EXHIBIT 10.3

 

EXECUTION COPY

 

--------------------------------------------------------------------------------

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

WILLIAMS ENERGY PARTNERS L.P.

 

and certain of its Subsidiaries

 

in favor of

 

LEHMAN COMMERCIAL PAPER INC.,

 

as Administrative Agent

 

Dated as of August 6, 2003

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page

--------------------------------------------------------------------------------

SECTION 1. DEFINED TERMS    2     

1.1

   Definitions    2     

1.2

   Other Definitional Provisions    6 SECTION 2. GUARANTEE    6     

2.1

   Guarantee    6     

2.2

   Right of Contribution    8     

2.3

   Subrogation    8     

2.4

   Amendments, etc. with respect to the Borrower Obligations    8     

2.5

   Guarantee Absolute and Unconditional    9     

2.6

   Reinstatement    11     

2.7

   Payments    11 SECTION 3. GRANT OF SECURITY INTEREST    11 SECTION 4.
REPRESENTATIONS AND WARRANTIES    12     

4.1

   Representations in Credit Agreement    12     

4.2

   Title; No Other Liens    12     

4.3

   Perfected First Priority Liens    12     

4.4

   Jurisdiction of Organization; Chief Executive Office    12     

4.5

   Investment Property    13 SECTION 5. COVENANTS    13     

5.1

   Covenants in Credit Agreement    13     

5.2

   Delivery of Instruments    13     

5.3

   Payment of Obligations.    13     

5.4

   Maintenance of Perfected Security Interest; Further Documentation    13     

5.5

   Changes in Name, etc.    14     

5.6

   Notices    14     

5.7

   Distributions in respect of Investment Property    14 SECTION 6. REMEDIAL
PROVISIONS    16     

6.1

   Pledged Stock    16     

6.2

   Proceeds to be Turned Over To Administrative Agent    16     

6.3

   Application of Proceeds    17     

6.4

   Code and Other Remedies    17     

6.5

   Sale of Pledged Stock    18     

6.6

   Deficiency    19 SECTION 7. THE ADMINISTRATIVE AGENT    19     

7.1

   Administrative Agent’s Appointment as Attorney-in-Fact, etc    19     

7.2

   Duty of Administrative Agent    20     

7.3

   Execution of Financing Statements    20     

7.4

   Authority of Administrative Agent    21 SECTION 8. MISCELLANEOUS    21

 

i

--------------------------------------------------------------------------------

               Page

--------------------------------------------------------------------------------

    

8.1

   Amendments in Writing    21     

8.2

   Notices    21     

8.3

   No Waiver by Course of Conduct; Cumulative Remedies    21     

8.4

   Enforcement Expenses; Indemnification    21     

8.5

   Successors and Assigns    22     

8.6

   Set-Off    22     

8.7

   Counterparts    23     

8.8

   Severability    23     

8.9

   Section Headings    23     

8.10

   Integration    23     

8.11

   GOVERNING LAW    23     

8.12

   Submission To Jurisdiction; Waivers    23     

8.13

   Acknowledgements    24     

8.14

   Additional Grantors    24     

8.15

   Releases    24     

8.16

   WAIVER OF JURY TRIAL    25 Schedules          

Schedule 1

           Notice Addresses of Guarantors     

Schedule 2

           Description of Pledged Stock     

Schedule 3

           Filings and Other Actions Required to Perfect Security Interest     

Schedule 4

           Jurisdiction of Organization, Identification Number and Location of
Chief Executive Office     

Annexes

         

Annex I

           Assumption Agreement     

 

ii

--------------------------------------------------------------------------------

GUARANTEE AND COLLATERAL AGREEMENT, dated as of August 6, 2003, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of LEHMAN COMMERCIAL PAPER
INC., as Administrative Agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions (the “Lenders”) from time to time
parties to the Credit Agreement, dated as of August 6, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among WILLIAMS ENERGY PARTNERS L.P., a Delaware limited partnership (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties to the Credit Agreement (the “Lenders”), LEHMAN BROTHERS
INC., as sole advisor and sole bookrunner (in such capacity, the “Bookrunner”),
Lehman Brothers Inc. and Banc of America Securities, LLC as joint lead arrangers
(in such capacity, the “Joint Lead Arrangers”), Bank of America, N.A. as
syndication agent (in such capacity, the “Syndication Agent”), and the
Administrative Agent.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Borrower to make valuable transfers to one or
more of the other Grantors in connection with the operation of their respective
businesses;

 

WHEREAS, certain of the Qualified Counterparties may enter into Specified Hedge
Agreements with one or more of the Grantors;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
extensions of credit under the Credit Agreement and from the Specified Hedge
Agreements; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
benefit of the Secured Parties, as follows:

--------------------------------------------------------------------------------

SECTION 1. DEFINED TERMS

 

1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement and the following terms are used herein as defined in the New
York UCC: Certificated Security, Instruments and Supporting Obligations.

