exv10w2



 





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





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