCO Parties
shall have a unilateral right to (i) decline to participate in any required
Capital Expenditure associated with any portion of an EnCana Expansion or (ii)
participate in such EnCana Expansion in any percentage it determines up to the
amount of its Sharing Ratio multiplied by such amounts required to fund such
EnCana Expansion; provided that, if an EnCana Expansion is undertaken prior to
the earlier of the Phase II Commencement Date and the Cost Sharing Date, TEPPCO’s
maximum percentage of participation shall be based on its Final Ownership
Interest, as may later be determined.  In
the event the TEPPCO Parties decline to contribute their full amount of any
Additional Capital Contributions with respect to an EnCana Expansion based on
their Sharing Ratios, Enterprise will fund the remainder of such EnCana
expansion by making all necessary Additional Capital Contributions without
reimbursement by the TEPPCO Parties and Enterprise’s Partnership Interest shall
be adjusted in accordance with the applicable provisions of Exhibit A
and as may further be determined by the Management Committee to fairly and
equitably reflect the Additional Capital Contributions made by such Partners.

4.             No Partner shall be
required to make any Capital Contribution (other than the Contributions
contemplated by paragraph 1 of this Schedule 3.2 and any other
Contribution to which such Partner has agreed in writing or otherwise consented
to) unless such Capital Contribution has been approved by a majority of the
Management Committee Representatives.  If
any Partner has the right to decline to fund its proportionate share of any
required Capital Contribution, such Partner must provide written notice to the
other Partners of its election not to participate within ten (10) Business Days
of such Partner’s receipt of a written statement from the Partnership detailing
such Capital Contribution or such Partner shall be deemed to have waived such
right and shall fund its proportionate share of the required Capital
Contribution together with the other Partners.

5.             For the avoidance
of doubt, TMC will contribute all of its interest in Jonah Gas Marketing, LLC
to the Partnership pursuant to the Contribution Agreement on the Effective Date
and prior to the Effective Date the TEPPCO Parties will cause the conversion of
any amounts payable by the Partnership to the TEPPCO Parties or their
Affiliates into Partner’s capital of the Partnership.  The Jonah Gas Marketing Contribution shall be
considered to be a Capital Contribution of TMC which occurred prior to the
Effective Date of this Agreement for all purposes of this Agreement.

6.             For the avoidance
of doubt, the parties calculated the Agreed Base Amount included in the Sharing
Ratio calculations set forth on Exhibit A based on the March 31, 2006 balance
sheet of the Partnership and such amount includes the 

 

 

following:

	
  Current Assets

  	
   

  	
  $

  	
  32,520,000

  	
   

  
	
  Property Plant
  and Equipment (Gross Cost)

  	
   

  	
  $

  	
  412,266,000

  	
   

  
	
  Intangible
  Assets

  	
   

  	
  $

  	
  222,800,000

  	
   

  
	
  Other Assets

  	
   

  	
  $

  	
  6,157,000

  	
   

  
	
  Current
  Liabilities

  	
   

  	
  $

  	
  (31,785,000

  	
  )

  
	
  Total

  	
   

  	
  $

  	
  641,958,000

  	
   

  

It is the parties intent that any amounts which were
included in the calculation set forth above shall be paid by the TEPPCO Parties
and not by Enterprise or the Partnership such that at the Effective Date the
TEPPCO Parties shall have paid (or will be responsible for paying) any amounts
which may be due and which relate to the assets included in the above
calculation.  In addition, with respect
to the 2006 Well Connect Capital and the Phase IV Capital Contribution, it is
the intent of the parties that the TEPPCO Parties will be responsible for
paying 100% of any such amounts included in the 2006 Well Connect Capital or
the Phase IV Capital Contribution and to the extent that any of such costs were
included in the calculation set forth above, the TEPPCO Parties agree that the
2006 Well Connect Capital and/or the Phase IV Capital Contribution will be
appropriately reduced.  To the extent
that there are any other non-expansion capital project costs which are not
included as 2006 Well Connect Costs or as part of the Phase IV Capital
Contribution or as part of the Agreed Base Amount referred to above and which
have not been paid as of the Effective Date, the parties agree to contribute to
such costs in the same manner as if such costs were non-expansion capital
projects which are commenced after the Effective Date in accordance with
paragraph 2 above.

 

 

SCHEDULE
4.2

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS GATHERING COMPANY

MANAGEMENT
AUTHORIZATION POLICY

 

 

Enterprise
Products GP, LLC

Enterprise
Products Partners L.P.

Enterprise
Products Operating L.P.

