Document:

exv10w53

 

Exhibit 10.53

AGREEMENT OF LIMITED PARTNERSHIP

OF

MONT BELVIEU STORAGE PARTNERS, L.P.

DATED EFFECTIVE JANUARY 21, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	DEFINITIONS
	 	 	 	 	 	 	1	 
	ARTICLE I
	 	FORMATION OF LIMITED PARTNERSHIP	 	 	7	 
	ARTICLE II
	 	NAME	 	 	7	 
	ARTICLE III
	 	PURPOSE	 	 	7	 
	ARTICLE IV
	 	NAMES AND ADDRESSES OF PARTNERS AND  PRINCIPAL OFFICE OF PARTNERSHIP	 	 	8	 
	ARTICLE V
	 	REGISTERED AGENT; REGISTERED OFFICE; ADDITIONAL OFFICES	 	 	8	 
	ARTICLE VI
	 	TERM	 	 	8	 
	ARTICLE VII
	 	ADDITIONAL LIMITED PARTNERS	 	 	8	 
	ARTICLE VIII
	 	CAPITAL CONTRIBUTIONS	 	 	9	 
	 	Section 8.1
	 	Capital Contributions	 	 	9	 
	 	Section 8.2
	 	Additional Contributions	 	 	11	 
	 	Section 8.3
	 	Capital Accounts	 	 	12	 
	 	Section 8.4
	 	Adjustment of Capital Accounts	 	 	12	 
	ARTICLE IX
	 	DISTRIBUTIONS	 	 	12	 
	 	Section 9.1
	 	Frequency	 	 	12	 
	 	Section 9.2
	 	Failure to Withdraw	 	 	13	 
	 	Section 9.3
	 	Transferor/Transferee Allocations	 	 	13	 
	 	Section 9.4
	 	Partner Advances	 	 	13	 
	ARTICLE X
	 	ALLOCATIONS OF INCOME, GAIN, LOSS, DEDUCTION AND CREDIT	 	 	14	 
	 	Section 10.1
	 	General	 	 	14	 
	 	Section 10.2
	 	Allocations for Tax Purposes	 	 	15	 
	 	Section 10.3
	 	Transferor/Transferee Allocations	 	 	15	 
	 	Section 10.4
	 	Reliance on Advisors	 	 	15	 
	 	Section 10.5
	 	Tax Matters Partner	 	 	15	 
	ARTICLE XI
	 	BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION	 	 	16	 
	 	Section 11.1
	 	Maintenance of Books and Records	 	 	16	 
	 	Section 11.2
	 	Reports	 	 	16	 
	ARTICLE XII
	 	FISCAL YEAR	 	 	17	 
	ARTICLE XIII
	 	PARTNERSHIP FUNDS	 	 	17	 
	ARTICLE XIV
	 	STATUS OF LIMITED PARTNERS	 	 	17	 
	 	Section 14.1
	 	No Personal Liability	 	 	17	 
	 	Section 14.2
	 	Dissolution or Bankruptcy of Limited Partner	 	 	17	 
	ARTICLE XV
	 	MANAGEMENT AND OPERATION OF BUSINESS	 	 	18	 
	 	Section 15.1
	 	Management by General Partner	 	 	18	 

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TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 	

	 	Section 15.2
	 	No Limited Partner Participation	 	 	18	 
	 	Section 15.3
	 	Actions Requiring Limited Partner Consent	 	 	18	 
	 	Section 15.4
	 	Third Party Reliance	 	 	19	 
	 	Section 15.5
	 	Compensation and Reimbursement	 	 	19	 
	 	Section 15.6
	 	Exculpation	 	 	19	 
	 	Section 15.7
	 	Indemnification	 	 	20	 
	 	Section 15.8
	 	Other Activities; Noncompetition	 	 	21	 
	ARTICLE XVI
	 	TRANSFER OF INTERESTS BY PARTNERS	 	 	23	 
	 	Section 16.1
	 	Restrictions on Transfer	 	 	23	 
	 	Section 16.2
	 	Transfers to Affiliates	 	 	23	 
	 	Section 16.3
	 	Right of First Refusal	 	 	23	 
	 	Section 16.4
	 	Change of Partner Control	 	 	24	 
	 	Section 16.5
	 	Procedures	 	 	25	 
	 	Section 16.6
	 	Purchase and Sale in the Event of Maximum Loss Being Exceeded	 	 	25	 
	 	Section 16.7
	 	Compliance with Securities Laws	 	 	26	 
	ARTICLE XVII
	 	DISSOLUTION OF THE PARTNERSHIP	 	 	26	 
	ARTICLE XVIII
	 	WINDING UP AND TERMINATION OF THE PARTNERSHIP	 	 	27	 
	 	Section 18.1
	 	Liquidator	 	 	27	 
	 	Section 18.2
	 	Reserves	 	 	28	 
	 	Section 18.3
	 	Sale of Assets; Distribution of Proceeds	 	 	28	 
	 	Section 18.4
	 	Final Accounting	 	 	28	 
	 	Section 18.5
	 	Recourse Limited to Assets of the Partnership	 	 	28	 
	 	Section 18.6
	 	Termination	 	 	28	 
	ARTICLE XIX
	 	NOTICES	 	 	29	 
	ARTICLE XX
	 	AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT	 	 	29	 
	ARTICLE XXI
	 	POWER OF ATTORNEY	 	 	29	 
	ARTICLE XXII
	 	REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	30	 
	ARTICLE XXIII
	 	DISPUTES	 	 	30	 
	 	Section 23.1
	 	Negotiation	 	 	30	 
	 	Section 23.2
	 	Failure to Resolve	 	 	31	 
	 	Section 23.3
	 	Arbitration	 	 	31	 
	 	Section 23.4
	 	Recovery of Costs and
Attorneys’ Fees	 	 	32	 
	 	Section 23.5
	 	Choice of Forum	 	 	33	 
	 	Section 23.6
	 	Jury Waivers	 	 	33	 
	 	Section 23.7
	 	Special Buy-Out Options	 	 	33	 
	 	Section 23.8
	 	Dispute Under Both this Agreement and LLC Agreement	 	 	34	 
	ARTICLE XXIV
	 	MISCELLANEOUS	 	 	34	 
	 	Section 24.1
	 	No Right of Partition	 	 	34	 
	 	Section 24.2
	 	Entire Agreement; Supersedure	 	 	34	 
	 	Section 24.3
	 	Governing Law	 	 	34	 

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	 	Section 24.4
	 	Binding Effect	 	 	34	 
	 	Section 24.5
	 	Construction of Agreement	 	 	34	 
	 	Section 24.6
	 	Captions	 	 	35	 
	 	Section 24.7
	 	Effect of Invalid Provision	 	 	35	 
	 	Section 24.8
	 	Counterparts	 	 	35	 
	 	Section 24.9
	 	Waiver	 	 	35	 

	 	 	 
	EXHIBIT A

EXHIBIT B

EXHIBIT C

EXHIBIT D	 	
Dreyfus Storage Agreement

MB Assets

Operating Procedures

TE Storage Agreement

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AGREEMENT OF LIMITED PARTNERSHIP

OF

MONT BELVIEU STORAGE PARTNERS, L.P.

     THIS AGREEMENT, effective as of the 21st day of January, 2003, by and
among Mont Belvieu Venture, LLC, a Delaware limited liability company, as the
General Partner, and TE Products Pipeline Company, Limited Partnership, a
Delaware limited partnership, and Louis Dreyfus Energy Services L.P., a
Delaware limited partnership, as the Limited Partners.

     WHEREAS, the parties hereto desire to form a limited partnership under and
pursuant to Delaware law.

     NOW, THEREFORE, in consideration of the premises and the mutual
undertakings contained herein, the parties hereto hereby agree as follows:

DEFINITIONS

     The following definitions shall be applicable to the terms set forth below
as used in this Agreement:

     “Acceptance” has the meaning assigned to such term in Section 16.3.

     “Accountants” has the meaning given such term in Section 11.2(a)(i).

     “Acquisition Proposal” has the meaning assigned to such term in Section
16.3.

     “Affiliate” means, when used with respect to a specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the specified person, provided that the
Partnership shall not be deemed to be an Affiliate of the Partners or any of
their respective subsidiaries or Affiliates. For purposes of this definition,
“control”, when used with respect to any specified person, means the power to
direct the management and policies of the person, directly or indirectly,
whether through the ownership of voting securities, by contract, by family
relationship or otherwise; and the terms “controlling” and “controlled” have
the meanings correlative to the foregoing. Notwithstanding the foregoing, for
purposes of this Agreement, Louis Dreyfus Natural Gas Corporation, an Oklahoma
corporation, shall not be deemed an Affiliate of the LD Partner.

     “Agreed Value” means, in the case of any contributions or distributions of
property other than the contributions described in Section 8.1(a), the fair
market value of such property net of any indebtedness or other liability either
assumed or to which such property is subject, as such fair market value is
determined by the General Partner using such reasonable method of valuation as
it may adopt.

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     “Agreement” means the Agreement of Limited Partnership of Mont Belvieu
Storage Partners, L.P. as the same may be amended, modified or restated from
time to time in accordance with Article XX hereof.

     “Built-In Gain” with respect to any Partnership property means (i) the
excess of the Agreed Value of any Contributed Property over its adjusted basis
for federal income tax purposes as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Partnership property
subject to depreciation, cost recovery or amortization pursuant to Section 8.4
as a result of a contribution of cash for a Partnership Interest, the
Unrealized Gain with respect to such property.

     “Built-In Loss” with respect to any Partnership property means (i) the
excess of its adjusted basis for federal income tax purposes of any Contributed
Property over its Agreed Value as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Partnership property
subject to depreciation, cost recovery or amortization pursuant to Section 8.4
as a result of a contribution of cash for a Partnership Interest, the
Unrealized Loss with respect to such property.

     “Business Day” means any day other than a Saturday, Sunday or bank holiday
in Houston, Texas.

     “Capital Account” means the account established for each Partner pursuant
to Section 8.3.

     “Capital Contributions” means the Agreed Value of any property and the
amount of cash contributed to the Partnership.

     “Carrying Value” with respect to any Capital Contribution means the Agreed
Value of such property reduced as of the time of determination by all
depreciation, cost recovery and amortization deductions charged to the Capital
Accounts with respect to such property and an appropriate amount to reflect any
sales, retirements or other dispositions of assets included in such property
and, with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes as of the time of determination. The
Carrying Values shall be further adjusted as provided in Section 8.4.

     “Certificate of Limited Partnership” means the Certificate of Limited
Partnership required to be filed in the Office of the Secretary of State of the
State of Delaware pursuant to the Partnership Act, as the same may be amended,
modified or restated from time to time.

     “Change of Partner Control” means either a TE Change of Partner Control or
a LD Change of Partner Control.

     “Code” means the Internal Revenue Code of 1986, as amended and in effect
on the effective date hereof and, to the extent applicable, as subsequently
amended.

     “Competing Business Transaction” has the meaning assigned to such term in
Section 15.8(c).

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     “Contributed Property” means any Capital Contribution of property other
than cash.

     “Default Interest Rate” means a rate per annum equal to the lesser of (a)
3% per annum plus the Prime Rate or (b) the maximum rate permitted by law.

     “Delinquent Partner” has the meaning assigned to such term in Section
8.1(d).

     “Discretionary Capital Expenditures” means any expenditure related to the
Partnership Business that is classified under GAAP as a capital expenditure and
(i) is not a Mandatory Capital Expenditure, or (ii) if classified as a
Mandatory Capital Expenditure, is associated or is in conjunction with, or is
the result of, a prior or current Discretionary Capital Expenditure, in which
case the portion of such Mandatory Capital Expenditure that is allocable to
such prior or current Discretionary Capital Expenditure shall be classified as
a Discretionary Capital Expenditure.

     “Dispose, Disposing or Disposition” means, with respect to Partnership
Interest or any portion thereof, a sale, assignment, transfer, conveyance,
gift, exchange or other disposition of such asset, whether such disposition be
voluntary, involuntary or by operation of law, including but not limited to the
following: (a) in the case of a Partnership Interest owned by an entity, a
Change of Partner Control and (b) a disposition in connection with, or in lieu
of, a foreclosure of an Encumbrance; but such terms shall not include the
creation of an Encumbrance.

     “Disputes” has the meaning assigned to such term in Section 23.1.

