FIFTH AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT

 

FIFTH AMENDED AND RESTATED

ADMINISTRATIVE SERVICES AGREEMENT

(formerly called, EPCO AGREEMENT)

by and among

EPCO, INC.

(formerly known as Enterprise Products Company)

ENTERPRISE GP HOLDINGS L.P.

EPE HOLDINGS, LLC

ENTERPRISE PRODUCTS PARTNERS L.P.

ENTERPRISE PRODUCTS OPERATING LLC

(successor to Enterprise Products Operating L.P.)

ENTERPRISE PRODUCTS GP, LLC

ENTERPRISE PRODUCTS OLPGP, INC.

DEP HOLDINGS, LLC

DUNCAN ENERGY PARTNERS L.P.

DEP OPERATING PARTNERSHIP, L.P.

TEPPCO PARTNERS, L.P.

TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC

TE PRODUCTS PIPELINE COMPANY, LLC

(successor to TE Products Pipeline Company, Limited Partnership)

TEPPCO MIDSTREAM COMPANIES, LLC

(successor to TEPPCO Midstream Companies, L.P.)

TCTM, L.P.

and

TEPPCO GP, INC.

 

 

 

 

 

TABLE OF CONTENTS

-i-

 

 

 

 

Exhibit A — Definitions

Schedule 2.12 — Schedule of Initial Dedicated EPCO Employees

-ii-

 

 

FIFTH AMENDED AND RESTATED

ADMINISTRATIVE SERVICES AGREEMENT

     THIS FIFTH AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT (this “ Agreement ”) is entered into and effective this 30th day of January, 2009 (the “ Effective Date ”), by and among EPCO, Inc., a Texas corporation formerly known as Enterprise Products Company (“ EPCO ”), Enterprise GP Holdings L.P., a Delaware limited partnership (“ EPE ”), EPE Holdings, LLC, a Delaware limited liability company (“ EPE GP ”), Enterprise Products Partners L.P., a Delaware limited partnership (“ EPD ”), Enterprise Products Operating LLC, a Texas limited liability company (“EPOLLC,” successor to Enterprise Products Operating L.P., a Delaware limited partnership, and such predecessor is referred to herein as “ EPD OLP ”), Enterprise Products GP, LLC, a Delaware limited liability company (“ EPD GP ”), Enterprise Products OLPGP, Inc., a Delaware corporation (“ EPD OLPGP ”), DEP Holdings, LLC, a Delaware limited liability company (“ DEP Holdings ”), Duncan Energy Partners L.P., a Delaware limited partnership (“ DEP ”), DEP Operating Partnership, L.P., a Delaware limited partnership (“ DEP OLP ”), TEPPCO Partners, L.P., a Delaware limited partnership (“ TPP ”), Texas Eastern Products Pipeline Company, LLC, a Delaware limited liability company (“ TPP GP ”), TE Products Pipeline Company, LLC, a Texas limited liability company (“ TE Products ” successor to TE Products Pipeline Company, Limited Partnership, a Delaware limited partnership, and such predecessor is referred to herein as “ TE LP ”), TEPPCO Midstream Companies, LLC, a Texas limited liability company (“ TEPPCO Midstream ,” successor to TEPPCO Midstream Companies, L.P., a Delaware limited partnership, and such predecessor is referred to herein as “ TEPPCO Midstream LP ”), TCTM, L.P., a Delaware limited partnership (“ TCTM ”), and TEPPCO GP, Inc., a Delaware corporation (“ TEPPCO Inc. ”). Capitalized terms not otherwise defined below have the meanings ascribed to such terms as set forth on Exhibit A to this Agreement.

R E C I T A L S

     The purpose of this Agreement is to amend and restate, in its entirety, that certain Fourth Amended and Restated Administrative Services Agreement (as amended on February 28, 2007 (but effective as of March 1, 2007) and August 7, 2007 (but effective as of May 7, 2007), the “ Fourth Amendment ”), dated January 30, 2007 but effective as of February 5, 2007, among certain of the Parties hereto.

     The Parties hereto (other than EPE, EPE GP, EPD OLPGP, DEP Holdings, DEP, DEP OLP, TPP, TPP GP, TE LP, TEPPCO Midstream, TCTM and TEPPCO Inc.) originally entered into that certain EPCO Agreement, dated as of July 31, 1998, in connection with the initial public offering of EPD units, pursuant to which EPCO and its Affiliates (other than the EPD Partnership Entities) agreed to provide certain operational and financial support to the EPD Partnership Entities.

     Effective as of December 10, 2003, EPD OLPGP succeeded EPD GP as the general partner of EPD OLP.