Management Authorization Policy

Effective Date: February 22,
2006

PURPOSE

The
purpose of this policy (this “Policy”) is the delegation by the Board of
Directors (the “Board”) of Enterprise Products GP, LLC (“EPGP”) of approval
limits for the various officers (the “Officers”) of EPGP, Enterprise Products
Partners L.P. (“EPPLP”), Enterprise Products Operating L.P. (“EPOLP”) and their
respective subsidiaries (collectively or individually, as the context may
require, “Enterprise”). This Policy is designed to promote the approval process
of expenditures at levels which the Board believes is adequate for the
efficient operation of Enterprise, while ensuring that material or significant
expenditures will continue to be subject to Board approval.

This
Policy is not a substitute for good judgment and, when a situation dictates,
action may be required which is contrary to this Policy. In situations where
persons may be subjected to injury or where financial losses are likely to
occur, operational and financial requirements take precedence over
administrative requirements. In these circumstances, the highest-ranking
individual present may make commitments without normal approvals provided the
approvals are subsequently obtained at the earliest possible time.

Other
related and more detailed policies and procedures exist, or will exist, for
specific purposes such as marketing, accounting and purchasing materials which
may be obtained by contacting the Vice President - Human Resources. An example
of this is the Financial Commodity Policy of Enterprise that encompasses risk
management, marketing and the use of derivatives. These policies provide more
specific guidance about different business areas and should be used in
conjunction with this Management Authorization Policy.

OFFICER AUTHORITY AND DELEGATION

Officers have the authority under this Policy as,
and to the extent, reflected in the Officer Limits of Authority attached as Exhibit
A (the “Officer Authority Limits”) and may generally delegate to other
non-Officer employees of EPCO, Inc. up to one-half of their Officer Authority
Limits. Delegations shall be made in accordance with reporting levels within
the Officer’s functional area and only for those items for which sub-delegation
is allowed. Delegation by Officers to non-Officers for items such as
administrative or operating expenses shall not exceed Ten Thousand Dollars
($10,000.00); provided, however, this restriction or prohibition shall not
apply to the delegation by Officers to non-Officers of the approval for payment
of administrative or operating expenses, non-AFE PO requisitions or payments on
Service Contracts, leases and rentals. Higher limits or specific variations in
limits of authority must be approved by the Chairman, the Chief Executive
Officer (“CEO”) or the Chief Operating Officer (“COO”). The Management
Authorization Form for Delegation of Authority (the “Authorization Form”), the
current form of which is attached as Exhibit B, shall be used to document
delegation to other personnel.

 

 

The delegating Officer
will retain a copy of each Authorization Form. The original will be sent to the
Risk Control Director to ensure the delegation is within this Policy.  The Risk Control Director will then have the
authorization form prepared for electronic “read only” access by Accounting and
Treasury for matching payment approvals with appropriate levels of
authorization. A copy of each Authorization Form will also be sent by the
Delegating Officer to the Legal Department. If an Officer wishes to change an
individual’s authority, such Officer must prepare and distribute, as set forth
above, a new Authorization Form.

A periodic report showing
delegated authorities will be distributed no less frequently than quarterly by
Risk Control to the Delegating Officers to help ensure documentation presented
for payment is properly authorized in accordance with this Policy.

Upon
a change in employment of an individual with authority granted or delegated
under this Policy, the delegating Officer will notify Risk Control to delete or
modify, as appropriate, the employee’s electronic “read-only” authorization
form and will notify the Legal Department of such change. Human Resources will
also notify Risk Control of such changes to further ensure authorizations are
maintained only for the employee’s current position.

If an Officer becomes
aware of a problem or potential problem related to delegated authorities, such
Officer should request their personnel and Accounts Payable to route some or
all invoices or requests for payment to the Officer for review and approval
prior to release of payment. Such routing should continue until the Officer has
found and corrected the problem or has reasonably determined that no problem
exists and that the authorization process is working as intended.

The following is a list
of the basic authorization levels and types of expenditures addressed by this
Policy:

AUTHORIZATION LEVELS

1.     Chairman

2.     CEO, COO and Management Directors (and
officers who are management directors)

3.     Executive Vice Presidents

4.     Senior Vice Presidents

5.     Vice President

All other levels are to
be delegated.

FUNDS RELEASE PROCESS

Funds for AFEs will not
be released until the project is approved. Project documentation submitted for
AFE approval should include a substantial description, explanation justifying
the need for the expenditure and properly prepared economic support.

