Execution Counterpart
Exhibit 10.2

     
 
     

GUARANTY AGREEMENT
dated as of
February 29, 2008
Between
ENERGY TRANSFER PARTNERS, L.P.,
as the Guarantor
and
THE ROYAL BANK OF SCOTLAND plc,
as the Administrative Agent

     
 
     

      

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TABLE OF CONTENTS

              Page
ARTICLE I. DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
    1  
 
       
SECTION 1.01 Defined Terms
    1  
SECTION 1.02 Other Interpretive Provisions
    9  
SECTION 1.03 Accounting Terms
    9  
SECTION 1.04 Rounding
    10  
SECTION 1.05 Times of Day
    10  
 
       
ARTICLE II. PERCENTAGE GUARANTY
    10  
 
       
SECTION 2.01 Percentage Guaranty by Guarantor
    10  
SECTION 2.02 Guarantor’s Rights in Respect of Other Guaranty Agreements
    14  
SECTION 2.03 Unconditional and Continuing Guaranty
    16  
SECTION 2.04 Subrogation
    18  
SECTION 2.05 Excess Recovery
    19  
SECTION 2.06 Effect of Debtor Relief Laws
    19  
SECTION 2.07 Waiver
    20  
SECTION 2.08 Full Force and Effect
    20  
 
       
ARTICLE III. REPRESENTATIONS AND WARRANTIES
    20  
 
       
SECTION 3.01 No Default
    20  
SECTION 3.02 Organization and Good Standing
    21  
SECTION 3.03 Authorization
    21  
SECTION 3.04 No Conflicts or Consents
    21  
SECTION 3.05 Enforceable Obligations
    21  
SECTION 3.06 Initial Financial Statements; No Material Adverse Effect
    21  
SECTION 3.07 Taxes
    22  
SECTION 3.08 Full Disclosure
    22  
SECTION 3.09 Litigation
    22  
SECTION 3.10 ERISA
    22  
SECTION 3.11 Compliance with Laws
    22  

      

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              Page
SECTION 3.12 Ownership of Property; Liens
    22  
SECTION 3.13 Environmental Compliance
    23  
SECTION 3.14 Insurance
    23  
SECTION 3.15 Margin Regulations; Investment Company Act
    23  
 
       
ARTICLE IV. [THIS ARTICLE INTENTIONALLY RESERVED]
    24  
 
       
ARTICLE V. [THIS ARTICLE INTENTIONALLY RESERVED]
    24  
 
       
ARTICLE VI. AFFIRMATIVE COVENANTS
    24  
 
       
ARTICLE VII. NEGATIVE COVENANTS
    25  
 
       
ARTICLE VIII. MISCELLANEOUS
    26  
 
       
SECTION 8.01 Notices, Etc
    26  
SECTION 8.02 Waivers; Amendments
    27  
SECTION 8.03 Successors and Assigns
    28  
SECTION 8.04 Survival
    28  
SECTION 8.05 Counterparts; Integration; Effectiveness
    28  
SECTION 8.06 Severability
    28  
SECTION 8.07 Right of Setoff
    28  
SECTION 8.08 Governing Law; Jurisdiction; Consent to Service of Process
    28  
SECTION 8.09 WAIVER OF JURY TRIAL
    30  
SECTION 8.10 Confidentiality
    30  
SECTION 8.11 EXCULPATION PROVISIONS
    31  
SECTION 8.12 Judgment Currency
    31  
SECTION 8.13 USA Patriot Act
    31  
 
       
SCHEDULE:
       
 
       
Schedule 3 Disclosure Schedule
       

      

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GUARANTY AGREEMENT
          THIS GUARANTY AGREEMENT, dated as of February 29, 2008 (this
“Agreement”) is between:
          (a) Energy Transfer Partners, L.P., a Delaware limited partnership
(the “Guarantor”); and
          (b) The Royal Bank of Scotland plc, a company registered in Scotland,
as the administrative agent for the Lenders party to the below-mentioned Credit
Agreement (in such capacity, together with any other Person that becomes
Administrative Agent pursuant to Section 8.08 thereof, the “Administrative
Agent”).
PRELIMINARY STATEMENTS
          Reference is made to the Credit Agreement dated as of the date hereof
(the “Credit Agreement”), among Midcontinent Express Pipeline LLC, a Delaware
limited liability company (“MEP”), the lenders party thereto (together which
each other person who becomes a lender thereunder, collectively, the “Lenders”),
The Royal Bank of Scotland plc, as Administrative Agent, and the other agents
named therein. It is a condition precedent to the effectiveness of the Credit
Agreement that the Guarantor shall have executed and delivered this Agreement.
          Now therefore, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
          SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
          “Administrative Agent” has the meaning specified in the introduction
to this Agreement.
          “Affiliate” means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified.
          “Agreement” has the meaning specified in the introduction to this
Agreement, as amended or supplemented from time to time in accordance with the
terms hereof.
          “Bankruptcy Code” has the meaning specified in Section 2.01(a).
          “Board” means the Board of Governors of the Federal Reserve System.
          “Business Day” has the meaning specified in the Credit Agreement.
      

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          “Capital Lease” means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
          “Capital Lease Obligation” means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
          “Commitment” has the meaning specified in the Credit Agreement.
          “Communications” has the meaning specified in Section 8.01.
          “Consolidated” refers to the consolidation of any Person, in
accordance with GAAP, with its properly consolidated subsidiaries. References
herein to a Person’s Consolidated financial statements, financial condition,
results of operations, cash flows, assets, liabilities, etc. refer to the
consolidated financial statements, financial condition, results of operations,
cash flows, assets, liabilities, etc. of such Person and its properly
consolidated subsidiaries. Notwithstanding the foregoing, when used in reference
to the Guarantor and its subsidiaries, “Consolidated” shall exclude the effect
on the consolidated financial statements, financial condition, results of
operations, cash flows, assets, liabilities, etc. of the Guarantor and its
subsidiaries of all Unrestricted Subsidiaries, determined as if neither the
Guarantor nor any Subsidiary held any Equity Interest in Unrestricted
Subsidiaries.
          “Credit Agreement” has the meaning specified in the Preliminary
Statements.
          “Cure Cutoff Date” has the meaning specified in Section 2.02(a).
          “Default” has the meaning specified in the Credit Agreement.
          “Default Rate” has the meaning specified in the Credit Agreement.
          “Defaulted Payment” has the meaning specified in Section 2.01(d).
          “Defaulting Other Guarantor” has the meaning specified in
Section 2.02(a).
          “Disclosure Schedule” means Schedule 3 hereto.
          “Dollar” and “$” mean lawful money of the United States.
          “Effective Date” has the meaning specified in the Credit Agreement.
          “Environmental Laws” means any and all Laws relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
      

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          “Equity Interests” means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
          “ERISA” means the Employee Retirement Income Security Act of 1974,
together with all rules and regulations promulgated with respect thereto.
          “ERISA Affiliate” means the Guarantor and its Subsidiaries and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control that, together with such
entity, are treated as a single employer under Section 414 of the Code.
          “ERISA Plan” means any employee pension benefit plan subject to Title
IV of ERISA maintained by any ERISA Affiliate with respect to which any of the
Guarantor or any Subsidiary has a fixed or contingent liability.
          “ETP Credit Agreement” means the Amended and Restated Credit Agreement
dated as of July 20, 2007, among ETP, Wachovia Bank, National Association, as
administrative agent, and the other agents and lenders party thereto.
          “Events of Default” has the meaning specified in the Credit Agreement.
          “Execution Date” means the earliest date upon which all of the
following shall have occurred: counterparts of this Agreement shall have been
executed by the Guarantor and the Administrative Agent, and the latter shall be
in possession of counterparts hereof which taken together, bear the signatures
of both.
          “Fitch” means Fitch, Inc., or its successor.
          “GAAP” means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of the
Guarantor and its Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Initial Financial Statements. If any change in
any accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting principle or practice, all
reports and financial statements required hereunder with respect to the
Guarantor or with respect to the Guarantor and its Consolidated Subsidiaries may
be prepared in accordance with such change, but all calculations and
determinations to be made hereunder may be made in accordance with such change
only after notice of such change is given
      

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to each Lender, and the Guarantor and Required Lenders agree to such change
insofar as it affects the accounting of the Guarantor or of the Guarantor and
its Consolidated Subsidiaries.
          “General Partner” means Energy Transfer Partners GP, L.P., a Delaware
limited partnership, or the corporate, partnership or limited liability
successor thereto, in either case, so long as such Person is the sole general
partner of the Guarantor and a wholly-owned Subsidiary of the GP Owner.
          “Governmental Authority” means the government of the United States or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
          “Guarantee” means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The term “Guarantee”
shall exclude endorsements in the ordinary course of business of negotiable
instruments in the course of collection. The amount of any Guarantee shall be
deemed to be an amount equal to the lesser of (i) the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made, or (ii) if not stated or determinable or if such
Guarantee by its terms is limited to less than the full amount of such primary
obligation, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith or the amount to which such
Guarantee is limited. The term “Guarantee” as a verb has a corresponding
meaning.
          “Guaranteed Obligations” has the meaning specified in Section 2.01(a).
          “Guarantor” has the meaning specified in the introduction to this
Agreement.
          “Guarantor’s Share” has the applicable meaning specified in
Section 2.05(a) or Section 2.05(b), as the case may be.
      

