Document:

exv10w5

 

Exhibit 10.5

COMPANY AGREEMENT

OF

TEPPCO MIDSTREAM COMPANIES, LLC

     This Company Agreement (this “Agreement”) of TEPPCO Midstream Companies, LLC, a Texas
limited liability company (the “Company”), is hereby adopted by TEPPCO GP, Inc., a Delaware
corporation (“TEPPCO GP”), and TEPPCO Partners, L.P., a Delaware limited partnership (the
“MLP”), to be effective June 30, 2007, in accordance with the Texas Limited Liability
Company Law, part of the Texas Business Organizations Code, as amended (the “TLLCL”), to
govern the affairs of the Company and the conduct of its business.

ARTICLE I

DEFINITIONS

     The following definitions shall for all purposes, unless otherwise clearly indicated to the
contrary, apply to the terms used in this Agreement.

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
controls, is controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

     “Agreement” has the meaning given such term in the preamble hereto.

     “Certificate” means the Certificate of Formation filed with the Secretary of State of the
State of Texas as referenced in Section 2.5, as such Certificate may be amended and/or restated
from time to time.

     “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, as
interpreted by the applicable regulations thereunder. Any reference herein to a specific section
or sections of the Code shall be deemed to include a reference to any corresponding provision of
future law.

     “Company” has the meaning given such term in the preamble hereto.

     “Indemnitee” has the meaning given such term in Section 10.1(a).

     “Manager” means (i) TEPPCO GP in its capacity as the sole manager of the Company prior to its
removal or resignation and (ii) any other Person designated as a manager of the Company pursuant to
the terms of this Agreement.

     “Member” means TEPPCO GP and the MLP, in their respective capacities as members of the
Company, or any other Person admitted to the Company from time to time as a member and that is
shown as a member on the books and records of the Company.

     “Membership Interest” means the interest of a Member in the Company.

 

 

     “MLP” has the meaning given such term in the preamble hereto.

     “Percentage Interest” means, as of the date of such determination, (a) 0.001% as to TEPPCO GP
and (b) 99.999% as to the MLP.

     “Person” means an individual or a corporation, partnership, limited liability company, trust,
unincorproated organization, association or other entity.

     “Subsidiary” means a Person controlled by the Company directly, or indirectly through one or
more intermediaries.

     “TEPPCO GP” has the meaning given such term in the preamble hereto.

     “TLLCL” has the meaning given such term in the preamble hereto.

ARTICLE II

ORGANIZATIONAL MATTERS

     Section 2.1 Formation. The Company was formed when its certificate of formation (the
“Certificate”) was filed by an “organizer” (within the meaning of the TLLCL) with the
Secretary of State of the State of Texas pursuant to and in accordance with the TLLCL. The
execution of the Certificate by such organizer, and the filing of the Certificate with the
Secretary of State of the State of Texas, are hereby ratified, confirmed and approved. Upon the
filing of the Certificate with the Secretary of State of the State of Texas, such organizer’s
powers as the “organizer” (within the meaning of the TLLCL) ceased. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Members and the administration, winding up and termination of the Company shall
be governed by the TLLCL. The Membership Interest of each Member shall be personal property for all
purposes.

     Section 2.2 Name. The name of the Company shall be “TEPPCO Midstream Companies, LLC”. The
Company’s business may be conducted under any other name or names deemed necessary or appropriate
by the Manager, including, without limitation, the name of the Manager or any Affiliate thereof.
The words “Limited Liability Company,” “LLC,” or similar words or letters shall be included in the
Company’s name where necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The Manager in its sole discretion may change the name of the Company at any time and
from time to time.

     Section 2.3 Registered Office; Principal Office. Unless and until changed by the Manager, the
registered office of the Company in the State of Texas shall be located at 1021 Main Street, Suite
1150, Houston, Texas 77002, and the registered agent for service of process on the Company in the
State of Texas at such registered office shall be CT Corporation System. The principal office of
the Company and the address of the Manager shall be 1100 Louisiana Street, Houston, Texas 77002, or
such other place as the Manager may from time to time designate. The Company may maintain offices
at such other place or places within or outside the State of Texas as the Manager deems advisable.