 2
 

 

 

EXPENDITURE DEFINITIONS AND RELEVANT INFORMATION

1.              AFEs are typically
for capital or large expense items that include economic analysis and other
critical documentation such as material and labor estimates, project maps and
detailed engineering plans used to justify the decision for the expenditure.  AFEs by nature have multiple signatures for
approval such as the requesting party, their supervisor, etc.  For Bank and Finance related AFEs, please
refer to Item 14 of Exhibit A.

2.              Charges to Approved AFEs: Spending limits on these charges aid management in monitoring
actual costs against the approved AFE amounts budgeted for the project.

3.              Over Expenditures: As
soon as it becomes apparent that a project will exceed the original AFE,
and the variance amount exceeds the lesser of 10% of the original AFE cost or
One Hundred Thousand Dollars ($100,000), a supplemental AFE is required
with the appropriate level(s) of approval. 
The supplemental AFE must be made for not only the anticipated increase
over original project cost, but also include the original cost and any
information pertaining thereto. 
Supplemental AFEs for over expenditures estimated to be less than
$10,000 in excess of the original AFE amount can be approved by a senior
vice-president responsible for that respective area such as the Senior
Vice-President of Engineering.

4.              Natural gas, natural
gas liquids (“NGLs”), crude oil and refined products agreements and joint
venture agreements: This includes all types of natural gas, NGL, crude oil
and refined products sales, purchase, exchange, transportation, storage, tolling,
processing, fractionation, and compression agreements (contracts).  These contracts and agreements are normally
authorized and approved in writing by middle to upper level management in the
functional marketing area such as the Vice President-Fractionation, Senior Vice
President-Gas Liquids Marketing and Senior Vice President-Gas Processing.

5.              Payments under
natural gas, NGL, crude oil and refined products contracts: If the payment
is the direct result of a specific contract for a specific transaction, and the
contract has been properly approved, additional approval for release of these
funds is not required.  Otherwise, the
appropriate level of management must approve payment.

6.             Service contracts,
leases and rental agreements:    Service
contracts, leases and rental agreements can be made at various locations for
many reasons but, in any event, are subject to the prior written approval of
the Legal Department.   For this reason,
the authorization and approval levels are intentionally much more limited for
such items than for AFEs or gas contracts.

7.             Non-AFE purchase
order requisitions, operating and administrative expenses and charges to
service contracts:  Due to the number
of possible transactions, this classification provides the most restrictive level
of authorization and approval.

8.             Payments for
insurance premiums and taxes:  These
expenditures are infrequent by comparison to other expenses and require
specific or technical knowledge as to their appropriateness, and thus should
generally not be delegated.

 3
 

 

 

9.             Sales or disposition of assets:  Sale or disposition of assets with a sale
price and or fair market value equal to or greater than One Hundred Thousand
Dollars ($100,000) also requires the written approval of the CEO, the COO or
the Chief Legal Officer and the Chief Financial Officer (the “CFO”).  Any agreement for the sale or disposition of
assets requires the prior written approval of the Chief Legal Officer or his
delegate.

10.       Guaranties: All guaranties in which Enterprise is the
guarantor shall be approved in writing, as to the amount and term thereof, by
the Treasurer, or his delegate, and as to the form thereof, by the Chief Legal
Officer, or his delegate, and shall be executed only by the CFO, or in the CFO’s
absence, the CEO, the COO, the Treasurer or the Chief Legal Officer.

11.       Confidentiality Agreements,
Employment Agreements and Consulting Agreements: Confidentiality agreements, employment
agreements and consulting agreements shall be approved in writing by the Chief
Legal Officer or his delegate and shall be executed only by the CEO, the COO,
the CFO or the Chief Legal Officer or their respective delegates.

12.       Legal Services; Legal Fees:  Only the Chief Legal Officer or his delegates
are authorized to (i) retain any law firm or attorney for the providing of
legal services to Enterprise and (ii) approve invoices for legal fees and
expenses.

CONTRACT ROUTING

All contracts for the purchase of commodities and
other goods or services (other than those transactions which are in the ordinary
course of Enterprise’s business), Enterprise guarantees, letters of intent and
indications of interest (except confirmations and unchanged standard agreements
previously approved by the Legal Department) shall be approved in writing by
the Legal Department and relevant administrative support (e.g. Treasury, Human
Resources, Accounting, Corporate Risk, Contract Administration, Information
Technology, etc.) management prior to execution. For example, joint venture
agreements must be reviewed and approved by the CFO, the Chief Legal Officer
and the Vice President-Corporate Risk, or their respective delegates, for
proper financial, legal, accounting, tax, and insurance considerations. Another
example is service agreements, which must be reviewed and approved by the
Corporate Risk and Legal Departments prior to execution. For any contract
requiring an extension of credit, the approving Officer must specifically
obtain credit approval from the Credit Department within the Treasury
Department.