     Effective as of January 1, 2004, the Parties hereto (other than EPE, EPE GP, DEP Holdings, DEP, DEP OLP, TPP, TPP GP, TE LP, TEPPCO Midstream, TCTM and TEPPCO Inc.) amended and restated the EPCO Agreement pursuant to the First Amended and Restated Administrative Services Agreement (the “ First Amendment ”), (i) to reduce the operational and financial support provided by the EPCO Group to the EPD Partnership Entities, (ii) to change the manner in which the EPD Partnership Entities were charged for certain administrative, management, and operating services provided by EPCO, from a fixed fee to allocating the cost of such services to the EPD Partnership Entities on a pro rata basis, (iii) to assign certain contract rights, initially retained by EPCO, but which related to assets owned by the EPD Partnership Entities to the EPD Partnership Entities, and (iv) to reflect certain other understandings between the EPCO Group and the EPD Partnership Entities.

     Effective as of June 21, 2004, EPCO assigned the Name and the Mark to EPD GP, and effective as of October 1, 2004, Enterprise GP assigned the Name and Mark to EPD OLP.

     Effective October 1, 2004, the Parties hereto (other than EPE, EPE GP, DEP Holdings, DEP, DEP OLP, TPP, TPP GP, TE LP, TEPPCO Midstream, TCTM and TEPPCO Inc.) amended and restated the First Amendment pursuant to a Second Amended and Restated Administrative Services Agreement (the “ Second Amendment ”) to evidence, among other matters the terms and conditions upon which (i) the EPCO Group would provide certain

 

 

services to the EPD Partnership Entities, (ii) EPD OLP would license the use of the Name and the Mark to EPCO and (iii) EPCO would provide indemnification to the EPD Partnership Entities for certain matters.

     On February 24, 2005, an Affiliate of EPCO acquired TPP GP. Effective February 24, 2005, the Parties to the Second Amendment executed Amendment No. 1 to the Second Amendment to exclude the TPP Partnership

Entities from the definition of EPCO Group and exclude such entities from the business opportunity agreements set forth in the Second Amendment.

     Effective February 24, 2005, the parties hereto or their predecessors (other than DEP Holdings, DEP and DEP OLP) amended and restated the Second Amendment pursuant to a Third Amended and Restated Administrative Services Agreement (the “ Third Amendment ”) to evidence, among other matters the terms and conditions pursuant to which (i) the EPCO Group provided certain services to the EPE Partnership Entities, (ii) the EPCO Group provided certain services to the TPP Partnership Entities and (iii) a variety of additional matters were handled among the EPCO Group, the EPE Partnership Entities, the EPD Partnership Entities and the TPP Partnership Entities.

     EPE completed the initial public offering of its units in August 2005.

     Effective February 13, 2006, the Parties executed a waiver regarding certain provisions of the Conflicts Policies and Procedures set forth in the Third Amended and Restated Administrative Services Agreement.

     Effective February 5, 2007, the parties hereto or their predecessors entered into the Fourth Amendment to amend and restate the Third Amended and Restated Administrative Services Agreement in connection with the initial public offering of DEP.

     On February 28, 2007, but effective as of March 1, 2007, the parties hereto or their predecessors entered into an amendment to the Fourth Amendment to delete the Conflicts Policies and Procedures attached to the Fourth Amendment as Exhibit B as well as Section 5.5 of the Fourth Amendment and all references to Exhibit B and such Conflicts Policies and Procedures in the Fourth Amendment.

     Effective as of June 30, 2007, a restructuring resulted in (i) EPD OLP converting into EPOLLC, a Texas limited liability company, and EPD OLPGP becoming the sole manager of EPOLLC; (ii) TE LP converting into TE Products and TEPPCO Inc. becoming the sole manager of TE Products and (iii) TEPPCO Midstream LP converting into TEPPCO Midstream and TEPPCO Inc. becoming the sole manager of TEPPCO Midstream.

     On August 7, 2007, but effective as of May 7, 2007, the parties hereto entered into an additional amendment to the Fourth Amendment to amend Section 5.4 of the Fourth Amendment with respect to the definition of “EPE Partnership Entities.”

     The Parties hereto desire, by their execution of this Agreement, to evidence the terms and conditions pursuant to which (i) the EPCO Group will provide certain services to the Partnership Entities and (ii) a variety of additional matters will be handled among the EPCO Group, the EPE Partnership Entities, the EPD Partnership Entities, the DEP Partnership Entities and the TPP Partnership Entities.