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     Section 2.4 Term. The Company commenced upon the filing of the Certificate in accordance with the
TLLCL and shall have perpetual existence, unless the Company is sooner terminated in accordance
with the provisions of this Agreement. The existence of the Company as a separate legal entity
shall continue until the termination of the Company as provided in the TLLCL.

     Section 2.5 Certificate of Formation. The organizer has caused the Certificate to be filed with
the Secretary of State of the State of Texas as required by the TLLCL. The Manager shall use all
reasonable efforts to cause to be filed such other certificates or documents as may be determined
by the Manager in its sole discretion to be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited liability company in the State of
Texas or any other state in which the Company may elect to do business or own property. To the
extent that such action is determined by the Manager in its sole discretion to be reasonable and
necessary or appropriate, the Manager shall file amendments to and restatements of the Certificate
and do all things to maintain the Company as a limited liability company under the laws of the
State of Texas or of any other state in which the Company may elect to do business or own property.

ARTICLE III

PURPOSE

     Section 3.1 Purpose and Business. The purpose and nature of the business to be conducted by the
Company shall be (a) to engage in the gathering of natural gas and natural gas liquids and related
products and activities, (b) to engage directly in, or to enter into or form any corporation,
partnership, joint venture, limited liability company or similar arrangement to engage in, any
business activity that may be lawfully conducted by a limited partnership organized pursuant to the
TLLCL and, in connection therewith, to exercise all of the rights and powers conferred upon the
Company pursuant to the agreements relating to such business activity, (c) to do anything necessary
or appropriate to the foregoing (including, without limitation, the making of capital contributions
or loans to any Subsidiary or in connection with its involvement in the activities referred to in
clause (b) of this sentence), and (d) to engage in any other business activity as permitted under
Texas law.

     Section 3.2 Powers. The Company shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described in Section 3.1 and for the protection and benefit of the
Company.

ARTICLE IV

CAPITAL CONTRIBUTIONS

     Section 4.1 Prior Contributions. Prior to the date hereof, the Members, or their predecessors,
have made capital contributions to the Company’s predecessor.

     Section 4.2 Additional Contributions. The Members may contribute additional cash or property to
the capital of the Company, but no Member has any obligation pursuant to this Agreement to make any
such contribution.

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     Section 4.3
Return of Contributions; Other Provisions Relating to Contributions. No Member shall
be entitled to withdraw any part of its capital contributions or its capital account or to receive
any distribution from the Company, except as provided in this Agreement. An unrepaid capital
contribution is not a liability of the Company or any Member, and no interest shall accrue on
capital contributions or on balances in the Members’ capital accounts.

     Section 4.4
Loans. A Member may make secured or unsecured loans to the Company, but no Member has
any obligation pursuant to this Agreement to make any such loan. Loans by a Member to the Company
shall not be considered capital contributions.

ARTICLE V

CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS

     Section 5.1 Capital Accounts. The Company shall maintain for each Member a separate capital
account in accordance with the regulations issued pursuant to Section 704 of the Code and as
determined by the Manager as consistent therewith.

     Section 5.2 Allocations for Tax and Capital Account Purposes. For federal income tax purposes,
each item of income, gain, loss, deduction and credit of the Company shall be allocated among the
Members in accordance with their Percentage Interests, except that the Manager shall have the
authority to make such other allocations as are necessary and appropriate to comply with Section
704 of the Code and the regulations issued pursuant thereto.

     Section 5.3 Distributions. The Company shall make distributions to the Members at such times, and
in such forms and amounts, as the Manager may from time to time determine. Distributions in
liquidation of the Company shall be made in accordance with the positive balances in the Members’
respective capital accounts maintained pursuant to Section 5.1. All other distributions shall be
made to the Members in accordance with their respective Percentage Interests.