Appropriate
Marketing and Supply personnel must approve all natural gas and NGL contracts
with a term greater than one month or a value greater than One Hundred Thousand
Dollars ($100,000) that could expose Enterprise to fixed price or option risk
on price or volume.

All
commodity contracts must be provided to Contract Administration no later than
the day the transaction commitment occurs.

EXPENSE REPORTING

Expense
reports (including Cash Advances) must be approved by the employee’s immediate
supervisor who has a MAP form on file or, in the supervisor’s absence, the next
higher level.

 4
 

 

 

Expense
reports totaling more than One Thousand Dollars ($1,000) must be approved by a
Vice President or higher.

For
non-officers, the One Thousand Dollar limit is considered to be included in the
line item beginning with “Operating Expenses” on the Management Authorization
Form for the Delegation of Authority. 
For limits greater than a thousand dollars, please specify under the
line item “Other”.  Details of employee
expense reporting are contained in the Enterprise Human Resources Policy for
Expense Accounts.

INVOICE APPROVAL

Regarding expenditures for operating expenses or
capital projects, a duly authorized member of management must approve all
purchase requisitions, purchase orders (PO’s) and invoices without properly
approved purchase orders. Accounting shall match the purchase requisition,
purchase order and invoices with authorization forms as necessary to determine
proper approval, and compare the receiving report for goods purchased to the
vendor invoice before releasing the invoice for payment. Individuals approving
invoices not generated by purchase orders are responsible for ensuring that the
goods or services invoiced have been properly received by Enterprise and that
such goods and services are required in the course of Enterprise’s business.
The individual approving the invoice should be certain that the charges are
correct as billed. If expenditure requires an AFE, the invoice should not be
processed until an AFE is properly approved.

MAJOR EXPENDITURE MONITORING

The
payment of expenditures related to new commercial operating arrangements or
contracts (which expenditures have been approved under an appropriate AFE)
should be reviewed and approved for a period of at least three months from the
beginning of operations or inception of the contract, by the Officer (or by the
manager or director who has been delegated such authority) in the commercial
group responsible for obtaining the business. This will help ensure that
expenditures are being made in accordance with the intent of the arrangement or
contract.

CHARITABLE CONTRIBUTIONS

The
Chairman, the CEO, the COO or the management director shall, in addition to the
appropriate dollar level approval, be required to approve contributions greater
than $500 for charitable purposes, such as educational institutions and other
publicly or privately funded special interest support organizations.

FINANCE RELATED TRANSACTIONS

The
CFO or his delegate must approve all financial guarantees of obligations for
any investments, financial obligations, long-term contracts including leases,
any non-trade credit transactions and International Swap and Derivative
Agreements (ISDA’s).

	
  

  	
  APPROVED BY:

  
	
   

  	
   

  
	
   

  	
  The Board of
  Directors of

  
	
   

  	
  Enterprise
  Products GP, LLC

  

 

 5

 

Enterprise Products GP, LLC

Enterprise Products Partners L.P.

Enterprise Products Operating
L.P.

Officer Limits of Authority

Exhibit  A

MAXIMUM AUTHORIZATION LEVELS*

	
  TYPES OF EXPENDITURES*

  	
   

  	
  Chairman

  	
   

  	
  CEO, COO and

  Management

  Directors (and

  officers who are

  management

  directors)

  	
   

  	
  Executive Vice

  Presidents

  	
   

  	
  Senior Vice

  Presidents

  	
   

  	
  Vice Presidents

  
	
  1. AFEs: (a) 
  (A) Budgeted  (B)
  Un-budgeted-operated facility  (C)
  Un-budgeted - non-operated facility (D) Reimbursable

  	
   

  	
  $100MM

  $100MM

  $100MM

  Full

  	
   

  	
  $100MM (b)

  $50MM (c)

  (applicable to

  A, B, C and

  D)

  	
   

  	
  $100M

  $50M

  $100M

  $100M

  	
   

  	
  $50M

  $25M

  $50M

  $50M

  	
   

  	
  $25M

  $12.5M

  $25M

  $25M

  
	
  2. Contracts with contingent financial obligations,
  take or pay or capacity reservation > 1
  year (total dollar obligation, not annual)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  S1.25MM

  	
   

  	
   

  
	
  3. Charges to approved AFEs up to the amount of the
  AFE

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full for assigned
  area

  	
   

  	
  Full for assigned
  area

  
	
