Document:

exv10w10

 

Exhibit 10.10

GROUND LEASE AGREEMENT

     THIS GROUND LEASE AGREEMENT (“Lease”) is made and entered into as of the date hereinafter set
forth by and among ENTERPRISE PRODUCTS TEXAS OPERATING L.P., a Texas limited partnership
(hereinafter referred to as “Lessor”), and DIAMOND-KOCH, L.P., a Delaware limited partnership
(hereinafter referred to as “Lessee”).

WITNESSETH:

     WHEREAS, Lessor owns lands upon which Lessee owns and operates certain assets used solely in
Lessee’s propylene business (the “D-K Propylene Assets”) and Lessee also operates, on behalf of the
owners thereof, three, propane/propylene fractionators and related assets (the “Facility”) in which
Lessor has a 66.66% undivided interest and in which Fina Splitter, Inc. has a 33.34% undivided
interest; and

     WHEREAS, Lessor and Lessee desire to enter into this Ground Lease on the terms contained
herein.

     NOW THEREFORE, for and in consideration of the mutual covenants contained herein, Lessor and
Lessee agree as follows:

ARTICLE I.

     1.1 LEASED PREMISES. Subject to the terms, provisions, and conditions herein set
forth, and in consideration of the covenants of payment and performance stipulated herein, Lessor
has leased, and by these presents does hereby lease unto Lessee, and Lessee hereby lease from
Lessor the following described tracts or parcels of land situated in Chambers County, Texas:

Being a tract of land lying and situated in Chambers County, Texas and being out of
the WILLIAM BLOODGOOD AUGMENTATION SURVEY, ABSTRACT NO. 5 and situated across those
certain tracts of land described as follows, being a 124 acre tract of land
described in a deed from Gulf Oil Corporation to Diamond Alkali Company, dated June
17, 1947 as recorded in Volume 103 on Page 286 of the Deed Records of Chambers
County, Texas, being a 48.4664 acre tract of land described in a deed from Gulf Oil
Corporation to Diamond Shamrock Corporation as recorded in Volume 527 on Page 175 of
the Deed Records of Chambers County, Texas, being a 8.68 acre tract of land
described in a deed to Diamond Alkali Company as recorded in Volume 212 on Page 345
of the Deed Records of Chambers County, Texas, being a 0.464 acre tract of land
described in a deed from Frank Jones Sylvia to Diamond Shamrock Corporation, dated
December 12, 1975 and recorded in Volume 375 on Page 779 of the Deed Records of
Chambers County, Texas, being a 0.525 acre tract of land described in a deed from
Margaret Foster Wilburn to Diamond Shamrock Corporation, dated September 26, 1975 as
recorded in Volume 373 on Page 286 of the Deed Records of Chambers County, Texas,
being a 0.787 acre tract of land described in a deed from A. E. Speer to Diamond
Shamrock Corporation, dated September 26, 1975 as recorded in

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Volume 373 on Page 284 of the Deed Records of Chambers County, Texas, all tracts of
land being conveyed to UDS NEWCO, INC, as described in a Special Warranty Deed dated
August 31, 1998 as recorded in Volume 386 on Page 113 of the Official Public Records
of Chambers County, Texas, and the said parcel being more particularly described by
metes and bounds as follows, to-wit:

BEGINNING at the Northwest corner of the aforesaid referred to 0.464 acre tract of
land, also being the Northeast corner of a 0.399 acre tract of land described in a
deed to Eleanore Watson Collier et. al. as recorded in Volume 236 on Page 534 of the
Deed Records of Chambers County, Texas, being an iron rod found for corner on the
South Right of Way Line of Loop 207 (80’ Right-of-Way) said point being the Point of
Beginning and having coordinates N 13875023.75 and E 3270029.50;

THENCE N 34°36’28” E with in part the North boundary line of said 0.464 acre tract
and the South Right of Way Line of Loop 207 at 62.33 feet a 5/8” iron rod set for
corner;

THENCE N 71°33’08” E at 778.26 feet a 5/8” iron rod set for corner;

THENCE S 18°26’52” E at 345.33 feet a 5/8” iron rod set for corner;

THENCE N 71°33’08” E at 289.93 feet a 5/8” iron rod set for corner,

THENCE S 19°39’08” E at 527.65 feet a 5/8” iron rod set for corner;

THENCE S 30°14’26” E at 278.49 feet intersect the North margin of Sun Oil Road a
5/8” iron rod set for corner;

THENCE three (3) calls with the North margin of Sun Oil Road as follows:

	1.	 	S 59°19’08” W at 613.30 feet the Point of Curvature being a 5/8” iron rod set for corner;
	 
	2.	 	Westerly with a 7.6907° curve to the right having a radius of 745.00 and a chord bearing and
distance of S 75°55’37” W, 425.89 feet, at 431.91 feet the Point of Tangency, being a 5/8”
iron rod set for corner;
	 
	3.	 	N 87027’53” W at 650.35 feet a 5/8” iron set for corner;

THENCE N 57°5025” E with a fence at 119.98 feet a 3/8” iron rod found for corner;

THENCE N 15°57’34” W with a fence line at 56.83 feet pass on line the north boundary
line of the aforesaid 48.4664 acre tract being a 3/8” iron rod found for corner;

THENCE N 16°55’00” W with an eastern boundary line of a 26.343 acre tract of land
conveyed to Warren Petroleum Corp, in Volume 236 on Page 534 of the Deed Records of
Chambers County, Texas and a West boundary line of the said

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aforesaid Diamond Alkali Company 8.68 acre tract at 558.92 feet the northwest corner
of said 8.68 acre tract also being an interior ell corner of said Warren Petroleum
tract being a 1/2” iron rod found for corner,

THENCE N 49°20’22” E with in part the North boundary line of said 8.68 acre tract
and a South boundary line of said Warren Petroleum tract at 452.66 feet the
Southwest corner of the aforesaid Diamond Shamrock 0.464 acre tract, also being the
Southeast corner of the aforesaid Collier 0.399 acre tract of land being a 1/2 iron
rod found for corner;

THENCE N 52°57’17” W with the West boundary line of said 0.464 acre tract of land
and the East boundary line of said Collier 0.399 acre tract of land at 191.17 feet
the point and place of beginning and containing 35.698 acres of land, less and
except a 0.437 acre Electrical Substation described as follows, to wit:

COMMENCING N 17°42’00” W, 851.86 feet and S 72°46’28” W, 102.77 feet from the
recognized Southwest corner of a 124 acre tract of land described in a deed from
Gulf Oil Corporation to Diamond Alkali Company as recorded in Volume 103 on Page 286
of the Deed Records of Chambers County, Texas being for corner and being the Point
of Beginning and having coordinates N 13874676.50 and E 3270387.68;

THENCE S 72°00’17” W at 147.18 feet a chain link fence corner for corner,

THENCE N 17°52’53” W at 129.00 feet a chain link fence corner for corner,

THENCE N 72°47’78” E at 145.98 feet a chain link fence corner for corner;

THENCE S 17°21’12” E at 131.01 feet the point and place of beginning and containing
19.055 square feet, or 0.437 acres of land, leaving a net total acreage of 35.261
acres of land, more or less.