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          “Hazardous Materials” means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
          “HHI” means Heritage Holdings, Inc., a Delaware corporation, or the
corporate, partnership or limited liability successor thereto.
          “HOLP” means Heritage Operating, L.P., a Delaware limited partnership,
or the corporate, partnership or limited liability successor thereto.
          “HOLP Companies” means HOLP and each Wholly-Owned Subsidiary of HOLP,
whether now existing or hereafter formed or acquired.
          “Indebtedness” of any Person at any date means, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
mandatorily redeemable preferred Equity Interests of such Person, (h) all
Guarantees of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, and (i) all obligations of the kind referred to
in clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation.
          “Initial Guarantor” means each of the Guarantor and the Other Initial
Guarantor.
          “Initial Financial Statements” means (i) the audited Consolidated
annual financial statements of the Guarantor as of August 31, 2007 and (ii) the
unaudited interim Consolidated quarterly financial statements of the Guarantor
as of November 30, 2007.
          “Issuance” has the meaning specified in Section 2.01(c).
          “Issuing Bank” has the meaning specified in the Credit Agreement.
          “KMEP” means Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership.
          “Laws” means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or any state or political
subdivision thereof or of any foreign country or any department, state, province
or other political subdivision thereof.
      

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          “Lenders” has the meaning specified in the Preliminary Statements.
          “Letter of Credit” has the meaning specified in the Credit Agreement.
          “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
          “Loan Documents” has the meaning specified in the Credit Agreement and
includes this Agreement and each Other Guaranty Agreement.
          “Loans” has the meaning specified in the Credit Agreement.
          “Material Adverse Effect” means a material adverse effect on (i) the
financial condition, operations, properties or prospects of the Guarantor and
its Subsidiaries, taken as a whole, or (ii) the ability of the Guarantor to
perform its obligations under this Agreement, or (iii) the validity or
enforceability of this Agreement.
          “Material Subsidiary” means any Subsidiary that is a “significant
subsidiary” as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such regulation is in
effect on any date of determination.
          “Maturity Date” has the meaning specified in the Credit Agreement.
          “MEP” has the meaning specified in the Preliminary Statements.
          “Moody’s” has the meaning specified in the Credit Agreement.
          “Non-Defaulting Guarantor” has the meaning specified in
Section 2.02(a).
          “Obligations” has the meaning specified in the Credit Agreement.
          “Other Guarantor” means the Other Initial Guarantor and, if any
Qualified Additional Guarantor shall become a party as guarantor to an Other
Guaranty Agreement, such other Qualified Guarantor.
          “Other Guarantor Defaulted Amount” has the meaning specified in
Section 2.02(a).
          “Other Guaranty Agreement” means an agreement of Guarantee to which an
Other Guarantor is party as guarantor; provided that the Other Guaranty
Agreement, if any, entered into by a Qualified Additional Guarantor (a) shall
contain operative guaranty provisions and appurtenant definitions substantially
identical with (and in the case of said operative provisions numbered
identically with) those of Article II of this Agreement and appurtenant
definitions (except that (1) the “Stated Percentage” of the Qualified Additional
Guarantor thereunder shall be a percentage which, when added to the Stated
Percentage of the Guarantor
      

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hereunder and the “Stated Percentage” of each Other Guarantor under its Other
Guaranty Agreement (in each case giving effect to the contemporaneous adjustment
thereof as herein and therein provided) total 100%, and (2) said agreement shall
contain appropriate modifications of Section 2.01(b) thereof, (b) shall contain
representations and warranties and covenants and appurtenant definitions
substantially identical with those contained in its senior unsecured credit
facility (which covenants and definitions may be either set forth in their
entirety or incorporated by reference, at the option of such Other Guarantor),
and (c) shall be in all respects in form, scope and substance reasonably
satisfactory to the Administrative Agent.
          “Other Initial Guarantor” means KMEP.
          “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
          “Principal Office” has the meaning specified in the Credit Agreement.
          “Qualified Additional Guarantor” means a Person which, at the time of
its execution and delivery of the Other Guaranty Agreement to which it is a
party, has a long term senior unsecured non-credit enhanced debt rating
designated by at least two of the Applicable Rating Agencies (as defined in the
Credit Agreement) of at least Baa3 in the case of Moody’s, BBB- in the case of
S&P, and BBB-in the case of Fitch; provided, however, if only two of such Rating
Agencies have rated a proposed Qualified Additional Guarantor, only one such
rating by a Rating Agency shall be required if such Rating Agency is either
Moody’s or S&P.
          “Qualified Subsidiary” means a (a) each Wholly-Owned Subsidiary of an
Initial Guarantor through which such Initial Guarantor owns the member interests
in MEP owned by it, and (b) each Wholly-Owned Subsidiary of a Qualified
Additional Guarantor through which such Qualified Additional Guarantor owns the
member interests in MEP owned by it.
          “Rating” means, as to each Rating Agency and on any day, the rating
maintained by such Rating Agency on such day for senior, unsecured, non-credit
enhanced long-term debt of the Guarantor.
          “Rating Agency” means Fitch, S&P or Moody’s.
          “Related Parties” means, with respect to any Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person’s Affiliates.
          “Required Lenders” has the meaning specified in the Credit Agreement.
          “Responsible Officer” means the chief executive officer, president,
chief financial officer, or treasurer of the Guarantor. Any document delivered
hereunder that is signed by a Responsible Officer of the Guarantor shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such entity and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such entity.
          “S&P” has the meaning specified in the Credit Agreement.
      

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          “Stated Percentage” has the meaning specified in Section 2.01(b),
subject to adjustment as provided in Section 2.01(c).
          “subsidiary” of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.
          “Subsidiary” means any subsidiary of the Guarantor other than an
Unrestricted Subsidiary.
          “Termination Event” means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(c)(5) or (6) of ERISA
or (ii) any other reportable event described in Section 4043(c) of ERISA other
than a reportable event not subject to the provision for 30 day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate
from an ERISA Plan during a plan year in which it was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of
intent to terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, or (d) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA, or (e) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any ERISA Plan.
          “Transfer” has the meaning specified in Section 2.01(c).
          “Tribunal” means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States or any state, province, commonwealth,
nation, territory, possession, county, parish, town, township, village or
municipality, whether now or hereafter constituted or existing.
          “Unrestricted Subsidiaries” means each of the following: (i) the HOLP
Companies, (ii) HHI and (iii) any other subsidiary of the Guarantor which is
designated as an Unrestricted Subsidiary pursuant to Section 4.09.
          “United States” and “U.S.” mean the United States of America.
          “Wholly Owned Subsidiary” means, with respect to a Person, any
subsidiary of such Person, all of the issued and outstanding stock, limited
liability company membership interests, or partnership interests of which
(including all rights or options to acquire such stock or interests) are
directly or indirectly (through one or more subsidiaries) owned by such Person,
excluding any general partner interests owned, directly or indirectly, by
General Partner in any such subsidiary that is a partnership, in each case such
general partner interests not to exceed two percent (2%) of the aggregate
ownership interests of any such partnership and directors’ qualifying shares if
applicable.
      