  4. Supplemental AFEs for over-expenditures (a)

  	
   

  	
  AFE with

  Supplemental

  not to exceed

  maximum set

  forth in Item 1

  above

  	
   

  	
  AFE with

  Supplemental

  not to exceed

  maximum set

  forth in Item 1

  above

  	
   

  	
  AFE with

  Supplemental

  not to exceed

  maximum set

  forth in Item 1

  above

  	
   

  	
  AFE with

  Supplemental

  not to exceed

  maximum set

  forth in Item 1

  above

  	
   

  	
  -0-

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5. Contracts for sale or purchase
  of natural gas,
  NGLs, crude oil or refined products (d) (e)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Commercial

  SVP’s

  $5MM &< lyr
  or

  $500M

  	
   

  	
  Commercial VP’s

  $2.5MM&<6 mo. or

  $500M

  
	
  6. Contracts for transportation,
  exchange, gathering, compression,
  processing,  fractionation, or storage
  (e) (f)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Commercial Sr

  VP’s 1 year

  	
   

  	
  Commercial VP’s 6
  mos.

  
	
  7. Payments on natural gas, NGL, crude oil  and refined products contracts and contracts 
  related to financial instruments (g)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  $5MM

  	
   

  	
  Accounting

  VP’s$2.5MM

  
	
  8. Service contracts, leases & rentals - annual
  amount (h)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  $200M

  	
   

  	
  $100M

  
	
  9. Non-AFE purchase requisitions, operating & administrative expenses, & payments
  on previously authorized service
  contracts, leases & rentals (i)
  (j) (k) (p)

  	
   

  	
  $100MM

  	
   

  	
  $100MM (b)

  $50MM (c)

  	
   

  	
  $5MM

  	
   

  	
  $100M

  	
   

  	
  $50M

  
	
  10. Sale or Disposition of Assets (l)

  	
   

  	
  $100MM

  	
   

  	
  $100MM (b)

  $50MM (c)

  	
   

  	
  $10MM

  	
   

  	
  $100M

  	
   

  	
  $100M

  
	
  11. Insurance premiums and bonds (m)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
   

  
	
  12. Tax payments: (A) Franchise,
  income, payroll and
  ad valorem (B) Sales and use tax payments (C) Production/severance taxes
  collected as first purchaser that are a pass t through to the respective
  state

  	
   

  	
  Full

  Full

  Full

  	
   

  	
  Full

  Full

  Full

  	
   

  	
  Full

  Full

  Full

  	
   

  	
   

  	
   

  	
  Controller $1MM

  Accounting VPs $1MM

  Accounting VPs $1MM

  
	
  13. Settlement of claims and lawsuits** (in payments or value of claims waived): (n)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  $100M

  	
   

  	
  $100M

  
	
  14. Finance and Bank Related Transactions: (o)

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
  Full

  	
   

  	
   

  	
   

  	
   

  
	
  * Authorizations are subject to notes (a) through (p)
  that follow ** Sub-delegation not
  allowed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 6
 

 

 

NOTES TO AUTHORIZATION LEVELS

(a)        Must comply with the Funds Release Process as
described in the Management Authorization Policy.   It is understood that Officers may only
approve AFEs relating to their assigned area of responsibility.  In order for AFEs to be approved by Officers other than
the Chairman, the CEO, or the COO, the AFE should be approved with joint
concurrence of Officers in Operations, Business Management, Engineering, and
Finance.  Supplemental AFEs for over expenditures estimated to be less than
$10,000 in excess of the original AFE amount can be approved by a senior
vice-president for that respective area such as the Senior Vice-President of
Engineering.  

(b)    Requires the approval of any two (2) of the Chairman, the CEO, the COO
and/or management directors (and officers who are management directors) with
the approval of an officer in Finance.

(c)    The Chairman, the CEO, the COO or any management director
(or any officer who is a management director), individually, can approve with
the approval of an officer in Finance.

(d)        The authorization amount
is the total to be expended during the term of the contract.

(e)        All contract approvals are subject to the Contract
Routing requirements stated in the Management Authorization Policy.

(f)         Exception - Any authorized personnel in this
category may approve or delegate approval for contracts other than storage with
volumes of 500 Bbls per day, 25 MMcf per day or less regardless of the term of
the contract.
[See note (e)]

(g)        Payments to Shell and Shell affiliates may be
approved by Accounting Vice Presidents up to a maximum of $30MM. Payments over
$30MM must be approved by an Accounting Senior Vice President or higher.