ARTICLE VI

MANAGEMENT AND OPERATIONS OF BUSINESS

     The Manager shall conduct, direct, and exercise full control over all activities of the
Company. Except as otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Company shall be exclusively vested in the Manager. The Manager shall
be designated from time to time by the Members, and the Members may remove the Person serving as
the Manager, with or without cause, at any time and may designate any other Person to serve as the
Manager. In addition to the powers now or hereafter granted a manager under applicable law or which
are granted to the Manager under any other provision of this Agreement, the Manager shall have full
power and authority to do all things and on such terms as it, in its sole discretion, may deem
necessary or desirable to conduct the business of the Company, to exercise all powers set forth in
Section 3.2 and to effectuate the purposes set forth in Section 3.1.

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ARTICLE VII

RIGHTS AND OBLIGATIONS OF MEMBERS

     No Member, by virtue of its status as a member of the Company, shall have any management power
over the business and affairs of the Company or actual or apparent authority to enter into
contracts on behalf of, or to otherwise bind, the Company.

ARTICLE VIII

WINDING UP AND TERMINATION

     The Company shall terminate, and its affairs shall be wound up, upon (a) an event of
resignation of the Manager, (b) a written consent of all of the Members, (c) a judicial decree
ordering the winding up and termination of the Company under Section 11.301 of the TLLCL, (d) the
sale of all or substantially all of the assets and properties of the Company and its Subsidiaries,
taken as a whole, (e) the dissolution of the MLP, if such dissolution occurs while the MLP is a
Member or (f) any other event requiring the winding up of the Company under the TLLCL; provided,
however, that the Company shall not be terminated or required to be wound up by reason of any event
of resignation of the Manager described in the preceding clause if within 90 days after the
resignation, a majority of the Members agree by vote to continue the business of the Company and to
the appointment of a manager of the Company.

ARTICLE IX

AMENDMENT OF COMPANY AGREEMENT

     The Manager may amend any provision of this Agreement without the consent of the Members and
may execute, swear to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, except that any amendment that would increase the liability of the Members or
materially and adversely affect the rights of the Member under this Agreement requires the consent
of the Members.

ARTICLE X

INDEMNIFICATION

     Section 10.1 Indemnification.

          (a) To the fullest extent permitted by law but subject to the limitations expressly provided
in this Agreement, the Manager, the Members and any Person who is or was an officer or director of
the Manager (each, an “Indemnitee”) shall each be indemnified and held harmless by the
Company from and against any and all losses, claims, damages, liabilities (joint or several),
expenses (including, without limitation, legal fees and expenses), judgments, fines, penalties,
interest, settlements and other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may
be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as
an Indemnitee; provided, that the Indemnitee shall not be indemnified and held harmless if there
has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which the Indemnitee is seeking indemnification
pursuant to this Section 10.1, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was unlawful. Any indemnification pursuant to this Section 10.1 shall be made only out of the
assets of the Company, it being agreed that the Members shall
not

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be personally liable for such indemnification and shall have no obligation to contribute or
loan any monies or property to the Company to enable it to effectuate such indemnification.

          (b) To the fullest extent permitted by law, expenses (including, without limitation, legal
fees and expenses) incurred by an Indemnitee in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Company prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is
not entitled to be indemnified as authorized in this Section 10.1.

          (c) The indemnification provided by this Section 10.1 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both
as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other
capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

          (d) The Company may purchase and maintain (or reimburse the Manager or its Affiliates for the
cost of) insurance, on behalf of the Manager and such other Persons as the Manager shall determine,
against any liability that may be asserted against or expense that may be incurred by such Person
in connection with the Company’s activities, whether or not the Company would have the power to
indemnify such Person against such liabilities under the provisions of this Agreement.

          (e) In no event shall the Members be subjected to personal liability by reason of the
indemnification provisions set forth in this Agreement, whether by action of an Indemnitee or
otherwise.

          (f) An Indemnitee shall not be denied indemnification in whole or in part under this Section
10.1 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

          (g) The provisions of this Section 10.1 are for the benefit of the Indemnitees, their heirs,
successors and assigns and shall not be deemed to create any rights for the benefit of any other
Persons.