 

(b) The following terms shall have the following meanings:

 

“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Borrower Credit Agreement Obligations”: the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and all
other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans and Reimbursement Obligations and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, or the other Loan Documents, or any Letter of
Credit, or any other document made, delivered or given in connection therewith
(other than a Hedge Agreement), in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
the Borrower pursuant to the terms of any of the foregoing agreements).

 

“Borrower Hedge Agreement Obligations”: the collective reference to all
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Hedge
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Specified
Hedge Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant Qualified
Counterparty that are required to be paid by the Borrower pursuant to the terms
of any Specified Hedge Agreement).

 

“Borrower Obligations”: the collective reference to (i) the Borrower Credit
Agreement Obligations, (ii) the Borrower Hedge Agreement Obligations, but only
to the extent that, and only so long as, the Borrower Credit Agreement
Obligations are secured

 

2

--------------------------------------------------------------------------------

and guaranteed pursuant hereto, and (iii) all other obligations and liabilities
of the Borrower, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the Secured
Parties that are required to be paid by the Borrower pursuant to the terms of
this Agreement).

 

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation that is an
Issuer, any and all equivalent ownership interests in a Person (other than a
corporation) that is an Issuer and any and all warrants, rights or options to
purchase any of the foregoing.

 

“Collateral”: as defined in Section 3.

 

“Collateral Account”: as defined in Section 6.2.

 

“Excluded Capital Stock”: the collective reference to (a) any Foreign Subsidiary
Voting Stock of any Issuer in excess of 65% of the Foreign Subsidiary Voting
Stock of such Issuer and (b) the Capital Stock of any Unrestricted Subsidiary.

 

“Foreign Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.

 

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.

 

“Guarantor Hedge Agreement Obligations”: the collective reference to all
obligations and liabilities of a Guarantor (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Hedge
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to such Guarantor,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Specified
Hedge Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant Qualified
Counterparty that are required to be paid by such Guarantor pursuant to the
terms of any Specified Hedge Agreement).

 

“Guarantor Obligations”: with respect to any Guarantor, the collective reference
to (i) any Guarantor Hedge Agreement Obligations of such Guarantor, but only to
the extent that, and only so long as, the obligations of such Guarantor referred
to in clause (ii) of this definition are secured and guaranteed pursuant hereto,
and (ii) all obligations and liabilities of such Guarantor which may arise under
or in connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations,

 

3

--------------------------------------------------------------------------------

reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Administrative Agent or to any Secured Party that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).

 

“Guarantors”: the collective reference to each Grantor other than the Borrower.

 

“Hedge Agreements”: as to any Person, all interest rate swaps, currency exchange
agreements, commodity swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against fluctuations in
interest rates, currency exchange rates or commodity prices or the exchange of
nominal interest obligations, either generally or under specific contingencies.
For avoidance of doubt, Hedge Agreements shall include any interest rate swap or
similar agreement that provides for the payment by the Borrower or any of its
Subsidiaries of amounts based upon a floating rate in exchange for receipt by
the Borrower or such Subsidiary of amounts based upon a fixed rate.

 

“Investment Property”: the collective reference to (i) all “investment property”
as such term is defined in Section 9-102(a)(49) of the New York UCC (other than
any Excluded Capital Stock) issued by a Restricted Subsidiary and (ii) whether
or not constituting “investment property” as so defined, all Pledged Stock.

 

“Issuers”: the collective reference to each Restricted Subsidiary of the
Borrower that is issuer of any Investment Property.

 

“New York UCC”: the Uniform Commercial Code as from time to time in effect in
the State of New York.

 

“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Guarantor, its Guarantor Obligations.

 

“Pledged LLC Interests”: in each case, whether now existing or hereafter
acquired, all of each Grantor’s right, title and interest in and to:

 

(i) any Issuer that is a limited liability company, but not any of such
Grantor’s obligations from time to time as a holder of interests in any such
Issuer (unless the Administrative Agent or its designee, on behalf of the
Administrative Agent, shall elect to become a holder of interests in any such
Issuer in connection with its exercise of remedies pursuant to the terms
hereof);

 

(ii) any and all moneys due and to become due to such Grantor now or in the
future by way of a distribution made to such Grantor in its capacity as a holder
of interest in any such Issuer or otherwise in respect of such Grantor’s
interest as a holder of interests in any such Issuer;

 

(iii) any other Property of any such Issuer to which such Grantor now or in the
future may be entitled in respect of its interest in any such Issuer by way of
distribution, return of capital or otherwise;

 

4

--------------------------------------------------------------------------------

(iv) any other claim or right which such Grantor now has or may in the future
acquire in respect of its interest in any such Issuer;

 

(v) the organizational documents of any such Issuer; and

 

(vi) all certificates, options or rights of any nature whatsoever that may be
issued or granted by any such Issuer to such Grantor while this Agreement is in
effect.