(h)        The Chief Legal Officer or his delegate must
approve all Enterprise legal fees.   All
lease terms must be reviewed and approved by the CFO or his delegate prior to signing any
lease.  All leases requiring monthly payments of $10,000 or
more, or $100,000 or more per annum must also be approved by the CFO. All lease
payments
including relevant terms such as the payment frequency, term of the agreement,
amount of payment,
and item(s) leased must be reported in writing to the CFO and the Controller.

(i)          Purchase requisitions
are intended for goods versus services, which should be approved by service
contracts.

(j)     Authorization for recurring expenses such
as utility bills that are consistent with the annual budget may be approved by
the Vice President responsible for that area.

(k)    All computer hardware, software, software
licensing, maintenance and consulting services must also be approved by the Vice
President - Information Technology or his delegate.

(l)     Per the Management Authorization Policy, all sales
or dispositions of company assets with a sale price and or fair market value
greater than $100,000 require approval by the CEO, the COO or the Chief Legal
Officer and the CFO.

 7
 

 

(m)   Premiums for new bonds require approval of the CFO
or the Treasurer.

(n)    Authorization for settlements of claims and
lawsuits by Senior Vice Presidents or Vice Presidents is limited to the
officer(s) in charge of Corporate Risk Department.  All other settlements, other than tax
settlements involving less than $5M, must be approved and initialed by the
Chief Legal Officer or his delegate.

(o)    Authorizations for these transactions are
specifically granted by Board resolutions and are subject to restrictions. All such
transactions must have the involvement of or review by the CFO’s organization
and Chief
Legal Officer

(p)    All check requests for charitable contributions
greater than $500 must be approved by the Chairman, the CEO, the COO or a
management director.

 8
 

 

 

Exhibit B

Enterprise
Products GP, LLC

Enterprise
Products Partners L.P,

Enterprise
Products Operating L.P.

Management
Authorization Form for Delegation of Authority

	
  Employee Name

  	
   

  	
  Title

  	
   

  	
  Employee Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Department

  	
   

  	
  Accounting Unit

  	
   

  	
  Current Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Officer Granting Authority

  	
   

  	
  Officer’s Title

  	
   

  	
  Effective Date

  Of Delegation

  

 

	
  Expenditure

  Description

  	
   

  	
  Maximum

  Amount

  	
   

  	
  Maximum

  Term

  
	
  Authorization for Expenditure (AFE)

  	
   

  	
   

  	
   

  	
  N/A

  
	
  Charges to AFEs

  	
   

  	
   

  	
   

  	
  N/A

  
	
  Supplemental AFEs for Over Expenditures

  	
   

  	
   

  	
   

  	
  N/A

  
	
  Contracts with Contingent Obligations, Take or Pay
  or Capacity Reservation > 1 year

  	
   

  	
   

  	
   

  	
   

  
	
  Natural Gas, NGL Contracts and term

  	
   

  	
   

  	
   

  	
   

  
	
  Payments under Natural Gas and NGL Contracts

  	
   

  	
   

  	
   

  	
   

  
	
  Service Contracts, Leases & Rentals - Annual
  Amount

  	
   

  	
   

  	
   

  	
   

  
	
  Operating Expenses, Non-AFE PO Requisitions &
  Payments on Service Contracts, Leases & Rentals

  	
   

  	
   

  	
   

  	
   

  
	
  Other – Specify

  	
   

  	
   

  	
   

  	
   

  

Explain
any special circumstances, instructions or authority being granted below.

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Employee Signature

  	
  Initials

  	
   

  	
  Risk Control Director - Within or Outside Policy

  
	
  (Sign & initial as you intend to

  authorize)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Delegating Officer Signature

  	
   

  	
  Robert G. Phillips, CEO - Variance Approved

  
						

 9
 

 

 

	
  Revision History

  	
   

  	
  Exhibit C

  

 

	
  Date

  	
   

  	
  Rev

  Number

  	
   

  	
  Change

  	
   

  	
  Reference Section

  
	
  November 2, 2004

  	
   

  	
  0

  	
   

  	
  New Policy

  	
   

  	
   

  
	
  May 5, 2005

  	
   

  	
  1

  	
   

  	
   

  	
   

  	
   

  
	
  November 4, 2005

  	
   

  	
  2

  	
   

  	
   

  	
   

  	
   

  

 

 10

 

SCHEDULE 5.2

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS GATHERING COMPANY

TAX MATTERS

1.             Tax Returns, Proceedings and
Elections.  Tax returns, proceedings,
and elections shall be governed by the provisions of this Schedule 5.2
as it may be amended from time to time by a vote of the Partners.