          (h) No amendment, modification or repeal of this Section 10.1 or any provision hereof shall in
any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be
indemnified by the Company, nor the obligation of the Company to indemnify any such Indemnitee
under and in accordance with the provisions of this Section 10.1 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.

          (i) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 10.1 ARE INTENDED BY THE
PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL

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RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

     Section 10.2 Liability of Indemnitees.

          (a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall
be liable for monetary damages to the Company or any Member for losses sustained or liabilities
incurred as a result of any act or omission of an Indemnitee unless there has been a final and
non-appealable judgment entered by a court of competent jurisdiction determining that, in respect
of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was criminal.

          (b) Subject to its obligations and duties as the Manager set forth in Article VI, the Manager
may exercise any of the powers granted to it by this Agreement and perform any of the duties
imposed upon it hereunder either directly or by or through its agents, and the Manager shall not be
responsible for any misconduct or negligence on the part of any such agent appointed by the Manager
in good faith.

          (c) Any amendment, modification or repeal of this Section 10.2 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the liability of an
Indemnitee under this Section 10.2 as in effect immediately prior to such amendment, modification
or repeal with respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

ARTICLE XI

BOOKS AND RECORDS

     The Manager shall keep or cause to be kept at the principal office of the Company appropriate
books and records with respect to the Company’s business including, without limitation, all books
and records necessary to provide to the Members any information, lists, and copies of documents
required to be provided pursuant to the TLLCL. Any such records may be maintained in other than a
written form if such form is capable of conversion into a written form within a reasonable time.

ARTICLE XII

GENERAL PROVISIONS

     Section 12.1 Addresses and Notices. Any notice, demand, request or report required or permitted
to be given or made to a Member under this Agreement shall be in writing and shall be deemed given
or made if received by it at the principal office of the Company referred to in Section 2.3.

     Section 12.2 Titles and Captions. All article or section titles or captions in this Agreement are
for convenience only. They shall not be deemed part of this Agreement and in no way define, limit,
extend or describe the scope or intent of any provisions hereof. Except as

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specifically provided otherwise, references to “Articles” and “Sections” are to articles and sections of this
Agreement.

     Section 12.3 Pronouns and Plurals. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice-versa.

     Section 12.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors, legal representatives and permitted assigns.

     Section 12.5 Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.

     Section 12.6 Creditors. None of the provisions of this Agreements shall be for the benefit of, or shall be enforceable
by, any creditor of the Company.

     Section 12.7
Waiver. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy
consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant,
duty, agreement or condition.

     Section 12.8 Applicable Law. This Agreement shall be construed in accordance with and governed by
the laws of the State of Texas, without regard to the principles of conflicts of law.

     Section 12.9 Invalidity of Provisions. If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.

     Section 12.10 Counterparts. This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding that all such
parties are not signatories to the original or the same counterpart.

* * * Remainder of this page intentionally left blank * * *

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the Members as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	MEMBERS:
	 
	 	 	 	 	 	 
	 	 	TEPPCO GP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William G. Manias
 

	 	 
	 	 	Name: William G. Manias
	 	 	Title: Vice President and Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	TEPPCO PARTNERS, L.P.
	 
	 	 	 	 	 	 
	 	 	By: Texas Eastern
Products Pipeline Company, LLC, 
its sole general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William G. Manias
 

	 	 
	 	 	Name: William G. Manias
	 	 	Title: Vice President and Chief Financial Officer

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Exhibit 10.7

EXECUTION VERSION

ASSIGNMENT, ASSUMPTION AND

AMENDMENT NO. 2 TO GUARANTY AGREEMENT

     THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT NO. 2 TO GUARANTY AGREEMENT (this “Amendment”) is
made as of May 21, 2007 by and among TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP, a Delaware
limited partnership (“TEPPCO”), MARATHON PETROLEUM COMPANY LLC, a Delaware limited liability
company formerly known as Marathon Ashland Petroleum LLC (“MAP”), and MARATHON OIL CORPORATION, a
Delaware corporation (“MARATHON”).