     “Distributable Cash” means, at the time of determination, all Partnership
cash derived from the conduct of the Partnership’s business, other than (i)
Capital Contributions, together with interest earned thereon pending
utilization thereof, (ii) financing proceeds, (iii) amounts required for
working capital and Discretionary and Mandatory Capital Expenditures and (iv)
other amounts that the General Partner reasonably determines to be necessary
for the proper operation of the Partnership’s business and its winding up and
liquidation.

     “Dreyfus Storage Agreement” shall mean the Storage Agreement in the form
attached as Exhibit A hereto.

     “EBITDA” means for any entity, such entity’s earnings for any period on a
GAAP basis before all charges for such period, for depreciation and
amortization, interest (except as provided below) and income taxes.
Notwithstanding the foregoing, all interest incurred in connection with
borrowings by such entity the proceeds of which are used for Discretionary
Capital Expenditures relating to the MB Assets shall be deducted as an expense
in calculating EBITDA.

     “Encumber, Encumbering, or Encumbrance” means the creation of a security
interest, lien, pledge, mortgage or other encumbrance, whether such encumbrance
be voluntary, involuntary or by operation of law.

     “Exercise Period” has the meaning assigned to such term in Section
23.7(a).

     “First Party” has the meaning assigned to such term in Section 15.8(c).

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     “GAAP” means Generally Accepted Accounting Principles in the United States
of America consistently applied for the time periods involved.

     “General Partner” means Mont Belvieu Venture, LLC, a Delaware limited
liability company or its successors or assigns.

     “Indemnitee” has the meaning assigned to such term in Section 15.7.

     “Interest” has the meaning assigned to such term in Section 16.3.

     “Joint Development Agreement” means that certain Joint Development
Agreement between the LD Partner and the TE Partner dated effective January 1,
2000, as the same may be modified, amended or restated from time to time.

     “LD Combined Capital Account Balance” has the meaning assigned to such
term in Section 16.4(b).

     “LD Partner Change of Control” means an event that causes the Parent of LD
Partner together with its Affiliates to cease to own, directly or indirectly,
at least a 50% voting interest in (i) the LD Limited Partner or any Affiliate
of the LD Limited Partner owning a membership interest in the General Partner
or (ii) in the event of the transfer of the LD Partner’s Partnership Interest
to an Affiliate, in such Affiliate.

     “LD Partner” means Louis Dreyfus Energy Services L.P., a Delaware limited
partnership, or its successors or assigns.

     “Lending Partner” has the meaning assigned to such term in Section 8.1(d).

     “Limited Partners” means TE Products Pipeline Company, Limited
Partnership, a Delaware limited partnership and Louis Dreyfus Energy Services
L.P., a Delaware limited partnership, or their respective successors or
permitted assigns, and “Limited Partner” means either of them.

     “Liquidator” has the meaning assigned to such term in Section 18.1.

     “LLC Agreement” means the Limited Liability Company Agreement of the
General Partner as the same may be modified, amended or restated from time to
time.

     “Loss” shall mean on any date the amount, if any, by which the sum of the
Minimum Cash Balance plus any other net requirements for cash to fund the
operations of the Partnership reasonably expected to arise over the following
month exceeds the Partnership’s cash balance on that date exclusive of
segregated cash balances.

     “Mandatory Capital Expenditures” means all expenditures related to the
Partnership’s assets that are classified under GAAP as a capital expenditure,
the primary function of which is for regulatory compliance, safety or
operational integrity of the Partnership’s assets or is otherwise the result of
actions permitted in emergency situations as provided in the Operating
Procedures.

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     “Maximum Loss” shall mean $1 million.

     “MB Assets” means the Mont Belvieu salt cavern storage and Houston area
shuttle system more fully described on Exhibit B hereto and all improvements,
expansions and additions thereto.

     “Minimum Cash Balance” shall mean $100,000 or such larger number as the
General Partner determines is reasonable and necessary to carry out the
business of the Partnership.

     “Net EBITDA” means the amount of EBITDA, if any, in excess of $7.15
million during any period.

     “Notice Month” has the meaning assigned to such term in Section 16.4(b).

     “Offer” has the meaning assigned to such term in Section 16.3.

     “Offer Period” has the meaning assigned to such term in Section 16.3.

     “Offeree” has the meaning assigned to such term in Section 16.3.

     “Offeror” has the meaning assigned to such term in Section 16.3.

     “Operating Procedures” means the Operating Procedures in the form attached
as Exhibit C hereto.

     “Option Interest” has the meaning assigned to such term in Section 16.4.

     “Option Partner” has the meaning assigned to such term in Section 16.4.

     “Parent” means, with respect to TE Partner, TEPPCO Partners, L.P., a
Delaware limited partnership, and with respect to LD Partner, S. A. Louis
Dreyfus et Cie., a French societe anonyme or Louis Dreyfus S.A.S., a French
societe par actions simplifiees.

     “Partners” means the General Partner and the Limited Partners.

     “Partnership” means Mont Belvieu Storage Partners, L.P., the limited
partnership entered into and formed hereunder pursuant to the Partnership Act.

     “Partnership Act” means the Delaware Revised Uniform Limited Partnership
Act, 6 Del. Code §§ 17-101 et seq., as it may be amended from time to time, and
any successor to said Partnership Act.

     “Partnership Business” means the operation, maintenance and marketing of
underground storage facilities for Products and the operation of the pipelines
included within the MB Assets to and from their specific points of delivery and
receipt.

     “Partnership Interest” as to any Partner means the entire ownership
interest and rights of that Partner in the Partnership, including, without
limitation, its right to a distributive share of the profits and losses of the
Partnership, its right to a distributive share of the assets of the

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Partnership in accordance with the provisions hereof, and in the case of a
General Partner, its right to participate in the management of the affairs of
the Partnership.

     “Pricing Period” means the trailing 12-month period ending on a date or
month as specified in this Agreement.

     “Prime Rate” means the interest rate as defined in Section 9.4 hereof.

     “Products” means propane, normal butane, isobutane, natural gasoline and
any other commodities as determined by the General Partner.

     “Put/Call Right” has the meaning assigned to such term in Section 23.7(a).

     “Restricted Affiliate” means with respect to each Limited Partner, any
person in which such Limited Partner’s Parent owns, directly or indirectly, at
least a 51% voting or equity interest, or which it otherwise controls. For
purposes of this definition, “control,” has the meaning assigned to such term
in the definition of Affiliate and Louis Dreyfus Natural Gas Corporation shall
not be deemed a Restricted Affiliate of the LD Partner.

     “Second Party” has the meaning assigned to such term in Section 15.8(c).

     “Sharing Ratio” means 1% in the case of the General Partner and 49.5% in
the case of each Limited Partner.

     “Storage Agreements” means the Dreyfus Storage Agreement and the TE
Storage Agreement.

     “TE Partner Change of Control” means a Disposition of any entity of which
over 75% of such entity’s EBITDA for the preceding 12-month period is derived
from the Partnership unless such disposition is to an Affiliate of the TE
Partner.

     “TE Partner” means TE Products Pipeline Company, Limited Partnership or
its successors or assigns.

     “TE Storage Agreement” means the Storage Agreement in the form attached
hereto as Exhibit D.

     “Territory” has the meaning assigned to such term in Section 15.8(a).

     “TMP” has the meaning assigned to such term in Section 10.5.

     “Unrealized Gain” attributable to a Partnership property means, as of the
date of determination, the excess of the fair market value of such property as
of such date of determination over the Carrying Value of such property as of
such date of determination.

     “Unrealized Loss” attributable to a Partnership property means, as of the
date of such determination, the excess of the Carrying Value of such property
as of such date of determination over the fair market value of such property as
of such date of determination.

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     “Unrecovered Loss Balance” shall mean for either Limited Partner the
result of (a) the sum of all Capital Contributions under Sections 8.1(b)(iii)
and 8.1(c), minus (b) the sum of all distributions under Section 9.1(a).

     “Valuation Expert” has the meaning assigned to that term in Section
23.7(b).

     “Valuation Multiple” means the result of dividing the fair market value of
businesses comparable or similar to the business of the Partnership by the same
businesses’ EBITDA for the twelve-month period immediately preceding the date
such fair market value was measured.

ARTICLE I

FORMATION OF LIMITED PARTNERSHIP

     The parties hereto hereby form a limited partnership pursuant to the
Partnership Act. The rights and liabilities of the Partners shall be as
provided in the Partnership Act, except as herein otherwise expressly provided.
The Partnership Interests of any Partner shall be personal property for all
purposes. On the request of the General Partner, the Limited Partners shall
execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary to qualify,
continue, or terminate the Partnership as a limited partnership under the laws
of the State of Delaware and to qualify the Partnership to do business in such
other states where such qualification is necessary or desirable.

ARTICLE II

NAME

     The name of the Partnership shall be, and the business of the Partnership
shall be conducted under the name of, Mont Belvieu Storage Partners, L.P. or
such other name or names that comply with applicable law as the General Partner
may designate from time to time. The General Partner shall take any action
that it determines is required to comply with the Partnership Act, assumed name
act, fictitious name act, or similar statute in effect in each jurisdiction or
political subdivision in which the Partnership proposes to do business and the
Limited Partners agree to execute any documents requested by the General
Partner in connection with any such action.

ARTICLE III

PURPOSE

     The purpose of the Partnership is to acquire, own, operate, maintain,
improve and otherwise deal with the MB Assets, and by means thereof, provide
storage, truck and railcar loading and unloading and pipeline transportation
services to the Partners, their Affiliates and third parties, and any other
business activities necessary, incidental or ancillary to any of the foregoing.

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ARTICLE IV

NAMES AND ADDRESSES OF PARTNERS AND

PRINCIPAL OFFICE OF PARTNERSHIP

     The names and mailing addresses of the Partners are as set forth on the
signature pages hereof. The location of the principal office of the
Partnership where the books and records of the Partnership shall be kept shall
be 2929 Allen Parkway, Suite 3200, Houston, Texas 77019. The General Partner
may change the location of the principal office of the Partnership.

ARTICLE V

REGISTERED AGENT; REGISTERED OFFICE; ADDITIONAL OFFICES

     The name and address of the registered office of the Partnership in the
State of Delaware is c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name and address of the registered agent for service of process on the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801. The General Partner may change the registered agent or the
registered office of the Partnership and may establish such additional offices
of the Partnership as the General Partner may from time to time determine. The
General Partner shall provide the Limited Partners with written notice of any
change in the Partnership’s principal office, registered agent or registered
office.

ARTICLE VI

TERM

     The term of the Partnership shall be perpetual from the date of the filing
of the Certificate of Limited Partnership in the Office of the Secretary of
State of the State of Delaware unless sooner liquidated or dissolved in
accordance with this Agreement.

ARTICLE VII

ADDITIONAL LIMITED PARTNERS

     In the event the General Partner determines that funds in addition to
those acquired pursuant to Section 8.1 are necessary to carry out the purposes
of the Partnership and the General Partner and the Limited Partners do not
agree to contribute such funds in their respective Sharing Ratios, the General
Partner is authorized to offer and sell additional Partnership Interests and
admit any purchasers thereof (which may include existing Partners or their
Affiliates) as additional limited partners of the Partnership. In such event,
the dilution of the then Partners shall be pro rata in accordance with their
respective Sharing Ratios prior to the issuance of such additional Partnership
Interests and this Partnership Agreement shall be amended to reflect the
admissions of such persons as limited partners of the Partnership, the revised
ownership and

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Sharing Ratio of each Partner and otherwise to reflect the relative rights
and obligations of the parties.

ARTICLE VIII

CAPITAL CONTRIBUTIONS

     Section 8.1 Capital Contributions.

		
	 	     (a) Each Limited Partner shall make the initial Capital
Contributions provided in the Joint Development Agreement and the General
Partner shall contribute $500,000 in cash to the Partnership. The Agreed
Value of any property included in such Capital Contributions shall be its
net book value reduced by liabilities assumed by the Partnership as
reflected on the books of the contributor at the date of contribution
computed in accordance with GAAP.
	 