A G R E E M E N T S

     NOW, THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE 1:    DEFINITIONS

      1.1 Definitions . The definitions listed on Exhibit A shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

      1.2 Construction . Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this

 

 

Agreement; (c) the terms “include”, “includes”, “including” or words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof”, “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

ARTICLE 2:    SERVICES

      2.1 EPCO Services; Term . During the period beginning on the Effective Date and ending on December 31, 2013, subject to the terms of this Article 2 and in exchange for the reimbursement described in Section 2.2, EPCO hereby agrees to provide, or to cause EPCO Holdings, Inc., a Texas corporation (“ EPCO Holdings ”), to provide, the Partnership Entities with such selling, general and administrative services and such management and operating services as may be necessary to manage and operate the business, properties and assets of the Partnership Entities in accordance with Prudent Industry Practices; it being understood and agreed by the Parties that in connection with the provision of such services, EPCO shall employ or otherwise retain the services of such personnel as may be necessary to cause the business, properties and assets of the Partnership Entities to be so managed and operated (individually, an “ EPCO Service ” and, collectively, the “ EPCO Services ”).

      2.2 EPCO Compensation . As compensation for the provision by EPCO of the EPCO Services to each of the Partnership Entities, EPCO shall be entitled to receive, and each of the Partnership Entities agrees to pay to EPCO, without duplication, an amount equal to (a) the sum of all costs and expenses (direct or indirect) incurred by EPCO which are directly or indirectly related to the business or activities of such Partnership Entity and (b) the cash value (allocated in accordance with the provisions of this Agreement) of distributions (whether in cash or securities), if any, made by TEPPCO Unit II L.P. and EPCO Unit L.P. to their respective Class B limited partners who perform services for such Partnership Entities (including, for purposes of both (a) and (b), above, without limitation, expenses, direct or indirect, reasonably allocated to such Partnership Entity by EPCO). In addition, each of the Partnership Entities shall pay all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time in respect of the EPCO Services provided to such Partnership Entity by EPCO. The aggregate amount payable by the Partnership Entities to EPCO pursuant to this Section 2.2 with respect to a given period of time shall be referred to herein as such entity’s “ Administrative Services Fee ”. It is the intention of the Parties that, with the exception of Article V and the Retained Leases (as hereinafter defined) in the case of the EPD Partnership Entities, the Administrative Services Fee with respect to the Partnership Entities represents fair and reasonable compensation to EPCO for the Partnership Entities’ allocable share of all general and administrative expenses, capital expenses and other costs for Shared Services borne or performed by EPCO, or any of the other members of the EPCO Group, for the benefit of any Partnership Entity.

      2.3 Dispute Regarding Services or Calculation of Costs . Should there be a dispute over the nature or quality of the EPCO Services, or the calculation and allocation of any Administrative Services Fee, relating to any of the EPCO Services, EPCO and the applicable Partnership Entity or Entities shall first attempt to resolve such dispute, acting diligently and in good faith, using the past practices of such Parties and documentary evidence of costs as guidelines for such resolution. If EPCO and the applicable Partnership Entity or Entities are unable to resolve any such dispute within thirty days, or such additional time as may be reasonable under the circumstances, the dispute shall be referred to the Audit and Conflicts Committee of EPE GP, EPD GP, DEP Holdings or TPP GP, as applicable. EPCO shall provide to each of the Partnership Entities a quarterly statement indicating the total EPCO costs and expenses allocated to all of the Partnership Entities and a detailed statement of the EPCO costs and expenses that are allocated to the particular group of Partnership Entities and representative of such Partnership Entities’ Administrative Service Fee (including an explanation of such allocation, which shall generally be consistent from period to period); provided that one group of Partnership Entities will not receive the allocation for another group of Partnership Entities (e.g., the EPD Partnership Entities will not receive the detailed statement of the TPP Partnership Entities’ costs and expenses, and vice-versa). The Parties agree that the applicable Audit and Conflicts Committee shall have the authority to settle any such dispute, in its sole discretion, recognizing that it is the intent of all Parties that all shared expenses or services be allocated among the EPCO Group and the applicable Partnership Entity or Entities on a fair and reasonable basis.

      2.4 Invoices . EPCO shall invoice the applicable Billing Agent on or before the last day of each month for the estimated Administrative Services Fee for the next succeeding month, plus or minus any adjustment necessary to correct prior estimated billings to actual billings. All invoices shall be due and payable on the last day of the month which the invoice covers. Upon request from the applicable Billing Agent, EPCO shall furnish in reasonable detail a

 

 

description of the EPCO Services performed for the corresponding Partnership Entity or Entities during any month or other relevant period.

      2.5 Disputes; Default . Notwithstanding any provision of this Article 2 to the contrary, should the applicable Billing Agent fail to pay EPCO, when due, any amounts owing in respect of the applicable EPCO Services, except as set forth in the third succeeding sentence, upon 30 days’ notice, EPCO may terminate this Article 2 as to those EPCO Services that relate to the unpaid portion of the invoice. Should there be a dispute as to the propriety of invoiced amounts, the applicable Billing Agent shall pay all undisputed amounts on each invoice, but shall be entitled to withhold payment of any amount in dispute and shall promptly notify EPCO of such disputed amount. EPCO shall promptly provide the applicable Billing Agent with records relating to the disputed amount so as to enable EPCO and the applicable Partnership Entities to resolve the dispute. So long as such parties are attempting in good faith to resolve the dispute, EPCO shall not be entitled to terminate the EPCO Services that relate to the disputed amount.

