Document:

exv10w2

Exhibit 10.2

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is made as of September 20,
2010, by and among each of the undersigned grantors, the Additional Grantors (as hereinafter
defined) (each, a “Grantor”), and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Collateral
Agent for the Lenders under the Credit Agreement as defined below (in such capacity, together with
its successors and assignees herein called “Secured Party”).

RECITALS:

     1. Energy Transfer Equity, L.P., a Delaware limited partnership (the “Borrower”), has
entered into a Credit Agreement dated as of September 20, 2010 (as from time to time amended,
supplemented or restated, the “Credit Agreement”), among the Borrower, Credit Suisse AG, as
the Administrative Agent, and the Lenders from time to time party thereto, pursuant to which the
Lender Parties (as defined below) have agreed to advance funds and extend credit to the Borrower up
to an aggregate principal amount of $200,000,000, subject to increases as provided therein of up to
$100,000,000.

     2. In consideration of the extensions of credit and other agreements of the Lenders, the LC
Issuer and the Swingline Lender as set forth in the Credit Agreement, each Grantor has agreed to
secure the obligations under the Loan Documents as set forth herein.

     3. Grantors, Borrower, and each direct and indirect Subsidiary of Borrower are mutually
dependent on each other in the conduct of their respective businesses under a holding company
structure, with the credit needed from time to time by each often being provided by another or by
means of financing obtained by one such affiliate with the support of the others for their mutual
benefit and the ability of each to obtain such financing being dependent on the successful
operations of the others.

     4. The applicable governing body or the members of each Grantor (or of each Grantor’s general
partner), as applicable, has determined that such Grantor’s execution, delivery and performance of
this Agreement may reasonably be expected to benefit such Grantor, directly or indirectly, and are
in the best interests of such Grantor.

     NOW, THEREFORE, in consideration of the premises, of the benefits which will inure to each
Grantor from the LC Issuer’s issuance of Letters of Credit, the Swingline Lender’s advances of
Swingline Loans and the Lenders’ advances of funds to Borrower under the Credit Agreement, and of
Ten Dollars and other good and valuable consideration, the receipt and sufficiency of all of which
are hereby acknowledged, and in order to induce the LC Issuer to issue Letters of Credit, the
Swingline Lender to advance Swingline Loans and the Lenders to advance funds under the Credit
Agreement, each Grantor hereby agrees with Secured Party, for the benefit of the Lender Parties, as
follows:

 

 

AGREEMENTS

ARTICLE I Definitions and References

     Section 1.1. General Definitions. As used herein, the following terms shall have the
following meanings:

     “Account Debtor” means each Person who is obligated on a Receivable or any supporting
obligation related thereto.

     “Additional Grantor” has the meaning given to such term in Section 5.2.

     “Administrative Agent” means the Person who is from time to time the “Administrative
Agent” as defined in the Credit Agreement.

     “Agreement” has the meaning given to such term in the Preamble.

     “Borrower” has the meaning given to such term in the Recitals.

     “Collateral” means all property, of whatever type, that is described in Section
2.1 as being at any time subject to a security interest granted hereunder to Secured Party.

     “Commercial Tort Claim” means a claim arising in tort with respect to which the
claimant is Grantor.

     “Company” means an LLC, Partnership or Corporation in respect of which Company Rights
are granted.

     “Company Agreements”, “Company Rights”, and “Company Rights to
Payments” have the meanings given them in Section 2.1(k) below.

     “Copyright License” means any license or other agreement, whether now or hereafter in
existence, under which is granted or authorized any right to use, copy, reproduce, distribute,
prepare derivative works, display or publish any records or other materials on which a Copyright is
in existence or may come into existence.

     “Copyrights” means all the following: (a) all copyrights under the laws of the United
States or any other country (whether or not the underlying works of authorship have been
published), all registrations and recordings thereof, all intellectual property rights to works of
authorship (whether or not published), and all application for copyrights under the laws of the
United States or any other country, including registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United States, any State
thereof or other country, or any political subdivision thereof, (b) all reissues, renewals and
extensions thereof, (c) all claims for, and rights to sue for, past or future infringements of any
of the foregoing, and (d) all income, royalties, damages and payments now or hereafter due or
payable with respect to any of the foregoing, including damages and payments for past or future
infringements thereof.

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     “Corporation” means any corporation that is included within the term “Corporation”
pursuant to Section 2.1(k)(iii) below, and any successor of any such corporation.

     “Credit Agreement” has the meaning given to such term in the Recitals.

     “Deposit Accounts” means all “deposit accounts” (as defined in the UCC) or other
demand, time, savings, passbook, or similar accounts maintained with a bank, including
non-negotiable certificates of deposit.

     “Documents” means all “documents” (as defined in the UCC) or other receipts covering,
evidencing or representing inventory, equipment, or other goods.

     “Equipment” means all “equipment” (as defined in the UCC) in whatever form, wherever
located, and whether now or hereafter existing, and all parts thereof, all accessions thereto, and
all replacements therefor.

     “ETP” means Energy Transfer Partners, L.P., a Delaware limited partnership.

     “ETP GP” means Energy Transfer Partners GP, L.P., a Delaware limited partnership, the
sole general partner of ETP.

     “ETP LLC” means Energy Transfer Partners, L.L.C., a Delaware limited liability
company.

     “General Intangibles” means all “general intangibles” (as defined in the UCC) of any
kind (including choses in action, Commercial Tort Claims, Software, Payment Intangibles, tax
refunds, insurance proceeds, and contract rights), and all instruments, security agreements,
leases, contracts, and other rights (except those constituting Receivables, Documents, or
Instruments) to receive payments of money or the ownership or possession of property, including all
general intangibles under which an account debtor’s principal obligation is a monetary obligation.
The General Intangibles include, among other items, all Intellectual Property.

     “Grantor” has the meaning given to such term in the Preamble.

     “Instruments” means all “instruments”, “chattel paper” or “letters of credit” (as each
is defined in the UCC) and all Letter-of-Credit Rights.

     “Intellectual Property” means any Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks, and Trademark Licenses.

     “Inventory” means all “inventory” (as defined in the UCC) in all of its forms,
wherever located and whether now or hereafter existing, including (a) all movable property and
other goods held for sale or lease, all movable property and other goods furnished or to be
furnished under contracts of service, all raw materials and work in process, and all materials and
supplies used or consumed in a business, (b) all movable property and other goods that are part of
a product or mass, (c) all movable property and other goods that are returned to or repossessed by
the seller, lessor, or supplier thereof, (d) all goods and substances in which any of the foregoing

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is commingled or to which any of the foregoing is added, and (e) all accessions to, products
of, and documents for any of the foregoing.

     “Investment Property” means all “investment property” (as defined in the UCC) and all
other securities, whether certificated or uncertificated, securities entitlements, securities
accounts, commodity contracts, or commodity accounts.

     “LC Issuer” means the Person who is from time to time the “LC Issuer” as defined in
the Credit Agreement.

     “Lender Hedging Obligations” has the meaning given to such term in the Credit
Agreement.

     “Lender Parties” means the Administrative Agent, the LC Issuer, the Swingline Lender,
the Lenders and the counterparties under Lender Hedging Obligations.

     “Lenders” means the Persons who are from time to time “Lenders” as defined in the
Credit Agreement.

     “Letter-of-Credit Rights” means all rights to payment or performance under a “letter
of credit” (as defined in the UCC) whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance.

     “LLC” means any limited liability company which is included within the term “LLC”
pursuant to Section 2.1(k)(i), and any successor of any such limited liability company.

     “Loan Documents” has the meaning given to such term in the Credit Agreement.

     “Loan Party” means any Person, including the Borrower and the other Grantors, who may
now or may at any time hereafter be primarily or secondarily liable for any of the Secured
Obligations or who may now or may at any time hereafter have granted to Secured Party, LC Issuer,
Swingline Lender or Lenders a Lien upon any property as security for the Secured Obligations.

     “Notes” has the meaning given to such term in the Credit Agreement.

     “Obligation Documents” means the Credit Agreement, the Notes, the Loan Documents, and
all other documents and instruments under, by reason of which, or pursuant to which any or all of
the Secured Obligations are evidenced, governed, secured, or otherwise dealt with, and all other
agreements, certificates, and other documents, instruments and writings heretofore or hereafter
delivered in connection herewith or therewith.

     “Other Company Rights” has the meaning given it in Section 2.1(k)(v).