	 	     (b) Without creating any rights in favor of any third party, (i)
each Partner shall contribute to the Partnership, in cash, on or before
the date specified as described in this Section 8.1(b), that Partner’s
Sharing Ratio of Discretionary Capital Expenditures shown in the current
capital expenditure budget adopted for the Partnership by the General
Partner as being funded by Capital Contributions, (ii) the TE Partner
shall contribute to the Partnership each quarter an amount equal to the
actual Mandatory Capital Expenditure for such quarter (excluding
Mandatory Capital Expenditures attributable to prior Discretionary
Capital Expenditures), in cash, on the earlier of (x) the date needed by
the Partnership to pay such expenses or (y) the date of the quarterly
distribution under Section 9.1(b) for such quarter, and (iii) the TE
Partner shall contribute to the Partnership, in cash, within three days
of such balance being known, an amount equal to any Loss of the
Partnership, except that in the event the TE Partner’s Unrecovered Loss
Balance is equal to or greater than the Maximum Loss, then Section 8.1(c)
shall apply. Unless otherwise stated herein, the General Partner shall
notify each Partner of the need for such Capital Contributions pursuant
to this Section 8.1(b), which notice must include a date (which date may
be no earlier than the second Business Day following each Partner’s
receipt of its notice) before which the Capital Contributions must be
made. All Capital Contributions under Section 8.1(b)(i) shall be kept in
a segregated account, shall not be commingled with other funds of the
Partnership, shall be used only for Discretionary Capital Expenditures
and shall not be included in Distributable Cash.
	 
	 	     (c)

		
	 	     (i) If the TE Partner’s Unrecovered Loss Balance is, or with
the then current Loss added, will be, equal to or greater than the
Maximum Loss then the TE Partner shall have the option to (x)
contribute, in cash, to the Partnership an amount equal to the
current Loss, or (y) cease to contribute any cash, in which case
the LD Partner shall have the option to contribute, in cash, to the
Partnership an amount equal to the current Loss.

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	 	     (ii) If, at any time the TE Partner’s Unrecovered Loss Balance
is equal to or greater than the Maximum Loss and neither Partner
chooses to contribute, in cash, to the Partnership an amount equal
to the current Loss then the provisions of Section 16.6 shall
apply.

		
	 	     (d) If a Partner does not contribute by the time required all or any
portion of a Capital Contribution that Partner is required to make as
provided in this Agreement, the Partnership may exercise, on notice to
that Partner (the “Delinquent Partner”), one or more of the following
remedies:

		
	 	     (i) taking such action (including court proceedings) as the
other Partners may deem appropriate to obtain payment by the
Delinquent Partner of the portion of the Delinquent Partner’s
Capital Contribution that is in default, together with interest on
that amount at the Default Interest Rate from the date that the
Capital Contribution was due until the date that it is made, all at
the cost and expense of the Delinquent Partner;

		
	 	     (ii) permitting one or more other Partners (the “Lending
Partner”), to advance the portion of the Delinquent Partner’s
Capital Contribution that is in default, with the following
results:

		
	 	     1. the sum advanced shall constitute a loan from the
Lending Partner to the Delinquent Partner and a Capital
Contribution of that sum to the Partnership by the Delinquent
Partner under the applicable provisions of this Agreement,

		
	 	     2. the principal balance of the loan and all accrued
unpaid interest is due and payable on the tenth day after
written demand by the Lending Partner to the Delinquent
Partner,

		
	 	     3. the amount loaned shall bear interest at the Default
Interest Rate from the date that the advance is deemed made
until the date that the loan, together with all interest
accrued on it, is repaid to the Lending Partner,

		
	 	     4. all distributions from the Partnership that otherwise
would be made to the Delinquent Partner (whether before or
after dissolution of the Partnership) instead shall be paid
to the Lending Partner until the loan and all interest
accrued on it have been paid in full to the Lending Partner
(with payments being applied first to accrued and unpaid
interest and then to principal), but all such payments to the
Lending Partner shall be treated for all purposes of this
Agreement as a distribution by the Partnership to the
Delinquent Partner and a payment by the Delinquent Partner to
the Lending Partner,

		
	 	     5. the payment of the loan and interest accrued on it is
secured by a security interest in the Delinquent Partner’s
Partnership Interest, as more fully set forth in Section
8.1(e), and

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	 	     6. the Lending Partner has the right, in addition to the
other rights and remedies granted to it under this Agreement
or at law or in equity, to take any action (including court
proceedings) that the Lending Partner may deem appropriate to
obtain payment by the Delinquent Partner of the loan and all
accrued and unpaid interest on it, at the cost and expense of
the Delinquent Partner;

		
	 	     (iii) exercising the rights of a secured party under the
Uniform Commercial Code of the State of Delaware, as more fully set
forth in Section 8.1(e); or

		
	 	     (iv) exercising any other rights and remedies available at law
or in equity.

		
	 	     (e) Each Partner grants to the Partnership, and to each Lending
Partner with respect to any loans made by the Lending Partner to that
Partner as a Delinquent Partner as described in Section 8.1(d), as
security, equally and ratably, for the payment of all Capital
Contributions that Partner has agreed to make and the payment of all
loans and interest accrued on them made by Lending Partners to that
Partner as a Delinquent Partner as described in Section 8.1(d), a
security interest in and a general lien on its Partnership Interest and
the proceeds of that Partnership Interest, all under the Uniform
Commercial Code of the State of Delaware. On any default in the payment
of a Capital Contribution or in the payment of such a loan or interest
accrued on it, the Partnership or the Lending Partner, as applicable, is
entitled to all the rights and remedies of a secured party under the
Uniform Commercial Code of the State of Delaware with respect to the
security interest granted in this Section 8.1(d). Each Partner shall
execute and deliver to the Partnership and the other Partners all
financing statements and other instruments that the other Partners or the
Lending Partner, as applicable, may request to effectuate and carry out
the preceding provisions of this Section 8.1(e). At the option of a
Lending Partner, this Agreement or a photographic or other copy of this
Agreement may serve as a financing statement.

     Section 8.2 Additional Contributions.

		
	 	     (a) The liability of each Limited Partner to the Partnership shall
be limited to the amount of its Capital Contributions to be made pursuant
to Section 8.1 and no Limited Partner shall have any further personal
liability to contribute money to, or in respect of, the liabilities or
the obligations of the Partnership unless it agrees in writing to make
additional capital contributions to the Partnership, nor shall any
Limited Partner be personally liable for any obligations of the
Partnership, except as may be provided in the Partnership Act.

		
	 	     (b) Notwithstanding the foregoing provisions of Section 8.2(a), in
the event the MB Assets contributed to the Partnership by the TE Partner
are Encumbered as collateral for indebtedness that is not assumed by the
Partnership, the TE Partner shall (i) continue to assume responsibility
for (A) the payment of such indebtedness, and (B) upon payment of such
indebtedness, the removal of all Encumbrances, and (ii) shall indemnify

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	 	     and hold harmless the Partnership for any cost, loss or expense
incurred by the Partnership as a result of such Encumbrance.

		
	 	     (c) No Partner shall be entitled to the return of any part of its
Capital Contribution or to be paid interest in respect of either its
Capital Account or any Capital Contribution made by such Partner. No
unrepaid Capital Contribution shall be deemed or considered to be a
liability of the Partnership or any Partner. No Partner shall be
required to contribute or lend any cash or property to the Partnership to
enable the Partnership to return any Partner’s Capital Contributions to
the Partner.

     Section 8.3 Capital Accounts. A capital account (“Capital Account”) shall
be established for each Partner and shall be maintained in such a manner as to
correspond with the requirements of Treasury Regulations promulgated from time
to time under section 704(b) of the Code.

     Section 8.4 Adjustment of Capital Accounts. If any additional Partnership
Interests are to be issued in consideration for a contribution of property or
cash or if any Partnership property is to be distributed in liquidation of the
Partnership or a Partnership Interest, the Capital Accounts of the Partners
(and the amounts at which all Partnership properties are carried on its books
and records utilized to maintain the Capital Accounts) shall, immediately prior
to such issuance or distribution, as the case may be, be adjusted (consistent
with the provisions of section 704(b) of the Code and the Treasury Regulations
promulgated thereunder) upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to all Partnership properties (as if such
Unrealized Gain or Unrealized Loss had been recognized upon actual sale of such
properties upon a liquidation of the Partnership immediately prior to such
issuance). If the Agreed Value of any property of the Partnership is properly
reflected on the books of the Partnership at a value that differs from the
adjusted tax basis of such property, this Section 8.4 shall be applied with
reference to such value.

ARTICLE IX

DISTRIBUTIONS

     Section 9.1 Frequency. Except as otherwise provided herein, Distributable
Cash attributable to each fiscal year shall be distributed as follows:

		
	 	     (a) First, quarterly all amounts to the Limited Partner or Partners
who funded Losses under Sections 8.1(b)(iii) or (c) pro rata in
proportion to their respective Unrecovered Loss Balances until such time
that such Partners’ Unrecovered Loss Balances, if any, are reduced to
zero.

		
	 	     (b) Second, quarterly to the TE Partner in an amount up to the
result of (i) $1.7875 million, minus (ii) Mandatory Capital Expenditures
for such quarter, minus (iii) any amounts payable in such quarter to a
third party operator of the Partnership’s assets if the General Partner,
acting by and through its Managing Member, ceases to operate such assets,
plus (iv) any Capital Contributions made by the TE Partner under Section
8.1(b)(ii) in such quarter.

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	 	     (c) Third, for the full fiscal year, to the TE Partner in an amount
equal to the positive difference, if any, of the result of (i) $7.15
million, minus (ii) Mandatory Capital Expenditures for such fiscal year,
minus (iii) any amounts payable in such fiscal year to a third party
operator of the Partnership’s assets if the General Partner, acting by
and through its Managing Member, ceases to operate such assets, minus
(iv) all distributions to the TE Partner pursuant to Section 9.1(b) for
quarters included in such fiscal year plus (v) any Capital Contributions
made by the TE Partner under Sections 8.1(b)(ii) in such fiscal year.

		
	 	     (d) Fourth, for the full fiscal year, the balance, if any, among the
Partners pro rata in accordance with their Sharing Ratios.

     Section 9.2
Failure to Withdraw. If any Partner does not withdraw the
whole or any part of his share of any cash distribution made pursuant to
Section 9.1, such Partner shall not be entitled to receive any interest thereon
without the express written consent of the other Partner.

     Section 9.3
Transferor/Transferee Allocations. Unless otherwise agreed in
writing by a transferor and transferee of a Partnership Interest herein,
Distributable Cash distributable with respect to any Partnership Interest which
may have been transferred during any year shall be distributed to the holder of
such Partnership Interest who was recognized as the owner on the date of such
distribution, without regard to the results of Partnership operations during
the year.

     Section 9.4
Partner Advances. Notwithstanding the foregoing, if any
Partner advances any funds or makes any other payment to or on behalf of the
Partnership, not required pursuant to the provisions hereof, to cover operating
or capital expenses of the Partnership which cannot be paid out of the
Partnership’s operating revenues, such advance or payment shall be deemed a
loan to the Partnership by such Partner, bearing interest from the date such
advance or payment was made until such loan is repaid at a floating rate per
annum equal to the lesser of (i) two percent (2%) over the interest rate
publicly quoted by The Wall Street Journal from time to time as the prime rate,
with adjustments in such varying rate to be made on the same date as any change
in the aforesaid rate (herein called “Prime Rate”) or (ii) the maximum rate
permitted under applicable law. Notwithstanding Section 9.1 above, all
distributions of Distributable Cash shall first be distributed to the Partners
making such loans until all such loans have been repaid to such Partners,
together with interest thereon as above provided, and, thereafter, the balance
of such distributions, if any, shall be made in accordance with the terms of
Section 9.1 above. If distributions are insufficient to repay and return all
such loans as provided above, the funds available from time to time shall first
be applied to repay and retire the oldest loan first and, if any funds
thereafter remain available, such funds shall be applied in a similar manner to
remaining loans in accordance with the order of the dates on which they were
made; however, as to loans made on the same date, each such loan shall be
repaid pro rata in the proportion that such loan bears to the total loans made
on said date.

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ARTICLE X

ALLOCATIONS OF INCOME, GAIN, LOSS, DEDUCTION AND CREDIT

     Section 10.1 General.