Recitals

     A. Centennial Pipeline LLC, a Delaware limited liability company (the “Company”), and The
Prudential Insurance Company of America (“Prudential”) entered into a Master Shelf Agreement dated
as of May 4, 2001, as amended by Letter Amendment No. 1 to Master Shelf Agreement dated as of the
date hereof (as so amended, and as the same may be further amended, supplemented or otherwise
modified from time to time, the “Shelf Agreement”), pursuant to which the Company issued and sold
to Prudential the Company’s senior fixed rate term notes, in the aggregate principal amount of
$140,000,000 (the “Notes”).

     B. In connection with the Shelf Agreement, Panhandle Eastern Pipe Line Company (“PEPL”),
TEPPCO and MAP entered into a Guaranty Agreement dated as of May 4, 2001, as amended by Assignment,
Assumption and Amendment No. 1 to Guaranty Agreement (such amendment, “Amendment No. 1”; such
Guaranty Agreement, as so amended, as amended hereby, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “Sponsor Guaranty”). Capitalized terms
used and not otherwise defined herein shall have the respective meanings ascribed to them in the
Sponsor Guaranty.

     C. Pursuant to Amendment No. 1, PEPL assigned to each of TEPPCO and MAP, and TEPPCO and MAP
each assumed, 50% of the duties and obligations of PEPL under the Sponsor Guaranty.

     D. MAP is a wholly owned, indirect subsidiary of Marathon.

     E. MAP wishes to assign all of its rights and obligations under the Sponsor Guaranty to
Marathon, and Marathon wishes to assume all of MAP’s rights and obligations under the Sponsor
Guaranty, (ii) MAP has requested that it be released from all such obligations under the Sponsor
Guaranty, and (iii) TEPPCO and Marathon have requested certain amendments to the Sponsor Guaranty.

     F. TEPPCO, MAP and Marathon have requested that Prudential consent and agree to such
assignment, assumption, release and amendments and, subject to the terms and conditions set forth
herein, Prudential is willing to consent and agree thereto.

 

 

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     SECTION 1. Assignment, Assumption and Release.

     (a) Assignment. MAP hereby assigns to Marathon all of MAP’s right, title and interest
in, to and under the Sponsor Guaranty.

     (b) Assumption. Marathon hereby accepts the foregoing assignment and assumes and
agrees to perform all of MAP’s duties and obligations under and with respect to the Sponsor
Guaranty.

     (c) Release. The foregoing assignment and assumption is hereby approved, and MAP is
hereby absolutely, unconditionally and irrevocably released and discharged from any and all
obligations under the Sponsor Guaranty.

     SECTION 2. Amendments to Sponsor Guaranty. The Sponsor Guaranty is hereby amended as follows:

     (a) Definition of Guarantors. The term “Guarantors” shall be deemed to refer
collectively to TEPPCO and Marathon.

     (b) Amendments to Section 1(a). Section 1(a) is amended as follows:

     (i) The definition of “Acceptable Credit Support” is amended by deleting clause (v)
thereof in its entirety and replacing such clause (v) with the following:

     “(v) at the sole option of one or more of the other Guarantors, a guaranty of
such Guarantor’s Pro Rata Portion of the Guaranteed Obligations, substantially in
the form of this Guaranty Agreement and provided by one or more of the other
Guarantors which as of such date have a senior unsecured long-term debt rating of
BBB- or better from S&P and Baa3 or better from Moody’s.”

     (ii) The following new definitions are hereby added to such Section 1(a), in the
appropriate alphabetical positions:

     “‘Covenant Default’ shall mean, with respect to any Guarantor, that either (i)
such Guarantor fails to perform or observe any term, covenant or agreement contained
in Section 10(b) of this Guaranty Agreement or (ii) such Guarantor fails to perform
or observe any agreement or covenant contained in Section 10(a) of this Guaranty
Agreement, and, in the case of this clause (ii), such failure shall not be remedied
within 30 days after any Responsible Officer of such Guarantor obtains actual
knowledge thereof.