     “Partnership” means any general or limited partnership which is included within the
term “Partnerships” pursuant to Section 2.1(k)(ii), and any successor of any such
partnership.

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     “Patent License” means any license or other agreement, whether now or hereafter in
existence, under which is granted or authorized any right with respect to any Patent or any
invention now or hereafter in existence, whether patentable or not, whether a patent or application
for patent is in existence on such invention or not, and whether a patent or application for patent
on such invention may come into existence.

     “Patents” means all the following: (a) all letters patent and design letters patent
of the United States or any other country and all applications for letters patent and design
letters patent of the United States or any other country, including applications in the United
States Patent and Trademark Office or in any similar office or agency of the United States, any
State thereof or other country, or any political subdivision thereof, (b) all reissues, divisions,
continuations, continuations-in-part, renewals and extensions thereof, (c) all claims for, and
rights to sue for, past or future infringements of any of the foregoing, and (d) all income,
royalties, damages and payments now or hereafter due or payable with respect to any of the
foregoing, including damages and payments for past or future infringements thereof.

     “Payment Intangibles” means all “payment intangibles” (as defined in the UCC).

     “Pledge and Security Agreement Supplement” has the meaning given such term in
Section 5.2.

     “Pledged Shares” has the meaning given such term in Section 2.1(k)(iii).

     “Proceeds” means, with respect to any property of any kind, all proceeds of, and all
other profits, products, rentals or receipts, in whatever form, arising from any sale, exchange,
collection, lease, licensing or other disposition of, distribution in respect of, or other
realization upon, such property, including all claims against third parties for loss of, damage to
or destruction of, or for proceeds payable under (or unearned premiums with respect to) insurance
in respect of, such property (regardless of whether Secured Party is named a loss payee
thereunder), and any payments paid or owing by any third party under any indemnity, warranty, or
guaranty with respect to such property, and any condemnation or requisition payments with respect
to such property, in each case whether now existing or hereafter arising.

     “Receivables” means (a) all “accounts” and “chattel paper” (as defined in the UCC) and
all other rights to payment for goods or other personal property which have been (or are to be)
sold, leased, or exchanged or for services which have been (or are to be) rendered, regardless of
whether such accounts or other rights to payment have been earned by performance and regardless of
whether such accounts or other rights to payment are evidenced by or characterized as accounts
receivable, contract rights, book debts, notes, drafts or other obligations of indebtedness, (b)
all Documents and Instruments of any kind relating to such accounts or other rights to payment or
otherwise arising out of or in connection with the sale, lease or exchange of goods or other
personal property or the rendering of services, (c) all rights in, to, or under all security
agreements, leases and other contracts securing or otherwise relating to any such accounts, rights
to payment, Documents, or Instruments, (d) all rights in, to and under any purchase orders, service
contracts, or other
contracts out of which such accounts and other rights to payment arose (or will
arise on performance), and (e) all rights in or pertaining to any goods arising out of or in
connection with any such purchase orders, service contracts, or other

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contracts, including rights in returned or repossessed goods and rights of replevin,
repossession, and reclamation.

     “Receiver” has the meaning given such term in Section 4.2(g).

     “Secured Obligations” has the meaning given such term in Section 2.2.

     “Secured Party” has the meaning given such term in the Preamble.

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

     “Software” means all “software” (as defined in the UCC), including all computer
programs, any supporting information provided in connection with a transaction relating to a
computer program, all licenses or other rights to use any of such computer programs, and all
license fees and royalties arising from such use to the extent permitted by such license or rights.

     “Trademark License” means any license or agreement, whether now or hereafter in
existence, under which is granted or authorized any right to use any Trademark.

     “Trademarks” means all of the following: (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of the foregoing have appeared or
appear, package and other designs, and any other source or business identifiers, and general
intangibles of like nature, and the rights in any of the foregoing which arise under applicable
law, (b) the goodwill of the business symbolized thereby or associated with each of them, (c) all
registrations and applications in connection therewith, including registrations and applications in
the United States Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or other country, or any political subdivision thereof, (d) all reissues,
extensions and renewals thereof, (e) all claims for, and rights to sue for, past or future
infringements of any of the foregoing, and (f) all income, royalties, damages and payments now or
hereafter due or payable with respect to any of the foregoing, including damages and payments for
past or future infringements thereof.

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

     Section 1.2. Incorporation of Other Definitions. Reference is hereby made to the
Credit Agreement for a statement of the terms thereof. All capitalized terms used in this
Agreement which are defined in the Credit Agreement and not otherwise defined herein shall have the
same meanings herein as set forth therein. All terms used in this Agreement which are defined in
the UCC and not otherwise defined herein or in the Credit Agreement shall have the same meanings
herein as set forth therein, except where the context otherwise requires. The parties intend that
the terms used herein that are defined in the UCC have, at all times, the broadest and most
inclusive meanings possible. Accordingly, if the UCC shall in the future be amended or held by a
court to define any term used

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herein more broadly or inclusively than the UCC in effect on the date
hereof, then such term, as used herein, shall be given such broadened meaning. If the UCC shall in
the future be amended or held by a
court to define any term used herein more narrowly, or less inclusively, than the UCC in
effect on the date hereof, such amendment or holding shall be disregarded in defining terms used
herein.

     Section 1.3. Attachments. All exhibits or schedules which may be attached to this
Agreement are a part hereof for all purposes.

     Section 1.4. Other Interpretive Provisions. With reference to this Agreement, unless
otherwise specified herein:

     (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 are included for convenience of reference only and shall not
affect the interpretation of this Agreement.

ARTICLE II Security Interest

     Section 2.1. Grant of Security Interest. As collateral security for all of the
Secured Obligations, each Grantor hereby pledges and assigns to Secured Party and grants to Secured
Party a continuing security interest, for the
benefit of the Lender Parties, in and to all right, title and interest of such Grantor in and
to any and all of the following property, whether now owned or existing or hereafter acquired or
arising and regardless of where located:

     (a) all Receivables;

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     (b) all General Intangibles;

     (c) all Documents;

     (d) all Instruments;

     (e) all Inventory;

     (f) all Equipment;

     (g) all Deposit Accounts;

     (h) all Investment Property;

     (i) all books and records (including, without limitation, customer lists, marketing
information, credit files, price lists, operating records, vendor and supplier price lists, sales
literature, computer software, computer hardware, computer disks and tapes and other storage media,
printouts and other materials and records) of such Grantor pertaining to any of the Collateral;

     (j) all moneys and property of any kind of such Grantor in the possession or under the control
of Secured Party;

     (k) all of the following (herein collectively called the “Company Rights”), whether
now or hereafter existing, which are owned by such Grantor or in which such Grantor otherwise has
any rights:

     (i) all interests in any limited liability company and all proceeds, interest, profits,
and other payments or rights to payment attributable to such Grantor’s interests in any
limited liability company (whether one or more, herein called the “LLCs”), including
those described in Exhibit A hereto, and all certificates representing such
interests;

     (ii) all interests in general or limited partnerships (including general partnership
interests and limited partnership interests) and all proceeds, interest, profits, and other
payments or rights to payment attributable to such Grantor’s interests in any general or
limited partnership (whether one or more, herein called the “Partnerships”),
including those described in Exhibit A hereto, and all certificates representing
such interests;

     (iii) all shares of stock of corporations (including common shares or preferred shares)
and all proceeds, interest, profits, and other payments or rights to payment attributable to
such Grantor’s interests in any corporation (whether one or more, herein
called the “Corporations”), including those described in Exhibit A
hereto, all certificates representing any such shares, all options and other rights,
contractual or otherwise, at any time existing with respect to such shares, and all
dividends, cash, instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares (any and
all such shares, certificates, options,

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rights, dividends, cash, instruments and other
property being herein called the “Pledged Shares”);

     (iv) all distributions, dividends, cash, instruments and other property now or
hereafter received, receivable or otherwise made with respect to or in exchange for any
interest of such Grantor in any Company, including interim distributions, returns of
capital, loan repayments, and payments made in liquidation of any Company, and whether or
not the same arise or are payable under any organizational document, any agreement or
certificate forming any Company or any other agreement governing any Company or the
relations among the members, partners or stockholders of any Company (any and all such
proceeds, interest, profits, payments, rights to payment, distributions, dividends, cash,
instruments, other property, interim distributions, returns of capital, loan repayments, and
payments made in liquidation being herein called the “Company Rights to Payments”,
and any and all such organizational documents, agreements, certificates, and other
agreements being herein called the “Company Agreements”); and

     (v) all other interests and rights of such Grantor in any Company, whether under the
Company Agreements or otherwise, including any option, right or warrant to acquire any of
the foregoing and any right to cause the dissolution of any Company or to appoint or
nominate a successor to such Grantor as a member, shareholder or partner in any Company (all
such other interests and rights being herein called the “Other Company Rights”); and

     (l) All Proceeds of any and all of the foregoing Collateral.