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          SECTION 1.02 Other Interpretive Provisions.
     With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
          (a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” The word “will” shall be
construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and
words of similar import when used in any Loan Document, shall be construed to
refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
          (b) In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”
          (c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
          SECTION 1.03 Accounting Terms.
          (a) Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Initial Financial Statements,
except as otherwise specifically prescribed herein.
          (b) Changes in GAAP. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and the change in GAAP could not at the time be the subject of an “ETP
Article VI Amendment” satisfying the conditions specified in Article VI, Part I,
(b)(2)(a)(x), (y) and (z), or an “ETP Article VII Amendment”
      

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satisfying the conditions specified in Article VII, Part I, (b)(2)(a)(x), (y)
and (z), as the case may be, and either the Guarantor or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Guarantor shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Guarantor shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.
          SECTION 1.04 Rounding.
     Any financial ratios required to be maintained by the Guarantor pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
          SECTION 1.05 Times of Day.
     Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).
ARTICLE II.
PERCENTAGE GUARANTY
          SECTION 2.01 Percentage Guaranty by Guarantor.
          (a) Percentage Guaranty. In consideration of, and in order to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make the Loans and each Issuing Bank to issue Letters
of Credit thereunder, the Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment and performance, when due, whether
at stated maturity, by acceleration or otherwise, of the Obligations (including
reimbursement obligations) of MEP, now or hereafter existing under the Credit
Agreement and the other Loan Documents to which MEP is a party, whether for
principal, interest (including interest accruing or becoming owing both prior to
and subsequent to the commencement of any proceeding against or with respect to
MEP under any chapter of Title 11 of the United States Code, as now or hereafter
in effect, or any successor thereto (the “Bankruptcy Code”)), cash
collateralization of Letters of Credit, fees, commissions, expenses (including
reasonable attorneys’ fees and expenses) or otherwise (all such Obligations
being the “Guaranteed Obligations”); provided, however, that the Guarantor’s
liability under its guaranty set forth above shall in no event exceed an amount
equal to its Stated Percentage of the Guaranteed Obligations (it being
understood, however, that in the manner and to the extent provided in the
following Section 2.02 the Guarantor may, in its sole discretion and being under
no obligation to do so, elect to make payments in respect of the Guaranteed
Obligations, and/or
      

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assume all obligations under one or more Other Guaranty Agreements, and thus
pay, or become obligated to pay, Guaranteed Obligations in excess of an amount
equal to its Stated Percentage thereof). The guaranty set forth in this
Section 2.01 is a guaranty of payment and not a guaranty of collection, and the
obligations of the Guarantor in respect thereof shall not in any way be
dependent upon or affected by any payment, or failure of payment, by an Other
Guarantor of any amount owing by it under an Other Guaranty Agreement or
conditioned upon any attempt to collect from MEP or any other action, event,
occurrence or circumstance whatsoever. The Guarantor also agrees to pay any and
all expenses incurred by each Lender and the Administrative Agent in enforcing
this Agreement against the Guarantor.
          (b) Guarantor’s Initial Stated Percentage. On and as of the Execution
Date, and thereafter, unless and until adjusted as provided in Section 2.01(c),
the Guarantor’s “Stated Percentage”, which is like unto its percentage ownership
of the member interests of MEP directly and indirectly owned by it, is 50%. On
and as of the Execution Date there is one Other Guarantor (the “Other Initial
Guarantor”), party to an Other Guaranty Agreement, whose “Stated Percentage”
under and as defined in that agreement, unless and until adjusted as provided in
Section 2.01(c) hereof and thereof, is also 50%.
          (c) Additional Other Guaranties; Adjustment of Guarantor’s and Other
Guarantors’ Stated Percentages. At any time or from time to time MEP may issue
additional member interests not outstanding on the Execution Date (an
“Issuance”) to, or one or more of the Guarantor or the Other Guarantors or their
respective Qualified Subsidiaries may sell, transfer or otherwise dispose of all
or a portion of the member interests in MEP owned by it (a “Transfer”) to, any
Person, provided that
     (i) the Person acquiring the member interests issued in such Issuance or
transferred in such Transfer is (A) an Initial Guarantor or its Qualified
Subsidiary, or (B) a Qualified Additional Guarantor or its Qualified Subsidiary,
(C) a Person eligible, by virtue of its long term senior unsecured non-credit
enhanced debt rating, to become a Qualified Additional Guarantor, or (D) a
Wholly-Owned Subsidiary of a Person described in the immediately preceding
clause (C) (such Person’s “Parent”) and, as such, eligible to become a Qualified
Subsidiary,
     (ii) upon and giving effect to the consummation of such Issuance or
Transfer, KMEP shall continue to maintain, either directly or indirectly through
one or more Qualified Subsidiaries, not less than a 40% percentage ownership of
the member interests in MEP,
     (iii) both immediately before, and upon and giving effect to, the
consummation of such Issuance or Transfer, no Default or Event of Default shall
have occurred and be continuing,
     (iv) if the Person acquiring such member interests is one described in the
foregoing Section 2.01(c)(i)(C) or (D), whichever of such Person or its Parent,
as the case may be, that is eligible to become a Qualified Additional Guarantor
shall, concurrently with the consummation of such Issuance or Transfer, and as a
condition thereof, become a Qualified Additional Guarantor by guaranteeing, by
an Other Guaranty Agreement in
      

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form, scope and substance reasonably satisfactory to the Administrative Agent, a
percentage of the Obligations like unto the percentage of the member interests
in MEP directly or indirectly owned by it, giving effect to such Issuance or
Transfer (which shall be the initial “Stated Percentage” of such new Qualified
Additional Guarantor under and as defined in its said Other Guaranty Agreement
as provided therein),
     (v) upon and giving effect to the consummation of such Issuance or Transfer
     (A) in the case of an Issuance,
     (x) the Stated Percentage of the Guarantor hereunder and the Stated
Percentage of each Other Guarantor under and as defined in its respective Other
Guaranty Agreement, shall, if such Person is acquiring member interests in MEP
in such Issuance, in each case reflect, or be increased to reflect, its
respective new or increased percentage member interest in MEP resulting from
such Issuance, or
     (y) the Stated Percentage of the Guarantor hereunder and the Stated
Percentage of each Other Guarantor under and as defined in its respective Other
Guaranty Agreement, shall, if such Person is not acquiring member interests in
MEP in such Issuance, in each case be reduced on a pro rata basis to reflect its
respective diminished percentage member interest in MEP resulting from such
Issuance, and
     (B) in the case of a Transfer,
     (x) the Stated Percentage of the Guarantor hereunder, and the respective
Stated Percentage of each Other Guarantor under and as defined in its respective
Other Guaranty Agreement, shall, if such Person is transferring member interests
in such Transfer, in each case be reduced to reflect its respective diminished
percentage member interest in MEP resulting from such Transfer, or
     (y) the Stated Percentage of the Guarantor hereunder, and the respective
Stated Percentage of each Other Guarantor under and as defined in its respective
Other Guaranty Agreement, shall, if such Person is acquiring member interests in
such Transfer, in each case reflect, or be increased to reflect, its respective
new or increased percentage member interest in MEP resulting from such Transfer,
or
     (z) the Stated Percentage of the Guarantor hereunder, and the respective
Stated Percentage of each Other Guarantor under and as defined in its respective
Other Guaranty Agreement,
      

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shall, if such Person is neither transferring nor acquiring member interests in
such Transfer, remain unaffected by such Transfer, and
     (vi) for purposes of Section 2.02(a) of this Agreement, the Stated
Percentage of a Qualified Additional Guarantor shall be deemed to be its initial
“Stated Percentage” under and as defined in its Other Guaranty Agreement (as
noted in the foregoing Section 2.01(c)(iv)), as from time to time adjusted and
in effect as provided therein (as noted in the foregoing Section 2.01(c)(v)).
          (d) Manner and Effect of Payments. Subject to Section 2.01(e), in the
event that at any time or from time to time, one or more Guaranteed Obligations
shall not be paid in full or cash collateralized by MEP when due as contemplated
by Section 2.01(a) (each, a “Defaulted Payment”), the Guarantor shall, not later
than the second Business Day following written notice from the Administrative
Agent (specifying (1) each such Defaulted Payment, the due date thereof and the
amount thereof not paid by MEP, (2) the obligee to which each such Defaulted
Payment is payable, and (3) an account in a bank or trust company in the United
States to which payment shall be remitted to or for the account of each such
obligee) pay to the obligee of such Defaulted Payment (or to the Administrative
Agent for its account, if the Credit Agreement shall so provide with respect to
the Guaranteed Obligation constituting such Defaulted Payment), by wire transfer
of funds, immediately available at the place of payment, to the account
specified in the Administrative Agent’s notice, an amount equal to the sum of
(A) the product of (x) the amount of such Defaulted Payment so specified which
has not been so paid by MEP, multiplied by (y) a decimal fraction equal to the
Guarantor’s then Stated Percentage, plus (B) an amount equal to interest on the
amount specified in the preceding clause (A) at the Default Rate from the date
on which such Defaulted Payment was due to the date of such payment by the
Guarantor. Each payment by the Guarantor pursuant to this Section 2.01(d) shall
be accompanied by a written notice which shall advise the payee that such
payment is a payment in respect of the Guarantor’s obligations under this
Section 2.01, shall specify the Defaulted Payment(s) in respect of which such
payment is being paid and refer specifically to the Administrative Agent’s
notice in connection therewith, and shall set forth computations showing in
reasonable detail the manner of determination of the amount so paid. If each of
the Guarantor and each Other Guarantor shall pay in full in respect of a
Defaulted Payment the amount required to be paid by it in respect thereof under
this Section 2.01(d) or Section 2.01 of its Other Guaranty Agreement, as the
case may be, within the time herein and therein provided, then as provided in
Section 7.01 of the Credit Agreement any Default or Event of Default arising
under the Credit Agreement solely by reason of MEP’s failure to make timely
payment in full of such Defaulted Payment shall be deemed cured and waived, and
the Administrative Agent shall send written notice thereof to MEP, the Lenders,
the Guarantor and each Other Guarantor (but such cure and waiver shall not
extend to any other Defaulted Payment as to which the Guarantor and each Other
Guarantor shall not have fully complied with this Section 2.01 or Section 2.01
of its Other Guaranty Agreement, as the case may be); provided, however, that no
such cure or waiver shall be deemed to have occurred for purposes of exercise of
the subrogation rights of the Guarantor under Section 2.04 hereof or of an Other
Guarantor under Section 2.04 of its Other Guaranty Agreement, as the case may
be.
          (e) Special Rule if Other Guarantor Event of Default and Acceleration.
Notwithstanding the preceding Section 2.01(d), if at any time (1) an Event of
Default shall have
      