     ‘Marathon’ shall mean Marathon Oil Corporation, a Delaware corporation.

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     ‘Responsible Officer’ shall mean, with respect to a Guarantor, the chief
executive officer, chief operating officer, chief financial officer or chief
accounting officer, or any other officer involved principally in its financial
administration or its controllership function.”

     (iii) The definition of “Pro Rata Portion” is amended by deleting in its entirety the
table set forth therein and replacing it with the following:

“TEPPCO            50%

Marathon           50%”

     (iv) The definitions of “Split Rating”, “Sponsor Default Event” and “Trigger Event” are
amended by deleting such definitions in their entirety and replacing them with the
following:

     “Split Rating” shall mean, with respect to any Guarantor, that such Guarantor
possesses either (i) a senior unsecured long-term debt rating of BB+ from S&P and a
senior unsecured long-term debt rating of Baa3 or better from Moody’s or (ii) a
senior unsecured long-term debt rating of Ba1 from Moody’s and a senior unsecured
long-term debt rating of BBB- or better from S&P.

     “Sponsor Default Event” shall mean, with respect to any Guarantor, that such
Guarantor (i) possesses either of the following: (A) a senior unsecured long-term
debt rating of BB+ or worse from S&P and a senior unsecured long-term debt rating of
Ba2 or worse from Moody’s, or (B) a senior unsecured long-term debt rating of Ba1 or
worse from Moody’s and a senior unsecured long-term debt rating of BB or worse from
S&P; or (ii) either S&P or Moody’s ceases to maintain a senior unsecured long-term
debt rating for such Guarantor. With respect to any Guarantor, a Sponsor Default
Event shall also be deemed to have occurred if such Guarantor fails to comply with
the provisions of either of clauses (a) or (b) of Section 12 hereof, within the time
periods specified therein.

     “Trigger Event” shall mean, with respect to any Guarantor, that such Guarantor
possesses any of the following: (i) a senior unsecured long-term debt rating of BB+
from S&P and a senior unsecured long-term debt rating of Ba1 from Moody’s; (ii) a
senior unsecured long-term debt rating of BBB- or better from S&P and a senior
unsecured long-term debt rating of Ba2 or worse from Moody’s; or (iii) a senior
unsecured long-term debt rating of Baa3 or better from Moody’s and a senior
unsecured long-term debt rating of BB or worse from S&P.

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     (c) Amendment of Section 12. Section 12 is amended as follows:

     (i) Clause (a) of Section 12 is amended by deleting such clause (a) in its entirety and
replacing it with the following:

     “(a) Split Rating.

     (i) In the event any Guarantor receives a Split Rating, such Guarantor
shall at its option, exercised by written notice to each holder of Notes
within five Business Days after the announcement by S&P or Moody’s, as
applicable, of the rating downgrade that results in such Split Rating,
provide the holders of Notes with either (A) from such Guarantor or the
applicable Subsidiary of such Guarantor holding membership interests in the
Company, as applicable, a first priority perfected pledge of and security
interest in such Guarantor’s or such Subsidiary’s membership interest in the
Company, which shall be subject to no options, rights of first refusal or
other restrictions on transfer, within 10 Business Days following the date
of such notice from such Guarantor, by executing and delivering, or causing
such Subsidiary to execute and deliver, a Pledge Agreement in substantially
the form attached hereto as Exhibit B, and by performing and
satisfying, or causing such Subsidiary to perform and satisfy, all of the
terms and conditions set forth therein with respect to creation and
perfection of such pledge and security interest, or (B) Acceptable Credit
Support within 30 Business Days following the date of such notice from such
Guarantor, which collateral or other credit support shall also be upon terms
and conditions and pursuant to documentation in form and substance
reasonably satisfactory to the Required Holder(s).