In each case, the foregoing shall be covered by this Agreement, whether such Grantor’s ownership or
other rights therein are presently held or hereafter acquired and however such Grantor’s interests
therein may arise or appear (whether by ownership, security interest, claim or otherwise).

     Notwithstanding anything to the contrary contained in this Section 2.1, if the
documents governing any of the foregoing Collateral contain enforceable restrictions on the
assignment or transfer of any Grantor’s rights thereunder, then the Liens granted under this
Agreement shall be limited only to the extent necessary to comply with such enforceable
restrictions (with such limitation automatically ceasing upon removal of, or receipt of any consent
with respect to, such restrictions), and will in any event attach to the amounts payable to such
Grantor under any such agreement.

     The granting of the foregoing security interest does not make Secured Party a successor to
such Grantor as a member of any LLC or as a partner of any Partnership or a stockholder of any
Corporation, and neither Secured Party nor any of its successors or assigns hereunder shall be
deemed to have become a member of any LLC, have become a partner of any Partnership or
have become a stockholder of any Corporation by accepting this Agreement or exercising any
right granted herein unless and until such time, if any, when Secured Party or any such successor
or assign expressly becomes a member of any LLC, becomes a partner of any Partnership or becomes a
stockholder of any Corporation after a foreclosure upon the Company Rights relating to that
Company. Notwithstanding anything herein to the contrary (except to the extent, if any,

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that
Secured Party or any of its successors or assigns hereafter expressly becomes a member of any LLC,
a partner of any Partnership or a stockholder of any Corporation), neither Secured Party nor any of
its successors or assigns shall be deemed to have assumed or otherwise become liable for any debts
or obligations of any Company or of any Grantor to or under any Company, and the above definition
of “Other Company Rights” shall be deemed modified, if necessary, to prevent any such
assumption or other liability.

     Section 2.2. Secured Obligations Secured. The security interest created by each
Grantor hereunder in its Collateral constitutes continuing collateral security for all Lender
Hedging Obligations and all Obligations, whether now existing or hereafter incurred or arising,
including all principal of and all interest on the Loans, all LC Obligations, and any and all other
indebtedness, obligations or liabilities which may at any time be owed to any Lender Party, whether
incurred heretofore or hereafter or concurrently herewith, under or pursuant to any of the Loan
Documents, and including interest, reasonable attorneys’ fees and collection costs as may be
provided by law or in any instrument or agreement evidencing any such indebtedness or liability
(collectively, the “Secured Obligations”).

Without limiting the generality of the foregoing, the Secured Obligations include all post-petition
interest, expenses, and other duties and liabilities of the Borrower described above in this
Section 2.2, which would be owed by the Borrower but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization, or similar
proceeding involving the Borrower.

It is the intention of each Grantor that is a Subsidiary of Borrower and Secured Party that this
Agreement not constitute a fraudulent transfer or fraudulent conveyance under any Law that may be
applied hereto. Each Grantor that is a Subsidiary of Borrower and, by its acceptance hereof,
Secured Party hereby acknowledges and agrees that, notwithstanding any other provision of this
Agreement: (a) with respect to such Grantor, the indebtedness secured hereby shall be limited to
the maximum amount of indebtedness that can be incurred or secured by such Grantor without
rendering the security interests granted, and obligations incurred, hereunder by such Grantor
subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable Law; and (b) the Collateral pledged by such Grantor hereunder shall be
limited to the maximum amount of Collateral that can be pledged by such Grantor without rendering
the pledge of Collateral by such Grantor subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable Law. Each Grantor hereby
acknowledges that the Secured Obligations are owed to the various Lender Parties and that each
Lender Party is entitled to the benefits of the Liens given under this Agreement.

ARTICLE III Representations, Warranties and Covenants

     Section 3.1. Representations and Warranties. Each Grantor hereby represents and
warrants to the Lender Parties as follows:

     (a) Ownership Free of Liens. Such Grantor has good and valid title to its Collateral
free and clear of all Liens, encumbrances or adverse claims, except for Liens permitted under
Section 7.02 of the Credit Agreement. No effective financing statement or other instrument

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similar
in effect covering all or any part of the Collateral is on file in any recording office except (i)
any which have been filed in respect of Liens permitted under Section 7.02 of the Credit Agreement,
and (ii) any such financing statements or other instruments for which a termination statement that
such Grantor is authorized to file has been delivered to Secured Party. Any and all references
made in this Agreement to Liens permitted under Section 7.02 of the Credit Agreement are made for
the purpose of limiting certain warranties and covenants made by Grantor herein and such reference
is not intended to affect the description herein of the Collateral nor to subordinate the Liens and
security interests hereunder to any Liens permitted under Section 7.02 of the Credit Agreement.

     (b) Security Interest. Such Grantor has full right, power and authority to grant a
security interest in its Collateral to Secured Party as provided herein, free and clear of any
Lien, adverse claim, or encumbrance other than Liens permitted under Section 7.02 of the Credit
Agreement. This Agreement creates a valid and binding first priority security interest in favor of
Secured Party in the Collateral, which security interest secures all of the Secured Obligations.

     (c) Name, Place of Business and Formation. Schedule 1 of the Agreement (as
such schedule may be amended or supplemented from time to time) contains: (i) the type of
organization of such Grantor; (ii) the jurisdiction of organization of such Grantor; and (iii) its
organizational identification number. The full legal name of such Grantor is as set forth on such
Schedule 1, and it has not done in the last five (5) years, and does not do, business under
any other name (including any trade-name or fictitious business name) except for those names set
forth on Schedule 1 (as such schedule may be amended or supplemented from time to time).
Except as provided on Schedule 1, it has not changed its name, jurisdiction of
organization, chief executive office or sole place of business (or principal residence if such
Grantor is a natural person) or its corporate structure in any way (e.g., by merger, consolidation,
change in corporate form or otherwise) within the past five (5) years.

     (d) Perfection. The security interests in favor of Secured Party in all of the
Collateral is perfected and, except with respect to any Collateral subject to a prior perfected
Lien permitted under Section 7.02 of the Credit Agreement, is a first priority security interest.

     (e) Receivables. Except has been disclosed to Secured Party, none of the Account
Debtors in respect of any Receivable is the government of the United States, any agency or
instrumentality thereof, any state or municipality or any foreign sovereign.

     (f) Company Rights. All units, stock, interests and other securities constituting the
Company Rights have been duly authorized and validly issued, are fully paid and (other than with
respect to partnership and limited liability company interests) non-assessable, and were not
issued in violation of the preemptive rights of any person or of any agreement by which
Grantor or any Company is bound. All documentary, stamp or other taxes or fees owing in connection
with the issuance, transfer or pledge of the Company Rights (or rights in respect thereof) have
been paid. Except for certain rights contained in the Company Agreements, no restrictions or
conditions exist with respect to the transfer, voting or capital of any Company Rights. Grantor
has delivered to Secured Party all certificates and instruments evidencing Company Rights. All
such certificates and instruments are valid and genuine and have not been altered. No Company has
any outstanding stock rights, rights to subscribe, options, warrants or convertible securities

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outstanding or any other rights outstanding whereby any person would be entitled to have issued to
it units of ownership interest or partnership or membership interests in such Company. Except as
set forth on Exhibit A hereto, neither Grantor nor any Company has elected the application
of Article 8 of the UCC to apply to any Company or any Company Rights, and Article 8 of the UCC is
thus not applicable to any Company, except with respect to any Corporation. Grantor owns the
interests in each Company which are described on Exhibit A. Neither the making of this
Agreement nor the exercise of any rights or remedies of Secured Party hereunder will cause a
default under any of the Company Agreements of any Company or otherwise adversely affect or
diminish any of the Company Rights thereunder. Grantor’s rights under the Company Agreements are
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 3.2. Covenants. Unless Secured Party shall otherwise consent in writing, each
Grantor will at all times comply with the covenants contained in this Section 3.2 so long
as any part of the Secured Obligations or the Commitment is outstanding.