		
	 	     (a) Except as otherwise provided herein or unless another allocation
is required by Treasury Regulations issued under section 704(b) of the
Code (including, but not limited to, provisions pertaining to qualified
income offsets and minimum gain chargebacks), for purposes of maintaining
the Capital Accounts, all items of Partnership income, gain, loss,
deduction and credit shall be allocated among the Partners pro rata in
accordance with their Sharing Ratios in effect for the period during
which such items accrue. For purposes of computing the amount of each
item of income, gain, deduction or loss to be charged or credited to the
Capital Accounts, the determination, recognition and classification of
such item shall be the same as its determination, recognition and
classification for federal income tax purposes, provided that:

		
	 	     (i) Any deductions for depreciation, cost recovery, or
amortization attributable to any Partnership property shall be
determined as if the adjusted basis of such property were equal to
the Carrying Value of such property. Upon an adjustment to the
Carrying Value of any Partnership property subject to depreciation,
cost recovery, or amortization pursuant to Section 8.4, any further
deductions for such depreciation, cost recovery, or amortization
attributable to such property shall be determined as if the
adjusted basis of such property were equal to the Carrying Value of
such property immediately following such adjustment.

		
	 	     (ii) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined by the
Partnership as if the adjusted basis of such property as of such
date of disposition were equal in amount to the Carrying Value of
such property as of such date.

		
	 	     (iii) All fees and other expenses incurred by the Partnership
to promote the sale of a Partnership Interest that can neither be
deducted nor amortized under section 709 of the Code shall be
treated as an item of deduction.

		
	 	     (iv) Computation of all items of income, gain, loss and
deduction shall be made without regard to any election under
section 754 of the Code which may be made by the Partnership and,
as to those items described in the section 705(a)(1)(B) or section
705(a)(2)(B) of the Code, without regard to the fact that such
items are not includable in gross income or are neither currently
deductible nor capitalizable for federal income tax purposes.

		
	 	     (b) Notwithstanding the foregoing, (i) each Limited Partner shall be
allocated Partnership gross income each fiscal year in an amount equal to
the distribution made to it pursuant to Section 9.1(a), 9.1(b) and 9.1(c)
with respect to such fiscal year and (ii) each Partner shall be allocated
(x) the depreciation and/or amortization deductions

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	 	attributable to the property, if any, contributed by such Partner to
the Partnership pursuant to Section 8.1(a) of this Agreement and (y) an
amount of deductions equal to the Capital Contributions made by such
Partner to fund Losses pursuant to Sections 8.1(b)(iii) and 8.1(c).

     Section 10.2 Allocations for Tax Purposes.

		
	 	     (a) The Partnership shall, except to the extent such item is subject
to allocation pursuant to subsection (b) below, allocate each item of
income, gain, loss, deduction and credit, as determined for federal and
other income tax purposes, in the same manner as such item was allocated
for Capital Account purposes; and

		
	 	     (b) The Partnership, for federal and other income tax purposes
shall, in the case of Contributed Properties, allocate items of income,
gain, loss, depreciation and cost recovery deductions attributable to
those properties with a Built-In Gain or Built-In Loss pursuant to
section 704(c) of the Code and the Treasury Regulations thereunder.
Similar allocations shall be made in the event that the Carrying Value of
Partnership properties subject to depreciation, cost recovery or
amortization are adjusted pursuant to Section 8.4 upon the issuance of
Partnership Interests for cash. If an existing Partner acquires
additional Partnership Interests, such allocations shall apply only to
the extent of his or its additional Interests. No allocation under
section 704(c) of the Code shall be charged or credited to a Partner’s
Capital Account.

     Section 10.3 Transferor/Transferee Allocations. Unless another method
permitted by the Code is agreed to by the General Partner, the transferor and
the transferee, income, gain, loss, deduction or credit attributable to any
Partnership Interest which has been transferred shall be allocated between the
transferor and the transferee allocated equally among the days of the
Partnership’s fiscal year without regard to Partnership operations during such
days.

     Section 10.4 Reliance on Advisors. The General Partner may rely upon, and
shall have no liability to the Limited Partner or the Partnership if it does
rely upon, the written opinion of tax counsel or accountants retained by the
Partnership from time to time with respect to all matters (including disputes
with respect thereto) relating to computations and determinations required to
be made under this Article X or other provisions of this Agreement.

     Section 10.5 Tax Matters Partner.

		
	 	     (a) The General Partner is designated tax matters partner (“TMP”) as
defined in section 6231(a)(7) of the Code. The TMP and the Limited
Partners shall use their best efforts to comply with responsibilities
outlined in this Section 10.5 and in sections 6222 through 6232 of the
Code (including any Treasury regulations promulgated thereunder) and in
doing so shall incur no liability to any other Partner.

		
	 	     (b) If a Limited Partner intends to file a notice of inconsistent
treatment under section 6222(b) of the Code, such Partner shall, prior to
the filing of such notice, notify the TMP of such intent and the manner
in which the Limited Partner’s intended treatment of a Partnership item
is (or may be) inconsistent with the treatment of that item by the
Partnership.

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	 	     (c) No Partner other than the TMP shall file a request pursuant to
section 6227 of the Code for an administrative adjustment of partnership
items for any Partnership taxable year.

		
	 	     (d) No Partner other than the TMP shall file a petition under Code
sections 6226, 6228 or other Code sections with respect to any
Partnership item, or other tax matters involving the Partnership. In the
case where the TMP files such petition, it shall determine the forum in
which such petition will be filed.

ARTICLE XI

BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION

     Section 11.1 Maintenance of Books and Records. Proper and complete
records and books of account (including those required by the Partnership Act)
shall be kept by the Partnership in which shall be entered all transactions and
other matters relative to the Partnership’s business as are usually entered
into records and books of account maintained by persons engaged in businesses
of like character. The Partnership books and records necessary for purposes of
maintaining the Capital Accounts and giving effect to the allocations provided
in Articles VIII and X shall be maintained in accordance with the accounting
principles described therein, and shall be kept on the accrual basis and the
other books and records shall be kept on the accrual basis in accordance with
GAAP for financial reporting purposes and for purposes of making all other
calculations contemplated herein. The books and records shall at all times be
made available at the principal office of the Partnership and shall be open to
the reasonable inspection and examination of the Partners or their duly
authorized representatives during the business hours of the General Partner for
any purpose reasonably related to the interest of such Partner as a partner in
the Partnership.

     Section 11.2 Reports.

		
	 	     (a) The Partnership shall

		
	 	     (i) appoint a firm of certified public accountants to report
on the Partnership’s financial statements (the “Accountants”), and

		
	 	     (ii) direct the Accountants to render an audit opinion on the
Partnership’s financial statements within 90 days after the end of
each fiscal year.

		
	 	     (b) As soon as reasonably practicable after the end of each fiscal
year and after the Accountants have rendered an opinion on the
Partnership’s financial statements, the Partnership shall send each
person who was a holder of a Partnership Interest at any time during the
fiscal year then ended:

		
	 	     (i) All Partnership tax information as shall be necessary for
the preparation by such holder of its federal and any applicable
state and local income tax returns; and

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	 	     (ii) A copy of the Partnership’s audited financial statements
which shall include an income statement, a balance sheet, statement
of cash flow and required notes to the financial statements.

		
	 	     (c) As soon as practicable after the end of each calendar quarter,
the Partnership shall send to each Partner:

		
	 	     (i) An unaudited income statement and a statement of cash
flows for such quarter; and

		
	 	     (ii) An unaudited balance sheet as of the end of such quarter
and a profit and loss statement and statement of cash flows for the
portion of the fiscal year then ended.

ARTICLE XII

FISCAL YEAR

     The
fiscal year of the Partnership shall end on the thirty-first (31st)
day of December in each year.

ARTICLE XIII

PARTNERSHIP FUNDS

     The funds of the Partnership shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest-bearing
accounts, as shall be designated by the General Partner. All withdrawals from
any such bank accounts shall be made by the General Partner or other agent or
agents duly authorized by the General Partner. Partnership funds shall not be
commingled with those of any other person (including the General Partner or any
of its Affiliates).

ARTICLE XIV

STATUS OF LIMITED PARTNERS

     Section 14.1 No Personal Liability. No Limited Partner shall have any
personal liability whatever, whether to the Partnership, to any of the Partners
or to the creditors of the Partnership, for the debts of the Partnership or any
of its losses beyond the amount agreed to be contributed by him to the capital
of the Partnership as set forth in Section 8.1 except to the extent required by
the Partnership Act. No Limited Partner shall be obligated to restore any
deficit in its Capital Account upon the liquidation of the Partnership or its
Partnership Interest.

     Section 14.2 Dissolution or Bankruptcy of Limited Partner. The
dissolution or bankruptcy of a Limited Partner shall not cause a dissolution of
the Partnership, but the rights of such Limited Partner to share in the profits
and losses of the Partnership, and to receive distributions of Partnership
funds, shall on the happening of such an event, devolve upon such Limited
Partner’s legal representatives or successors in interest, as the case may be,
subject to

-17-

 

the terms and conditions of this Agreement, and the Partnership shall
continue as a limited partnership. Each Limited Partner’s successor in
interest shall be liable for all the obligations of such Limited Partner. In
no event, however, shall such estate, legal representative or other successor
in interest become a substituted Limited Partner, except in accordance with
Article XVI hereof.

ARTICLE XV

MANAGEMENT AND OPERATION OF BUSINESS

     Section 15.1 Management by General Partner.

		
	 	     (a) Except as otherwise expressly provided in Section 15.3 of this
Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and the
Limited Partners shall not have any right of control or management power
over the business and affairs of the Partnership. The General Partner
may, from time to time, designate one or more individuals as Partnership
officers to carry out the day-to-day operations of the Partnership’s
activities. Such Partnership officers may include a president,
vice-presidents, a secretary, a treasurer and such other officers as the
General Partner shall designate.

		
	 	     (b) Whenever in this Agreement (including the Operating Procedures)
the General Partner is permitted or required to make a decision (i) in
its “discretion” or under a similar grant of authority or latitude, the
General Partner shall be entitled to consider such interests and factors
as it desires and may consider its own interests or (ii) in its “good
faith” or under another express standard, the General Partner shall act
under such express standard and shall not be subject to any other or
different standards imposed by this Agreement or by law. The Limited
Partners hereby agrees that any standard of care or duty imposed in this
Agreement or under the Partnership Act or any other applicable law, rule
or regulation shall be modified, waived or limited in each case as
required to permit the General Partner to act under this Agreement and to
make any decision pursuant to the authority prescribed in this Agreement
so long as such action or decision was not performed or omitted with the
intent to defraud or deliberately cause injury to the Limited Partners.

     Section 15.2 No Limited Partner Participation. No Limited Partner shall
participate in the management or operations of or have any control over the
Partnership’s business nor shall any Limited Partner have the power to
represent, act for, sign for or bind the General Partner or the Partnership.
The Limited Partners hereby consent to the exercise by the General Partner of
the powers conferred on it by this Agreement.

     Section 15.3 Actions Requiring Limited Partner Consent. Notwithstanding
any other provision of this Agreement to the contrary, without the consent of
the Limited Partners, the General Partner shall not have the authority to:

		
	 	     (a) Admit a person as a General Partner, except as provided in this
Agreement;

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	 	     (b) Admit a person as a Limited Partner, except as provided in this
Agreement;

		
	 	     (c) Knowingly perform any act that would subject the Limited
Partners to any liability as a general partner; or

		
	 	     (d) Sell or dispose of all or substantially all of the assets of the
Partnership.

     Section 15.4 Third Party Reliance. Notwithstanding any other provision of
this Agreement to the contrary, no lender, lessor, lessee, purchaser or any
other person dealing with the Partnership, shall be required to verify any
representation by the General Partner as to the extent of the interest in the
assets of the Partnership that the General Partner is entitled to encumber,
sell, lease or otherwise use or Partnership action that the General Partner is
empowered to authorize and conduct and such person shall be entitled to rely
exclusively on the representations of the General Partner as to its authority
to enter into such arrangements and shall be entitled to deal with the General
Partner as if it were the sole party in interest therein, both legally and
beneficially. Each Limited Partner and each assignee or successor hereby
waives any and all defenses or other remedies that may be available against
such lender, purchaser or other person to contest, negate or disaffirm any such
action of the General Partner. In no event shall any person dealing with the
General Partner or its representative with respect to any business or property
of the Partnership be obligated to ascertain that the terms of this Agreement
have been complied with, or to inquire into the necessity or expediency of any
act of the General Partner or its representative; and every contract,
agreement, deed, assignment, lease, mortgage, security agreement, promissory
note or other instrument or document executed by the General Partner or its
representative with respect to any business or property of the Partnership
shall be conclusive evidence in favor of any and every person relying thereon
or claiming thereunder that (i) at the time of the execution and delivery
thereof this Agreement was in full force and effect, (ii) such instrument or
document was duly executed in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership, and (iii) the General Partner or
its representative was duly authorized and empowered to execute and deliver any
and every such instrument or document for and on behalf of the Partnership.