Note:

The bearings, distances, and coordinates used in this description are based on Texas
State Plane Coordinates, South Central Zone, Lambert Projections, NAD83.

The above-described land is hereinafter referred to as the “Leased Premises.”

ARTICLE II.

     2.1 TERM A Subject to the terms hereof, this Lease shall commence on the effective date of
this agreement” 01/17/2002 (“Commencement Date”) and shall continue in force, unless sooner
terminated as hereinafter provided, until the earlier to occur of (i) December 31, 2100 or (ii) the
effective date of the termination, by Lessee or their assigns, for any reason, of operations on the
Leased Premises which operations relate to the construction, ownership, and operation of
all of the Improvements (as herein defined) permitted by this Lease and constructed on the
Leased Premises.

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ARTICLE III.

     3.1 USE; COMPLIANCE WITH LAWS. The Leased Premises may be used by for the operation
of the D-K Propylene Assets and of the Facility as the same are constructed as of the Commencement
Date or substitutions or replacements of the same, all as described with more particularity in
Schedule 3.1 attached hereto and incorporated herein by this (the “Existing Assets”). The Leased
Premises may also be used for additional propylene splitter fractionators and related tanks,
machinery, equipment, fixtures, appliances, valves, fittings, flares, and material of any nature
whatsoever and any and all appurtenances thereto which are necessary for the operation of the same
and for alterations, additions, enlargements, replacements, and revisions of the same or of the
assets described on Schedule 3.1 hereto (the “Additional Assets”). In no event may the Existing
Assets or Additional ever consist of, or be used for any purpose other than, fractionators,
propylene sales or Assets, any other similar uses, or any used inconsistent with a propylene
splitter business.

The Existing Assets and the Additional Assets are sometimes herein collectively called the
“Improvements.” The agreements set forth herein with respect to the use of the Leased Premises are
a material consideration to Lessor to enter into this Lease, and the Leased Premises may not be
used for any purpose not set forth herein. Lessee shall comply with all federal, state, county,
city, and other local laws, ordinances, and regulations applicable to the Leased Premises, to the
Improvements situated on the Leased Premises, and to all activities of Lessee on or about the
Leased Premises (all such laws, ordinances, and regulations being hereinafter referred to as
“Laws”). Notwithstanding the foregoing, Lessee shall not have any obligation to Lessor with respect
to violations, if any, of any Laws (including any “Environmental Law,” as that term is defined in
below), which violations may now or hereafter exist on the Leased Premises solely as the result of
the operations of Lessor. For purposes hereof, “Environmental Law” means any and all federal,
state, and local laws, ordinances, and regulations relating to the environment or the release of
any materials into the environment or the handling, storage, disposal, treatment, and/or delivery
of any hazardous materials to or from the Leased Premises.

ARTICLE IV.

     4.1 RENTAL. As consideration for the use and occupancy of, and as rental for, the
Leased Premises, Lessee promises and agrees to pay Lessor, while this Lease remains in force and
effect, in the manner hereinafter provided, and subject to the terms, provisions, and conditions
herein set forth, a lease rental of Seven Thousand Dollars ($7,000.00) per month. Such rental shall
be payable monthly in advance, the first installment to be due and payable on the Commencement Date
of the term of this Lease, and succeeding installments of rental shall be due on the first day of
each month thereafter, without notice or demand. In the event that this Lease shall begin on other
than the first day of any month, the first and last month’s rental shall be prorated and the last
month’s rental shall be due on the first day of the month in which this Lease terminates.

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     4.2 PLACE OF PAYMENT. Lessee shall pay all rental and other sums payable by Lessee
pursuant to the terms of this Lease to Lessor at Lessor’s address hereinafter set forth.

     4.3 NET LEASE. This Lease is a net lease, and Lessee shall pay to Lessor, net
throughout the term of this Lease, the rental in addition to (and not in lieu of) any other
payments due hereunder. All rental and other payments due hereunder shall be free of any taxes (other
than those taxes based on net income), assessments, or similar charges payable by Lessee or
for
which Lessee is responsible pursuant to Article X hereof.

ARTICLE V.

     5.1 CONSTRUCTION/MAINTENANCE. The Improvements shall be constructed in a good and
workmanlike manner and in all respects in compliance with applicable Laws. Lessee shall not have
any right, authority, or power to bind Lessor, the Leased Premises, or any interest of Lessor in
the Leased Premises, for any claim for labor, materials, or specially fabricated materials or for
any other charge or expense incurred in or related in any manner to erection and construction of
any of the Improvements on the Leased Premises or any alterations, additions, or improvements
thereto or any replacement or substitution therefor. LESSEE SHALL INDEMNIFY LESSOR AGAINST AND HOLD
IT HARMLESS FROM ALL LIABILITY, COSTS, AND EXPENSES RELATED TO ANY CLAIMS OR LIENS BY WHOMSOEVER
MADE OR FILED ARISING OUT OF SUCH CONSTRUCTION, INCLUDING ANY MECHANIC’S OR MATERIALMEN’S CLAIMS OR
LIENS. LESSEE SHALL TAKE ANY ACTION NECESSARY TO RELEASE OR DISCHARGE ANY SUCH CLAIMS OR LIENS MADE
OR FILED AGAINST LESSOR OR ITS PROPERTY (INCLUDING THE LEASED PREMISES); PROVIDED, THAT IF LESSEE
CONTESTS THE VALIDITY OF SUCH A LIEN IN GOOD FAITH, LESSEE MAY, IN LIEU OF OBTAINING A RELEASE
THEREOF, POST A BOND OR OTHER SECURITY REASONABLY SATISFACTORY TO LESSOR SUFFICIENT TO PROTECT
LESSOR THEREFROM DURING THE PENDENCY OF SUCH CONTEST. Lessee shall not in any way be considered as
an agent or agents of Lessor in connection with the construction, erection, alteration,
replacement, or operation of the Improvements on the Leased Premises. Lessor shall have the right
to post such notices of nonresponsibility on or about the Leased Premises or the Improvements
thereon concerning the foregoing as Lessor shall elect.