(a)           Enterprise is
designated the tax matters partner (“TMP”) as defined in Section
6231(a)(7) of the Code.  The designation
of TMP shall be effective only for operations conducted by the Partnership
pursuant to this Agreement.

(b)           The TMP shall cause to
be prepared all necessary federal, state, and local Partnership income, excise,
and property tax returns and, except for excise taxes, furnish a copy of the
proposed return to the Partners for their review not later than one month prior
to the due date, including extensions, for filing such returns.  The TMP shall timely file such returns and,
upon the written request of a Partner, shall provide the Partners with
schedules which are consistent with the treatment of all items on those
returns.  The TMP agrees to use all
reasonable efforts in the preparation and filing of such tax returns but, in
doing so, shall incur no Liability to any Partner with respect to such returns
or any elections relating thereto.  On or
before the last day of May after the end of the taxable year, the TMP will
cause each Partner to be provided with estimates of all information reasonably
necessary or appropriate to file its respective tax returns and reports.

(c)           The Partners shall
furnish the TMP with such information as it may reasonably request to aid in
the preparation of the Partnership returns and which will permit it to provide
the Internal Revenue Service with sufficient information so that proper notice
can be mailed to such Partners as provided in Section 6223 of the Code.

(d)           To the extent and in
the manner provided by applicable Regulations, the TMP shall keep each Partner
informed of all administrative and judicial proceedings for the adjustment of
Partnership items (as defined in Section 6231(a)(3) of the Code) at the
Partnership level.

(e)           If an administrative proceeding
contemplated under Section 6223 of the Code has begun, the Partners shall
notify the TMP of their treatment of any Partnership item on

 

 

their federal
income tax return in a manner which is or may be inconsistent with the
treatment of that item on the Partnership return.

(f)            The TMP shall not enter into any
extension of the period of limitations as provided under Section 6229 of the
Code without the prior written consent of the Partners.

(g)           Any Partner who enters into a
settlement agreement with the Secretary of the Treasury with respect to
Partnership items shall promptly notify the other Partners of such settlement
agreement.

(h)           The TMP shall not bind the other
Partners to a settlement agreement without obtaining the written concurrence of
the Partners who will be bound by such agreement.

(i)            The TMP shall notify all Partners of
any intention to file a petition with a court for a readjustment of any
Partnership items.  Such notice shall be
given within a reasonable time so that the Partners may participate in choosing
the forum for the filing of any petition. 
This provision shall not apply to any Partner who does not have an
interest in the outcome of such matter. 
Whether a Partner has an interest in the outcome will be determined
using the standard in Section 6226(d) of the Code.  Further, the TMP or other Partner who had
brought the action under Section 6226 of the Code, shall provide the other
Partners with notice of any intention to seek review of a determination by any
court under that Section.

(j)            No Partner may file a request for an
administrative adjustment of Partnership items for any Partnership taxable year
pursuant to Section 6227 of the Code without first notifying all other
Partners.  If the other Partners agree
with the requested adjustment, the TMP shall file the request for
administrative adjustment on behalf of the Partnership.

(k)           If any part of an administrative
adjustment request filed by a Partner is not allowed by the Internal Revenue
Service, the Partner filing such request shall seek the concurrence of other
Partners with regard to the filing of a petition with a court and with regard
to seeking review of the determination by any court in the same manner as
provided in Section l(i) of this Schedule 5.2.

(l)            The TMP and other Partners shall use
all reasonable efforts to comply with the responsibilities as outlined herein
and in Sections 6222 through 6233 of the Code, but shall incur no Liability to
any other Partner for failure to fulfill such responsibilities.

(m)          The provisions of this Schedule 5.2
shall survive the termination of the Partnership or the termination of any
Partner’s interest in the Partnership and shall remain binding on the Partners
for a period of time necessary to resolve with the Internal Revenue Service or
the Department of the Treasury any and all matters regarding the federal income
taxation of the Partnership and any applicable state income tax matters.

 

 

2.             Elections. The Partners
agree that the TMP is directed to make the following elections on behalf of the
Partnership in the appropriate returns of the Partnership prepared pursuant to Section
1 above:

(a)           To adopt the accrual method of
accounting;

(b)           To compute the allowance for
depreciation or cost recovery using the shortest permissible life and most
rapid recovery method permitted under the Code;

(c)           To elect the calendar year as the
Fiscal Year of the Partnership;

(d)           To elect to amortize all organization
costs of the Partnership under Section 709 of the Code; and

(e)           To make such other elections as the
Partners may direct.

3.             Section 754 Election.  The Partnership shall make an election
pursuant to Section 754 of the Code to adjust the basis of Partnership
property.