     Section 15.5 Compensation and Reimbursement. The General Partner shall
receive no compensation for its services hereunder but shall be reimbursed for
any costs, expenses, fees or other disbursements paid or incurred by it for or
on behalf of the Partnership. As more fully provided in the Operating
Procedures, the General Partner may pay with funds of the Partnership or incur
for and on behalf of the Partnership, costs, expenses, fees and other
disbursements as it in its sole discretion deems necessary for the ongoing
operations of the Partnership’s business, activities and affairs.

     Section 15.6 Exculpation. Neither the General Partner, its Affiliates,
nor any owner, member, manager, officer, director, partner, employee or agent
of the General Partner or its Affiliates, shall be liable, responsible or
accountable in damages or otherwise to the Partnership or any Partner for any
action taken or failure to act (EVEN IF SUCH ACTION OR FAILURE TO ACT
CONSTITUTED THE NEGLIGENCE OF SUCH PERSON) on behalf of the Partnership within
the scope of the authority conferred on the person described in this Agreement
and the LLC Agreement or by law unless such act or omission was performed or
omitted

-19-

 

fraudulently or constituted gross negligence or willful misconduct. To
the extent that, at law or in equity, the General Partner, its Affiliates, or
any owner, manager, officer, director, partner, employee or agent thereof have
duties (including fiduciary duties) and liabilities relating to the Partnership
or to another Partner, the General Partner, its Affiliates, or any owner,
manager, officer, director, partner, employee or agent thereof acting under the
Agreement shall not be liable to the Partnership or to any such other Partner
for their reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they expand or restrict the duties and
liabilities of the General Partner, its Affiliates, or any owner, manager,
officer, director, partner, employee or agent thereof otherwise existing at law
or in equity, are agreed by the Partners to replace such other duties and
liabilities of the General Partner, its Affiliates, or any owner, officer,
director, partner, employee or agent thereof.

     Section 15.7 Indemnification.

		
	 	     (a) TO THE FULLEST EXTENT PERMITTED BY LAW, THE GENERAL PARTNER, ITS
AFFILIATES, THEIR RESPECTIVE OFFICERS, MANAGERS, DIRECTORS, PARTNERS,
MEMBERS, EMPLOYEES AND AGENTS OR ANY PERSON PERFORMING A SIMILAR FUNCTION
(INDIVIDUALLY, AN “INDEMNITEE”) SHALL BE INDEMNIFIED AND HELD HARMLESS BY
THE PARTNERSHIP FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
JUDGMENTS, LIABILITIES, OBLIGATIONS, PENALTIES, SETTLEMENTS AND
REASONABLE EXPENSES (INCLUDING LEGAL FEES) ARISING FROM ANY AND ALL
CLAIMS, DEMANDS, ACTIONS, SUITS OR PROCEEDINGS, CIVIL, CRIMINAL,
ADMINISTRATIVE OR INVESTIGATIVE, IN WHICH THE INDEMNITEE MAY BE INVOLVED,
OR THREATENED TO BE INVOLVED, AS A PARTY OR OTHERWISE, BY REASON OF ITS
STATUS AS (X) THE GENERAL PARTNER OR AN AFFILIATE THEREOF, OR (Y) AN
OFFICER, MANAGER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF THE GENERAL
PARTNER OR AN AFFILIATE THEREOF, REGARDLESS OF WHETHER THE INDEMNITEE
CONTINUES TO BE THE GENERAL PARTNER OR AN AFFILIATE OR AN OFFICER,
MANAGER, DIRECTOR, EMPLOYEE OR AGENT OF THE GENERAL PARTNER OR AN
AFFILIATE THEREOF AT THE TIME ANY SUCH LIABILITY OR EXPENSE IS PAID OR
INCURRED, UNLESS THE ACT OR FAILURE TO ACT GIVING RISE TO INDEMNITY
HEREUNDER CONSTITUTED FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

		
	 	     (b) The Partnership through the General Partner may purchase and
maintain insurance on behalf of the General Partner and such other
persons as the General Partner shall determine against any liability that
may be asserted against or expense that may be incurred by such person in
connection with the Partnership’s activities, regardless of whether the
Partnership would have the power to indemnify such person against such
liability under the provisions of this Partnership Agreement.

		
	 	     (c) Expenses incurred by any Indemnitee in defending any claim with
respect to which such Indemnitee may be entitled to indemnification by
the Partnership hereunder (including without limitation reasonable
attorneys’ fees and disbursements) shall, to the maximum extent permitted
by law, be advanced by the Partnership prior to

-20-

 

		
	 	the final disposition of such claim, upon receipt of a written
undertaking by or on behalf of such Indemnitee to repay the advanced
amount of such expenses unless it is determined ultimately that the
Indemnitee is entitled to indemnification by the Partnership under
Section 15.7(a).

		
	 	     (d) The indemnification provided in this Section 15.7 is for the
benefit of the Indemnitees and shall not be deemed to create any right to
indemnification for any other persons.

     Section 15.8 Other Activities; Noncompetition.

		
	 	     (a) Each Limited Partner agrees that, for a period beginning on the
date of this Agreement and ending on the earlier to occur of (i) the
termination of this Agreement for whatever reason, or (ii) the
disposition, directly or indirectly, by such Limited Partner,
respectively (or, to the extent such interest has been transferred to an
Affiliate of such Partner as permitted hereby, by such Affiliate), of its
interest in the Partnership to a person that is not a wholly owned,
direct or indirect, subsidiary of such Limited Partner’s Parent, no such
Limited Partner or any of its Restricted Affiliates will engage or
participate in, or carry on, directly or indirectly, either as
proprietor, partner, member, director, stockholder, agent, consultant,
advisor, trustee, Affiliate, or otherwise, whether or not for
compensation, any business that competes with the Partnership Business in
Chambers and Harris Counties, Texas (the “Territory”). Each Limited
Partner acknowledges and agrees that the foregoing noncompetition
agreement is given in partial consideration for the other party’s
entering into this Agreement.

		
	 	     (b) Each of the Limited Partners or its Affiliates have, pursuant to
Storage Agreements, leased or obtained the right to use storage capacity
of the Partnership. Without limiting the generality of the provisions of
Section 15.8(a) and in furtherance thereof, each of the Limited Partners
agrees that it and its Affiliates will use such storage capacity solely
for its own internal business operations and will not lease or sublease
such storage capacity to third parties, and will direct to the
Partnership any such third party seeking access to the Partnership’s
storage facility so that such additional business shall be for the
benefit of the Partnership. The foregoing shall not be interpreted to
prohibit or restrict the current practices of the TE Partner with respect
to such storage capacity. Additionally, except as otherwise herein
specifically provided, the Limited Partners agree to act in good faith
with respect to each other and the Partnership Business to maximize the
returns from such business throughout the term of the Partnership.

		
	 	     (c) In the event either Limited Partner (the “First Party”) or any
of its Restricted Affiliates desires to pursue a business opportunity
that will compete with the Partnership Business in the Territory as
prohibited by Section 15.8(a) (“Competing Business Transaction”), such
Limited Partner shall be obligated to promptly bring such Competing
Business Transaction to the attention of the other Limited Partner (the
“Second Party”), to fully disclose all details regarding the proposed
opportunity (subject to the execution of appropriate confidentiality
undertakings), and to offer such business opportunity to become part of
the Partnership Business. The Limited Partners shall negotiate in good
faith for a period of 45 days (unless the business opportunity dictates a

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	 	shorter period of time, in which event, for such shorter time period
as will avoid the loss of such opportunity) to bring such Competing
Business Transaction into the Partnership Business, either by
contribution or purchase. Should the Limited Partners be unable to agree
within such 45 day period on the terms and provisions for incorporating
the Competing Business Transaction into the Partnership Business and the
First Party or its Restricted Affiliate, as may be the case, wishes to
pursue the Competing Business Transaction rather than continue with the
Partnership Business and the transactions contemplated by this Agreement,
subject to the provisions of Section 15.8(e) below, either Limited
Partner may invoke the special buy-out provisions of Section 23.7 without
first complying with Section 23.1. The First Party agrees to give
written notice within one Business Day of the consummation of such
transaction.

		
	 	     (d) In the event the First Party or any of its Restricted Affiliates
desires to pursue a Competing Business Transaction which cannot become a
part of the Partnership Business for any reason other than the failure of
the Second Party to consent to such transaction, and the First Party or
its Restricted Affiliate, as may be the case, elects to pursue such
Competing Business Transaction rather than continue with the Partnership
Business, the First Party shall give written notice of such election to
the Second Party and either Party may invoke the special buy-out
provisions of Section 23.7 without first complying with Section 23.1.
The First Party agrees to give written notice within one Business Day of
the consummation of such transaction.

		
	 	     (e) Notwithstanding any other provision of this Agreement, the
Second Party may waive the non-competition provision of this Section 15.8
as it applies to any Competing Business Transaction offered by the First
Party under Section 15.8(c). In such event, (i) the First Party may
participate in such Competing Business Transaction without being in
violation of this Agreement; (ii) the Second Party thereby waives any
right to participate in, or to benefit from, such transaction; and (iii)
neither Limited Partner shall be entitled to invoke the special buy-out
provisions of Section 23.7 as a result of such transaction. Any such
waiver shall apply only to the specific Competing Business Transaction
being presented and shall not be construed as applicable to any other
Competing Business Transaction.

		
	 	     (f) Notwithstanding the foregoing or any other provision of this
Agreement:

		
	 	     (i) Neither Limited Partner nor any of its Affiliates shall be
prohibited from conducting business activities or operations
outside the Territory of a similar nature as are conducted by such
Limited Partner or Affiliate as of the date hereof; or

		
	 	     (ii) Neither Limited Partner nor any of its Affiliates shall
be prohibited from constructing and operating other pipelines to
and from or through the Territory so long as they do not compete
with the pipelines that comprise a part of the Partnership’s assets
as of the date hereof,

		
	 	     (iii) Neither Limited Partner nor any of its Affiliates shall
be prohibited from operating pipelines to, from or through the
Territory which are currently

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	 	operated by such persons, including the servicing of persons
who are customers of the Partnership, or from expanding, improving
or otherwise modifying such pipelines, or

		
	 	     (iv) Neither Limited Partner, nor any of its Affiliates, has
any obligation or duty to first offer to the Partnership new
business ideas that are outside the scope of the Partnership
Business.

		
	 	     (g) Each Limited Partner acknowledges that the covenant provided in
this Section 15.8 is manifestly reasonable on its face and is no more
restrictive than is required for the protection of the Partnership,
including the interest of the other Limited Partner and the Partnership.
In the event that the provisions of this Section 15.8 should ever be
deemed to exceed the time and geographic limitations permitted by
applicable law, then such provisions shall be reformed to the maximum
time or geographic limitations permitted by applicable law.

		
	 	     (h) It is specifically understood and agreed that any breach of the
provisions of this Section 15.8 hereof is likely to result in irreparable
harm to the Partnership and that an action at law for damages alone will
be an inadequate remedy for such breach, and that the Partnership would
suffer irreparable harm in the event either Limited Partner or its
Restricted Affiliates fail to comply with its obligations hereunder.
Therefore, in addition to any other remedy that may be available to it,
the other Limited Partner or the Partnership shall be entitled to enforce
the specific performance of Section 15.8 on the breaching Limited Partner
and its Restricted Affiliates and to seek both temporary and permanent
injunctive relief (to the extent permitted by law) without the necessity
of proving actual damages, and such other relief as the court may allow.

ARTICLE XVI

TRANSFER OF INTERESTS BY PARTNERS

     Section 16.1 Restrictions on Transfer. No Partner shall have the right to
Dispose of its interest in the Partnership, or any portion thereof without (a)
complying with the provisions of this Article XVI, (b) Disposing of its entire
Partnership Interest to a single purchaser or transferee, and (c)
simultaneously Disposing of its and any Affiliate’s entire membership interest
in the General Partner. Any attempted transfer or assignment of any interest
in the Partnership in violation of the provisions of this Article XVI shall be
void and of no force and effect.