     5.2 APPLICATION FOR GOVERNMENTAL APPROVAL. Lessor shall assist Lessee in any
applications to any governmental authority for the erection and construction of the Improvements.
Lessor shall grant to Lessee any easements or rights of way across Lessor’s adjoining properties at
locations reasonably designated by Lessor as shall be reasonably necessary to construct, alter,
replace, or operate the Improvements on the Leased Premises, so long as such easements and rights
of way do not unreasonably interfere with use of Lessor’s adjoining properties. No such assistance
or grants of Lessor, however, shall bind the Leased Premises or Lessor beyond the term of this
Lease, and all such applications, easements, rights-of -way, and other matters shall at Lessor’s
option cease and terminate upon the termination of this Lease for any reason whatsoever.

     5.3 OWNERSHIP OF IMPROVEMENTS. Ownership of the Improvements erected or constructed
on the Leased Premises by Lessee shall remain in Lessee (100% with respect to

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the D-K Propylene Assets and to the extent of Lessee’s ownership interest with respect to the
Facility) throughout the term of this Lease, subject to the terms of this Lease. Unless an event of
default (as defined in Section 12.1 hereof) has occurred and is continuing, Lessee may at any time
during the term of this Lease or upon the termination of the term of this Lease remove the
Improvements located on the Leased Premises. Additionally, upon termination of this Lease for any
reason, Lessee shall remove the Improvements constructed by Lessee on the Leased Premises. Such
removal shall be accomplished in compliance with all Laws. In the event that the Improvements are
not removed at or prior to the termination of the term of this Lease, Lessee be considered in
holdover as contemplated in Section 13.5 until the Improvements are removed. Notwithstanding any
provision herein contained to the contrary, in the event for any reason whatsoever the Improvements
have not been removed from the Leased Premises within one (1) year after the termination of the
term of this Lease, then the Movements shall at the option of Lessor and upon written notice to
Lessee (i) become the property of Lessor or (ii) Lessor may elect to remove the Improvements from
the Leased Premises and dispose of such Improvements in any manner elected by Lessor, and Lessee
shall to Lessor on demand all such Improvements, less the amount of any proceeds received by from
such disposition. Lessee shall repair all damage or injury to the Leased Premises from the removal
of the Improvements from the Leased Premises and shall return the Leased Premises to substantially
the same condition as the Leased Premises were in on January 13, 1989. Lessee shall pay any actual
and necessary costs incurred by Lessor to put the Leased Premises in such condition if Lessee do
not do so.

ARTICLE VI.

     6.1 CONDITION OF LEASED PREMISES. Subject to the provisions of this Section 6.1,
Lessee hereby acknowledges and agrees that it is thoroughly familiar with the condition of the
Leased Premises, and that it accepts the Leased Premises in an “AS IS, WHERE IS” condition subject
to all defects whatsoever, latent or otherwise. LESSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE QUALITY OR CONDITION OF THE LEASED PREMISES, THE HABITABILITY OF THE LEASED
PREMISES, OR THE FITNESS OF THE LEASED PREMISES FOR ANY PURPOSE AND LESSEE EXPRESSLY WAIVES AND
RELEASES ANY CLAIMS THEREFOR.

     6.2 LESSOR’S MAINTENANCE. Except to the extent covered by Lessor’s indemnification
obligations pursuant to Section 7.2 hereof, Lessor shall have no obligation whatsoever to maintain
or repair all or any portion of the Leased Premises, such duty of maintenance and repair being the
responsibility of Lessee as more fully set forth hereinbelow.

     6.3 LESSEE’S MAINTENANCE: REPAIRS. Lessee, at Lessee’s sole risk, liability, cost, and
expense, shall keep and maintain the Leased Premises and all Improvements thereon in good and safe
condition and in first class order and repair. Lessee shall comply with all Laws relating to such
maintenance and repairs,

ARTICLE VII.

     7.1 LESSEE’S INDEMNITY. EXCEPT AS HEREINAFTER EXPRESSLY PROVIDED IN THIS SECTION 7.1
TO THE CONTRARY, LESSEE SHALL INDEMNIFY AND HOLD HARMLESS LESSOR, ITS SUCCESSORS AND ASSIGNS (THE

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“INDEMNIFIED PARTIES”), FROM ALL CLAIMS, SUITS, ACTIONS, JUDGMENTS, AND PROCEEDINGS WHATSOEVER
WHICH MAY BE BROUGHT, INSTITUTED, OR INCURRED ON ACCOUNT OF OR GROWING OUT OF ANY AND ALL INJURIES
OR DAMAGES, INCLUDING DEATH, TO PERSONS OR PROPERTY (INCLUDING, WITHOUT LIMITATION, DAMAGE
SUSTAINED BY LESSOR, ITS EMPLOYEES, AND AGENTS, AND REPRESENTATIVES OR OWNERS OF PROPERTY IN THE
VICINITY OF THE LEASED PREMISES) IN CONNECTION OR GROWING OUT OF THE OPERATIONS OF LESSEE ON THE
LEASED OR THE PERFORMANCE BY LESSEE OF ITS OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, THE
CONSTRUCTION, MAINTENANCE, OR OPERATION OF THE IMPROVEMENTS ON THE LEASED (“CLAIMS”), AND ALL
LOSSES, COSTS, PENALTIES, DAMAGES, AND LISTS OF DEFENDING AGAINST, INVESTIGATING, AND SETTLING THE
LESSEE SHALL ASSUME ON BEHALF OF THE INDEMNIFIED PARTIES CONDUCT WITH DUE DILIGENCE AND IN GOOD
FAITH THE DEFENSE OF ALL CLAIMS BROUGHT AGAINST ANY OF THE INDEMNIFIED PARTIES; PROVIDED, HOWEVER,
WITHOUT RELIEVING LESSEE OF ITS OBLIGATIONS UNDER THIS LEASE, THE INDEMNIFIED PARTIES, AT THEIR
ELECTION, MAY DEFEND OR PARTICIPATE, AT THEIR SOLE COST AND EXPENSE, IN THE DEFENSE OF ANY OR ALL
OF THE CLAIMS WITH ATTORNEYS AND REPRESENTATIVES OF THEIR OWN CHOOSING, MAINTENANCE OF THE
INSURANCE REFERRED TO IN THIS LEASE SHALL NOT AFFECT LESSEE’S OBLIGATIONS UNDER THIS SECTION 7.1
AND THE LIMITS OF SUCH INSURANCE SHALL NOT CONSTITUTE A LIMIT ON LESSEE’S LIABILITY UNDER THIS
SECTION 7.1. LESSOR AGREES THAT LESSEE SHALL HAVE THE RIGHT TO CONTEST THE VALIDITY OF ANY AND ALL
SUCH CLAIMS OF ANY KIND OR CHARACTER AND BY WHOMSOEVER CLAIMED, IN THE NAM! OF LESSEE OR LESSOR, AS
LESSEE MAY DEEM APPROPRIATE, PROVIDED THAT THE EXPENSES THEREOF SHALL BE PAID BY LESSEE, OR LESSEE
SHALL CAUSE THE SAME TO BE PAID BY THEIR INSURER, AND FURTHER PROVIDED, THAT THE PROSECUTION OF
SUCH CONTEST WILL NOT THREATEN OR AFFECT THE CONTINUED OWNERSHIP OF THE LEASED PREMISES BY LESSOR
OR THE OPERATION THEREOF BY LESSEE. NOTWITHSTANDING THE FOREGOING, THE INDEMNITY OF LESSEE
HEREUNDER SHALL NOT COVER THAT PROPORTION OF ANY CLAIMS ATTRIBUTABLE TO (I) THE NEGLIGENCE OF THE
INDEMNIFIED PARTIES (WHEN ACTING IN ITS CAPACITY AS LESSOR), OR ANY OF THEM OR (II) THE VIOLATION
BY THE INDEMNIFIED PARTIES OF ANY LAW APPLICABLE TO THE LEASED PREMISES.