     (ii) Any pledge of membership interests by a Guarantor, or by a
Subsidiary of such Guarantor, following such Guarantor’s receipt of a Split
Rating will be released by the holders of Notes if such Guarantor (A)
reestablishes both (I) a senior unsecured long-term debt rating of BBB- or
better from S&P and (II) a senior unsecured long-term debt rating of Baa3 or
better from Moody’s or (B) provides Acceptable Credit Support.

     (iii) For avoidance of doubt, (A) no Credit Fee shall be assessed in
the event of a Split Rating and (B) so long as a Sponsor Default Event shall
not have been deemed to have occurred as a result of a Guarantor’s failure
to comply with the provisions of this Section 12(a) within the time periods
specified herein, the providing of Acceptable Credit Support shall not be
required in the event of a Split Rating, but shall instead be provided only
at the option of the applicable Guarantor in lieu of pledging its membership
interest, or causing its applicable Subsidiary to pledge such Subsidiary’s
membership interest, in the Company.”; and

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     (ii) Clause (d)(i) of such Section 12 is amended by deleting such clause (d)(i) in its
entirety and replacing it with the following:

     “(i) Upon a determination that a Representation Default or a Covenant Default
with respect to any Guarantor has occurred, the Required Holder(s), at their option
and by written notice delivered to such Guarantor, may require that such Guarantor
provide Acceptable Credit Support, which may be in any form of Acceptable Credit
Support other than that specified in clause (iv) of the definition thereof, as
security for payment of such Guarantor’s Pro Rata Portion of the Guaranteed
Obligations.”

     (d) Amendment of Section 13. Section 13 is amended by deleting such Section in its
entirety and replacing it with the following:

	 	“13.	 	 TERMINATION AND RELEASE. Subject to the provisions of Section 7, and except to
the extent that any Guarantor’s obligations arising hereunder prior to such time have
not been fulfilled, this Guaranty Agreement shall terminate and each of the Guarantors
shall be absolutely, unconditionally and irrevocably released and discharged of any and
all obligations hereunder upon the indefeasible payment in full of the Notes and all
other Guaranteed Obligations.”

     (e) Amendment of Section 15. Section 15 is amended by deleting such Section in its
entirety and replacing it with the following:

	 	“15.	 	NOTICES. Unless otherwise specifically provided herein, all notices, consents,
directions, approvals, instructions, requests and other communications required or
permitted by the terms hereof shall be in writing, and any such communication shall
become effective when received, addressed in the following manner: (a) if to TEPPCO, to
it at 1100 Louisiana Street, Houston, TX 77002, Attention: General Counsel, (b) if to
Marathon, to it at 5555 San Felipe Road, Houston, Texas 77056, Attention: Treasurer, or
(c) if to any holder of a Note, to the respective addresses set forth in the
Information Schedule to the Shelf Agreement; provided, however, that
any such addressee may change its address for communications by notice given as
aforesaid to the other parties hereto.”

     SECTION 3. Conditions to Effectiveness. This Amendment shall become effective on the date
hereof (the “Effective Date”), subject to the following conditions:

     (a) Certain Documents. Prudential shall have received the following, each duly
executed and in form, scope and substance satisfactory to Prudential:

     (i) a counterpart of this Amendment;

     (ii) a certificate of the Secretary or other officer of each of TEPPCO (or of its
general partner) and Marathon, (A) attaching resolutions evidencing approval of the
transactions contemplated by this Amendment and any other documents to be executed and
delivered in connection herewith or therewith and the execution, delivery and performance
thereof, authorizing certain officers to execute and deliver the same, and

5

 

certifying that such resolutions were duly and validly adopted and have not since been
amended, revoked or rescinded, (B) attaching copies of the constitutive documents of TEPPCO
(and of its general partner) or Marathon, as applicable, or, in the case of TEPPCO,
certifying that there have been no changes to such constitutive documents since May 4, 2001,
(C) certifying as to the names, titles and true signatures of the officers or other
authorized persons of TEPPCO (or of its general partner) or Marathon, as applicable,
authorized to sign, on behalf of TEPPCO or Marathon, as applicable, this Amendment and any
other documents to be executed and delivered in connection herewith or therewith, (D)
attaching good standing certificates from the jurisdiction of organization of TEPPCO (and of
its general partner) or Marathon, as applicable, and (E) certifying that no dissolution or
liquidation proceedings as to TEPPCO (and its general partner) or Marathon, as applicable,
have been commenced or are contemplated;