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occurred and be continuing by reason of any action of, failure to act by, or
other event, circumstance or condition pertaining to, an Other Guarantor
(including a failure of such Other Guarantor to make any payment required to be
made by it under Section 2.01(d) of its Other Guaranty Agreement), (2) the
maturity of all Guaranteed Obligations shall have been accelerated and MEP shall
be obligated to cash collateralize all then outstanding Letters of Credit as
provided in Section 7.01 of the Credit Agreement, and (3) the Guarantor shall
have timely paid in full all amounts required to be paid by it under
Section 2.01(d) above and shall not otherwise be in breach or default of any of
its obligations under this Agreement, then the Guarantor’s obligation to make
the payments specified in said Section 2.01(d) of this Agreement, to the extent
arising from such acceleration and the obligation to effect such cash
collateralization and not already timely paid or provided by the Guarantor in
accordance with said Section 2.01(d) without regard to this Section 2.01(e),
shall ipso facto be extended from the second Business Day, to the ninetieth
(90th) day, following the Administrative Agent’s notice referred to therein.
          (f) No Application of Other Payments. No payments (a) made by the
Guarantor at any time or from time to time in respect of the Guaranteed
Obligations (i) by way of its payment in whole or part of an Other Guarantor
Defaulted Amount under the following Section 2.02(a), or (ii) by reason of its
assumption of the obligations of an Other Guarantor under its Other Guaranty
Agreement under the following Section 2.02(b), or (b) made by an Other Guarantor
at any time or from time to time in respect of the Guaranteed Obligations by way
of its payment, in whole or part, of (i) a “Defaulted Payment” (under and as
defined in Section 2.01(d) of its Other Guaranty Agreement), or (ii) an “Other
Guarantor Defaulted Amount” (under and as defined in Section 2.02(a) of its
Other Guaranty Agreement), shall be credited to, reduce or in any way diminish
obligations of the Guarantor in respect of its Stated Percentage of the
Guaranteed Obligations under this Section 2.01, nor shall any assumption of the
obligations of the Guarantor under Section 2.01 of this Agreement by an Other
Guarantor under Section 2.02(b) of its Other Guaranty Agreement, or any payment
made by such Other Guarantor consequent thereupon, do so.
          SECTION 2.02 Guarantor’s Rights in Respect of Other Guaranty
Agreements.
          (a) Guarantor’s Option to Pay Amounts Unpaid by Other Guarantor(s). If
at any time or from time to time (1) one or more Other Guarantors (each a
“Defaulting Other Guarantor”) shall fail to make any payment due and payable by
it under Section 2.01(d) of its Other Guaranty Agreement in respect of a
Defaulted Payment within the period therein specified, (2) the Guarantor shall
have timely paid in full in respect of such Defaulted Payment the amount
required to be paid by it under Section 2.01(d) above and shall not otherwise be
in breach or default of any of its obligations under this Agreement, and
(3) neither Section 2.01(e) nor the following Section 2.02(b) shall apply, the
Administrative Agent shall promptly send written notice thereof to the Guarantor
and to the Other Guarantor, if any, that shall have timely paid in full in
respect of such Defaulted Payment the amount required to be paid by it under
Section 2.01 of its Other Guaranty Agreement (each of the Guarantor and any such
Other Guarantor, a “Non-Defaulting Guarantor”). Such notice shall specify the
portion of the Defaulted Payment payable, but not paid, by each Defaulting Other
Guarantor (an “Other Guarantor Defaulted Amount”) and a date (the “Cure Cutoff
Date”), which shall be two (2) Business Days from the date of such notice, by
which the Guarantor and the other Non-Defaulting Guarantor, if any, may make
      

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payment (if both, such payment to be divided between them in such proportions as
their respective Stated Percentages bear to one another or as they may otherwise
agree) of all such Other Guarantor Defaulted Amounts to the obligee(s) thereof,
with interest, accompanied by notice and otherwise in like manner, as in the
case of its own payment in respect of such Defaulted Payment under
Section 2.01(d) of this Agreement or Section 2.01(d) of its Other Guaranty
Agreement, as the case may be. If, on or prior to the Cure Cutoff Date, the
Guarantor, either alone or in the aggregate with the other Non-Defaulting
Guarantor, if any, shall pay in full to the obligee(s) thereof an amount equal
to the sum of (A) all Other Guarantor Defaulted Amounts, plus (B) an amount
equal to interest thereon at the Default Rate from the date on which such
Defaulted Payment was due to the date of such payment, and each such payment is
accompanied by the written notice specified in the immediately preceding
sentence, then for purposes of Section 7.01 of the Credit Agreement any Default
or Event of Default arising under the Credit Agreement solely by reason of MEP’s
failure to make such Defaulted Payment and/or that of each Defaulting Other
Guarantor to pay in full its obligations in respect thereof under
Section 2.01(d) of its Other Guaranty Agreement shall be deemed cured, and the
Administrative Agent shall send written notice thereof to MEP, the Lenders, the
Guarantor and the Other Guarantors; provided, however, that no such cure shall
be deemed to have occurred for purposes of exercise of subrogation rights by the
Guarantor under Section 2.04 hereof, or by an other Non-Defaulting Guarantor
under Section 2.04 of its Other Guaranty Agreement.
          (b) Guarantor’s Option to Assume Obligations of Other Guarantor(s). If
at any time or from time to time (1) a Default or an Event of Default shall have
occurred and be continuing by reason of any action of, failure to act by, or
other event, circumstance or condition pertaining to, an Other Guarantor
(including a failure of such Other Guarantor to make any payment required to be
made by it under Section 2.01(d) of its Other Guaranty Agreement), (2) the
maturity of all Obligations shall not at the time have been accelerated as
provided in Section 7.01 of the Credit Agreement, and (3) the Guarantor shall
have timely paid in full all amounts required to be paid by it under
Section 2.01(d) above and shall not otherwise be in breach or default of any of
its obligations under this Agreement, then the Administrative Agent shall
promptly send written notice thereof to the Guarantor and the non-defaulting
Other Guarantor, if any. In such event the Guarantor and the non-defaulting
Other Guarantor, if any, shall have the option, by one or more instruments in
writing reasonably satisfactory in form, scope and substance to the
Administrative Agent (an executed copy of which shall be delivered to the
Administrative Agent within two (2) Business Days of its notice of such
Default), to assume liability under and in respect of such defaulting Other
Guarantor’s obligations under and in respect of Section 2.01 of such Other
Guarantor’s Other Guaranty Agreement. Such assumption shall be (and be stated in
such written instrument to be) irrevocable, and the Guarantor’s liability as so
assumed shall be joint and several with that of such defaulting Other Guarantor,
and with that of any other Person (including the remaining Other Guarantor, if
it shall likewise have assumed such liability under Section 2.02(b) of its Other
Guaranty Agreement). Without limiting the generality of the foregoing, in the
event of such assumption, the Guarantor and the assuming Other Guarantor, if
any, shall be liable to make any payment for
      