     7.2 LESSOR’S INDEMNITY. LESSOR AGREES TO INDEMNIFY AND HOLD HARMLESS LESSEE FROM AND
AGAINST ANY AND ALL CLAIMS WHICH MAY BE BROUGHT, INSTITUTED, OR INCURRED ON ACCOUNT OF OR GROWING
OUT OF ANY AND ALL INJURIES OR DAMAGES, INCLUDING DEATH, TO PERSONS OR PROPERTY (INCLUDING, WITHOUT
LIMITATION, DAMAGE SUSTAINED BY OWNERS OF PROPERTY IN THE VICINITY OF THE LEASED PREMISES) IN
CONNECTION WITH OR GROWING OUT OF (A) LESSOR’S ITERATIONS ON OR ADJACENT TO THE LEASED PREMISES
OR THE PERFORMANCE BY LESSOR OF ITS OBLIGATIONS HEREUNDER (B) THE NEGLIGENCE OF LESSOR, ITS
EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS, OR SERVANTS, OR (C) THE VIOLATION BY LESSOR, IF ANY, OF
ANY ENVIRONMENTAL LAW APPLICABLE TO THE LEASED

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PREMISES. LESSOR SHALL ASSUME ON BEHALF OF LESSEE AND CONDUCT WITH DUE AND IN GOOD-FAITH THE
DEFENSE OF ALL CLAIMS FOR WHICH HAS AGREED TO INDEMNIFY LESSEE PURSUANT TO THIS SECTION PROVIDED,
HOWEVER, THAT WITHOUT RELIEVING LESSOR OF ITS OBLIGATIONS HEREUNDER, LESSEE, AT ITS ELECTION, MAY
DEFEND OR PARTICIPATE, AT ITS SOLE COST AND EXPENSE, IN THE DEFENSE OF ANY OR OF SUCH CLAIMS WITH
ATTORNEYS AND REPRESENTATIVES OF ITS CHOOSING.

ARTICLE VIII.

     8.1 CASUALTY INSURANCE. Lessee shall during the term of this Lease carry such
insurance on the Improvements as Lessee shall elect covering loss or damage by fire or other
casualty, provided that Lessee shall continue to carry such insurance in such amounts as will be
required to cover the cost of removal of the Improvements and restoration of the Leased Premises to
the same condition as existed on January 13, 1989, in the event that the extent of damage or
destruction to the Improvements results in a constructive total loss of the Improvements,

     8.2 LIABILITY INSURANCE. During the term of this Lease, Lessee agrees to secure and
maintain in force, at its sole cost and expense, comprehensive general liability insurance,
including coverage for contractual liability, issued by a reputable company or companies or via
self-insurance, or a combination thereof, with limits of not less than Ten Million Dollars
($10,000,000.00) combined single limit with respect to bodily injury or death and property damage
in any one accident. Such limits shall be increased from time to time during the term hereof upon
request by Lessor in amounts which Lessor in its reasonable business discretion may deem to be
reasonable at the time.

     8.3 INSURANCE COMPANIES: CANCELLATION. Lessee shall provide Lessor with certificates
of all insurance required or permitted to be carried hereunder. All such insurance shall name both
Lessor and Lessee as insureds and shall provide that such insurance may not be cancelled without
first giving at least thirty (30) days advance written notice to Lessor.

     8.4 FAILURE TO CARRY INSURANCE. In the event of the failure of Lessee to maintain any
insurance required hereunder, Lessor may at its election (but shall not be obligated to) procure
such insurance, at reasonable premium rates, as may be necessary to comply with the above
requirements, and Lessee agrees to repay the cost of same to Lessor on demand, with interest
thereon at the Contract Rate until paid. The term “Contract Rate” shall mean the lesser of (i) the
highest prime rate of interest published in the Money Section of the Wall Street Journal
from time to time during the term of this Lease (“Prime Rate”) plus three percent (3%) or (ii)
the highest lawful rate permitted by applicable law. The Contract Rate shall change as often as and
contemporaneously with any change in the Prime Rate.

     8.5 WAIVER OF SUBROGATION. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING
(INCLUDING THE INDEMNITY AGREEMENTS SET FORTH IN ARTICLE VII, TO WHICH THE WAIVER OF SUBROGATION
PROVIDED FOR HEREIN BY LESSOR AND LESSEE SHALL NOT BE APPLICABLE), LESSOR AND

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LESSEE EACH HEREBY WAIVE ANY AND ALL RIGHTS OF RECOVERY, CLAIM, ACTION, OR CAUSE OF ACTION,
AGAINST THE OTHER, ITS AGENTS, OFFICERS, OR EMPLOYEES, FOR ANY LOSS OR DAMAGE THAT MAY OCCUR TO THE
IMPROVEMENTS, OR ANY PART THEREOF, OR ANY PERSONAL PROPERTY OF SUCH PARTY THEREIN, BY REASON OF
FIRE, ELEMENTS, OR ANY OTHER CAUSE WHICH IS INSURED AGAINST OR WHICH COULD BE INSURED AGAINST UNDER
A SPECIAL FORM PROPERTY INSURANCE POLICY. REGARDLESS OF CAUSE OR ORIGIN, INCLUDING NEGLIGENCE OF
THE OTHER PARTY HERETO, ITS AGENTS, OFFICERS, OR EMPLOYEES, AND COVENANTS THAT NO INSURER SHALL
HOLD ANY RIGHT OF SUBROGATION AGAINST SUCH OTHER PARTY. ALL PROPERTY INSURANCE OBTAINED BY EITHER
LESSEE OR LESSOR HEREUNDER SHALL CONTAIN PROVISIONS WHEREBY THE INSURER RELEASES ALL RIGHTS OF
SUBROGATION AGAINST BOTH LESSOR AND LESSEE.