     (a) General. Except for the security interest created by this Agreement, such Grantor
shall not create or suffer to exist any Lien upon or with respect to any of the Collateral, except
for Liens permitted by Section 7.02 of the Credit Agreement, and such Grantor shall defend the
Collateral against all Persons at any time claiming any interest therein. Such Grantor shall not
produce, use or permit any Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or any policy of insurance
covering the Collateral. Such Grantor shall not take or permit any action which could impair the
Secured Party’s rights in the Collateral. Such Grantor shall keep and maintain at its own cost and
expense satisfactory and complete records of the Collateral. Upon the reasonable request of
Secured Party from time to time, such Grantor shall make all further or subsequent filings,
recordings or registrations, or give other public notices or take such other action as is necessary
or desirable to perfect or otherwise continue, preserve or protect the security interest of the
Secured Party in the Collateral.

     (b) Company Rights. Except as permitted by Sections 7.04 and 7.05 of the Credit
Agreement, such Grantor will maintain its ownership of the interests in each Company listed on
Exhibit A, and upon any such permitted sale or other disposition, Secured Party agrees to
release any Lien in favor of Secured Party on any such interests concurrently with the consummation
of such permitted sale or disposition. Such Grantor will timely honor all calls under any Company
Agreement to provide capital to any Company, and such Grantor will not otherwise default in
performing any of Grantor’s obligations under any Company Agreement or allow any Company
Rights to be adversely affected or diminished. The Company Rights shall at all times be duly
authorized and validly issued and shall not be issued in violation of the pre emptive rights of any
Person or of any agreement by which any Grantor or any Company thereof is bound. Nothing herein
shall require a Grantor as a member, partner or shareholder of a Company to cause such Company to
initiate, approve, adopt or order a capital call by such Company.

     (c) Delivery of Documents, Instruments and Certificates. All instruments, documents
and certificates constituting or evidencing Collateral on the date of the Agreement shall be
delivered to Secured Party on or prior to the execution and delivery of this Agreement. All other

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instruments, documents or certificates, if any, constituting or evidencing Collateral from time to
time shall be delivered to Secured Party promptly upon the receipt thereof by or on behalf of
Grantor. Without limiting the foregoing, all such instruments, documents and certificates received
by such Grantor shall be held in trust on behalf of Secured Party pursuant hereto and shall be
delivered to Secured Party in suitable form for transfer by delivery with any necessary endorsement
or shall be accompanied by fully executed instruments of transfer or assignment in blank, in each
case in form and substance reasonably satisfactory to Secured Party. To the extent that any of the
Company Rights (whether now owned or hereafter acquired) are not evidenced by a certificate,
instrument or other writing, the Grantor will take all actions required under applicable Law to
perfect the security interest created hereunder, and such other actions as the Secured Party
considers necessary or desirable to effect the foregoing, and upon reasonable request by the
Secured Party will provide an opinion of counsel satisfactory to the Secured Party, acting
reasonably, with respect to the pledge of uncertificated interests.

     (d) Diminution of Company Rights. Such Grantor will not adjust, settle, compromise,
amend or modify any of the Company Rights or the Company Agreements related to ETP GP or ETP LLC,
except as permitted (or not restricted) by the Credit Agreement. Such Grantor will not permit the
creation of any additional interests in any Company (other than ETP or Regency) or the issuance of
any additional shares of any class of capital stock or any other interests of any Company (other
than ETP or Regency) (unless immediately upon creation or issuance the same are pledged and
delivered to Secured Party pursuant to the terms hereof to the extent necessary to give Secured
Party a first priority security interest therein), whether such additional interests are presently
vested or will vest upon the payment of money or the occurrence or nonoccurrence of any other
condition.

     (e) Status of Company Rights. Except for certificated securities that have been
delivered to Secured Party and reflected on Exhibit A (as supplemented from time to time),
the Company Rights are not and shall not at any time be evidenced by any certificates. The
certificates evidencing the Company Rights shall at all times be valid and shall not be altered.
The Company Rights at all times shall be duly authorized, validly issued, fully paid and (other
than with respect to partnership and limited liability company interests) non assessable, and shall
not be issued in violation of the pre emptive rights of any Person or of any agreement by which
Grantor or any Company is bound and shall not be subject to any restrictions with respect to
transfer, voting or capital of such Company Rights.

     (f) Restrictions on Collateral. Such Grantor will not enter into any agreement
creating, or otherwise permit to exist, any restriction or condition upon the transfer, voting,
control, or exercise of any Company Rights in respect of any Company other than any such
restrictions or conditions contained in the applicable Company’s Company Agreement or similar
agreement as of the Closing Date.

     (g) Commercial Tort Claims. If such Grantor shall at any time hold or acquire a
material Commercial Tort Claim, such Grantor shall immediately notify Secured Party in writing of
the details thereof and grant to Secured Party in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and
substance reasonably acceptable to Secured Party.

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ARTICLE IV Remedies, Powers and Authorizations

     Section 4.1. Provisions Concerning the Collateral.

     (a) Authorization to File Financing Statements; Additional Filings. Each Grantor
hereby irrevocably authorizes Secured Party at any time and from time to time to file, without the
signature of such Grantor, in any jurisdiction any financing statements and amendments thereto that
(i) indicate the Collateral as “all assets of Grantor and all proceeds thereof, and all rights and
privileges with respect thereto” or words of similar effect, regardless of whether any particular
asset included in the Collateral falls within the scope of Article 9 of the UCC; (ii) contain any
other information required by subchapter E of Article 9 of the UCC for the sufficiency or filing
office acceptance of any financing statement or amendment, including the address of such Grantor,
whether such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor; and (iii) are necessary to properly effectuate the
transactions described in this Agreement, as determined by Secured Party in its reasonable
discretion. Each Grantor agrees to furnish any such information to Secured Party promptly upon
request. Each Grantor hereby further authorizes Secured Party to file one or more continuation
statements to such financing statements. Each Grantor further agrees that a carbon, photographic or
other reproduction of this Security Agreement or of any financing statement describing any
Collateral is sufficient as a financing statement and may be filed in any jurisdiction accepting
same by Secured Party.

     (b) Power of Attorney. Each Grantor hereby irrevocably appoints Secured Party as such
Grantor’s attorney in fact and proxy, with full authority in the place and stead of such Grantor
and in the name of such Grantor or otherwise, from time to time in Secured Party’s reasonable
discretion, if an Event of Default shall have occurred and be continuing, to take any action, and
to execute or endorse any instrument, certificate or notice, which Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement, including any action or instrument: (i)
to request or instruct each Company (and each registrar, transfer agent, or similar Person acting
on behalf of each Company) to register the pledge or transfer of its Collateral to Secured Party;
(ii) to otherwise give notification to any Company, registrar, transfer agent, financial
intermediary, or other Person of Secured Party’s security interests in its Collateral hereunder;
(iii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of its Collateral; (iv) to
receive, endorse and collect any drafts or other instruments or documents
included in its Collateral; (v) to enforce any obligations included in its Collateral; and
(vi) to file any claims or take any action or institute any proceedings which Secured Party may, in
its reasonable discretion, deem necessary or desirable for the collection of any of its Collateral
or otherwise to enforce, perfect, or establish the priority of the rights of Secured Party with
respect to any of its Collateral. Each Grantor hereby acknowledges that such power of attorney and
proxy are coupled with an interest, and are irrevocable.

     (c) Collection Rights. Secured Party shall have the right at any time, after the
occurrence and during the continuance of a Default or of an Event of Default, to notify, or require
any Grantor to notify, any or all Persons (including any Company) obligated to make payments which
are included among its Collateral (whether accounts, general intangibles, dividends, distribution
rights, Company Rights to Payment, or otherwise) of the assignment

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thereof to Secured Party under
this Agreement and to direct such obligors to make payment of all amounts due or to become due to
such Grantor thereunder directly to Secured Party and, upon such notification and at the expense of
such Grantor and to the extent permitted by Law, to enforce collection thereof and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to the same extent as
such Grantor could have done. After such Grantor receives notice that Secured Party has given (and
after Secured Party has required such Grantor to give) any notice referred to above in this
subsection, and so long as any Event of Default shall be continuing:

     (i) all amounts and proceeds (including instruments and writings) received by such
Grantor in respect of such rights to payment, accounts, general intangibles, dividends,
distribution rights or Company Rights to Payments shall be received in trust for the benefit
of Secured Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over to Secured Party in the same form as so received (with any necessary
endorsement) to be applied as specified in Section 4.3; and

     (ii) except with the consent of Secured Party (such consent not to be unreasonably
withheld), such Grantor will not adjust, settle or compromise the amount or payment of any
such account or general intangible, Company Rights to Payments or release wholly or partly
any account debtor or obligor thereof (including any Company) or allow any credit or
discount thereon.