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which such defaulting Other Guarantor is liable at the time of such assumption,
or for which it becomes liable thereafter, under Section 2.01 of such defaulting
Other Guarantor’s Other Guaranty Agreement. If the Guarantor, either alone or
together with the other non-defaulting Guarantor, if any, shall timely assume
the obligations of a defaulting Other Guarantor in accordance with the terms of
this Section 2.02(b), and shall have paid in full to the obligee(s) thereof all
payments for which such defaulting Other Guarantor was liable at the time of
such assumption, then for purposes of Section 7.01 of the Credit Agreement any
Default or Event of Default arising under the Credit Agreement solely by reason
of such action of, failure to act by, or other event, circumstance or condition
pertaining to, such defaulting Other Guarantor shall be deemed cured, and the
Administrative Agent shall send written notice thereof to MEP, the Lenders, the
Guarantor and the Other Guarantors; provided, however, that no such cure shall
be deemed to have occurred for purposes of exercise of subrogation rights by the
Guarantor under Section 2.04 hereof, or by an other Non-Defaulting Guarantor
under Section 2.04 of its Other Guaranty Agreement.
          SECTION 2.03 Unconditional and Continuing Guaranty.
          (a) Guaranty Unconditional. The Guarantor guarantees (to the extent of
its Stated Percentage or any greater amount assumed in accordance with
Section 2.02(b)) that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Credit Agreement and the other Loan Documents.
The Guarantor agrees that, to the maximum extent permitted by applicable law,
the Guaranteed Obligations and Loan Documents to which MEP is a party may be
extended or renewed, and indebtedness thereunder repaid and reborrowed in whole
or in part, without notice to or assent by the Guarantor, and that it will
remain bound upon its guaranty contained in, and the other provisions of, this
Agreement notwithstanding any extension, renewal or other alteration of any
Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing
of Loans. To the maximum extent permitted by applicable law, except as otherwise
expressly provided in this Agreement or any other Loan Document to which the
Guarantor is a party, the obligations of the Guarantor under this Agreement
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms hereof under any and all circumstances
whatsoever, including:
     (1) any modification, amendment, supplement, renewal, extension for any
period, increase, decrease, alteration or rearrangement of all or any part of
the Guaranteed Obligations, or of this Agreement or any other Loan Document
executed in connection herewith, or any contract or understanding among the
Guarantor, any Other Guarantor, MEP, the Administrative Agent and/or the
Lenders, or any other Person, pertaining to the Guaranteed Obligations;
     (2) any adjustment, indulgence, forbearance or compromise that might be
granted or given by the Lenders to the Guarantor, any Other Guarantor, MEP, or
any other Person liable on the Guaranteed Obligations;
     (3) the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Guarantor, any
Other Guarantor, MEP or any other Person at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of the Guarantor,
any Other Guarantor, MEP or any sale, lease or transfer of any or all of the
assets of the Guarantor, any Other Guarantor, or MEP, or any changes in the
owners of the equity of the Guarantor, any Other Guarantor, MEP, or any
reorganization of the Guarantor, any Other Guarantor, or MEP;
      

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     (4) the invalidity, illegality or unenforceability of all or any part of
the Guaranteed Obligations, or any document or agreement executed in connection
with the Guaranteed Obligations, for any reason whatsoever, including the fact
that (A) the Guaranteed Obligations, or any part thereof, exceeds the amount
permitted by law, (B) the act of creating the Guaranteed Obligations or any part
thereof is ultra vires, (C) the officers or representatives executing the
documents or otherwise creating the Guaranteed Obligations acted in excess of
their authority, (D) the Guaranteed Obligations or any part thereof violate
applicable usury laws, (E) the Guarantor, any Other Guarantor, or MEP has valid
defenses, claims and offsets (whether at law or in equity, by agreement or by
statute) which render the Guaranteed Obligations wholly or partially
uncollectible from the Guarantor, any Other Guarantor, or MEP, (F) the creation,
performance or repayment of the Guaranteed Obligations (or execution, delivery
and performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations, or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or (G) this
Agreement, any other Loan Document, or any other document or instrument
pertaining to the Guaranteed Obligations, has been forged or otherwise is
irregular or not genuine or authentic;
     (5) any full or partial release of the liability of the Guarantor, any
Other Guarantor, or MEP on the Guaranteed Obligations or any part thereof, or of
any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Guaranteed Obligations or any part thereof; it being
recognized, acknowledged and agreed by the Guarantor that the Guarantor may be
required to pay an amount equal to its Stated Percentage of, and as herein
provided may elect or obligate itself, but will not be required, to pay a
greater percentage of, the Guaranteed Obligations without assistance or support
of any other Person, and the Guarantor has not been induced to enter into this
Agreement on the basis of a contemplation, belief, understanding or agreement
that any other Person will be liable to perform the Guaranteed Obligations, or
that the Administrative Agent or any Lender will look to any other Person (other
than the Other Guarantors) to perform the Guaranteed Obligations;
     (6) the taking or accepting of any other security, collateral or guaranty,
or other assurance of payment, for all or any part of the Guaranteed
Obligations;
     (7) any release, surrender, exchange, subordination, deterioration, waste,
loss or impairment of any collateral, property or security, at any time existing
in connection with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations;
     (8) the failure of the Administrative Agent, the Lenders or any other
Person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security;
     (9) the fact that any collateral, security or Lien contemplated or intended
to be given, created or granted as security for the repayment of the Guaranteed
Obligations shall not be properly perfected or created, or shall prove to be
unenforceable or
      

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subordinate to any other Lien; it being recognized and agreed by the Guarantor
that the Guarantor is not entering into this Agreement in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any collateral for the Guaranteed Obligations;
     (10) any payment by MEP or the Guarantor or any Other Guarantor to the
Administrative Agent or any Lender is held to constitute a preference under
bankruptcy laws, or for any other reason either the Administrative Agent or any
Lender is required to refund such payment or pay such amount to MEP or any other
Person; or
     (11) any other action taken or omitted to be taken with respect to this
Agreement, any other Loan Document, the Guaranteed Obligations, or any security
and collateral therefor, whether or not such action or omission prejudices the
Guarantor or increases the likelihood that the Guarantor will be required to pay
its Stated Percentage of the Guaranteed Obligations pursuant to the terms
hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay an amount equal to its Stated Percentage of
the Guaranteed Obligations (or any greater amount assumed in accordance with
Section 2.02(b)) when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein (including any
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge of a surety or guarantor, including by reason of any future judicial
decisions or legislations of any jurisdiction), except for the full and final
payment and satisfaction of the Guaranteed Obligations after the termination of
the Commitments of all Lenders and the expiration or termination of all Letters
of Credit.
          (b) Acceleration. The Guarantor further agrees that, to the fullest
extent permitted by law, as between the Guarantor and the Other Guarantors, on
the one hand, and the Lenders and the Administrative Agent, on the other hand,
(i) the maturity of the Guaranteed Obligations, including the requirement for
cash collateralization of all outstanding Letters of Credit, may be accelerated
as provided in the Credit Agreement for the purposes of this Agreement and each
Other Guaranty Agreement, notwithstanding any stay, injunction or other
prohibition preventing such acceleration of the Guaranteed Obligations, and
(ii) in the event of any acceleration of the Guaranteed Obligations (including
the cash collateral requirement) as provided in the Credit Agreement, the
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantor and the Other Guarantors, in each case to the
extent of its respective Stated Percentage thereof under and as defined herein
or in the applicable Other Guaranty Agreement, as the case may be, for the
purpose of this Agreement and such Other Guaranty Agreement.
          SECTION 2.04 Subrogation. If a Guarantor shall make any payment to any
obligee pursuant to the foregoing Section 2.01 or 2.02, as the case may be, it
shall (to the extent of the payment(s) so made) be subrogated to such obligee’s
rights against MEP and/or each Defaulting Other Guarantor, as the case may be;
provided, however, that the Guarantor’s rights of subrogation against MEP and
the Defaulting Other Guarantors shall be subject and subordinate to, and the
Guarantor agrees that it shall take no action to exercise such rights until,
      