 

“Pledged Partnership Interests”: in each case, whether now existing or hereafter
acquired, all of each Grantor’s right, title and interest in and to:

 

(i) any Issuer that is a partnership, but not any of such Grantor’s obligations
from time to time as a general or limited partner, as the case may be, in any
such Issuer (unless the Administrative Agent or its designee, on behalf of the
Administrative Agent, shall elect to become a general or limited partner, as the
case may be, in any such Issuer in connection with its exercise of remedies
pursuant to the terms hereof);

 

(ii) any and all moneys due and to become due to such Grantor now or in the
future by way of a distribution made to such Grantor in its capacity as a
general or limited partner, as the case may be, in any such Issuer or otherwise
in respect of such Grantor’s interest as a general or limited partner, as the
case may be, in any such Issuer;

 

(iii) any other Property of any such Issuer to which such Grantor now or in the
future may be entitled in respect of its interest as a general or limited
partner, as the case may be, in any such Issuer by way of distribution, return
of capital or otherwise;

 

(iv) any other claim or right which such Grantor now has or may in the future
acquire in respect of its general or limited partner interest in any such
Issuer;

 

(v) the partnership agreement or other organizational documents of any such
Issuer; and

 

(vi) all certificates, options or rights of any nature whatsoever that may be
issued or granted by any such Issuer to such Grantor while this Agreement is in
effect.

 

“Pledged Stock”: all Pledged LLC Interests, Pledged Partnership Interests and
other Capital Stock, including, without limitation, the LLC interests,
partnership interests and other Capital Stock listed on Schedule 2, together
with any other shares, interests, stock certificates, options or rights of any
nature whatsoever in respect of the Capital Stock of any Restricted Subsidiary
that may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided, that Pledged Stock shall in any event exclude the
Excluded Capital Stock.

 

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, including, without limitation, all dividends or other
income from the Investment Property, collections thereon or distributions or
payments with respect thereto.

 

5

--------------------------------------------------------------------------------

“Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was
entered into, was a Lender or an affiliate of a Lender.

 

“Secured Parties”: the collective reference to the Administrative Agent, the
Syndication Agent, the Bookrunner, the Lenders (including any Issuing Lender in
its capacity as Issuing Lender) and, with respect to any Specified Hedge
Agreement, any Qualified Counterparties.

 

“Securities Act”: the Securities Act of 1933, as amended.

 

“Specified Hedge Agreement”: any Hedge Agreement entered into by (i) the
Borrower or any Guarantor and (ii) any Qualified Counterparty, provided that the
Borrower or Guarantor party thereto has agreed with the Qualified Counterparty
thereto in writing that such Hedge Agreement shall be entitled to the benefits
afforded a Specified Hedge Agreement under this Agreement.

 

1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

 

(b) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 

(c) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

 

SECTION 2. GUARANTEE

 

2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).

 

(ii) The Borrower hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by each Guarantor when due (whether at stated
maturity, by acceleration or otherwise) of the Guarantor Hedge Agreement
Obligations of such Guarantor.

 

6

--------------------------------------------------------------------------------

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, (i) the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
fraudulent conveyances or transfers or the insolvency of debtors (after giving
effect to the right of contribution established in Section 2.2) and (ii) the
maximum liability of the Borrower under this Section 2 shall in no event exceed
the amount which can be guaranteed by the Borrower under applicable federal and
state laws relating to fraudulent conveyances or transfers or the insolvency of
debtors (after giving effect to the right of contribution established in Section
2.2).

 

(c) (i) Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee of such Guarantor contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Secured
Party hereunder.

 

(ii) The Borrower agrees that the Guarantor Hedge Agreement Obligations may at
any time and from time to time exceed the amount of the liability of the
Borrower under this Section 2 without impairing the guarantee of the Borrower
contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.

 

(d) Subject to Section 8.15 hereof, the guarantee contained in this Section 2
shall remain in full force and effect until all the Borrower Obligations (other
than Borrower Obligations arising under Section 2.1(a)(ii) hereof) and the
obligations of each Guarantor under the guarantee contained in this Section 2
(other than Guarantor Obligations in respect of Borrower Obligations arising
under Section 2.1(a)(ii) hereof) shall have been satisfied by full and final
payment in cash, no Letter of Credit shall be outstanding and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations and
any or all of the Guarantors may be free from their respective Guarantor Hedge
Agreement Obligations.

 

(e) No payment made by the Borrower, any of the Guarantors, any other guarantor
or any other Person or received or collected by the Administrative Agent or any
Secured Party from the Borrower, any of the Guarantors, any other guarantor or
any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations or the Guarantor Hedge Agreement
Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of the Borrower or any Guarantor under this Section 2 which shall,
notwithstanding any such payment (other than any payment made by the Borrower or
such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations or any payment received or collected from the Borrower or
such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations), remain liable for the Borrower Obligations and the
Guarantor Hedge Agreement Obligations up to the maximum liability of the
Borrower or such Guarantor hereunder until the Borrower Obligations and the
Guarantor Hedge Agreement Obligations are fully and finally paid in cash, no
Letter of Credit shall be outstanding and the Commitments are terminated.