     Section 4.2. Event of Default Remedies. If an Event of Default shall have occurred
and be continuing, then Secured Party may from time to time in its discretion, without limitation
and without notice except as expressly provided below:

     (a) exercise in respect of the Collateral, in addition to any other rights and remedies
provided for herein, under the other Loan Documents or otherwise available to it, all the rights
and remedies of a secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral);

     (b) require each Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of Secured Party, promptly assemble all books, records and information of such
Grantor relating to the Collateral at a place to be designated by Secured Party which is
reasonably convenient to both parties;

     (c) reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the
security interest created hereby by any available judicial procedure;

     (d) dispose of, at its office, on the premises of the respective Grantor or elsewhere, all or
any part of the Collateral, as a unit or in parcels, by public or private proceedings, and by way
of one or more contracts (it being agreed that the sale of any part of the Collateral shall not
exhaust Secured Party’s power of sale, but sales may be made from time to time, and at any time,
until all of the Collateral has been sold or until the Secured Obligations have been paid and
performed in full), and at any such sale it shall not be necessary to exhibit any of the
Collateral;

     (e) buy (or allow one or more of the Lender Parties to buy) the Collateral, or any part
thereof, at any public sale;

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     (f) buy (or allow one or more of the Lender Parties to buy) the Collateral, or any part
thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market
or is of a type which is the subject of widely distributed standard price quotations;

     (g) appoint by instrument in writing one or more receivers, managers or receiver/manager for
the Collateral or the business and undertaking of any Grantor pertaining to the Collateral (the
“Receiver”). Any such Receiver will have, in addition to any other rights, remedies and
powers which a Receiver may have at Law, in equity or by statute, the rights and powers set out
elsewhere in this Section 4.2. In exercising such rights and powers, any Receiver will act
as and for all purposes will be deemed to be the agent of Grantors and no Lender Party will be
responsible for any act or default of any Receiver. The Lender Parties may remove any Receiver and
appoint another from time to time. No Receiver appointed by the Lender Parties need be appointed
by, nor need its appointment be ratified by, or its actions in any way supervised by a court;

     (h) apply by appropriate judicial proceedings for appointment of a receiver for the
Collateral, or any part thereof, and each Grantor hereby consents to any such appointment; and

     (i) at its discretion, retain the Collateral in satisfaction of the Secured Obligations
whenever the circumstances are such that Secured Party is entitled to do so under the UCC or
otherwise (provided that Secured Party shall in no circumstances be deemed to have retained the
Collateral in satisfaction of the Secured Obligations in the absence of an express notice by
Secured Party to such Grantor that Secured Party has either done so or intends to do so).

Each Grantor agrees that, to the extent notice of sale shall be required by Law, at least ten (10)
days’ notice to such Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

     Section 4.3. Application of Proceeds. If any Event of Default shall have occurred and
be continuing, then Secured Party may in its discretion apply any cash proceeds from the Collateral
held by Secured Party as Collateral, and any cash proceeds received by Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the Collateral, as
provided in Section 8.03 of the Credit Agreement.

     Section 4.4. Deficiency. In the event that the proceeds of any sale, collection or
realization of or upon Collateral by Secured Party are insufficient to pay all Secured Obligations
and any other amounts to which Secured Party is legally entitled, each Grantor that is the Borrower
or is a Guarantor shall be liable for the deficiency, together with interest thereon as provided in
the governing Loan Documents, together with the costs of collection and the reasonable fees of any
legal counsel employed by Secured Party, the LC Issuer, the Swingline Lender or the Lenders to
collect such deficiency.

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     Section 4.5. Indemnity and Expenses. In addition to, but not in qualification or
limitation of, any similar obligations under other Loan Documents:

     (a) each Grantor will indemnify each Lender Party from and against any and all claims, losses
and liabilities arising out of or resulting from this Agreement (including enforcement of this
Agreement), whether based on contract, tort or any other theory, whether brought by a third party
or by such Grantor or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses (i) are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (ii) result from a
claim brought by such Grantor or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Grantor or
such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction; and

     (b) each Grantor will upon demand pay to Secured Party the amount of any and all reasonable
costs and expenses, including the reasonable fees and disbursements of Secured Party’s counsel and
of any experts and agents, which Secured Party may incur in connection with (i) the transactions
which give rise to this Agreement, (ii) the preparation of this Agreement and the perfection and
preservation of this security interest created under this Agreement, (iii) the administration of
this Agreement, (iv) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any Collateral, (v) the exercise or enforcement of any of the
rights of Secured Party hereunder, or (vi) the failure by Grantor to perform or observe any of the
provisions hereof, except expenses resulting from Secured Party’s gross negligence or willful
misconduct.

     Section 4.6. Non-Judicial Remedies. In granting to Secured Party the power to enforce
its rights hereunder without prior judicial process or judicial hearing, each Grantor expressly
waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured
Party to enforce its rights by judicial process. In so providing for non judicial remedies, each
Grantor recognizes and concedes that such remedies are consistent with the usage of trade, are
responsive to commercial necessity, and are the result of a bargain at arm’s length. Nothing
herein is intended, however, to prevent Secured Party or any Grantor from resorting to judicial
process at its option.

     Section 4.7. Other Recourse. Each Grantor waives any right to require any Lender
Party to proceed against any other Person, to exhaust any Collateral or other security for the
Secured Obligations, to marshal the Collateral, or to have any Loan Party joined with such Grantor
in any suit arising out of the Secured Obligations or this Agreement, or pursue any other remedy in
Secured Party’s power. Each Grantor further waives any and all notice of the creation,
modification, rearrangement, renewal or extension for any period of any of the Secured Obligations
of any Loan Party from time to time. Each Grantor further waives any defense arising by reason of
any disability or other defense of any Loan Party or by reason of the cessation from any cause
whatsoever of the liability of any Loan Party. This Agreement shall continue irrespective of the
fact that the liability of any Loan Party may have ceased and

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irrespective of the validity or enforceability of any other Loan Document to which such
Grantor or any Loan Party may be a party, and notwithstanding any reorganization or bankruptcy of
any Loan Party or any other event or proceeding affecting any Loan Party. Until all of the Secured
Obligations shall have been paid in full, no Grantor shall have any right to subrogation and each
Grantor waives the right to enforce any remedy which any Lender Party has or may hereafter have
against any Loan Party, and waives any benefit of and any right to participate in any other
security whatsoever now or hereafter held by Secured Party. Each Grantor authorizes each Lender
Party, without notice or demand, without any reservation of rights against such Grantor, and
without in any way affecting such Grantor’s liability hereunder or on the Secured Obligations, from
time to time to (a) take or hold any other property of any type from any other Person as security
for the Secured Obligations, and exchange, enforce, waive and release any or all of such other
property, (b) apply the Collateral or such other property and direct the order or manner of sale
thereof as Secured Party may in its discretion determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any Loan Party in
respect of any or all of the Secured Obligations or other security for the Secured Obligations, (d)
waive, enforce, modify, amend, restate or supplement any of the provisions of any Loan Document
with any Person other than such Grantor, and (e) release or substitute any Loan Party.

     Section 4.8. Exercise of Company Rights.

     (a) So long as no Event of Default shall have occurred and be continuing Grantors may receive,
retain and use, free and clear of any Lien created hereby, any and all Company Rights to Payment
paid in respect of the Collateral, provided, however, that any and all Company Rights to Payment
paid or payable other than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any Company Rights shall be,
and shall forthwith be delivered to Secured Party to hold as, Company Rights and shall, if received
by any Grantor, be received, segregated, held in trust and delivered as set forth above.

     (b) Anything herein to the contrary notwithstanding, Grantors may at all times exercise any
and all voting rights pertaining to the Company Rights and Other Company Rights for any purpose not
inconsistent with the terms of this Agreement.