     Section 16.2 Transfers to Affiliates. A Limited Partner may Dispose of
all of its Partnership Interest to an Affiliate of such Limited Partner
provided that such purchaser or transferee, prior to such Disposition, becomes
a party to this Agreement and agrees to be bound by all applicable terms and
conditions including this Article XVI.

     Section 16.3 Right of First Refusal. If a Limited Partner (“Offeror”)
desires to Dispose of its Partnership Interest (other than a sale or other
transfer of its Partnership Interest to an Affiliate or a Change of Partner
Control), such Disposition may be made only by a sale of all

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of its entire Partnership Interest and its and any Affiliate’s entire
membership interest in the General Partner (collectively, the “Interest”) for
cash (or cash equivalent) and only if the Offeror receives with respect thereto
a bona fide binding written proposal for the acquisition of such Interest (an
“Acquisition Proposal”), and then only in compliance with the following
procedures:

		
	 	     (a) Upon receipt of an Acquisition Proposal, the Offeror shall
offer, by written notice (the “Offer”) to the other Limited Partner (the
“Offeree”), to sell the Interest to the Offeree or Affiliates thereof on
the terms (including price) specified in the Acquisition Proposal
pursuant to the terms of this Section 16.3. Such Offer shall contain a
description of and a copy of the Acquisition Proposal subject to
appropriate confidentiality provisions. In addition, the Offeror shall
provide to the Offeree all other information with respect to the
Acquisition Proposal and the proposed transferee reasonably requested by
the Offeree in order for it to evaluate the Acquisition Proposal, to
verify the bona fide nature thereof and to evaluate the effect of having
the person making such Acquisition Proposal as a Partner in the
Partnership.

		
	 	     (b) The Offeree shall have the right, to be exercised by notice (the
“Acceptance”) from the Offeree to the Offeror on or before the 30th day
following receipt of the Offer (the “Offer Period”), to elect to purchase
all (but not less than all) of the Interest pursuant to the terms of the
Offer.

		
	 	     (c) If the Offeree accepts the Offer, the closing of the acquisition
of the Interest shall be consummated on or before the 60th day after the
Offeror receives the Acceptance but effective at the end of the calendar
month occurring on or immediately prior to such closing. The acquisition
shall be consummated at a closing held at the principal offices of the
Partnership (unless otherwise agreed by the purchaser of the Partnership
Interest and the Offeror), at which time the purchaser shall deliver to
the Offeror the purchase price (in the form of immediately available
funds), and the Offeror shall deliver to the purchaser such transfer
documentation reasonably acceptable to the purchaser as shall be required
to evidence the transfer of such Interest free and clear of all liens and
encumbrances, except those created under this Agreement.

		
	 	     (d) If the Offeree does not accept the Offer, the Offeror shall be
permitted for a period of 180 days after expiration of the Offer Period
to sell all (but not less than all) of the Interest on terms not more
favorable to such transferee than the terms specified in the Acquisition
Proposal and at a price that is not less than the price specified in the
Acquisition Proposal.

     Section 16.4
Change of Partner Control. If a Limited Partner or an
Affiliate desires to Dispose of its Partnership Interest by a Change of Partner
Control or undergoes an involuntary change of Partner Control, the other
Limited Partner (“Option Partner”) or its designated Affiliate shall have an
option to acquire the Partnership Interest of the other Limited Partner and it
or its Affiliate’s membership interest in the General Partner (collectively,
the “Option Interest”) in accordance with the following procedures:

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	 	     (a) If the Partner undergoing the Change of Partner Control is the
TE Partner, the terms and provisions of Section 16.3 shall apply.

		
	 	     (b) If the Partner undergoing the Change of Partner Control is the
LD Partner, the option price payable shall be the greater of (i) 50% of
the Net EBITDA for the 12-month period preceding the Notice Month (as
hereinafter defined) times ten (10.0) and (ii) the LD Partner’s capital
account in the Partnership and in the General Partner (or, if applicable,
the capital account of its Affiliate in the General Partner), in both
cases according to GAAP (collectively, the “LD Combined Capital Account
Balance”). “Notice Month” means the month during which the LD Change of
Partner Control occurs.

		
	 	     (c) The provisions of Sections 16.3(a), (b) and (c), with respect to
notice, the offer period for the Option Interests, acceptance of the
offer by the Option Partner and the closing of the acquisition shall
apply.

     Section 16.5 Procedures. Any Partner who desires to transfer its
Partnership Interest shall arrange for any permitted transferee to be bound by
the provisions of this Agreement, as it may then be amended, by having such
transferee execute two counterparts of an instrument of assignment satisfactory
in form and substance to the General Partner and by delivering the same to the
General Partner together with any such other information that may be required
by counsel to the Partnership to determine whether the proposed transfer
violates applicable federal or state securities or other laws or regulations.
If and when the consent of the other Partners to such assignment and the
substitution of such transferee hereof is secured and the other requirements of
this Article XVI are satisfied, the transferee shall become a substituted
Partner as to the Partnership Interest thus transferred effective as of the
first day of the calendar month during which the General Partner actually
receives the aforesaid instrument of assignment executed by both the transferor
and transferee. The transferee shall be required to pay any and all reasonable
filing and recording fees, legal fees, accounting fees, and other charges and
fees incurred by the Partnership and its counsel as a result of such transfer.

     Section 16.6 Purchase and Sale in the Event of Maximum Loss Being
Exceeded.

		
	 	     (a) In the event that the Maximum Loss is exceeded and the
provisions of Section 8.1(c)(ii) apply, then the TE Partner shall acquire
the Partnership Interest of the LD Partner and the membership interest
held by the LD Partner or its Affiliate in the General Partner for an
amount equal to the LD Combined Capital Account Balance, less the product
of (i) the sum of the LD Partner’s Unrecovered Loss Balance and TE
Partner’s Unrecovered Loss Balance, times (ii) the LD Combined Capital
Account Balance divided by the total of all GAAP capital account balances
in the Partnership and the General Partner.

		
	 	     (b) The closing of the purchase and sale contemplated hereunder
shall be consummated within 60 days after the provisions of Section
8.1(c)(ii) first become applicable at the principal office of the
Partnership (unless otherwise mutually agreed by the Limited Partners),
at which time the purchase price (in the form of immediately available
funds) shall be delivered to the sellers and the sellers shall deliver to
the buyer

-25-

 

		
	 	or its designee such transfer documentation reasonably acceptable to
the buyer and the sellers as shall be required to evidence the transfer
of such Partnership Interest and membership interest in the General
Partner, free and clear of all liens and encumbrances, except those
created under this Agreement.

     Section 16.7 Compliance with Securities Laws. All Partners acknowledge
that the Partnership interests have not been registered under (i) the
Securities Act of 1933, as amended (the “1933 Act”), in reliance on the
exemptions afforded by Section 4(2) of the 1933 Act, or (ii) applicable state
securities laws in reliance on exemptions under such laws. Therefore, to
preserve said exemptions and notwithstanding anything contained herein to the
contrary, the Partners hereby agree that interests of the Partners shall be
nontransferable and nonassignable, except in compliance with the registration
provisions of the 1933 Act and the Partnership Act, or an exemption or
exemptions therefrom, and any attempted or purported transfer or assignment in
violation of the foregoing shall be void and of no effect. Accordingly, as an
additional condition precedent to any assignment or other transfer of any
interest in the Partnership, the General Partner may require an opinion of
counsel satisfactory to the General Partner that such assignment or transfer
will be made in compliance with the registration provisions of the 1933 Act and
applicable state securities laws or exemption(s) therefrom, and such transferor
or assignor shall be responsible for paying said counsel’s fee for the opinion.

ARTICLE XVII

DISSOLUTION OF THE PARTNERSHIP

     The happening of any one of the following events shall work an immediate
dissolution of the Partnership:

		
	 	     (a) An event of withdrawal of the General Partner as defined in §
17-402 of the Partnership Act except that an event described in
Subsections (a)(4) and (a)(5) of § 17-402 shall not be an event of
withdrawal unless within 90 days of such event of withdrawal, the
remaining Partners agree in writing to continue the business of the
Partnership and appoint, effective as of the date of withdrawal, a
successor General Partner of the Partnership who acquires, or enters into
an agreement to acquire, the Partnership Interest of the prior General
Partner during such 90-day period;

		
	 	     (b) The receipt by the Partnership of the final payment due on the
sales price of all or substantially all the assets of the Partnership or
the Partnership’s business following the Partnership’s sale thereof;

		
	 	     (c) The agreement by all of the Partners to dissolve;

		
	 	     (d) At the time there are no Limited Partners; and

		
	 	     (e) Entry of a decree of judicial dissolution under § 17-802 of the
Partnership Act.

Any withdrawal of the General Partner under § 17-602 of the Partnership Act
shall be effective on the date specified in a written notice of withdrawal
given by the General Partner to the

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Limited Partners; provided, however, that the effective date shall be not less
than 60 days following the date of delivery of such notice.

ARTICLE XVIII

WINDING UP AND TERMINATION OF THE PARTNERSHIP

     Section 18.1 Liquidator. If the Partnership is dissolved for any reason,
a liquidator (the “Liquidator”) shall commence to wind up the affairs of the
Partnership and to liquidate and sell its assets. The General Partner shall
serve as the Liquidator unless the dissolution occurred as a result of an event
of withdrawal of the General Partner, in which case the person designated by
the Limited Partners shall serve as the Liquidator. The Liquidator shall have
full right and discretion to determine the time, manner and terms of sale or
sales of Partnership property pursuant to such liquidation having due regard to
the activity and condition of the relevant market and general financial and
economic conditions. The Liquidator appointed in the manner provided herein
shall have and may exercise, without further authorization or consent of any of
the parties hereto or their legal representatives or successors in interest,
all of the powers conferred upon the General Partner under the terms of this
Agreement (but subject to all of the applicable limitations, contractual and
otherwise, upon the exercise of such powers) to the extent necessary or
desirable in the good faith judgment of the Liquidator to carry out the duties
and functions of the Liquidator hereunder for and during such period of time,
not to exceed two (2) years after the date of dissolution of the Partnership,
as shall be reasonably required in the good faith judgment of the Liquidator to
complete the liquidation and dissolution of the Partnership as provided for
herein, including, without limitation, the following specific powers:

		
	 	     (a) The power to continue to manage and operate any business of the
Partnership during the period of such liquidation or dissolution
proceedings, excluding, however, the power to make and enter into
contracts which may extend beyond the period of liquidation.

		
	 	     (b) The power to make sales and incident thereto to make deeds,
bills of sale, assignments and transfers of assets and properties of the
Partnership; provided, that the Liquidator may not impose personal
liability upon any of the Partners under any such instrument.

		
	 	     (c) The power to borrow funds as may, in the good faith judgment of
the Liquidator, be reasonably required to pay debts and obligations of
the Partnership or operating expenses, and to execute and/or grant deeds
of trust, mortgages, security agreements, pledges and collateral
assignments upon and encumbering any of the Partnership properties as
security for repayment of such loans or as security for payment of any
other indebtedness of the Partnership; provided, that the Liquidator
shall not have the power to create any personal obligation on any of the
Partners to repay such loans or indebtedness other than out of available
proceeds of foreclosure or sale of the properties or assets as to which a
lien or liens are granted as security for payment thereof.

-27-

 

		
	 	     (d) The power to settle, release, compromise or adjust any claims
asserted to be owing by or to the Partnership, and the right to file,
prosecute or defend lawsuits and legal proceedings in connection with any
such matters.

     Section 18.2 Reserves. After making payment or provision for payment of
all debts and liabilities of the Partnership and all expenses of liquidation,
the Liquidator may set up, for a period not to exceed the aforesaid two (2)
years, such cash reserves as the Liquidator may deem reasonably necessary for
any contingent liabilities or obligations of the Partnership. Upon the
satisfaction or other discharge of such contingency, the amount of the reserves
not retired, if any, will be distributed in accordance with this Article XVIII.

     Section 18.3 Sale of Assets; Distribution of Proceeds. Upon the winding
up and termination of the business and affairs of the Partnership, its assets
(other than cash) shall be sold, its liabilities and obligations to creditors
and all expenses incurred in its liquidation shall be paid (either by payment
or the making of reasonable provision for payment). All items of Partnership
income, gain, loss or deduction shall be credited or charged to the Capital
Accounts of the Partners pro rata in accordance with their Sharing Ratios.
Thereafter, the net proceeds from such sales (after deducting all selling costs
and expenses in connection therewith), together with (at the expiration of the
two (2) year period referred to therein) the balance and reserve account
referred to in Section 18.2 above, shall be distributed among the Partners in
accordance with their respective positive balances in their Capital Accounts.