ARTICLE IX.

     9.1 PERFORMANCE BY LESSOR. If Lessee shall at any time fail to make any payment or
perform any other act on its part to be made or performed under this Lease, Lessor may, but shall
not be obligated to, and without notice or demand and without waiving or releasing Lessee from any
obligation of Lessee under this Lease, make such payment or perform such other act to the extent
Lessor may deem desirable, and in connection therewith pay expenses and employ counsel. All sums
paid by Lessor and all expenses in connection herewith, together with interest thereon at the
Contract Rate from the date of such payment, shall be deemed additional rent hereunder and be
payable to Lessor on demand and Lessor shall have the same rights and remedies for the nonpayment
thereof as in the case of default in the payment of rent.

ARTICLE X.

     10.1 TAXES. Lessee shall pay all ad valorem taxes and general or special assessments
which accrue against the Leased Premises and the Improvements thereon during the term of this
Lease. Lessor agrees to cooperate with Lessee to secure a separate assessment for the Leased
Premises with the taxing authorities. Further, if at any time during the term of this Lease the
present method of taxation or assessment should be so changed that the whole or any part of the
taxes or assessments now levied or assessed on real estate and/or the Improvements thereon shall be
discontinued and as a substitute therefor taxes, assessments, levies, or charges shall be levied,
or assessed wholly or partly on the rents received from the Leased Premises or any part thereof,
then such substitute taxes, assessments, levies, or charges, to the extent so levied or assessed,
shall be deemed to be included within the terms taxes and assessments to the extent that such
substitute taxes, assessments, levies, or charges would be payable if the Leased Premises were only
property of Lessor subject to such taxes, assessments, levies, or charges. Lessee shall not be
required to pay any taxes imposed on the income of Lessor generally. Lessee further to pay all
taxes and assessments of every kind or character levied, assessed, or imposed or against any
business activities conducted by Lessee upon the Leased Premises, and upon against any and all
personal property of Lessee now or hereafter placed by Lessee, the successors, legal
representatives, and assigns of Lessee, in or upon the Leased Premises, and are or may hereafter
be placed in or upon the Leased Premises or any Improvements now or hereafter situated
thereon.

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     10.2 PAYMENT OF TAXES BY LESSOR. If Lessee shall fail to pay any of such or
assessments before the same become delinquent, Lessor may, at Lessor’s election, pay such taxes or
assessments with interest and penalties due thereon, and the amount so paid by Lessor shall
constitute additional rent due from Lessee on demand, together with interest thereon at the
Contract Rate from the date of such payment by Lessor until repaid by Lessee.

ARTICLE XI.

     11.1 DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS. In the event that all or substantially
all of the Improvements situated on the Leased Premises shall be wholly or partially destroyed or
damaged by fire, windstorm, rising water, or any other casualty whatsoever, subject to its
obligations contained in Section 6.3 above, Lessee may, at Lessee’s sole option, repair or replace
such Improvements or other property, provided that in any event Lessee shall be obligated to repair
all damage or destruction to the Leased Premises. In the event that less than all or substantially
all of the Improvements are so destroyed or damaged, Lessee may elect not to repair the same,
provided that Lessee shall repair all damage or destruction to the Leased Premises and shall remove
and clean-up any debris or remnants of Improvements not repaired or restored. In the event that the
damage or destruction is of all or substantially all of the Improvements and Lessee shall determine
not to repair or replace the Improvements, or Lessee shall fail to commence the repair or
replacement of the Improvements within one (1) year after the date of damage or destruction or
shall thereafter fail to complete the repair or replacement of the Improvements with diligence,
then this Lease shall terminate, provided, however, that notwithstanding the foregoing, Lessee
shall repair or replace the damaged Improvements and/or otherwise safeguard the Leased Premises to
the extent deemed reasonably necessary by Lessor to protect any adjacent property and the health
and safety of any persons residing or working thereon or as may otherwise be required by Law;
provided further, however, the requirement that Lessee proceed with any such repair or replacement
with diligence shall not be applicable to the extent that (i) any court of competent jurisdiction
has issued an order or entered a judgment prohibiting or restricting Lessee from effecting such
repair or replacement or (ii) Lessee is involved in a bona fide dispute with any insurer of the
damaged or destroyed Improvements in respect of the insurance proceeds payable thereon. In the
event of a termination of this Lease pursuant to the immediately preceding sentence, Lessee shall
nevertheless be obligated to repair all damage or destruction to the Leased Premises and to remove
the remaining Improvements and reasonably restore the Leased Premises to the same condition as it
existed on January 13, 1989. Additionally, in the event this Lease is so terminated and Lessee does
not remove the Improvements, Lessee shall assign or pay to Lessor all insurance proceeds in respect
of the damage or destruction. There shall not be any abatement of rent or other sums payable
hereunder during repair or replacement of the Improvements. Notwithstanding the foregoing,
regardless of the extent of the damage or destruction, Lessee shall immediately repair any damage
or destruction which affects the health or safety of any persons or property.

     11.2 TOTAL CONDEMNATION. Lessor and Lessee agree that should the whole of the Leased
Premises be taken (which term when used in this Article XI shall include any Conveyance in
avoidance or settlement of condemation or eminent domain proceedings) by any

10

 

government or power whatsoever, or by any corporation under the right of eminent domain, or
the whole of said Leased Premises and Improvements be condemned by any court, city, county, or
governmental authority or office, department, or bureau of the city, county, or United States, or
if such a portion of the Leased Premises is taken so that in Lessee’s judgment it is economically
unsound to continue to use the remainder of the Leased Premises, then this Lease shall terminate as
of the date of taking possession by the condeming authorities.

     11.3 PARTIAL CONDEMNATION: CONTINUATION OF LEASE. In the event that only a portion of
the Leased Premises is taken by any government or power whatsoever under the power of eminent
domain and this Lease is not terminated pursuant to Section 11.2 hereof, then this Lease shall
continue in full force and effect as to the remainder of the Leased Premises, and the rental
payable hereunder during the remainder of the term hereof after the date of taking by the
condemning authority shall be reduced prorata based on the number of acres remaining in. the Leased
Premises, provided that there shall not be any abatement of rental or other so due hereunder by
reason of the repair or replacement of the Improvements.

     11.4 PARTIAL CONDEMNATION: CONTINUATION OF LEASE. In the event that only a portion of
the Leased Premises is taken by any government or power whatsoever under the power of eminent
domain and this Lease is not terminated pursuant to Section 11.2 hereof, then this Lease shall
continue in full force and effect as to the remainder of the Leased Premises, and the rental
payable hereunder during the remainder of the term hereof after the date of taking by the
condemning authority shall be reduced prorata based on the number of acres remaining in. the Leased
Premises, provided that there shall not be any abatement of rental or other so due hereunder by
reason of the repair or replacement of the Improvements.