 

7

--------------------------------------------------------------------------------

2.2 Right of Contribution. (a) Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder in respect of any Borrower Credit Agreement Obligation,
such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder which has not paid its proportionate share
of such payment.

 

(b) The Borrower and each Guarantor agrees that to the extent that the Borrower
or any Guarantor shall have paid more than its proportionate share of any
payment made hereunder in respect of any Guarantor Hedge Agreement Obligation of
any other Guarantor, the Borrower or such Guarantor, as the case may be, shall
be entitled to seek and receive contribution from and against the Borrower and
any other Guarantor which has not paid its proportionate share of such payment.

 

(c) The Borrower’s and each Guarantor’s right of contribution under this Section
2.2 shall be subject to the terms and conditions of Section 2.3. The provisions
of this Section 2.2 shall in no respect limit the obligations and liabilities of
the Borrower or any Guarantor to the Administrative Agent and the Secured
Parties, and the Borrower and, subject to the operation of Section 2.1(b), each
Guarantor shall remain liable to the Administrative Agent and the Secured
Parties for the full amount guaranteed by the Borrower or such Guarantor
hereunder.

 

2.3 Subrogation. Notwithstanding any payment made by the Borrower or any
Guarantor hereunder or any set-off or application of funds of the Borrower or
any Guarantor by the Administrative Agent or any Secured Party, neither the
Borrower nor any Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any Secured Party against the Borrower or
any other Guarantor or any collateral security or guarantee or right of offset
held by the Administrative Agent or any Secured Party for the payment of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor shall the
Borrower or any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by the Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrower on account of the
Borrower Obligations are fully and finally paid in cash, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to the Borrower or any Guarantor on account of such subrogation rights at
any time when all of the Borrower Obligations shall not have been fully and
finally paid in cash, such amount shall be held by the Borrower or such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of the Borrower or such Guarantor, and shall,
forthwith upon receipt by the Borrower or such Guarantor, be turned over to the
Administrative Agent in the exact form received by the Borrower or such
Guarantor (duly indorsed by the Borrower or such Guarantor to the Administrative
Agent, if required), to be applied against the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.

 

2.4 Amendments, etc. with respect to the Borrower Obligations. The Borrower and
each Guarantor shall remain obligated hereunder notwithstanding that, without
any

 

8

--------------------------------------------------------------------------------

reservation of rights against the Borrower or any Guarantor and without notice
to or further assent by the Borrower or any Guarantor, any demand for payment of
any of the Borrower Obligations or Guarantor Hedge Agreement Obligations made by
the Administrative Agent or any Secured Party may be rescinded by the
Administrative Agent or such Secured Party and any of the Borrower Obligations
or Guarantor Hedge Agreement Obligations continued, and the Borrower Obligations
or Guarantor Hedge Agreement Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Secured Party (with
the consent of such of the Borrower and the Guarantor as shall be required
thereunder), and the Specified Hedge Agreements, the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders or all
Lenders, as the case may be) may (with the consent of such of the Borrower and
the Guarantor as shall be required thereunder) deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any Secured Party for the payment of the Borrower
Obligations or Guarantor Hedge Agreement Obligations may (with the consent of
such of the Borrower and the Guarantor as shall be required thereunder) be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent nor
any Secured Party shall, except to the extent set forth in, and for the benefit
of the parties to, the agreements and instruments governing such Lien or
guarantee, have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Borrower Obligations or Guarantor Hedge
Agreement Obligations or for the guarantees contained in this Section 2 or any
property subject thereto.

 

2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations (other than any notice with respect to any Guarantor Hedge Agreement
Obligation with respect to which such Guarantor is a primary obligor and to
which it is entitled pursuant to the applicable Specified Hedge Agreement) and
notice of or proof of reliance by the Administrative Agent or any Secured Party
upon the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Administrative Agent and the Secured Parties, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations (other than any diligence, presentment, protest, demand or
notice with respect to any Guarantor Hedge Agreement Obligation with respect to
which such Guarantor is a primary obligor and to which it is entitled pursuant
to the applicable Specified Hedge Agreement). Each Guarantor understands and
agrees that the guarantee of such Guarantor contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any collateral
security therefor or guarantee or right of offset with respect thereto

 

9

--------------------------------------------------------------------------------

at any time or from time to time held by the Administrative Agent or any Secured
Party, (b) any defense, set-off or counterclaim (other than a defense of payment
or performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent or any Secured
Party, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee of such Guarantor
contained in this Section 2, in bankruptcy or in any other instance. When making
any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Secured Party may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability under this Section 2, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Secured Party against any
Guarantor. For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