     (c) Upon the occurrence and during the continuance of an Event of Default:

     (i) all rights of each Grantor to receive and retain the Company Rights to Payment
which it would otherwise be authorized to receive and retain pursuant to subsection (a) of
this section shall automatically cease, and all such rights shall thereupon become vested in
Secured Party which shall thereupon have the sole right to receive and hold as Collateral
such Company Rights to Payment;

     (ii) without limiting the generality of the foregoing, Secured Party may at its option
exercise any and all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of the Company Rights, other than voting rights
pertaining to the Company Rights, as if it were the absolute owner thereof, including,
without limitation, the right to exchange, in its discretion, any and all of the

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Company Rights upon the merger, consolidation, reorganization, recapitalization or
other adjustment of any Company, or upon the exercise by any Company of any right, privilege
or option pertaining to any Company Rights, and, in connection therewith, to deposit and
deliver any and all of the Company Rights with any committee, depository, transfer agent,
registrar or other designated agent upon such terms and conditions as it may determine and
any and all rights to dissolve any Company or to compel distribution of any Company’s
assets; and

     (iii) all Company Rights to Payments which are received by Grantor contrary to the
provisions of subsection (c)(i) of this section shall be received in trust for the benefit
of Secured Party, shall be segregated from other funds of such Grantor, and shall be
forthwith paid over to Secured Party as Company Rights in the exact form received, to be
held by Secured Party as Collateral.

     Section 4.9. Private Sale of Company Rights. Each Grantor recognizes that Secured
Party may deem it impracticable to effect a public sale of all or any part of the Company Rights
and that Secured Party may, therefore, determine to make one or more private sales of any such
Company Rights to a restricted group of purchasers who will be obligated to agree, among other
things, to acquire the same for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that such private sales
shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to delay sale of any such Company Rights for the period of time necessary to
permit their registration for public sale under the Securities Act, to the extent, if any, that the
Securities Act would be applicable thereto. Each Grantor further acknowledges and agrees that any
offer to sell any Company Rights which has been (a) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial community of New York, New
York (to the extent that such an offer may be so advertised without prior registration under the
Securities Act), or (b) made privately in the manner described above to not less than fifteen (15)
bona fide offerees shall be deemed to involve a “public disposition” for the purposes of Section
9-610(c) of the UCC (or any successor or similar, applicable statutory provision) as then in effect
in the State of New York, notwithstanding that such sale may not constitute a “public offering”
under the Securities Act, and that Secured Party or one or more of the Lender Parties may, in such
event, bid for the purchase of such Company Rights.

ARTICLE V Miscellaneous

     Section 5.1. Notices. Any notice or communication required or permitted hereunder
shall be given, in the case of Borrower or Secured Party, as provided in the Credit Agreement, in
the case of each other Grantor on the date of this Agreement, at the address below its signature
hereto, and, in the case of any other Grantor, as provided in such Grantor’s Pledge and Security
Agreement Supplement.

     Section 5.2. Amendments; Pledge and Security Agreement Supplements. No amendment of
any provision of this Agreement shall be effective unless it is in writing and

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signed by each Grantor and Secured Party, and no waiver of any provision of this Agreement,
and no consent to any departure by any Grantor therefrom, shall be effective unless it is in
writing and signed by Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given and to the extent specified in such
writing. In addition, all such amendments and waivers shall be effective only if given with the
necessary approvals of Lenders as required in the Credit Agreement. Upon the execution and
delivery by any Person of a pledge and security agreement supplement in substantially the form of
Exhibit B (each, a “Pledge and Security Agreement Supplement”), (a) such Person
shall be referred to as an “Additional Grantor” and shall become and be a Grantor
hereunder, and each reference in this Agreement to a “Grantor” shall also mean and be a
reference to such Additional Grantor, and each reference in any other Loan Document to a
“Grantor” shall also mean and be a reference to such Additional Grantor, and (b) each
reference herein to “this Agreement,” “hereunder,” “hereof” or words of
like import referring to this Agreement, and each reference in any other Loan Document to the
“Security Agreement,” “thereunder,” “thereof” or words of like import
referring to this Agreement, shall mean and be a reference to this Agreement as supplemented by
such Pledge and Security Agreement Supplement.

     Section 5.3. Preservation of Rights. No failure on the part of Secured Party or any
other Lender Party to exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any other right.
Neither the execution nor the delivery of this Agreement shall in any manner impair or affect any
other security for the Secured Obligations. The rights and remedies of Secured Party provided
herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of,
any rights or remedies provided by Law. The rights of Secured Party under any Loan Document
against any party thereto are not conditional or contingent on any attempt by Secured Party to
exercise any of its rights or exhaust any recourse under any other Loan Document against such party
or against any other Person.

     Section 5.4. Unenforceability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or invalidity without invalidating the remaining portions hereof or thereof or
affecting the validity or enforceability of such provision in any other jurisdiction.

     Section 5.5. Survival of Agreements. All representations and warranties of each
Grantor herein, and all covenants and agreements herein shall survive the execution and delivery of
this Agreement, the execution and delivery of any other Loan Documents and the creation of the
Secured Obligations.

     Section 5.6. Other Liable Party. Neither this Agreement nor the exercise by Secured
Party or the failure of Secured Party to exercise any right, power or remedy conferred herein or by
Law shall be construed as relieving any Loan Party from liability on the Secured Obligations or any
deficiency thereon. This Agreement shall continue irrespective of the fact that the liability of
any Loan Party may have ceased or irrespective of the validity or enforceability of any other Loan
Document to which any Grantor or any Loan Party may be a party, and notwithstanding the
reorganization, death, incapacity or bankruptcy of any Loan Party, and

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notwithstanding the reorganization or bankruptcy or other event or proceeding affecting any
Loan Party.

     Section 5.7. Binding Effect and Assignment. This Agreement creates a continuing
security interest in the Collateral and (a) shall be binding on each Grantor and its successors and
permitted assigns and (b) shall inure, together with all rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and assigns. Without
limiting the generality of the foregoing, Secured Party, the LC Issuer, the Swingline Lender or any
Lender may pledge, assign or otherwise transfer any or all of its rights hereunder as provided in
the Credit Agreement, and such other Person shall thereupon become vested with all of the benefits
in respect thereof granted to Secured Party, herein or otherwise. None of the rights or duties of
any Grantor hereunder may be assigned or otherwise transferred without the prior written consent of
Secured Party.

     Section 5.8. Termination. It is contemplated by the parties hereto that there may be
times when no Secured Obligations are outstanding, but notwithstanding such occurrences, this
Agreement shall remain valid and shall be in full force and effect as to subsequent outstanding
Secured Obligations. Upon the satisfaction in full of the Secured Obligations and the termination
or expiration of the Credit Agreement, then upon written request for the termination hereof
delivered by Borrower to Secured Party, this Agreement and the security interest created hereby
shall terminate and all rights to the Collateral shall revert to Grantors. Secured Party will,
upon the respective Grantor’s request and at the respective Grantor’s expense, return to such
Grantor such of the Collateral as shall not have been sold or otherwise disposed of in accordance
with the terms of this Agreement free and clear of the Liens hereof and execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such termination.

     Section 5.9. Governing Law and Choice of Venue.

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

     (b) SUBMISSION TO JURISDICTION. EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN

21

 

THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE
AGENT, ANY LENDER OR THE LC ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

     (c) WAIVER OF VENUE. EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF
AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

     (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 5.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT
OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     Section 5.10. Counterparts. This Agreement may be separately executed in any number
of counterparts (including by facsimile transmission), all of which when so executed shall be
deemed to constitute one and the same Agreement.

     Section 5.11. “Loan Document.” This Agreement is a “Loan Document,” as
defined in the Credit Agreement, and, except as expressly provided herein to the contrary, this
Agreement is subject to all provisions of the Credit Agreement governing such Loan Documents. In
the event of a conflict between the terms and conditions of the Credit Agreement and this
Agreement, the terms and conditions of the Credit Agreement shall control.

     Section 5.12. Limitation on Recourse Against Non-Guarantor Grantor. In respect of any
Grantor that is neither the Borrower nor a Guarantor, Secured Party will look solely to the
Collateral pledged by such Grantor and nothing contained in this Agreement will create any right
for the Secured Party to enforce a deficiency in respect of the Secured Obligations against such
Grantor. The foregoing shall not limit the rights of Secured Party to proceed against such Grantor
(i) to enforce the security interest against Collateral pledged by such Grantor (including
enforcement in connection with any proceeding under the United States Bankruptcy Code), (ii) to
enforce any policy of insurance or to recover any condemnation proceeds or insurance proceeds or
other similar funds in respect of Collateral pledged by such Grantor (but only to the extent of the
value of such Collateral), (iii) to recover damages for fraud or waste by such Grantor in respect
of Collateral pledged by such Grantor (but only to the extent of the value of such Collateral), or
(iv) to recover Collateral or proceeds of Collateral that, under the terms of the Loan Documents,
should have been delivered or paid to Secured Party by such Grantor. This Section shall not waive
any right which Secured Party may have to make any election permitted

22

 

under Section 1111(b) of the United States Bankruptcy Code or to require that after acquired
property of the Grantor shall continue to secure the Secured Obligations.