     (iii) a favorable opinion of Michael F. Jordan, General Attorney at MAP and New York
counsel for Marathon, a favorable opinion of special New York counsel to TEPPCO and
favorable opinions of counsel to each of TEPPCO (and its general partner) and Marathon (each
such counsel to be reasonably acceptable to such Purchaser), in each case in form, scope and
substance reasonably satisfactory to Prudential, and as to such matters as Prudential may
reasonably require; and

     (iv) any additional documents or certificates as may be reasonably requested by
Prudential.

     (b) Representations and Warranties; No Default; No Material Adverse Effect. After
giving effect to this Amendment and the transactions contemplated hereby, (i) the representations
and warranties of TEPPCO and Marathon contained in this Amendment and the Sponsor Guaranty shall be
true on and as of the date hereof, (ii) there shall exist on the date hereof no Event of Default or
Default (as such terms are defined in the Shelf Agreement), and (iii) on the date hereof there
shall exist or have occurred no condition, event or act which could reasonably be expected to have
a Material Adverse Effect.

     (c) Proceedings. All corporate, partnership, limited liability company and other
actions taken or to be taken in connection with the transactions contemplated hereby and all
documents incident to the foregoing shall be satisfactory in form, scope and substance to
Prudential, and Prudential shall have received all such counterpart originals or certified or other
copies of such documents as Prudential may reasonably request.

     SECTION 4. Representations and Warranties. In order to induce Prudential to consent and agree
to this Amendment, each of Marathon and TEPPCO represents and warrants that after giving effect to
this Amendment, the representations and warranties made by it in the Sponsor Guaranty shall be true
and correct on and as of the Effective Date.

     SECTION 5. Miscellaneous.

     (a) Except as specifically amended herein, the Sponsor Guaranty shall remain in full force and
effect, and is hereby ratified and confirmed.

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     (b) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
set forth herein, operate as a waiver of any right, power or remedy of any holder or holders of
Notes, nor constitute a waiver of any provision of the Sponsor Guaranty, the Shelf Agreement, the
Notes or any other document, instrument or agreement executed and delivered in connection with the
Sponsor Guaranty.

     (c) THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.

     (d) This Amendment may be executed in counterparts, each of which shall be deemed an original
and all of which taken together shall constitute one and the same document. Delivery of this
Amendment may be made by telecopy of a duly executed counterpart copy hereof.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

7

 

     IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to
execute this Amendment as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	TE PRODUCTS PIPELINE COMPANY,

  LIMITED PARTNERSHIP
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	TEPPCO GP, Inc., 

its sole general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ William G. Manias
 

	 	 
	 	 	 	 	 	 	Name: William G. Manias
	 	 	 	 	 	 	Title: Vice President and Chief
Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	MARATHON PETROLEUM COMPANY LLC
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ J. Douglas Sparkman	 	 
	 	 	 	 	 	 	 
	 	 	Name: J. Douglas Sparkman
	 	 	Title: Senior Vice President
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	MARATHON OIL CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Paul C. Reinbolt	 	 
	 	 	 	 	 	 	 
	 	 	Name: Paul C. Reinbolt
	 	 	Title: Vice President, Finance & Treasurer

HOLDER OF NOTES (To evidence consent to

the assignment, assumption and amendment hereby

of the Sponsor Guaranty and release of MAP therefrom):

	 	 	 	 	 
	THE PRUDENTIAL INSURANCE COMPANY 

  OF AMERICA	 	 
	 
	 	 	 	 
	By:

	 	/s/ Brian N. Thomas
 

Vice President
	 	 

Signature Page to Assignment, Assumption and

Amendment No. 2 to Guaranty Agreement

8

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