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the prior indefeasible payment in full to the respective obligee or obligees
thereof of all Obligations of MEP under the Credit Agreement and the other Loan
Documents, whether or not the same shall at any time be due and payable and
whether fixed and absolute, contingent or unspecified as to amount.
          SECTION 2.05 Excess Recovery. If at any time or from time to time
(i) the Guarantor shall have made any payment in respect of a Defaulted Payment
as provided in Section 2.01 or Section 2.02, and (ii) the obligee that is the
payee of such payment(s) shall have received any other payment in respect of
such Defaulted Payment from MEP or any other party or parties, and (iii) as a
result thereof, such obligee has received payments in respect of the Defaulted
Payment aggregating more than 100% of the amount thereof, and the payments so
received are indefeasible, the Guarantor shall be entitled to a refund from the
payee equal to the Guarantor’s Share of such excess. For purposes of the
foregoing sentence:
          (a) if each of the Guarantor and the Other Guarantors shall have fully
honored its obligation in respect of the Defaulted Payment as set forth in
Section 2.01 of this Agreement or Section 2.01 of the applicable Other Guaranty
Agreement, as the case may be, the “Guarantor’s Share” of such excess shall be
the Guarantor’s Stated Percentage thereof; or
          (b) if any of the Guarantor and the Other Guarantors shall not have
fully honored its obligation in respect of the Defaulted Payment as set forth in
Section 2.01 of this Agreement or Section 2.01 of the applicable Other Guaranty
Agreement, as the case may be, the “Guarantor’s Share” of such excess shall be
determined by multiplying the amount of such excess by a fraction of which the
numerator is the aggregate of all payments made by the Guarantor in respect of
Defaulted Payments under this Agreement, and the denominator is the aggregate of
the payments made by the Guarantor and the Other Guarantors in respect of
Defaulted Payments under this Agreement and the Other Guaranty Agreements.
          SECTION 2.06 Effect of Debtor Relief Laws. If after receipt of any
payment of all or any part of the Guaranteed Obligations, the Administrative
Agent, any Issuing Bank or any Lender is for any reason compelled to surrender
or voluntarily surrenders, such payment to any Person (a) because such payment
is or may be avoided, invalidated, declared fraudulent, set aside, determined to
be void or voidable as a preference, fraudulent conveyance, fraudulent transfer,
impermissible set-off or a diversion of trust funds or (b) for any other reason,
including (i) any judgment, decree or order of any court or administrative body
having jurisdiction over the Administrative Agent, any Issuing Bank, any Lender
or any of their respective properties or (ii) any settlement or compromise of
any such claim effected by the Administrative Agent, any Issuing Bank or any
Lender with any such claimant (including MEP), then the Guaranteed Obligations
or part thereof intended to be satisfied shall be reinstated and continue, and
this Guaranty shall continue in full force as if such payment had not been
received, notwithstanding any revocation thereof or the cancellation of any
instrument evidencing any of the Guaranteed Obligations or otherwise; and the
Guarantor shall be liable to pay the Administrative Agent, each Issuing Bank and
the Lenders, and hereby does indemnify the Administrative Agent, each Issuing
Bank and the Lenders and holds them harmless for the amount of such payment so
surrendered and all reasonable expenses (including reasonable attorneys’ fees,
court costs and expenses attributable thereto) incurred by the Administrative
Agent, any Issuing Bank or any Lender in the defense of any claim made against
it that any
      

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payment received by the Administrative Agent, any Issuing Bank or any Lender in
respect of all or part of the Guaranteed Obligations must be surrendered. The
provisions of this Section 2.06 shall survive the termination of this Agreement,
and any satisfaction and discharge of MEP by virtue of any payment, court order
or any Federal or state law.
          SECTION 2.07 Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and, except as expressly herein provided, any
other notice with respect to any of the Guaranteed Obligations and this Guaranty
and waives presentment, demand for payment, notice of intent to accelerate,
notice of dishonor or nonpayment and any requirement that the Administrative
Agent, any Issuing Bank or any Lender institute suit, collection proceedings or
take any other action to collect the Guaranteed Obligations, including any
requirement that the Administrative Agent, any Issuing Bank or any Lender
exhaust any right or take any action against MEP, any Other Guarantor or any
other Person or any collateral (it being the intention of the Administrative
Agent, the Lenders and the Guarantor that the guaranty contained in this
Agreement is to be a guaranty of payment and not of collection). It shall not be
necessary for the Administrative Agent, any Issuing Bank or any Lender, in order
to enforce any payment by the Guarantor hereunder, to institute suit or exhaust
its rights and remedies against MEP, any Other Guarantor or any other Person,
including others liable to pay any Guaranteed Obligations, or to enforce its
rights against any security ever given to secure payment thereof. The Guarantor
hereby expressly waives to the maximum extent permitted by applicable law each
and every right to which it may be entitled by virtue of the suretyship laws of
the State of New York or any other state in which it may be located, including
any and all rights it may have pursuant to Rule 31, Texas Rules of Civil
Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code and
Chapter 34 of the Texas Business and Commerce Code.
          SECTION 2.08 Full Force and Effect. This Agreement and the guaranty
set forth herein constitute a continuing guaranty and shall remain in full force
and effect until all of the Guaranteed Obligations under this Agreement and the
other Loan Documents to which MEP is a party and all other amounts payable under
this Agreement have been paid in full (after the termination of the Commitments
of the Lenders and the termination or expiration of all outstanding Letters of
Credit). All rights, remedies and powers provided in this Agreement may be
exercised, and all waivers contained in this Agreement may be enforced, only to
the extent that the exercise or enforcement thereof does not violate any
provisions of applicable law which may not be waived.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
     The Guarantor makes the following representations and warranties to the
Administrative Agent and the Lenders:
          SECTION 3.01 No Default. The Guarantor is not in default in the
performance of any of the covenants and agreements contained in any Loan
Document to which it is party. No event has occurred and is continuing which
constitutes either a Default or an Event of Default.
      

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          SECTION 3.02 Organization and Good Standing. The Guarantor and each
Subsidiary is duly organized, validly existing and in good standing under the
Laws of its jurisdiction of organization, having all powers required to carry on
its business and enter into and carry out the transactions contemplated hereby.
The Guarantor and each Subsidiary is duly qualified, in good standing, and
authorized to do business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the business transacted by
it makes such qualification necessary except where the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect.
          SECTION 3.03 Authorization. The Guarantor has duly taken all action
necessary to authorize the execution and delivery by it of the Loan Documents to
which it is a party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations thereunder.
          SECTION 3.04 No Conflicts or Consents. The execution and delivery by
the Guarantor of the Loan Documents to which it is a party, the performance by
the Guarantor of its obligations under such Loan Documents, and the consummation
of the transactions contemplated by the various Loan Documents, do not and will
not (i) conflict with any provision of (1) any Law, (2) the organizational
documents of the Guarantor, any Subsidiary or the General Partner, or (3) any
material Contractual Obligation, judgment, license, order or permit applicable
to or binding upon the Guarantor, any Subsidiary or the General Partner,
(ii) result in the acceleration of any Indebtedness owed by the Guarantor, any
Subsidiary, any Unrestricted Subsidiary or the General Partner, or (iii) result
in or require the creation of any Lien upon any assets or properties of the
Guarantor, any Subsidiary or the General Partner, except, in each case, with
respect to the preceding clauses (i) through (iii), as could not reasonably be
expected to have a Material Adverse Effect. Except as expressly contemplated in
the Loan Documents or disclosed in the Disclosure Schedule, no permit, consent,
approval, authorization or order of, and no notice to or filing, registration or
qualification with, any Tribunal or third party is required in connection with
the execution, delivery or performance by the Guarantor of any Loan Document or
to consummate any transactions contemplated by the Loan Documents. Neither the
Guarantor nor any Subsidiary is in breach of or in default under any instrument,
license or other agreement applicable to or binding upon such entity, which
breach or default has had, or could reasonably be expected to have a Material
Adverse Effect.
          SECTION 3.05 Enforceable Obligations. This Agreement is, and the other
Loan Documents to which the Guarantor is a party when duly executed and
delivered will be, legal, valid and binding obligations of the Guarantor
enforceable in accordance with their terms except as such enforcement may be
limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors’ rights.
          SECTION 3.06 Initial Financial Statements; No Material Adverse Effect.
          (a) The Guarantor has heretofore delivered to the Lenders true,
correct and complete copies of the Initial Financial Statements. The Initial
Financial Statements were prepared in accordance with GAAP. The Initial
Financial Statements fairly present the Guarantor’s Consolidated financial
position at the respective dates thereof, the Consolidated
      