     11.5 REPAIRS AND RESTORATION IN EVENT OF CONDEMNATION. In the event that this Lease
is terminated by reason of the condemnation of the Leased Premises, then Lessor and Lessee shall
have the rights and obligations with respect to the remaining Improvements as set forth in Section
5.3 hereof. Notwithstanding the foregoing, Lessee, at its sole cost and expense, shall repair or
restore the remainder of the Leased Premises. In the event that only a portion of the Leased
Premises is taken and the damage to the remaining Improvements is material and this Lease is not
terminated by reason of the taking, then Lessee shall repair or replace the remainder of the Leased
Premises and Improvements suitable for the conduct of Lessee’s business. Such repair or replacement
shall be conducted in the same mariner and with the same requirements as are set forth in Section
5.2 hereof with respect to the original construction of such Improvements. In the event that Lessee
fails to commence such repairs or replacement within one (1) year after the date of taking, or in
the event that Lessee shall thereafter fail to complete the repairs or replacement with diligence,
then this Lease shall terminate, and Lessor and Lessee shall have the rights and obligations with
respect to the remaining Improvements as are set forth in Section 5.3 hereof. Notwithstanding the
foregoing, whether or not the damage to the remaining Improvements is material, Lessee shall
immediately repair any damage or destruction which affects the health or safety of any persons or
property. The term “material” shall mean that after the taking, the remaining Improvements cannot
be (or are not being) operated for the purposes set forth in Section 3.1 hereof.

     11.6 AWARD IN CONDEMNATION. In the event of the taking of any part or all of the
Leased Premises, (a) Lessor shall be entitled to such a portion of the award in condemnation

11

 

as will be equal to the fair market value of the Leased Premises unburdened by this Lease and
Lessee shall be entitled to receive the value of the Improvements taken or (b) at Lessee’s request,
Lessor shall request the court having jurisdiction over such condemnation proceeding to apportion
the award on the basis of comparative value, including severance damages, and subject to right of
appeal, such award shall be binding on Lessor and Lessee.

ARTICLE XII.

     12.1 DEFAULT. Each of the following shall be deemed an “event of default” by and a
material breach of this Lease:

     (A) Failure by Lessee to pay any installment of rent or to pay taxes or other
liquidated sums of money herein stipulated to be paid by Lessee and such failure continues
for a period of thirty (30) days after written notice thereof has been given to Lessee.

     (B) Failure by Lessee to perform or observe any of the terms, covenants, conditions,
agreements, and provisions of this Lease (other than the payment of rent, taxes, insurance
premiums, or other liquidated sums of money) stipulated in this Lease to be observed and
performed by Lessee if such failure shall continue for a period of sixty (60) days after
notice thereof has been given to Lessee; provided, however, that if any such failure (other
than a failure involving payment of liquidated sums of money) cannot reasonably be cured
within such sixty (60) day period, then Lessor shall not have the right to terminate this
Lease or Lessee’s right to possession pursuant to Section 12.2 hereof for so long as Lessee
proceed in good faith and with reasonable diligence to remedy and correct such failure,
provided that Lessee have promptly commenced to cure such failure after the effective date
of such notice (and in any event within such sixty (60) day period) and diligently proceed
with the cure. Notwithstanding any of the foregoing, in the event that the default is the
failure to comply with any laws, regulations, or ordinances, including, without limitation,
any Environmental Laws or any laws, regulations, or ordinances governing the handling,
storage, and/or delivery of hazardous materials to, on, or from the Leased Premises and such
default results in danger to persons or property and if the governmental agency with
jurisdiction over the matter determines that cure of the default must occur in a shorter
time period, then the time period for cure of the default shall be reduced to the shorter
period.

     12.2 REMEDIES. If any event of default occurs hereunder, Lessor may, at any time
thereafter and without waiving any other rights hereunder or available to Lessor at law or in
equity, do one or more of the following:

     (A) Lessor shall have the right to enforce the full and specific payment and
performance of such obligations by Lessee under this Lease in any manner or method provided
by law or to otherwise avail itself of all its rights and remedies at law or in equity.

     (B) Lessor may terminate this Lease by giving Lessee written notice thereof in which
event this Lease and the leasehold estate created hereby and all interest of Lessee

12

 

and all parties claiming by, through, or under Lessee shall automatically, terminate
upon the effective date of such notice with the same force and effect and to the same extent
as if the effective date of such notice were the day originally fixed in Article n hereof
for the expiration of the term of this Lease, and Lessor, its agents or representatives,
shall have the right, without further demand or-notice, to peacefully reenter and take
possession of the Leased Premises (including all Improvements thereon) and remove all
persons and property therefrom, with or without process of law, without being deemed guilty
of any manner of trespass and without prejudice to any remedies for arrears of rent or
existing breaches of covenants. Lessor shall then be entitled to recover forthwith as
damages a sum of money equal to and total of (a) the cost of recovering and restoring the
Leased Premises, (b) the unpaid rent earned at the time of termination, plus interest
thereon at the rate often percent (10%) per annum from the due date, (c) the present value
(discounted at the rate of eight percent (8%) per annum) of the balance of the rent for the
remainder of the term less the present value (discounted at the same rate) of the fair
market rental value of the Leased Premises for said period, and (d) any other sum of money
owed by Lessee and any damages suffered by Lessor.

Upon the exercise of Lessor’s remedies pursuant to this Section 12.2, Lessee shall execute such
releases, deeds, and other instruments in recordable form as Lessor shall reasonably request to
accurately set forth of record the status of the leasehold estate and Lessee’s rights hereunder.

     12.3 WAIVER. No waiver of any breach of any covenant or provision of this Lease shall
be construed to be a waiver of any other or subsequent breach of the same or of any other covenant
or provision, and the acceptance of rental after default shall not be deemed a waiver of the right
to demand the complete, prompt performance by Lessee of its obligations hereunder as such
obligations become due in accordance with their terms.

     12.4 ATTORNEYS’ FEES. In the event Lessor or Lessee default in the performance of any
of the terms, covenants, conditions, agreements, or provisions contained in this Lease or any
default otherwise occurs under this Lease and either party employs attorneys in connection with the
enforcement of this Lease or any provision hereof or the exercise of any of its remedies hereunder,
the prevailing party shall be entitled to prompt reimbursement of its reasonable attorneys’ fees
incurred thereby.

ARTICLE XIII.