(b) The Borrower waives any and all notice of the creation, renewal, extension
or accrual of any of the Guarantor Hedge Agreement Obligations and notice of or
proof of reliance by the Administrative Agent or any Secured Party upon the
guarantee by the Borrower contained in this Section 2 or acceptance of the
guarantee by the Borrower contained in this Section 2; the Guarantor Hedge
Agreement Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee by the Borrower contained in this Section 2; and
all dealings between the Borrower and any of the Guarantors, on the one hand,
and the Administrative Agent and the Secured Parties, on the other hand, with
respect to any Guarantor Hedge Agreement Obligation likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee by the Borrower contained in this Section 2. The Borrower waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower with respect to the Guarantor Hedge Agreement
Obligations. The Borrower understands and agrees that the guarantee by the
Borrower contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Guarantor Hedge Agreement Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Person against the Administrative Agent or any Secured Party, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or any Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the applicable Guarantor for the
applicable Guarantor Hedge Agreement Obligations, or of the Borrower under its
guarantee contained in

 

10

--------------------------------------------------------------------------------

this Section 2, in bankruptcy or in any other instance. When making any demand
under this Section 2 or otherwise pursuing its rights and remedies under this
Section 2 against the Borrower, the Administrative Agent or any Secured Party
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any Guarantor or any
other Person or against any collateral security or guarantee for the Guarantor
Hedge Agreement Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
any Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Secured Party against the Borrower under this Section 2. For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.

 

2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

 

2.7 Payments. The Borrower and each Guarantor hereby guarantees that payments by
it hereunder will be paid to the Administrative Agent without set-off or
counterclaim (i) in the case of obligations in respect of Borrower Obligations
arising under the Credit Agreement or any other Loan Document in Dollars at the
Payment Office specified in the Credit Agreement and (ii) in the case of
obligations in respect of any Borrower Hedge Agreement Obligations or any
Guarantor Hedge Agreement Obligations, in the currency and at the place
specified in the applicable Specified Hedge Agreement.

 

SECTION 3. GRANT OF SECURITY INTEREST

 

Each Grantor hereby assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor’s Obligations:

 

(a) all Investment Property (other than any Excluded Capital Stock);

 

(b) all books and records pertaining to the Collateral; and

 

11

--------------------------------------------------------------------------------

(c) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing, all Supporting Obligations in respect of any of the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each Lender that:

 

4.1 Representations in Credit Agreement. In the case of each Guarantor, the
representations and warranties set forth in Section 4 of the Credit Agreement as
they relate to such Guarantor or to the Loan Documents to which such Guarantor
is a party, each of which is hereby incorporated herein by reference, are true
and correct, and the Administrative Agent and each Lender shall be entitled to
rely on each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 4.1, be deemed to be a reference to such
Guarantor’s knowledge.

 

4.2 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement or as are permitted by the Credit Agreement.

 

4.3 Perfected First Priority Liens. The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Administrative Agent in completed and
duly executed form) will constitute valid perfected security interests in all of
the Collateral in favor of the Administrative Agent, for the ratable benefit of
the Secured Parties, as collateral security for the Obligations, enforceable in
accordance with the terms hereof against all creditors of the Grantors and any
Persons purporting to purchase any Collateral from the Grantors and (b) are
prior to all other Liens on the Collateral in existence on the date hereof.

 

4.4 Jurisdiction of Organization; Chief Executive Office. On the date hereof,
such Grantor’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any), and the location of such Grantor’s chief
executive office or sole place of business, as the case may be, are specified on
Schedule 4. Such Grantor has furnished to the Administrative Agent a certified
charter, certificate of limited partnership, certificate of incorporation or
other organizational document and long-form good standing certificate as of a
date that is recent to the date hereof.

 

12

--------------------------------------------------------------------------------

4.5 Investment Property. (a) The shares of Capital Stock pledged by such Grantor
hereunder constitute all the issued and outstanding shares of all classes of the
Capital Stock of each Issuer owned by such Grantor, other than Excluded Capital
Stock.

 

(b) All the shares of the Pledged Stock have been duly and validly issued and
are fully paid and nonassessable (except to the extent such nonassessability may
be affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act or Section 18-607 of the Delaware Limited Liability Company Act,
as the case may be).

 

(c) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.

 

SECTION 5. COVENANTS

 

Each Grantor covenants and agrees with the Administrative Agent and the Secured
Parties that, from and after the date of this Agreement until the Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:

 

5.1 Covenants in Credit Agreement. In the case of each Guarantor, such Guarantor
shall take, or shall refrain from taking, as the case may be, each action that
is necessary to be taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or to refrain from
taking such action by such Guarantor or any of its Subsidiaries.

 

5.2 Delivery of Instruments. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument or
Certificated Security, such Instrument or Certificated Security shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.

 

5.3 Payment of Obligations. Such Grantor will pay and discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all material taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.

 

5.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.3 and shall defend such security interest against the claims and demands of
all Persons whomsoever.

 

13

--------------------------------------------------------------------------------

(b) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, taking any actions necessary to enable
the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.

 

5.5 Changes in Name, etc. . Such Grantor will not, except upon 15 days’ prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of all additional executed financing statements and other documents
reasonably requested by the Administrative Agent to maintain the validity,
perfection and priority of the security interests provided for herein:

 

(i) change its jurisdiction of organization from that referred to in Section
4.3; or

 

(ii) change its name.