      2.6 Input Regarding EPCO Services . Any records, information or other input from the Partnership Entities that is necessary for EPCO to perform any EPCO Services shall be submitted, upon EPCO’s written request therefor, to EPCO by such Partnership Entities. If the Partnership Entities fail to supply such records, information or other input to EPCO and such failure renders EPCO’s performance of any EPCO Services unreasonably difficult, in EPCO’s reasonable judgment, EPCO, upon reasonable notice to the applicable Partnership Entity, may refuse to perform such EPCO Services until such records, information or other input is supplied.

      2.7 Limitation Regarding EPCO Services . The Partnership Entities acknowledge that EPCO shall only be required to perform and provide (i) those EPCO Services with respect to the business of such Partnership Entities as operated on the Effective Date, and (ii) such additional EPCO Services as may be mutually agreed orally or in writing by EPCO and the Partnership Entities, which agreement regarding additional or fewer EPCO Services shall reflect an appropriate adjustment to the applicable Administrative Services Fee. EPCO shall not be required to perform any EPCO Services hereunder for the benefit of any Person other than the Partnership Entities.

      2.8 Representations Regarding Use of Services . The Partnership Entities represent and agree that they will use the EPCO Services only in accordance with all applicable federal, state and local laws and regulations, and in accordance with the reasonable conditions, rules, regulations, and specifications that may be set forth in any manuals, materials, documents, or instructions furnished from time to time by EPCO to such Partnership Entities. EPCO reserves the right to take all actions, including, without limitation, termination of any portion of the EPCO Services for any Partnership Entity that it reasonably believes is required to be terminated in order to assure compliance with applicable laws and regulations.

      2.9 Warranties; Limitation of Liability . The EPCO Services shall be provided in accordance with the Services Standard. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, EPCO MAKES NO (AND HEREBY DISCLAIMS AND NEGATES ANY AND ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE EPCO SERVICES. IN NO EVENT SHALL EPCO OR ANY OF ITS AFFILIATES BE LIABLE TO ANY OF THE PERSONS RECEIVING ANY EPCO SERVICES OR TO ANY OTHER PERSON FOR ANY EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM ANY ERROR IN THE PERFORMANCE OF SUCH SERVICE, REGARDLESS OF WHETHER THE PERSON PROVIDING SUCH SERVICE, ITS AFFILIATES, OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT, EXCEPT TO THE EXTENT SUCH EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARE PAID BY THE PARTY INCURRING SUCH DAMAGES TO A THIRD PARTY.

      2.10 Force Majeure . EPCO shall have no obligation to perform the EPCO Services if its failure to do so is caused by or results from any act of God, governmental action, natural disaster, strike, failure of essential equipment, or any other cause or circumstance, whether similar or dissimilar to the foregoing causes or circumstances, beyond the reasonable control of EPCO.

      2.11 Affiliates . At its election, EPCO may cause one or more of its Affiliates or third party contractors reasonably acceptable to the Party receiving any EPCO Services to provide such EPCO Services; provided , however , EPCO shall remain responsible for the provision of such EPCO Service in accordance with this Agreement.

 

 

      2.12 Dedication of EPCO Employees . EPCO shall cause the employees initially set forth on Schedule 2.12 to perform EPCO Services exclusively for the benefit of the corresponding DEP Partnership Entity or its successor set forth on Schedule 2.12 . In addition, EPCO shall designate and cause such additional personnel necessary to provide EPCO Services exclusively for the benefit of such entities or any other DEP Partnership Entity or its successor as DEP Holdings shall reasonably request.

.

ARTICLE 3:    [RESERVED]

ARTICLE 4:    EPCO’S INDEMNIFICATION FOR EXCLUDED LIABILITIES

      4.1 Indemnification . From and after the date hereof and subject to the remaining provisions of this Article 4, EPCO shall indemnify, defend and hold harmless the Partnership Entities from and against any loss, cost, claim, liability, prepayment or similar penalty, damage, expense, attorneys fees, judgment, award or settlement of any kind or nature whatsoever (other than out-of-pocket costs and expenses incurred by the Partnership Entities in connection with the discharge of their obligations pursuant to Section 4.2(b)) (collectively, “ Losses ”) incurred by the Partnership Entities in connection with the Excluded Liabilities; provided , however , in no event shall such indemnification obligation, or the term “ Losses ,” cover or include exemplary, punitive, special, consequential, indirect, or incidental damages or lost profits suffered by the Partnership Entities in connection with the Excluded Liabilities, except to the extent such exemplary, punitive, special, consequential, indirect or incidental damages or lost profits are actually paid by any Partners