     13.1 RIGHT OF ENTRY. Lessor or Lessor’s representatives shall have, upon giving
reasonable notice, the right at all times during the term of this Lease to enter upon any part of
the Leased Premises or the Improvements thereon for the purpose of determining whether the
conditions and covenants contained in this Lease are being kept and performed so long as such entry
does not interfere with the operations of Lessee on the Leased Premises. Except in cases of
emergency where imminent harm to persons or property is threatened (in which event notice will be
given as much in advance as possible) Lessor agrees to give reasonable notice (not less than 24
hours) to Lessee in the event of any such entry.

     13.2 UTILITIES. Lessee agree to pay all charges for water, gas, electricity, phone
service, and any other utilities used on the Leased Premises or the Improvements thereon during

13

 

term of this Lease, Arrangements for the connection, commencement, and termination of all
utility services are the Lessee’s responsibility. Upon termination of this Lease and upon Lessor’s
request, Lessee will furnish the Lessor receipts for payment of all final utility bills.

     13.3 ASSIGNMENT OR SUBLEASE. Lessee shall not assign this Lease or sublet the Leased
Premises, or any part thereof (including, but not limited to, any assignment by operation of law),
except in connection with the assignment or subletting by Lessee to a co-owner of the Facility or
in connection with a sale of Lessee’s ownership interest in the D-K Propylene Assets or in the
Facility.

     13.4 ENCUMBRANCE. Without the prior written consent of Lessor, Lessee shall not
mortgage, grant a security interest in, or otherwise encumber all or any part of the interests of
Lessee in this Lease or in and to the Leased Premises.

     13.5 HOLDING OVER. It is agreed that any holding over by the Lessee of the Leased
Premises after the expiration of this Lease by lapse of time or otherwise shall operate and be
construed as a tenancy from month to month at a monthly rental equal to two hundred percent (200%)
of the rental provided for herein.

     13.6 SURRENDER OF POSSESSION. Upon termination of this Lease, Lessee shall surrender
the Leased Premises in substantially as good condition as the same were when Lessee originally
accepted possession thereof from Lessor on January 13, 1989, excepting only actual wear and tear
from the reasonable use thereof.

     13.7 TRANSFER BY LESSOR. Lessor shall have the right to transfer and assign, in whole
or in part, all of its rights and obligations hereunder in the Leased Premises (including its fee
ownership of the Leased Premises), including this Lease, provided, that such assignee agrees in
writing to assume Lessor’s obligations under this Lease which occur subsequent to the date of such
assignment. If Lessor assigns this Lease to any person or entity possessing the same or better
financial net worth (determined in accordance with generally accepted accounting principles) as
Lessor has as of the effective date hereof, thereupon Lessor shall be automatically freed and
relieved of any and all liability of any type for any acts, obligations, or covenants occurring or
arising subsequent to the date of such assignment, or any Claims relating thereto. Any successor
or assignee of Lessor shall also have the right to assign this Lease and be relieved of any further
obligation or liability hereunder provided that the new assignee shall have the same or better
financial net worth as Lessor has as of the effective date hereof. Any assignment by Lessor, its
successors or assigns, to any assignee not having the required financial capability shall not
relieve the assignor from any liability hereunder.

     13.8 EXPENSES AND PERFORMANCE. Irrespective of whether or not expressly so stated, all
of the duties, covenants, obligations, and agreements of each party hereto, respectively, and all
acts and things done or provided to be done by each party hereto, respectively, shall be fully and
punctually kept, performed, and complied with by such party at such party’s sole risk, cost,
expense, and liability and without cost, risk, expense, or liability to or on the part of the other
party.

14

 

     13.9 RELIEF BY TERMINATION. No termination of this Lease, regardless of how such
termination may be brought about or occur, by or insofar as it relates to or affects any party
hereto, shall relieve any party hereto of any duties, obligations, or liabilities which shall
theretofore have accrued or become payable or performable by such party.

     13.10 WAIVER. LESSEE DOES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE, RELEASE, AND
RELINQUISH ALL CLAIMS, CAUSES OF SUITS, AND LIABILITY (COLLECTIVELY, “CAUSES OF ACTION”) LESSOR
UNDER THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACT (THE “ACT”), WHETHER NOW OR
HEREAFTER EXISTING, TO THE EXTENT THAT THE ACT MAY BE APPLICABLE TO THIS LEASE OR THE LEASED
PREMISES.

     13.11 MEMORANDUM OF LEASE: RELEASE. At the request of any party hereto, all parties
hereto shall enter into a memorandum of this Lease in recordable form setting forth the identity of
Lessor and Lessee, the description of the Leased Premises, the Commencement Date of this Lease, and
the term hereof. Upon the termination of this Lease for any reason whatsoever, all parties hereto
shall enter into a memorandum in recordable form setting forth the termination hereof.

     13.12 SUBJECT TO PRIOR EASEMENTS AND TO LESSOR’S RIGHT TO USE LEASED PREMISES. This
Lease is subject and inferior to Lessor’s operations conducted under the Leased Premises as of the
date hereof and to any rights of way and/or easements affecting the Leased Premises as of the date
hereof (whether filed of record or visible from a visual inspection of the Leased Premises) and
shall not limit, restrict, or supersede the rights granted thereby. Lessor may, at any time and
from time to time, after giving reasonable notice, enter upon the Leased Premises for any desired
purpose, including, but not limited to, laying, maintaining, constructing, operating, inspecting,
replacing, repairing, and removing pipelines, electric and other utility lines, pump and meter
stations, and their appurtenances, at such locations as Lessor may select, so long as such entry
does not unreasonably interfere with Lessee’s use of the Leased Premises.

ARTICLE XIV.

     14.1 NOTICE. Any notices or communications required or permitted to be given pursuant
to this Lease shall be considered as properly given or made if (i) sent by overnight messenger,
facsimile, telecopier, or tested telex or (ii) mailed from within the United States by first class
United States mail, postage prepaid, in certified or registered form, return-receipt requested, and
addressed as follows:

	 	 	 
	If to Lessor:
	 	 
	 
	 	 
	For Payments:

	 	Enterprise Products Texas Operating L.P.
	 

	 	P.O. Box 4324
	 

	 	Houston, TX 77210-4324
	 
	 	 
	For Overnight Messenger:

	 	Enterprise Products Texas Operating L.P.
	 

	 	Attention: President
	 

	 	2727 North Loop West
	 

	 	Houston, TX 77008

15

 

	 	 	 
	For Mail:

	 	Enterprise Products Texas Operating L.P.
	 

	 	Attention: President
	 

	 	P.O. Box 4324
	 

	 	Houston, TX 77210-4324
	 
	 	 
	For Facsimile:

	 	Facsimile: (713)-880-7670, Attention: President
	 
	 	 
	If to Lessee
	 	 
	 
	 	 
	For Overnight Messenger:

	 	Diamond-Koch, L.P.
	 