 

 

SCHEDULE
6.1

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS GATHERING COMPANY

FINANCIAL
RESPONSIBILITY REQUIREMENTS

Each
potential new Partner in the Partnership must demonstrate adequate financial
responsibility itself or through an Affiliate that is willing to execute a
guarantee of the obligations of such prospective Partner on such terms that are
acceptable to the Partners. Such credit worthiness may be demonstrated by
satisfying one of the two methods of meeting financial responsibility described
below.

1.             Method I

The
Partner or its Affiliate has senior unsecured debt outstanding which is rated
by:

	
  (a)

  	
   

  	
  Moody’s Investors Services

  	
  Baa3 or better, and

  	
   

  
	
  (b)

  	
   

  	
  Standard and Poors

  	
  BBB or better

  	
   

  

2.             Method II

If a
Partner or its Affiliate fails to meet the above test, then the following
criteria will be applied to the proposed new Partner’s or its Affiliate’s
financial statements:

Debt/Capital is less than or
equal to 55% and such proposed Partner’s net worth is greater than or equal to
$500 million; or

Debt/EBITDA is less than or
equal to 3.5 and such proposed Partner’s net worth is greater than or equal to
$500 million; or

Current assets/current
Liabilities is greater than or equal to 1.0 and such proposed Partner’s net
worth is greater than or equal to $500 million.

If the proposed
Partner or its Affiliate meets any one of the above criteria, then such
proposed Partner or its Affiliate shall be deemed to have adequate financial
capability to fulfill the obligations of a Partner.

 

 

SCHEDULE 10.23

TO THE

AMENDED AND RESTATED

AGREEMENT OF PARTNERSHIP

OF

JONAH GAS GATHERING COMPANY

DISPUTE RESOLUTION PROCEDURE

1.             Initiation of Procedures.  Any Party desiring to initiate the dispute
resolution procedures set forth herein with respect to a dispute (including a
dispute described in the last sentence of Section 4.1(k) of the Agreement) (“Dispute”)
not resolved in the ordinary course of business (the “Initiating Party”)
must give written notice of the Dispute (the “Dispute Notice”) to the
other Party (the “Non-Initiating Party”).  The Dispute Notice shall include (i) a
statement of that Party’s position and a summary of arguments supporting that
position, and (ii) the name and title of the executive who will represent that
Party, and of any other person who will accompany the executive, in the
negotiations under Section 2 below. 
For purposes of the alternative dispute resolution procedure as set
forth in this Schedule 10.23, any reference to “Party” or “Parties”
shall include the Partners.

2.             Negotiation Between Executives.  If one Party has given a Dispute Notice under
Section 1 above, the Parties shall attempt in good faith to resolve the
Dispute within forty-five (45) days following receipt of the Dispute Notice by
the Non-Initiating Party by negotiation between executives who have authority
to settle the Dispute and who are at a higher level of management than the
persons with direct responsibility for administration of this Agreement or the
matter in Dispute.  Within fifteen (15)
days after receipt of the Dispute Notice, the Non-Initiating Party shall submit
to the other a written response.  The
response will include (i) a statement of that Party’s position and a summary of
arguments supporting that position, and (ii) the name and title of the
executive who will represent that Party and of any other person who will
accompany the executive.  Within
forty-five (45) days following receipt of the Dispute Notice by the
Non-Initiating Party, the executives of both Parties will meet at a mutually
acceptable time and place, and thereafter, as often as they reasonably deem
necessary, to attempt to resolve the Dispute.

3.             Tolling and Performance.  Except as otherwise provided in these procedures,
all applicable statutes of limitation and defenses based upon the passage of
time and all contractual limitation periods specified in this Agreement, if
any, will be tolled while the procedures specified herein are pending.  The Parties will take all actions necessary
to effectuate the tolling of any applicable statute of limitation or
contractual limitation periods.  All
deadlines specified herein may be extended by mutual written agreement of the
Parties.  Each Party is required to
continue to perform its obligations under this Agreement pending final
resolution of any Dispute, unless to do so would be impossible or impracticable
under the circumstances.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:

 2
 

 

 

(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).

 3
 

 

 

(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

 4
 

 

 

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.

 5
 

 

 

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

 6
 

 

 

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

 7
 

 

 

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.

 8
 

 

 

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;

 9
 

 

 

(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”).

 10

 

 

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

 11
 

 

 

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).

 12
 

 

 

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.

 14
 

 

 

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

 15
 

 

 

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

 16
 

 

 

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]

 17

 

 

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

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