 

5.6 Notices. Such Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of any Lien (other than security interests
created hereby or Liens permitted under the Credit Agreement).

 

5.7 Distributions in respect of Investment Property. (a) If such Grantor shall
become entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Secured Parties, hold the
same in trust for the Administrative Agent and the Secured Parties and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. If an Event of Default shall
have occurred and be continuing and the Administrative Agent shall give notice
of its intent to exercise such rights to the relevant Grantor, any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property, or any property shall be

 

14

--------------------------------------------------------------------------------

distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Investment Property shall be
received by such Grantor, such Grantor shall, if an Event of Default shall have
occurred and be continuing and the Administrative Agent shall give notice of its
intent to exercise such rights to the relevant Grantor, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Grantor, as additional collateral security for the Obligations. Notwithstanding
the foregoing, the Grantors shall not be required to pay over to the
Administrative Agent or deliver to the Administrative Agent as Collateral any
proceeds of any liquidation or dissolution of any Issuer, or any distribution of
capital or property in respect of any Investment Property, to the extent that
(i) such liquidation, dissolution or distribution, if treated as a Disposition
of the relevant Issuer, would be permitted by the Credit Agreement and (ii) the
proceeds thereof are applied toward prepayment of Loans and reduction of
Commitments to the extent required by the Credit Agreement.

 

(b) Without the prior written consent of the Administrative Agent, such Grantor
will not (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, unless such
securities, if certificated, are delivered to the Administrative Agent,
concurrently with the issuance thereof, to be held by the Administrative Agent
as Collateral, (ii)sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property owned by
such Grantor or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Stock or
Proceeds thereof.

 

(c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i)
it will be bound by the terms of this Agreement relating to the Pledged Stock
issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Pledged Stock issued by it and (iii) the terms of Sections 6.1(c)
and 6.4 shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 6.1(c) or 6.4 with respect to the
Pledged Stock issued by it.

 

(d) If any equity interest issued by any Issuer that is a partnership or a
limited liability company shall be or become a “security” within the meaning of
Sections 8-102 and 8-103 of the New York UCC, then the Grantor that owns such
equity interest hereby instructs such Issuer to comply with instructions
originated by the Administrative Agent without further consent by such Grantor.

 

15

--------------------------------------------------------------------------------

SECTION 6. REMEDIAL PROVISIONS

 

6.1 Pledged Stock. (a) Unless an Event of Default shall have occurred and be
continuing, each Grantor shall be permitted to receive all cash dividends paid
in respect of the Pledged Stock, paid in the normal course of business of the
relevant Issuer and consistent with past practice, not prohibited in the Credit
Agreement, and to exercise all voting and corporate rights with respect to the
Pledged Stock; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Administrative Agent’s reasonable
judgment, would impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Loan Document.

 

(b) If an Event of Default shall occur and be continuing and the Administrative
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Pledged Stock and make application thereof to the Obligations in the
order set forth in Section 6.3, and (ii) any or all of the Pledged Stock shall
be registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Stock at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Administrative Agent of any
right, privilege or option pertaining to such Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to any Grantor
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.

 

(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Stock pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Stock directly to the Administrative Agent.

 

6.2 Proceeds to be Turned Over To Administrative Agent. If an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and Instruments shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All

 

16

--------------------------------------------------------------------------------

Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a collateral account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a collateral
account maintained under the sole dominion and control of the Administrative
Agent (a “Collateral Account”) (or by the Borrower in trust for the
Administrative Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.3.

 

6.3 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in the
following order:

 

First, to pay incurred and unpaid fees and expenses of the Administrative Agent
under the Loan Documents;

 

Second, to the Administrative Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations of
the relevant Grantor, pro rata among the Secured Parties according to the
amounts of such Obligations then due and owing and remaining unpaid to the
Secured Parties;

 

Third, to the Administrative Agent, for application by it towards prepayment of
the Obligations of the relevant Grantor, pro rata among the Secured Parties
according to the amounts of such Obligations then held by the Secured Parties;
and

 

Fourth, any balance of such Proceeds remaining after the Obligations of the
relevant Grantor shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.

 

6.4 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker’s board or office of the Administrative Agent or any
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon

 

17

--------------------------------------------------------------------------------

any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Administrative Agent’s request, to assemble the Collateral and
make it available to the Administrative Agent at places that the Administrative
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section with respect to any Grantor’s Collateral, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral of
such Grantor or in any way relating to the Collateral of such Grantor or the
rights of the Administrative Agent and the Secured Parties hereunder with
respect thereto, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Obligations of such
Grantor, in the order specified in Section 6.3, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of law, including, without limitation, Section 9-615(a)(3) of
the New York UCC, need the Administrative Agent account for the surplus, if any,
to any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Administrative Agent
or any Secured Party arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

 

6.5 Sale of Pledged Stock. (a) Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

 

(b) Each Grantor agrees to use its best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 6.5 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.5 will cause irreparable injury to the Administrative Agent and the
Secured Parties, that the Administrative Agent and the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.5 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.