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results of the Guarantor’s operations for the respective periods thereof and the
Guarantor’s Consolidated cash flows for the respective periods thereof.
          (b) Since the date of the audited Initial Financial Statements, no
event or circumstance has occurred that has had a Material Adverse Effect.
          SECTION 3.07 Taxes. The Guarantor and each Subsidiary has timely filed
all tax returns and reports required to have been filed and has paid all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property, except to the extent that any of the foregoing
is not yet due or is being in good faith contested as permitted by Section 4.06.
          SECTION 3.08 Full Disclosure. No written certificate, statement or
other information, taken as a whole, delivered herewith or heretofore by the
Guarantor to any Lender in connection with the negotiation of this Agreement or
in connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading as of the date made or deemed made.
          SECTION 3.09 Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule and except for matters that could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect
(i) there are no actions, judgments, injunctions, orders, suits or legal,
equitable, arbitrative or administrative proceedings pending or, to the
knowledge of the Guarantor, threatened, by or before any Tribunal against the
Guarantor or any Subsidiary or against any property of the Guarantor or any
Subsidiary.
          SECTION 3.10 ERISA. All currently existing ERISA Plans are listed in
the Disclosure Schedule. Except as disclosed in the Initial Financial Statements
or in the Disclosure Schedule, no Termination Event has occurred with respect to
any ERISA Plan and all ERISA Affiliates are in compliance with ERISA in all
material respects. No ERISA Affiliate is required to contribute to, or has any
other absolute or contingent liability in respect of, any “multiemployer plan”
as defined in Section 4001 of ERISA. Except as set forth in the Disclosure
Schedule: (i) no “accumulated funding deficiency” (as defined in Section 412(a)
of the Code exists with respect to any ERISA Plan, whether or not waived by the
Secretary of the Treasury or his delegate, and (ii) the current value of each
ERISA Plan’s benefits does not exceed the current value of such ERISA Plan’s
assets available for the payment of such benefits by more than $5,000,000.
          SECTION 3.11 Compliance with Laws. The Guarantor and each Subsidiary
is in compliance with all Laws applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
          SECTION 3.12 Ownership of Property; Liens. Each of the Guarantor and
each Material Subsidiary has good title to, or valid leasehold interests in, all
material property necessary or used in the ordinary conduct of its business,
except for such defects in title as would
      

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not, individually or in the aggregate, have a Material Adverse Effect. There is
no Lien on any property of the Guarantor or any Subsidiary, other than Liens
permitted by Article VII of the ETP Credit Agreement, as incorporated in this
Agreement by Article VII hereof.
          SECTION 3.13 Environmental Compliance. The Guarantor and its Material
Subsidiaries conduct in the ordinary course of business a review of the effect
of existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof have reasonably
concluded that, except as specifically disclosed in the Disclosure Schedule,
they: (a) to the best of their knowledge, are in compliance with all applicable
Environmental Laws, except to the extent that any non-compliance would not
reasonably be expected to have a Material Adverse Effect; (b) to the best of
their knowledge, are not subject to any judicial, administrative, government,
regulatory or arbitration proceeding alleging the violation of any applicable
Environmental Laws or that may lead to claim for cleanup costs, remedial work,
reclamation, conservation, damage to natural resources or personal injury or to
the issuance of a stop-work order, suspension order, control order, prevention
order or clean-up order, except to the extent that any such proceeding would not
reasonably be expected to have a Material Adverse Effect; (c) to the best of
their knowledge, are not subject to any federal, state, local or foreign review,
audit or investigation which may lead to a proceeding referred to in (b) above;
(d) have no actual knowledge that any of their predecessors in title to any of
their property and assets are the subject of any currently pending federal,
state, local or foreign review, audit or investigation which may lead to a
proceeding referred to in (b) above; (e) have not filed any notice under any
applicable Environmental Laws indicating past or present treatment, storage or
disposal of, or reporting a release of Hazardous Materials into the environment
where the circumstances surrounding such notice would reasonably be expected to
have a Material Adverse Effect; and (f) possess, and are in compliance with, all
approvals, licenses, permits, consents and other authorizations which are
necessary under any applicable Environmental Laws to conduct their business,
except to the extent that the failure to possess, or be in compliance with, such
authorizations would not reasonably be expected to have a Material Adverse
Effect.
          SECTION 3.14 Insurance. The properties of the Guarantor and the
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Guarantor or the Subsidiaries
operate.
          SECTION 3.15 Margin Regulations; Investment Company Act.
          (a) The Guarantor is not engaged and will not engage, principally or
as one of its important activities, in the business of buying or carrying margin
stock (within the meaning of Regulation U issued by the Board), or extending
credit for the purpose of buying or carrying margin stock.
          (b) The Guarantor is not an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
      

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ARTICLE IV.
[THIS ARTICLE INTENTIONALLY RESERVED]
ARTICLE V.
[THIS ARTICLE INTENTIONALLY RESERVED]
ARTICLE VI.
AFFIRMATIVE COVENANTS
          PART I. Incorporation By Reference.
          (a) Article VI of the ETP Credit Agreement and, solely for the
purposes of said Article VI, the rules of construction contained in Section 1.02
of the ETP Credit Agreement and the appurtenant definitions (other than the
Excluded Definitions, defined below) set forth in the ETP Credit Agreement and
applicable to said Article VI, are hereby incorporated by this reference into
this Article VI, as fully as if set forth at length herein immediately following
Part III of this Article VI, with the same Section numbers and captions as set
forth in the ETP Credit Agreement.
          (b) For purposes of this Article VI (including Article VI of the ETP
Credit Agreement, as incorporated in this Article VI):
          (1) the terms “Administrative Agent” ,“Agreement", “Default", “Event
of Default", “Lender”, “Lenders” and “Material Adverse Effect” (collectively the
"Excluded Definitions") shall have the respective meanings assigned to them in
Section l.01 of this Agreement; and
          (2) the term “ETP Credit Agreement” shall mean the ETP Credit
Agreement, as in effect on the date of this Agreement, except that :
     (A) in the event that any provision of Article VI of the ETP Credit
Agreement (or any rule of construction in Section 1.02 thereof or appurtenant
definition set forth in the ETP Credit Agreement and applicable to said
Article VI, other than any Excluded Definition) shall be amended in accordance
with the terms of the ETP Credit Agreement as then in effect (an “ETP Article VI
Amendment”), and if in any such case (x) no Default or Event of Default, and no
Default or Event of Default under and as defined in the ETP Credit Agreement,
shall have occurred and be continuing immediately prior to such ETP Article VII
Amendment, and (y) such ETP Article VI Amendment has not been executed in
anticipation of the termination of said agreement or its otherwise ceasing to be
in full force and effect, and (z) there shall have been delivered to the
Administrative Agent a fully executed copy (which may be in counterparts) of
such ETP Article VI Amendment, together with a certificate of a Responsible
Officer of the Guarantor to the effect that such ETP Article VI Amendment has
been adopted in accordance with the foregoing provisions of this paragraph
I(b)(2)(A), then the corresponding provisions of this Article VI and, for
purposes hereof, the corresponding
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provisions of the ETP Credit Agreement, as incorporated herein, shall ipso facto
be correspondingly amended effective as of the date of such ETP Article VI
Amendment, and
     (B) in the event that the ETP Credit Agreement shall at any time be
terminated, or otherwise no longer be in full force and effect, the provisions
thereof incorporated into this Article VI, as in effect at the time of such
termination or such agreement otherwise ceasing to be in full force and effect,
as the case may be, shall remain in effect for purposes of this Agreement so
long as this Article VI shall remain in effect.
          PART II. Compliance with Incorporated Provisions. Until the Guaranteed
Obligations are finally and indefeasibly paid in full after the Commitments have
expired or been terminated, and no obligations of the Guarantor hereunder are
any longer subject to reinstatement as provided in Section 2.06, the Guarantor
covenants and agrees with the Administrative Agent for the benefit of the
Lenders that it will comply with each affirmative covenant set forth in
Article VI of the ETP Credit Agreement, as and to the extent from time to time
incorporated herein and in effect for purposes hereof as provided in Part I of
this Article VI.
          PART III. Survival. The provisions of this Article VI shall survive
the termination of this Agreement, and any satisfaction and discharge of MEP by
virtue of any payment, court order or any Federal or state law, to the same
extent and for the same period as Section 2.06 hereof.
ARTICLE VII.
NEGATIVE COVENANTS
          PART I. Incorporation By Reference. (a) Article VII of the ETP Credit
Agreement and, solely for the purposes of said Article VII, the rules of
construction contained in Section 1.03 of the ETP Credit Agreement and the
appurtenant definitions (other than the Excluded Definitions, defined above) set
forth in the ETP Credit Agreement and applicable to said Article VII, are hereby
incorporated by this reference into this Article VII, as fully as if set forth
at length herein immediately following Part III of this Article VII, with the
same Section numbers and captions as set forth in the ETP Credit Agreement.
          (b) For purposes of this Article VII (including Article VII of the ETP
Credit Agreement, as incorporated in this Article VII):
          (1) the Excluded Definitions shall have the respective meanings
assigned to them in Section l.01 of this Agreement; and
          (2) the term “ETP Credit Agreement” shall mean the ETP Credit
Agreement, as in effect on the date of this Agreement, except that :
     (A) in the event that any provision of Article VII of the ETP Credit
Agreement (or any rule of construction in Section 1.03 thereof or appurtenant
definition set forth in the ETP Credit Agreement and applicable to said
Article VII, other than any Excluded Definition) shall be
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amended in accordance with the terms of the ETP Credit Agreement as then in
effect (an “ETP Article VII Amendment”), and if in any such case (x) no Default
or Event of Default, and no Default or Event of Default under and as defined in
the ETP Credit Agreement, shall have occurred and be continuing immediately
prior to such ETP Article VII Amendment, and (y) such ETP Article VII Amendment
has not been executed in anticipation of the termination of said agreement or
its otherwise ceasing to be in full force and effect, and (z) there shall have
been delivered to the Administrative Agent a fully executed copy (which may be
in counterparts) of such ETP Article VII Amendment, together with a certificate
of a Responsible Officer of the Guarantor to the effect that such ETP
Article VII Amendment has been adopted in accordance with the foregoing
provisions of this paragraph I(b)(2)(A), then the corresponding provisions of
this Article VII and, for purposes hereof, the corresponding provisions of the
ETP Credit Agreement, as incorporated herein, shall ipso facto be
correspondingly amended effective as of the date of such ETP Article VII
Amendment, and
     (B) in the event that the ETP Credit Agreement shall at any time be
terminated, or otherwise no longer be in full force and effect, the provisions
thereof incorporated into this Article VII, as in effect at the time of such
termination or such agreement otherwise ceasing to be in full force and effect,
as the case may be, shall remain in effect for purposes of this Agreement so
long as this Article VII shall remain in effect.
          PART II. Compliance with Incorporated Provisions. Until the Guaranteed
Obligations are finally and indefeasibly paid in full after the Commitments have
expired or been terminated, and no obligations of the Guarantor hereunder are
any longer subject to reinstatement as provided in Section 2.06, the Guarantor
covenants and agrees with the Administrative Agent for the benefit of the
Lenders that it will comply with each negative covenant set forth in Article VII
of the ETP Credit Agreement, as and to the extent from time to time incorporated
herein and in effect for purposes hereof as provided in Part I of this
Article VII.
          PART III. Survival. The provisions of this Article VII shall survive
the termination of this Agreement, and any satisfaction and discharge of MEP by
virtue of any payment, court order or any Federal or state law, to the same
extent and for the same period as Section 2.06 hereof.
ARTICLE VIII.
MISCELLANEOUS
          SECTION 8.01 Notices, Etc.
          (a) Except with respect to notices and other communications expressly
permitted to be given by telephone, all notices, consents, requests, approvals,
demands and other communications (collectively “Communications”) provided for
herein shall be in writing (including facsimile Communications) and mailed,
telecopied or delivered:
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(i)   if to the Guarantor, to it at:       Thomas P. Mason, General Counsel
Energy Transfer Partners, L.P.
3738 Oak Lawn Avenue
Dallas, Texas 75219       214-981-0726       214-981-0701 (fax)
tom.mason@energytransfer.com   (ii)   if to the Administrative Agent, to it at:
      The Royal Bank of Scotland plc
101 Park Avenue, 6th Floor
New York, New York 10178
Attention:     Juanita Baird
Telecopy No.: (212) 401 1478
E-Mail:          gbmnaagency@rbs.com;            or such other address or
telecopy number as either party may hereafter specify for such purpose by notice
to the other party.