     Section 18.4 Final Accounting. Within a reasonable time following the
completion of the liquidation of the Partnership’s properties, the Liquidator
shall supply to each of the Partners a statement prepared by the Partnership’s
accountants which shall set forth the assets and the liabilities of the
Partnership as of the date of complete liquidation, each Partner’s pro rata
portion of distributions pursuant to Section 18.3, and the amount retained as
reserves by the Liquidator pursuant to Section 18.2.

     Section 18.5 Recourse Limited to Assets of the Partnership. Each holder
of an interest in the Partnership shall look solely to the assets of the
Partnership for all distributions with respect to the Partnership and its
Capital Contribution thereto (including the return thereof) and share of
profits or losses thereof, and shall have no recourse therefor (upon
dissolution or otherwise) against the Partnership, the General Partner or the
Liquidator. No holder of an interest in the Partnership shall have any right
to demand or receive property other than cash upon dissolution and termination
of the Partnership.

     Section 18.6 Termination. Upon the completion of the liquidation of the
Partnership and the distribution of all Partnership funds, the Partnership
shall terminate and the Liquidator shall (and is hereby given the power and
authority to) execute, acknowledge, swear to and record all documents required
to effectuate the dissolution and termination of the Partnership. No Partner
shall be required to restore any deficit balance existing in its Capital
Account upon the liquidation and termination of the Partnership.

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ARTICLE XIX

NOTICES

     To be effective, all notices and demands under this Agreement must be in
writing and must be given (i) by depositing same in the United States mail,
postage prepaid, certified or registered, return receipt requested, (ii) by
telecopy with receipt confirmed by return telecopy or (iii) by delivering same
in person and receiving a signed receipt therefor. For purposes of notice, the
addresses of the Partners or their respective assigns shall be as set forth on
the signature pages hereof. Notices mailed in accordance with the foregoing
shall be deemed to have been given and made upon receipt. Any Partner or his
assignee may designate a different address to which notices or demands shall
thereafter be directed by written notice given in the manner hereinabove
required and directed to the Partnership at its principal office as hereinabove
set forth.

ARTICLE XX

AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT

     This Agreement may be modified or amended from time to time by the written
agreement of the General Partner and each of the Limited Partners.

ARTICLE XXI

POWER OF ATTORNEY

     Each Limited Partner and any permitted assignee or transferee of its
interest hereunder, does hereby irrevocably constitute and appoint the General
Partner, its true and lawful attorney in fact and agent, to execute,
acknowledge, verify, swear to, deliver, record and file, in such Limited
Partner’s or assignee’s name, place and stead, all instruments, documents and
certificates which may from time to time be required to effectuate and
implement the terms and provisions of this Agreement including, without
limitation, the power and authority to execute, verify, swear to, acknowledge,
deliver, record and file (i) all certificates and other instruments which the
General Partner deems appropriate to form, qualify or continue the Partnership
as a limited partnership in the State of Delaware and in such other states as
the General Partner deems appropriate, (ii) all instruments which the General
Partner deems appropriate to reflect any amendment to this Agreement, or
modification of the Partnership, made in accordance with the terms of this
Agreement, (iii) all conveyances and other instruments which the General
Partner deems appropriate to reflect the dissolution and termination of the
Partnership pursuant to the terms of this Agreement, including any writing
required by the Partnership Act, (iv) all instruments relating to the admission
of any additional or substituted Limited Partner, (v) a certificate of assumed
name and such other certificates and instruments as may be necessary under any
fictitious or assumed name statutes from time to time in effect in
jurisdictions in which the Partnership conducts or plans to conduct business
and (vi) all other instruments that may be required or permitted by law to be
filed on behalf of the Partnership and that are not inconsistent with this
Agreement. The power of attorney granted herein shall be deemed to be coupled
with an interest, shall be irrevocable, shall survive and not be affected by
the subsequent death,

-29-

 

dissolution, bankruptcy, incompetency or legal disability of a Limited
Partner and shall extend to such Limited Partner’s successors and assigns; and
may be exercised by executing such instrument acting as attorney in fact for
the Limited Partner or in such other manner as said agent and attorney in fact
may deem appropriate. Each Limited Partner hereby agrees to be bound by any
action taken by the General Partner acting pursuant to such power of attorney,
and each Limited Partner and assigns hereby waives any and all defenses which
may be available to contest, negate or disaffirm any action of the General
Partner taken under such power of attorney.

ARTICLE XXII

REPRESENTATIONS, WARRANTIES AND COVENANTS

     The General Partner and each Limited Partner each hereby respectively
represent and warrant to the others that (i) it is duly organized, validly
existing and in good standing under the jurisdiction of its organization, with
full power and authority to enter into and perform its obligations under this
Agreement; (ii) it has validly executed this Agreement, and upon delivery, this
Agreement shall be a binding obligation of such party, enforceable against such
party in accordance with its terms; and (iii) its entry into this Agreement and
the performance of its obligations hereunder will not require the approval of
any governmental body or regulatory authority and will not violate, conflict
with or cause a default under, any of its organizational documents, any
contractual covenant or restriction by which such party is bound, or any
applicable law, regulation, rule, ordinance, order, judgment or decree.

ARTICLE XXIII

DISPUTES

     Section 23.1 Negotiation. Except for the injunctive remedies provided by
Section 15.8, in the event of any claims, counterclaims, demands, causes of
action, disputes, controversies, and other matters in question arising out of
or relating to this Agreement, any provision hereof, the alleged breach
thereof, or in any way relating to the subject matter of this Agreement or the
relationship between the Partners created by this Agreement, involving the
Limited Partners and/or their respective representatives and/or Affiliates (all
of which are referred to herein as “Disputes”), the Limited Partners shall
promptly seek to resolve any such Dispute by negotiations between senior
executives of the Limited Partners who have authority to settle the Dispute.
When a Limited Partner believes there is a Dispute under this Agreement, that
Limited Partner will give the other written notice of the Dispute. Within
thirty (30) days after receipt of such notice, the receiving Limited Partner
shall submit to the other a written response. Both the notice and response
shall include (i) a statement of each Limited Partner’s position and a summary
of the evidence and arguments supporting its position, and (ii) the name,
title, fax number, and telephone number of the executive who will represent
that Limited Partner. In the event the Dispute involves a claim arising out of
the actions of any person or entity not a signatory to this Agreement, the
receiving Limited Partner shall have such additional time as necessary, not to
exceed an additional thirty (30) days, to investigate the Dispute before
submitting a written response. The executives shall meet at a mutually
acceptable time and place within fifteen (15) days after the date of the
response and thereafter as often as they

-30-

 

reasonably deem necessary to exchange relevant information and to attempt
to resolve the Dispute. If one of the executives is an attorney or intends to
be accompanied at a meeting by an attorney, the other executive shall be given
at least five (5) days’ notice of such intention and may also be accompanied by
an attorney. All negotiations and communications pursuant to this Article
XXIII shall be treated and maintained by the Limited Partners as confidential
information and shall be treated as compromise and settlement negotiations for
the purposes of federal and state rules of evidence.

     Section 23.2 Failure to Resolve. If the Dispute has not been resolved
within sixty (60) days after the date of the response given pursuant to Section
23.1 above, or such additional time, if any, that the Limited Partners mutually
agree to in writing, or if the Limited Partner receiving such notice denies the
applicability of the provisions of Section 23.1 or otherwise refuses to
participate under the provisions of Section 23.1, either Limited Partner may
initiate arbitration pursuant to the provisions of Section 23.3 below;
provided, however, that either Partner may reject arbitration and trigger the
special Buy-Out Option of Section 23.7, all as provided below.

     Section 23.3 Arbitration. Any Disputes not settled pursuant to the
foregoing provisions shall be resolved as follows:

		
	 	     (a) Any Limited Partner desiring to initiate arbitration in
connection with any Dispute shall send, via certified mail, written
notice of demand of arbitration to the other Limited Partner and the name
of the arbitrator appointed by the Limited Partner demanding arbitration
together with a statement of the matter in controversy.

		
	 	     (b) Within fifteen (15) days after receipt of such demand, the
receiving Limited Partner shall either (i) agree to submit the Dispute to
arbitration and name its arbitrator or (ii) refuse to submit the Dispute
to arbitration, in which case the provisions of this Section 23.3 shall
not be applicable to such Dispute. If the receiving Limited Partner
fails or refuses to name its arbitrator within such 15-day period, it
shall be deemed to have agreed to submit the Dispute to arbitration and
the second arbitrator shall be appointed, upon request of the party
demanding arbitration, by the Chief U.S. District Court Judge for the
Southern District of Texas or such other person designated by such judge.
The two arbitrators so selected shall within fifteen (15) days after
their designation select a third arbitrator; provided, however, that if
the two arbitrators are not able to agree on a third arbitrator within
such 15-day period, either Limited Partner may request the Chief U.S.
District Court Judge for the Southern District of Texas or such other
person designated by such judge to select the third arbitrator as soon as
possible. In the event the Judge declines to appoint an arbitrator,
appointment shall be made, upon application of either Limited Partner,
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. If any arbitrator refuses or fails to fulfill his or her
duties hereunder, such arbitrator shall be replaced by the Limited
Partner which selected such arbitrator (or if such arbitrator was
selected by another person, through the procedure which such arbitrator
was selected) pursuant to the foregoing provisions.

		
	 	     (c) Each arbitrator selected by the Limited Partners shall be a
certified public accountant or licensed attorney with at least fifteen
(15) years of oil and gas experience as a certified public accountant
and/or practicing attorney. The arbitrators selected by

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	 	the Limited Partners are not required to be neutral, but the third
arbitrator shall be neutral and shall be a retired judge.

		
	 	     (d) The Limited Partners hereto hereby request and consent to the
three (3) arbitrators conducting a hearing in Houston, Texas no later
than sixty (60) days following their selection or thirty (30) days after
all prehearing discovery has been completed, whichever is later, at which
the Limited Partners shall present such evidence and witnesses as they
may choose, with or without counsel.

		
	 	     (e) Arbitration shall be conducted in accordance with the Commercial
Arbitration Rules and procedures of the American Arbitration Association.

		
	 	     (f) The Federal Rules of Civil Procedure, as modified or
supplemented by the local rules of civil procedure for the U.S. District
Court for the Southern District of Texas, shall apply in the arbitration.
The Limited Partners shall make their witnesses available in a timely
manner for discovery pursuant to such rules. If a Limited Partner fails
to comply with this discovery agreement within the time established by
the arbitrators, after resolving any discovery disputes, the arbitrators
may take such failure to comply into consideration in reaching their
decision. All discovery disputes shall be resolved by the arbitrators
pursuant to the procedures set forth in the Federal Rules of Civil
Procedure.

		
	 	     (g) Adherence to formal rules of evidence shall not be required.
The arbitrators shall consider any evidence and testimony that they
determine to be relevant.

		
	 	     (h) The Limited Partners hereto hereby request that the arbitrators
render their decision within thirty (30) calendar days following
conclusion of the hearing.

		
	 	     (i) Any decision by a majority of the arbitration panel shall be
final, binding and non-appealable. Any such decision may be filed in any
court of competent jurisdiction and may be enforced by either Limited
Partner as a final judgment in such court. There shall be no grounds for
appeal of any arbitration award hereunder.

		
	 	     (j) The defenses of statute of limitations and laches shall be
tolled from and after the date a Party gives the other Limited Partner
written notice of a Dispute as provided in Section 23.1 above until such
time as the Dispute has been resolved pursuant to Section 23.1, or an
arbitration award has been entered pursuant to this Section 23.3.

		
	 	     (k) The Partners hereby waive any claim to, and the arbitrators are
especially divested of any power to award, special, consequential,
punitive, exemplary, incidental, indirect costs, expenses, damages or
claims or statutory damages in excess of compensatory damages, or any
form of damages in excess of compensatory damages.

     Section 23.4 Recovery of Costs and Attorneys’ Fees. In the event
arbitration (or, despite the Limited Partners’ agreement to resolve the
Disputes through binding arbitration, litigation) arising out of this Agreement
is initiated by either Limited Partner, the prevailing Limited Partner, after
the entry of a final non-appealable order, shall be entitled to recover from

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the other party, as a part of said order, all court costs, fees and
expenses of such arbitration (or litigation), including, without limitation,
reasonable attorneys’ fees.