     Section 5.13. FINAL AGREEMENT. THIS WRITTEN PLEDGE AND SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS OF THE PARTIES.

     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[The remainder of this page is intentionally left blank.]

23

 

     IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered
by its officer thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 

	 	 	ENERGY TRANSFER EQUITY, L.P.
	 	 	By: LE GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 

John W. McReynolds
	 	 
	 

	 	 	 	President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ENERGY TRANSFER PARTNERS, L.L.C.
	 	 	By: Energy Transfer Equity, L.P., its sole member
	 	 	By: LE GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 

John W. McReynolds
	 	 
	 

	 	 	 	President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ETE GP ACQUIRER LLC,
	 	 	BY: Energy Transfer Equity, L.P., its sole member
	 	 	By: LE GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 

John W. McReynolds
	 	 
	 

	 	 	 	President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ETE SERVICES COMPANY, LLC,
	 	 	BY: Energy Transfer Equity, L.P., its sole member
	 	 	By: LE GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 

John W. McReynolds
	 	 
	 

	 	 	 	President and Chief Financial Officer	 	 

Signature Page to Pledge and Security Agreement

 

 

	 	 	 	 	 	 	 

	 	 	REGENCY GP LLC,
	 	 	BY: ETE GP Acquirer LLC, its sole member
	 	 	By: Energy Transfer Equity, L.P., its sole member
	 	 	By: LE GP, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John W. McReynolds	 	 
	 

	 	 	 	 

John W. McReynolds
	 	 
	 

	 	 	 	President and Chief Financial Officer	 	 

Address of each Grantor:

3738 Oak Lawn Avenue

Dallas, TX 75219

Attention: Chief Financial Officer

Phone: (214) 981-0722

Facsimile: (214) 981-0706

Signature Page to Pledge and Security Agreement

 

 

	 	 	 	 	 	 	 

	Agreed and Accepted:	 	 
	 
	 	 	 	 	 	 
	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,	 	 
	as Administrative Agent as provided herein	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Nupur Kumar	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Nupur Kumar	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Kevin Buddhdew	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Kevin Buddhdew	 	 
	 

	 	Title:
	 	Associate	 	 

Signature Page to Pledge and Security Agreement

 

 

SCHEDULE 1

GENERAL INFORMATION

	(A)	 	Full legal name, type of organization, jurisdiction and organizational identification number
of each Grantor:

	 	 	 	 	 	 	 	 	 
	 	 	State of	 	 	 	 
	 	 	Incorporation/	 	 	 	 
	Name	 	Formation	 	 	Organizational #	 
	Energy Transfer Equity, L.P.
	 	Delaware	 	 	4019371	 
	Energy Transfer Partners, L.L.C.
	 	Delaware	 	 	3187550	 
	ETE GP Acquirer L.L.C.
	 	Delaware	 	 	4820006	 
	ETE Services Company, LLC
	 	Delaware	 	 	4821292	 
	Regency GP LLC
	 	Delaware	 	 	4027333	 

	(B)	 	Other Names (including any Trade-Name or Fictitious Business Name) under which each Grantor
has conducted business for the past five (5) years:

None

	(C)	 	Changes in Name, Jurisdiction of Organization, Chief Executive Office and Corporate Structure
within past five (5) years:

None

Schedule 1

 

 

EXHIBIT A

Description of Pledged Shares

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Percentage of
	 	 	 	 	 	 	 	 	Equity Interest
	Debtor	 	Company	 	Cert. No.	 	# of Shares	 	Pledged
	 
	None

Description of Partnership Interests

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage and Type of
	Grantor	 	Company	 	Cert. No.	 	Equity Interest Pledged
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners GP, L.P.	 	1	 	100%  Class A limited

	 
	 		 	 	 	partnership interest
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners GP, L.P.	 	2	 	50% of the Class B limited

	 
	 		 	 	 	partnership interests
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners GP, L.P.	 	4	 	50% of the Class B limited

	 
	 		 	 	 	partnership interests
	 
	 	 	 	 	 	 
	Energy Transfer Partners, L.L.C.
	 	Energy Transfer Partners GP, L.P.	 	2	 	.01%  general partnership

	 
	 		 	 	 	interest
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0585	 	3,787,857 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0061	 	3,742,515 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0060	 	7,721,542 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0369	 	15,883,234 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0620	 	1,638,692 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0927	 	1,069,850 common limited

	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-0981	 	2,570,150 common limited
	 
	 		 	 	 	partnership units
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.P.	 	ET-3753	 	13,813,127 common limited
	 
	 		 	 	 	partnership units

EXHIBIT A

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage and Type of
	Grantor	 	Company	 	Cert. No.	 	Equity Interest Pledged
	ETE GP Acquirer LLC
	 	Regency GP LP	 	None*	 	93.1% limited partnership
	 
	 	 	 	 	 	interest
	 
	 	 	 	 	 	 
	Regency GP LLC
	 	Regency GP LP	 	None*	 	.001% general partnership
	 
	 	 	 	 	 	interest representing
	 
	 	 	 	 	 	100% of the general
	 
	 	 	 	 	 	partnership interests
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	Regency Energy Partners LP	 	RP 0312	 	26,266,791 common limited
	 
	 		 	 	 	partnership units

 

			
	*	 	Non-certificated

Description of LLC Rights

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage and Type of
	Debtor	 	Company	 	Cert. No.	 	Equity Interest Pledged
	Energy Transfer Equity, L.P.
	 	Energy Transfer Partners, L.L.C.	 	5	 	100% limited liability company interests (10,000 Class A units)
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	ETE GP Acquirer LLC	 	1	 	100% limited liability company interests
	 
	 	 	 	 	 	 
	Energy Transfer Equity, L.P.
	 	ETE Services Company, LLC	 	001	 	100% limited liability company interests
	 
	 	 	 	 	 	 
	ETE GP Acquirer LLC
	 	Regency GP LLC	 	1	 	100% limited liability company interests

Exhibit A

 

 

EXHIBIT B

FORM OF PLEDGE AND SECURITY AGREEMENT SUPPLEMENT

                    , 20     

Credit Suisse AG, Cayman Islands Branch, as the Administrative Agent

Eleven Madison Avenue

New York, NY 10010

			
	     Re:	 	Credit Agreement dated as of September 20, 2010 (herein, as from time to time
amended, supplemented or restated, called the “Credit Agreement”), among Energy
Transfer Equity, L.P., a Delaware limited partnership (the “Borrower”), Credit
Suisse AG, Cayman Islands Branch, as Administrative Agent, Collateral Agent, LC Issuer
and Swingline Lender and the Lenders from time to time party thereto

Ladies and Gentlemen:

     Reference is made to the Credit Agreement and to that certain Pledge and Security Agreement
dated as of September 20, 2010, executed by and among the grantors party thereto and the
Administrative Agent, for the benefit of the Lender Parties (as heretofore amended, supplemented,
restated or otherwise modified, the “Original Security Agreement”; such Original Security
Agreement, as in effect on the date hereof and as it may hereafter be amended, supplemented,
restated or otherwise modified from time to time, together with this Pledge and Security Agreement
Supplement, being the “Security Agreement”). The capitalized terms defined in the Security
Agreement and not otherwise defined herein are used herein as therein defined.

     Section 1. Grant of Security Interest. The undersigned Grantor hereby confirms the
grant to the Secured Party set forth in the Security Agreement of, and does hereby grant to the
Secured Party, a security interest in all of Grantor’s right, title and interest in and to all
Collateral to secure the Secured Obligations, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same may be located. The
undersigned Grantor represents and warrants that the attached supplements to schedules accurately
and completely set forth all additional information required pursuant to the Security Agreement and
hereby agrees that such supplements to schedules shall constitute part of the schedules to the
Security Agreement.