	 	Attention: VP — Propylene
	 

	 	20. E. Greenway Plaza
	 

	 	Houston, Texas 77046
	 

	 	(713)-544-5948
	 
	 	 
	For Mail:

	 	Diamond-Koch, L,P.
	 

	 	Attention: VP — Propylene
	 

	 	20. E. Greenway Plaza
	 

	 	Houston, Texas 77046
	 
	 	 
	For Facsimile:

	 	If to Diamond-Koch, L.P.
	 

	 	Attention: VP — Propylene
	 

	 	Facsimile: (713)-544-7820

     Notice given as aforesaid shall be effective only upon receipt by the Party for whom the same
is intended. Lessor or Lessee may change its respective address, telephone, or facsimile numbers by
giving notice in writing to the other parties stating the new address. Commencing upon the tenth
(10th) day after the giving of such notice, such newly-designated address (or number, as the case
may be) shall be such party’s address (or number, as the case may be) for the purpose of all
notices or other communications required or permitted to be given pursuant to this Lease.

ARTICLE XV.

     15.1 ENTIRE CONTRACT. This Lease embodies the entire contract between the Parties
hereto relative to the subject matter hereof. No amendments, variations, modifications, or changes
herein or hereof shall be binding unless in writing and signed by Lessor and Lessee.

     15.2 PERSONAL PRONOUNS. All personal pronouns used in this Lease shall
include the other genders whether used in the masculine, feminine, or neuter gender and the
singular shall include the plural whenever and as often as may be appropriate.

16

 

     15.3 CAPTIONS OR HEADINGS. The marginal captions, notes, or titles appearing in this
Lease are inserted and included solely for convenience and shall never be considered or given any
effect in construing this Lease or any provision or provisions hereof, or in connection with the
duties, obligations, or liabilities of the respective parties hereto or in ascertaining intent, if
any question of intent should arise.

     15.4 REAL RIGHT AND COVENANT. This Lease shall constitute a real right and covenant
running with the Leased Premises, and this Lease and all of its terms and provisions shall be
binding upon the successors, assigns, and legal representatives of Lessee; and whenever in this
Lease a reference to either of the parties hereto is made, such reference shall be deemed to
include, wherever applicable, a reference to the heirs, executors, administrators, successors, and
assigns of said parties. Nothing herein shall be deemed to permit an assignment by Lessee of its
interest in this Lease in violation of Section 13.3 hereof.

     15.5 NO AGENCY. It is not the intention of the parties hereto to create under any
circumstances, a partnership, or a relationship of master-servant or principal-agent. As between
Lessor and Lessee, the rights, duties, obligations, and liabilities of Lessor and Lessee are
separate and not joint or collective, and nothing herein shall ever be construed to create a
partnership or relationship of master-servant or principal-agent under the laws of the State of
Texas. Lessor does not consent to the imposition of any mechanic’s or materialman’s lien against
the Leased Premises.

     15.6 EFFECTIVE DATE. The Commencement Date of this Lease shall be the date set forth
below for execution of this Lease.

     15.7 APPLICATION OF LAW. This Lease shall be governed by and construed in accordance
with the laws of the State of Texas.

17

 

     EXECUTED AND DELIVERED EFFECTIVE as of 17th day of January, 2002.

	 	 	 
	 

	 	LESSOR:
	 
	 	 
	 

	 	ENTERPRISE PRODUCTS TEXAS
	 

	 	OPERATING, L.P.
	 

	 	By: Enterprise Products Operating L.P., its
	 

	 	general partner
	 

	 	By: Enterprise Products GP, LLC,
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: /s/ Richard H. Bachmann
	 

	 	Name: Richard H. Bachmann
	 

	 	Title: Executive Vice-President
	 
	 	 
	 

	 	LESSEE:
	 
	 	 
	 

	 	DIAMOND-KOCH, L.P.
	 

	 	By: D-K Diamond-Koch, L.L.C.
	 

	 	Its General Partner
	 
	 	 
	 

	 	By: /s/ Damon Cox
	 

	 	Name: Damon Cox
	 

	 	Title: Attorney-in-Fact

18exv10w11

 

Exhibit 10.11

PIPELINE LEASE AGREEMENT

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

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

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

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

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

-1-

 

	4.	 	Ownership of Property.

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

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

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

-2-

 

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

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

-3-

 

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

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

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

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

	 	 	 	 	 	 	 	 	 
	 	 	Type of Insurance	 	 	 	Limits	 	 
	 
	 	 	 	 	 	 	 	 
	I.

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

But not less than $500,000
	 	 
	 
	 	 	 	 	 	 	 	 
	II.

	 	Commercial General Liability

including:
	 	 	 	Combined Single Limit

$3,000,000 per occurrence	 	 
	 

	 	(a) Contractual Liability	 	 	 	 	 	 
	 

	 	(b) Property damage arising from

losses resulting from explosion,

collapse or underground damage	 	 	 	 	 	 
	 

	 	(c) Products and completed
operations	 	 	 	 	 	 
	 

	 	(d) Environmental Impairment	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

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	III.

	 	Comprehensive Auto

Liability
	 	 	 	Combined Single Limit

$3,000,000	 	 
	 
	 	 	 	 	 	 	 	 
	IV.

	 	Property Damage Insurance

For the Leased Pipeline
	 	 	 	Combined Single Limit

$4,000,000	 	 
	 
	 	 	 	 	 	 	 	 
	V.

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

$10,000,000	 	 

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

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

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

-7-

 

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

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

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

	 	 	 
	LESSOR:
 

 

 

 

LESSEE:

	 	TE Products Pipeline Company, Limited Partnership

1100 Louisiana Street, 10th Floor

Houston, Texas 77002

Attention: Vice-President, Refined Products
 

ENTERPRISE
GC, L.P.

1100 Louisiana Street, 10th Floor

Houston, Texas 77002

Attention: Vice-President, NGL Assets

-8-

 

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

	 	 	 	 	 
	 
	 	 	 	 
	TE Products Pipeline Company, Limited Partnership

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

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Enterprise GC, L.P.

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

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

-9-

 

	 	 	 	 	 	 	 
	     STATE OF TEXAS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	     COUNTY OF HARRIS

	 	 	)	 	 	 
	 
	 	 	 	 	 	 

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

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

	 	 	 	 	 	 	 
	MY COMMISSION EXPIRES:

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	NOTARY PUBLIC	 	 
	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	     STATE OF TEXAS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	     COUNTY OF HARRIS

	 	 	)	 	 	 
	 
	 	 	 	 	 	 

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

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

	 	 	 	 	 	 	 
	MY COMMISSION EXPIRES:

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	NOTARY PUBLIC	 	 

-10-

 

EXHIBIT A

SEE
ATTACHED

 

 

 

 

-11-

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