     Section 23.5 Choice of Forum. If, despite the Limited Partners’ agreement
to submit any Disputes to binding arbitration, there are any court proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby, such proceedings shall be brought and tried in the federal or state
courts situated in the City of Houston, Texas.

     Section 23.6 Jury Waivers. THE LIMITED PARTNERS HEREBY WAIVE ANY AND ALL
RIGHTS TO DEMAND A TRIAL BY JURY.

     Section 23.7 Special Buy-Out Options.

		
	 	     (a) Upon the failure of the Limited Partners to resolve or submit a
Dispute to binding arbitration within seventy-five (75) days after the
date of the response given pursuant to Section 23.1, either Limited
Partner shall have the right (the “Put/Call Right”) for a period of 30
days following the expiration of such 75-day period (the “Exercise
Period”), to be exercised by written notice to the other Limited Partner
within such applicable period, to cause a purchase and sale to the TE
Partner of the Interest of the LD Partner and its Affiliate. Such
purchase and sale shall be for cash at a purchase price equal to the
greater of (i) 50% of the Net EBITDA for the Pricing Period ending with
the month immediately preceding the month in which the written notice is
given exercising the Put/Call Right times the Valuation Multiple and (ii)
the LD Combined Capital Account Balance.

		
	 	     (b) If either Limited Partner timely exercises such Put/Call Right,
the Limited Partners shall consult for the purpose of determining the
Valuation Multiple and, on or before the 10th day after exercise of the
Put/Call Right, the non-exercising Limited Partner shall select one of
four entities proposed by the exercising Limited Partner, each of which
such entities shall have at least ten years experience in valuing similar
assets or businesses (the “Valuation Expert”) if required as contemplated
below. If on or before the 30th day after exercise of the Put/Call
Right, such Limited Partners have not reached agreement on the Valuation
Multiple, each Limited Partner shall submit a proposed Valuation Multiple
to the Valuation Expert, together with any supporting documentation such
Limited Partners deems appropriate, on or before the 60th day after the
exercise of the Put/Call Right. The Valuation Expert shall determine the
Valuation Multiple by selection of one of the proposed Valuation
Multiples submitted by the Limited Partners (and shall have no authority
beyond selection of one of such proposals) as promptly as possible (and
in any event on or before the 30th day after submittal of the competing
proposals). The cost of such Valuation Expert shall be paid in equal
portions by the Limited Partners.

		
	 	     (c) The purchase price shall be the amount calculated under Section
23.7(a) unless the Put/Call Right has been triggered by either Partner
pursuant to Section 15.8(c) or (d), in which case the purchase price to
be paid by the TE Partner shall be the amount computed as follows:

-33-

 

		
	 	     (i) If the TE Partner is the First Party, the purchase price
shall be 115% of the amount calculated under Section 23.7(a); and

		
	 	     (ii) if the LD Partner is the First Party, the purchase price
shall be 85% of the amount calculated under Section 23.7(a).

		
	 	     (d) The closing of the acquisition of the Interests contemplated
hereunder shall be consummated on or before the 60th day after the
determination of the Valuation Multiple but effective at the end of the
calendar month occurring on or immediately prior to such closing. The
acquisition shall be consummated at a closing held at the principal
offices of the Partnership (unless otherwise mutually agreed by the
Limited Partners), at which time the purchase price (in the form of
immediately available funds) shall be delivered to the sellers and the
sellers shall deliver to the buyer such transfer documentation reasonably
acceptable to the buyer and the seller as shall be required to evidence
the transfer of such Partnership Interest and membership interest in the
General Partner, free and clear of all liens and encumbrances, except
those created under this Agreement.

     Section 23.8 Dispute Under Both this Agreement and LLC Agreement.
Notwithstanding anything herein to the contrary, it is the intention of the
Partners that any Dispute hereunder that is also subject to the terms and
provisions of the LLC Agreement shall be handled under one unified proceeding
under and pursuant to the terms and provisions of this Agreement and that no
Partner shall be entitled to seek a second resolution of the same Dispute under
the Terms and Provisions of this Article XXIII.

ARTICLE XXIV

MISCELLANEOUS

     Section 24.1 No Right of Partition. The Partners agree that the
Partnership properties are not and will not be suitable for partition.
Accordingly, each of the Partners hereby irrevocably waives any and all rights
that he may have to maintain any action for partition of any of the Partnership
property.

     Section 24.2 Entire Agreement; Supersedure. This Agreement and the
additional documents and agreements referred to herein or contemplated
hereunder constitute the entire agreement among the parties. It supersedes any
prior agreement or understandings among them, and it may not be modified or
amended in any manner other than as set forth herein.

     Section 24.3 Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware.

     Section 24.4 Binding Effect. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.

     Section 24.5 Construction of Agreement. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural
shall include the singular and the

-34-

 

plural, and pronouns stated in the masculine, the feminine or the neuter
gender shall include the masculine, feminine and neuter. The term “person”
means any individual, corporation, partnership, trust or other entity.

     Section 24.6 Captions. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provision hereof.

     Section 24.7 Effect of Invalid Provision. If any provision of this
Agreement, or the application of such provision to any person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

     Section 24.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. It shall not be necessary for all
Partners to execute the same counterpart hereof.

     Section 24.9 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

-35-

 

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

	 	 	 	 	 	 	 
	 	 	GENERAL PARTNER:
	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	2929 Allen Parkway, Suite 3200	 	Mont Belvieu Venture, LLC
	Houston, TX 77019	 	 	 	 	 	 
	Telecopy: 713/759-3645	 	By:	 	TE Products Pipeline Company, Limited
	 	 	 	 	Partnership, its managing member
	 	 	 	 	 	 	 
	 	 	 	 	By:
	 	TEPPCO GP, Inc., its general partner
	 	 	 	 	 	 	 
	 	 	By: /s/ JOHN N. GOODPASTURE
	 	 	 	

	 	 	Name: John N. Goodpasture
	 	 	Title: Vice President, Corporate Development
	 	 	 	 	 	 	 
	 	 	LIMITED PARTNERS:
	 	 	 	 	 	 	 
	2929 Allen Parkway, Suite 3200	 	TE Products Pipeline Company, Limited
	Houston, Texas 77019	 	Partnership
	Telecopy: 713/759-3645	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	By:	 	TEPPCO GP, Inc., its general partner
	 	 	 	 	 	 	 
	 	 	By: /s/ JOHN N. GOODPASTURE
	 	 	 	

	 	 	Name: John N. Goodpasture
	 	 	Title: Vice President, Corporate Development
	 	 	 	 	 	 	 
	20 Westport Road	 	Louis Dreyfus Energy Services L.P.
	Wilton, Connecticut 06897	 	 	 	 	 	 
	Telecopy: 203/761-8119	 	By:	 	Louis Dreyfus ES GP LLC, its general partner
	 	 	 	 	 	 	 
	 	 	 	 	By: /s/ WILLIAM C. RIPPE
	 	 	 	 	 	

	 	 	 	 	Name: William C. Rippe
	 	 	 	 	Title: Executive Vice President

-36-

 

EXHIBIT A

DREYFUS STORAGE AGREEMENT

 

EXHIBIT B

MB ASSETS

     The MB Assets consist of the Subject Property, as such term is defined in
that certain General Conveyance and Assumption Agreement dated effective as of
January 21, 2003, from TE Products Pipeline Company, Limited Partnership, as
“Grantor,” to Mont Belvieu Storage Partners, L.P., as “Grantee”.

 

 

EXHIBIT C

OPERATING PROCEDURES

 

 

EXHIBIT D

TE STORAGE AGREEMENTexv10w54

 

Exhibit 10.54

October 25, 2003

Mont Belvieu Venture, LLC

2929 Allen Parkway, Suite 3200

Houston, TX 77019

Telecopy: 713/759-3645

Mont Belvieu Storage Partners, L.P.

2929 Allen Parkway, Suite 3200

Houston, TX 77019

Telecopy: 713/759-3645

Louis Dreyfus Energy Services L.P.

20 Westport Road

Wilton, Connecticut 06897

Telecopy: 203/761-8119

	 	 	 	 	 
	 	 	
Re:
	 	Letter Of Agreement Clarifying Rights
& Obligations of the Parties Under the Mont Belvieu
Storage Partners, L.P., Partnership Agreement and the
Mont Belvieu Venture, LLC, LLC Agreement

Dear Sirs:

     This Letter Agreement, upon its acceptance, as hereinafter provided, sets
forth the understanding and agreement between TE Products Pipeline Company,
Limited Partnership (“TEPPCO”), Mont Belvieu Venture, LLC (“MB Venture”), Mont
Belvieu Storage Partners, L.P. (MB Partners”) and Louis Dreyfus Energy Services
L.P. (“ Louis Dreyfus”) (jointly the “Parties”) regarding the clarification of
the effective date of (i) the Limited Liability Company Agreement of Mont
Belvieu Venture, LLC (the “LLC Agreement”) and (ii) the Agreement of Limited
Partnership of Mont Belvieu Storage Partners, L.P (the “Partnership
Agreement”).

     On or about August 13, 2003, TEPPCO and Louis Dreyfus entered into the LLC
Agreement and the Partnership Agreement. The effective date of both the LLC
Agreement and the Partnership Agreement (jointly the “Agreements”) was January
21, 2003. TEPPCO and Louis Dreyfus established January 21, 2003 as the
effective date of the Agreements for the sole reason that January 21, 2003 was
the date that the Certificate of Limited Partnership for MB Partners and the
Certificate of Formation for MB Venture were filed with the Secretary of State
of the State of Delaware. It was always, and remains, the intention of the
Parties that the rights

 

 

and obligations of the Parties set forth in the LLC Agreement and the
Partnership Agreement would be effective and binding on the Parties as of
January 1, 2003 as if Mont Belvieu Venture, LLC and Mont Belvieu Storage
Partners, L.P. had been in existence on that date.

     The Parties now, therefore, agree that the Agreements, including all
rights and obligations set forth therein, will be binding on and enforceable
against each of the Parties effective as of January 1, 2003.

[The remainder of this page is intentionally left blank.]

 

 

     If the above is acceptable to Mont Belvieu Venture, LLC, Mont Belvieu
Storage Partners, L.P. and Louis Dreyfus Energy Services L.P., please sign the
enclosed duplicate of this letter in the space indicated below and return it to
us for our files.

	 	 	 	 	 	 	 
	 	 	
 
	 	Sincerely,
	 	 	 	 	 	 	 
	 	 	 	 	TE PRODUCTS PIPELINE COMPANY,
 LIMITED
PARTNERSHIP by TEPPCO GP, Inc. its 
general
partner
	 	 	 	 	 	 	 
	 	 	 	 	By:
	 	/s/ JOHN N. GOODPASTURE
	 	 	 	 	 	 	

	 	 	 	 	Title: Vice President, Corporate Development

	 	 	 	 	 
	
ACCEPTED AND AGREED TO:	 	 
	 	 	 	 	 
	
Mont Belvieu Venture, LLC by

Its managing member, TE Products Pipeline Company,

Limited Partnership, by TEPPCO GP, Inc.,

its general partner
	 	 
	 	 	 	 	 
	By:	 	
/s/ JOHN N. GOODPASTURE	 	 
	 	 	

	 	 
	
Title: Vice President, Corporate Development	 	 
	
Date: September 24, 2003	 	 
	 	 	 	 	 
	
Mont Belvieu Storage Partners, L.P.

by its general partner

Mont Belvieu Venture, LLC by

its managing member, TE Products Pipeline Company,

Limited Partnership, by TEPPCO GP, Inc.,

its general partner
	 	 
	 	 	 	 	 
	By:	 	
/s/ JOHN N. GOODPASTURE	 	 
	 	 	

	 	 
	
Title: Vice President, Corporate Development	 	 
	
Date: September 24, 2003	 	 
	 	 	 	 	 
	
Louis Dreyfus Energy Services L.P.,

by its general partner

Louis Dreyfus ES GP LLC	 	 
	 	 	 	 	 
	By:	 	
/s/ TIMOTHY J. STUART	 	 
	 	 	

	 	 
	Title: President	 	 
	
Date: September 29, 2003

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