          (b) The Administrative Agent or the Guarantor may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.
          (c) Either party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other party. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
          SECTION 8.02 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, in exercising, and no course of dealing with respect to,
any right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No notice
to or demand on the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstances. No waiver
of any provision of this Agreement or consent to any departure therefrom shall
in any event be effective unless the same shall be permitted by Section 8.02(b),
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.
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          (b) Except as provided in Article VI or VII, no provision of this
Agreement may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Guarantor and the Administrative Agent
as provided in Section 9.02 of the Credit Agreement or Section 1.03 hereof.
          SECTION 8.03 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, the Lenders and their respective successors and assigns
permitted hereby and, any legal or equitable right, remedy or claim under or by
reason of this Agreement.
          SECTION 8.04 Survival. All covenants, agreements, representations and
warranties made by the Guarantor herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement.
          SECTION 8.05 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement constitutes
the entire contract among the parties hereto relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become
effective when it shall have been executed by the Guarantor and the
Administrative Agent. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
          SECTION 8.06 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
          SECTION 8.07 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Guarantor against any of and all the
Guaranteed Obligations now or hereafter existing under this Agreement and the
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
Guaranteed Obligations may be unmatured. The rights of each Lender under this
Section 8.07 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
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          SECTION 8.08 Governing Law; Jurisdiction; Consent to Service of
Process.
          (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
          (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE GUARANTOR HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE
DATE HEREOF AT 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT
OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, THE GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN
NEW YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE ADMINISTRATIVE AGENT. THE GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 8.01,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
          (c) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO PLEAD OR CLAIM, AND
AGREES NOT TO PLEAD OR CLAIM, THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
          (d) EACH PARTY HERETO HEREBY (i) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL,
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EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iii) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 8.08.
          SECTION 8.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.09.
          SECTION 8.10 Confidentiality. The Administrative Agent and by
accepting the benefits of this Agreement, each of the Issuing Banks and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates,
directors, officers and employees and to its agents, including accountants,
legal counsel and other advisors who have been informed of the confidential
nature of the information provided, (b) to the extent requested by any
regulatory authority, including the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio, (c) to the extent a Lender reasonably believes it is required by
applicable laws or regulations or by any subpoena or similar legal process (and
such Lender will provide prompt notice thereof to the Guarantor), (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an understanding with such Person that such Person will comply
with this Section 8.10, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Guarantor or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 8.10 or (ii) becomes available to the Administrative Agent, any
Issuing Bank or any Lender from a source other than the Guarantor (unless such
source is actually known by the individual providing the information to be bound
by a confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information). For the purposes of this
Section 8.10, “Information” means all information received from the Guarantor
relating to it
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or its business, other than any such information that is known to a Lender,
publicly known or otherwise available to the Administrative Agent, any Issuing
Bank or any Lender other than through disclosure (a) by the Guarantor, or
(b) from a source actually known to a Lender to be bound by a confidentiality
agreement or other legal or contractual obligation of confidentiality with
respect to such information. Any Person required to maintain the confidentiality
of Information as provided in this Section 8.10 shall be considered to have
complied with its obligation to do so if such Person maintains the
confidentiality of such Information in accordance with procedures adopted in
good faith to protect confidential Information of third parties delivered to a
lender.
          SECTION 8.11 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT, THE CREDIT
AGREEMENT AND THE NOTES AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE
OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS
CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN
ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT
RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF
THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH
LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE
VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS”.
          SECTION 8.12 Judgment Currency. It is an essential component to this
transaction that all payments be made at the Principal Office of the
Administrative Agent, and Dollars shall be the currency of account in all
events. The Guarantor’s payment obligations under this Agreement shall not be
discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to Dollars and transfer to the Principal Office under normal banking
procedures does not yield the Dollar amount at the Principal Office due under
any Loan Document. Guarantor, as a separate obligation and notwithstanding any
such judgment, agrees to indemnify, defend and hold the Administrative Agent and
each Lender harmless from and against any costs and expenses (including
reasonable attorneys’ fees and costs, if any) associated with the exercise or
enforcement of any rights granted to such person pursuant to this Section 8.12.
          SECTION 8.13 USA Patriot Act. The Administrative Agent, on behalf of
each Lender that is subject to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”),
hereby notifies the Guarantor that
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pursuant to the requirements of the Patriot Act, each such Lender is required to
obtain, verify, and record information that identifies the Guarantor, which
information includes the name and address of the Guarantor and other information
that will allow such Lender to identify the Guarantor in accordance with the
Patriot Act.
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          The parties hereto have caused this Agreement to be duly executed as
of the date and year first above written.

                      ENERGY TRANSFER PARTNERS, L.P.,     as the Guarantor
 
                        By:   Energy Transfer Partners GP, L.P.,             its
General Partner
 
                        By:   Energy Transfer Partners GP, L.L.C.,            
its General Partner
 
               
 
          By:   /s/ Brian J. Jennings 
 
               
 
          Name:   Brian J. Jennings 
 
               
 
          Title:   Chief Financial Officer
 
               

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                  THE ROYAL BANK OF SCOTLAND plc,         as the Administrative
Agent    
 
           
 
  By:  
/s/ Stuart Gibson
   
 
  Name:   Stuart Gibson    
 
  Title:   Senior Vice President    

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SCHEDULE 3
DISCLOSURE SCHEDULE

     
Section 3.04
  No Conflicts or Consents
 
   
 
  None
 
   
Section 3.09
  Litigation
 
   
 
  None
 
   
Section 3.10
  ERISA
 
   
 
  None
 
   
Section 7.02
  Limitation on Liens
 
   
 
  None

2008 ETP MEP Guaranty Agreement