 

18

--------------------------------------------------------------------------------

6.6 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Secured Party to collect such deficiency.

 

SECTION 7. THE ADMINISTRATIVE AGENT

 

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Subject to
the last sentence of this Section 7.1(a), each Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:

 

(i) execute, in connection with any sale provided for in Section 6.4 or 6.5, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

 

(ii) (1) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (2) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate; and (7)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Parties’ security interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.

 

Anything in this Section 7.1 (a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

 

19

--------------------------------------------------------------------------------

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

 

(c) The expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the rate per annum at which interest would then be
payable on past due Revolving Credit Loans that are Base Rate Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

 

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

 

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Secured Parties hereunder are solely to protect the Administrative
Agent’s and the Secured Parties’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

 

7.3 Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent to file or record financing statements and
other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
“all capital stock, partnership interests, limited liability company interests
and investment property” in any such financing statements. Each Grantor hereby
ratifies and authorizes the filing by the Administrative Agent of any financing
statement with respect to the Collateral made prior to the date hereof. The
Administrative Agent agrees that, upon any request by the Borrower, the
Administrative Agent will (a) confirm, to any Person designated by the Borrower,
that the security interest created hereby does not encumber any Capital Stock
other than Capital Stock of Restricted Subsidiaries and (b) authorize the filing
of any record to confirm that any Capital Stock of any Person other than a
Restricted Subsidiary is not encumbered hereby.

 

20

--------------------------------------------------------------------------------

7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Agreement with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority. Notwithstanding any other provision herein or in any Loan Document,
the only duty or responsibility of the Administrative Agent to any Qualified
Counterparty under this Agreement is the duty to remit to such Qualified
Counterparty any amounts to which it is entitled pursuant to Section 6.3.

 

SECTION 8. MISCELLANEOUS

 

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by each affected Grantor and the Administrative Agent,
provided that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent in accordance with Section 10.1 of the
Credit Agreement. No consent of any Qualified Counterparty shall be required for
any waiver, amendment, supplement or other modification to this Agreement.

 

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.

 

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Administrative Agent or any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Administrative Agent or such Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay, or
reimburse each Secured Party and the Administrative Agent for, all its costs and
expenses

 

21

--------------------------------------------------------------------------------

incurred in collecting against such Guarantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Guarantor is a party, including,
without limitation, the fees and disbursements of counsel to each Secured Party
and of counsel to the Administrative Agent.

 

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.

 

(c) Each Guarantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to Section 10.5 of the Credit
Agreement.

 

(d) The agreements in this Section shall survive repayment of the Obligations
and all other amounts payable under the Credit Agreement and the other Loan
Documents.

 

8.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

 

8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative Agent
and each Secured Party at any time and from time to time after the occurrence
and during the continuance of an Event of Default, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Secured Party to or for the credit or
the account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Secured Party may elect, against and on account of
the obligations and liabilities of such Grantor to the Administrative Agent or
such Secured Party hereunder and claims of every nature and description of the
Administrative Agent or such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as the Administrative Agent or such Secured Party may
elect, whether or not the Administrative Agent or any Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by the
Administrative Agent or such Secured Party of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and each Secured
Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off), which the
Administrative Agent or such Secured Party may have.

 

22

--------------------------------------------------------------------------------

8.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

 

8.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

 

8.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Secured Parties with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.

 

8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

 

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York in the
Borough of Manhattan, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;

 

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

23

--------------------------------------------------------------------------------

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

 

8.13 Acknowledgements. Each Grantor hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

 

(b) neither the Administrative Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

 

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

 

8.14 Additional Grantors. Each Subsidiary of the Borrower that is required to
become a party to this Agreement pursuant to Section 6.9 of the Credit Agreement
shall become a Grantor for all purposes of this Agreement upon execution and
delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.

 

8.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and
the other Obligations (other than Borrower Hedge Agreement Obligations and
Guarantor Hedge Agreement Obligations) shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.

 

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of
by any Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a

 

24

--------------------------------------------------------------------------------

written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.

 

(c) No consent of any Qualified Counterparty shall be required for any release
of Collateral or Guarantors pursuant to this Section.

 

8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

25

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

WILLIAMS ENERGY PARTNERS L.P.

By:

 

WEG GP LLC, its General Partner

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

WILLIAMS GP INC.

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

WILLIAMS OLP, L.P.

By:

 

Williams GP Inc., its General Partner

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

WILLIAMS NGL, LLC

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

--------------------------------------------------------------------------------

WILLIAMS AMMONIA PIPELINE, L.P.

By:

 

Williams NGL, LLC, its General Partner

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

WILLIAMS TERMINALS HOLDINGS, L.P.

By:

 

Williams NGL, LLC, its General Partner

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

WILLIAMS PIPELINES HOLDINGS, L.P.

By:

 

Williams NGL, LLC, its General Partner

By:

 

/s/ John D. Chandler

--------------------------------------------------------------------------------

   

Name: John D. Chandler

   

Title: Chief Financial Officer

--------------------------------------------------------------------------------

Schedule 1

 

NOTICE ADDRESSES OF GUARANTORS

 

For all Grantors:

[Name of Grantor]

c/o Williams Energy Partners L.P.

One Williams Center

Tulsa, Oklahoma 74172

Attention: Chief Executive Officer

--------------------------------------------------------------------------------

Schedule 2

 

DESCRIPTION OF PLEDGED STOCK

 

Pledged Stock:

 

Issuer

--------------------------------------------------------------------------------

 

Class of Stock

--------------------------------------------------------------------------------

 

Stock Certificate No.

--------------------------------------------------------------------------------

 

No. of Shares

--------------------------------------------------------------------------------

Williams GP Inc.   Common Stock   1   1,000 Williams OLP, L.P.  

99.999% Limited

Partnership Interest

  uncertificated   N/A    

0.001% General

Partnership Interest

  uncertificated   N/A Williams NGL, LLC  

100% limited liability

company interest

  uncertificated   N/A

Williams Ammonia

Pipeline, L.P.

 

99.999% Limited

Partnership Interest

  uncertificated   N/A    

0.001% General

Partnership Interest

  uncertificated   N/A

Williams Terminals

Holdings, L.P.

 

99.999% Limited

Partnership Interest

  uncertificated   N/A    

0.001% General

Partnership Interest

  uncertificated   N/A

Williams Pipelines

Holdings, L.P.

 

99.99% Limited

Partnership Interest

  uncertificated   N/A    

0.001% General

Partnership Interest

  uncertificated   N/A

--------------------------------------------------------------------------------

Schedule 3

 

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

 

Uniform Commercial Code Filings

 

Debtor/Grantor

--------------------------------------------------------------------------------

 

Filing Office

--------------------------------------------------------------------------------

Williams Energy Partners L.P.

 

Secretary of State of the State of Delaware

Williams GP Inc.

 

Secretary of State of the State of Delaware

Williams OLP, L.P.

 

Secretary of State of the State of Delaware

Williams NGL, LLC

 

Secretary of State of the State of Delaware

Williams Ammonia Pipeline, L.P.

 

Secretary of State of the State of Delaware

Williams Terminals Holdings, L.P.

 

Secretary of State of the State of Delaware

Williams Pipelines Holdings, L.P.

 

Secretary of State of the State of Delaware

 

Actions with respect to Pledged Stock

 

Delivery of Certificate representing shares of Williams GP Inc. together with
related undated stock power executed in blank to the Administrative Agent in New
York

 

Other Actions

 

NONE

--------------------------------------------------------------------------------

Schedule 4

 

JURISDICTION OF ORGANIZATION, IDENTIFICATION NUMBER AND

LOCATION OF CHIEF EXECUTIVE OFFICE

 

Grantor

--------------------------------------------------------------------------------

 

Jurisdiction of

Organization

--------------------------------------------------------------------------------

 

Identification

Number

--------------------------------------------------------------------------------

 

Location of Chief

 Executive Office

--------------------------------------------------------------------------------

Williams Energy Partners L.P.   Delaware   3281012   Tulsa, Oklahoma Williams GP
Inc.   Delaware   3496120   Tulsa, Oklahoma Williams OLP, L.P.   Delaware  
3307580   Tulsa, Oklahoma Williams NGL, LLC   Delaware   3350501   Tulsa,
Oklahoma Williams Ammonia Pipeline, L.P.   Delaware   2186752   Tulsa, Oklahoma
Williams Terminals Holdings, L.P.   Delaware   2331527   Tulsa, Oklahoma
Williams Pipelines Holdings, L.P.   Delaware   3068935   Tulsa, Oklahoma

--------------------------------------------------------------------------------

Annex I

to

Guarantee and Collateral Agreement

 

ASSUMPTION AGREEMENT, dated as of                             , 200    , made by
                                , a                          (the “Additional
Grantor”), in favor of LEHMAN COMMERCIAL PAPER INC., as administrative agent (in
such capacity, the “Administrative Agent”) for the banks and other financial
institutions (the “Lenders”) parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.

 

W I T N E S S E T H :

 

WHEREAS, WILLIAMS ENERGY PARTNERS L.P. (the “Borrower”), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of August 6,
2003 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”);

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of August 6, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the benefit of
the Lenders;

 

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement; and

 

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules 1, 2, 3 and 4 to the Guarantee
and Collateral Agreement. The Additional Grantor hereby represents and warrants
that each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement as they relate to such Additional Grantor and
the Loan Documents to which such Additional Grantor will be a party are true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.

--------------------------------------------------------------------------------

EXHIBIT I-2

 

2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR]

By:

 

 

--------------------------------------------------------------------------------

   

Name:

   

Title