     Section 2. Obligations Under the Security Agreement. The undersigned Grantor hereby
agrees, as of the date first above written, to be bound as a Grantor by all of the terms and
conditions of the Security Agreement to the same extent as each of the other Grantors thereunder.
The undersigned Grantor further agrees, as of the date first above written, that each reference in
the Security Agreement to an “Additional Grantor” or a “Grantor” shall also mean

Exhibit B

 

and be a reference to the undersigned, and each reference in any other Loan Document to a
“Grantor” or a “Loan Party” shall also mean and be a reference to the undersigned.

     Section 3. Representations, Warranties and Covenants. The undersigned Grantor hereby
(a) makes each representation and warranty set forth in Section 3.1 of the Security
Agreement and (b) undertakes each covenant obligation set forth in Section 3.2 of the
Security Agreement, in each case to the same extent as each other Grantor.

     Section 4. Governing Law and Choice of Venue. This Security Agreement shall be
governed by and construed in accordance with the Laws of the State of New York applicable to
contracts made and to be performed entirely within such State, except as required by mandatory
provisions of Law and except to the extent that the perfection and the effect of perfection or
non-perfection of the security interest created hereunder, in respect of any particular Collateral,
are governed by the Laws of a jurisdiction other than such State. Each of the Grantors irrevocably
waives any objection, to the extent permitted by applicable Law, that it may now or hereafter have
(including any claim of inconvenient forum) to the venue of any legal proceeding arising out of or
relating to this Security Agreement in the courts of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof.

     Section 6. FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES HERETO.

     Exhibit B

 

 

     IN WITNESS WHEREOF, the undersigned has caused this Pledge and Security Agreement Supplement
to be executed and delivered by its officer thereunto duly authorized, as of the date first above
written.

	 	 	 	 	 	 	 

	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	[NAME OF ADDITIONAL GRANTOR]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

Exhibit Bexv10w1

Exhibit 10.1

Execution Version

VOTING AGREEMENT

     This Voting Agreement (“Agreement”) is entered into as of September 19, 2010, by
and between Rudy Acquisition Corp., a Delaware corporation (“Parent”), and
                    (“Stockholder”).

Recitals

     A. Stockholder is a holder of record and the “beneficial owner” (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934) of certain shares of common stock of Rae Systems
Inc., a Delaware corporation (the “Company”).

     B. Parent, Rudy Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of
Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger of even
date herewith (the “Merger Agreement”) which provides (subject to the conditions set forth therein)
for the merger of Merger Sub into the Company (the “Merger”). Capitalized terms used herein,
unless otherwise defined herein, shall have the meanings ascribed to them in the Merger Agreement.

     C. In the Merger, the outstanding shares of common stock of the Company (other than the
Rollover Shares) are to be converted into the right to receive the Merger Consideration.

     D. In order to induce Parent to enter into the Merger Agreement, Stockholder is entering into
this Agreement.

Agreement

     The parties to this Agreement, intending to be legally bound, agree as follows:

SECTION 1. Certain Definitions. For purposes of this Agreement:

     1.1 “Company Common Stock” shall mean the common stock, par value $0.001 per share, of the
Company.

     1.2 Stockholder shall be deemed to “Own” or to have acquired “Ownership” of a security if
Stockholder: (a) is the record owner of such security; or (b) is the “beneficial owner” (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of such security.

     1.3 “Person” shall mean any (a) individual, (b) corporation, limited liability company,
partnership or other entity, or (c) governmental authority.

     1.4 “Rollover Agreement” shall mean that certain Rollover Agreement dated as of the date
hereof between the Stockholder and Parent.

1.

 

     1.5 “Subject Securities” shall mean: (a) all securities of the Company (including all shares
of Company Common Stock and all options, warrants and other rights to acquire shares of Company
Common Stock) Owned by Stockholder as of the date of this Agreement; and (b) all additional
securities of the Company (including all additional shares of Company Common Stock and all
additional options, warrants and other rights to acquire shares of Company Common Stock) of which
Stockholder acquires Ownership during the period from the date of this Agreement through the Voting
Covenant Expiration Date.

     1.6 A Person shall be deemed to have effected a “Transfer” of a security if such Person
directly or indirectly: (a) sells, pledges, encumbers, grants an option with respect to, transfers
or disposes of such security or any interest in such security to any Person other than Parent; (b)
enters into an agreement or commitment for the sale of, pledge of, encumbrance of, grant of an
option with respect to, transfer of or disposition of such security or any interest therein to any
Person other than Parent; (c) enters into a swap or similar transaction that transfers the
economic consequences of ownership of such security; or (d) reduces such Person’s beneficial
ownership of, interest in or risk relating to such security.

     1.7 “Voting Covenant Expiration Date” shall mean the earlier of the date upon which the Merger
Agreement is validly terminated, or the date upon which the Merger is consummated.

SECTION 2. Transfer of Subject Securities and Voting Rights

     2.1 Restriction on Transfer of Subject Securities. Subject to Section 2.3, during the period
from the date of this Agreement through the Voting Covenant Expiration Date, Stockholder shall not,
directly or indirectly, cause or permit any Transfer of any of the Subject Securities to be
effected.

     2.2 Restriction on Transfer of Voting Rights. During the period from the date of this
Agreement through the Voting Covenant Expiration Date, Stockholder shall ensure that: (a) none of
the Subject Securities is deposited into a voting trust; and (b) no proxy is granted, and no voting
agreement or similar agreement is entered into, with respect to any of the Subject Securities.

     2.3 Permitted Transfers. Section 2.1 shall not prohibit a transfer of Company Common Stock by
Stockholder (a) to any member of his or her immediate family, or to a trust for the benefit of
Stockholder or any member of his or her immediate family, (b) upon the death of Stockholder, (c) if
Stockholder is a partnership or limited liability company, to one or more partners or members of
Stockholder or to an affiliated corporation under common control with Stockholder, or (d) the
consummation by Stockholder of the Rollover (as defined in the Rollover Agreement) pursuant to, and
in accordance with, Section 1(a) of the Rollover Agreement; provided, however, that a transfer
referred to clauses (a) through (c) of this sentence shall be permitted only if, as a precondition
to such transfer, the transferee agrees in a writing, reasonably satisfactory in form and substance
to Parent, to be bound by the terms of this Agreement. Furthermore, nothing herein will be deemed
to restrict the ability of Stockholder to exercise any Company Options held by the Stockholder.

2.

 

SECTION 3. Voting of Shares

     3.1 Voting Covenant. Stockholder hereby agrees that, prior to the earlier to occur of the
valid termination of the Merger Agreement or the consummation of the Merger, at any meeting of the
stockholders of the Company, however called, and in any written action by consent of stockholders
of the Company, unless otherwise directed in writing by Parent, Stockholder shall cause the Subject
Securities to be voted:

     (a) in favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the adoption and approval of the Merger Agreement and the terms thereof; and

     (b) against any Acquisition Proposal; and

     (c) against any other action which would reasonably be expected to impede, interfere
with, delay, postpone, discourage or adversely affect the Merger or any of the other
transactions contemplated by the Merger Agreement.

Prior to the earlier to occur of the valid termination of the Merger Agreement or the consummation
of the Merger, Stockholder shall not enter into any agreement or understanding with any Person to
vote or give instructions in any manner inconsistent with clause “(a)”, “(b)”, or “(c)” of the
preceding sentence.

     3.2 Proxy; Further Assurances.

     (a) Contemporaneously with the execution of this Agreement: (i) Stockholder shall
deliver to Parent a proxy in the form attached to this Agreement as Exhibit A,
which shall be irrevocable to the fullest extent permitted by law (at all times prior to the
Voting Covenant Expiration Date) with respect to the shares referred to therein (the
“Proxy”); and (ii) Stockholder shall cause to be delivered to Parent an additional proxy (in
the form attached hereto as Exhibit A) executed on behalf of the record owner of
any outstanding shares of Company Common Stock that are owned beneficially (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934), but not of record, by
Stockholder.

     (b) Stockholder shall, at his, her or its own expense, perform such further acts and
execute such further proxies and other documents and instruments as may reasonably be
required to vest in Parent the power to carry out and give effect to the provisions of this
Agreement.

SECTION 4. Waiver of Appraisal Rights

     Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived
and to prevent the exercise of, any rights of appraisal, any dissenters’ rights and any similar
rights relating to the Merger or any related transaction that Stockholder or any other Person may
have by virtue of any outstanding shares of Company Common Stock Owned by Stockholder.

3.

 

SECTION 5. Representations and Warranties of Stockholder

     Stockholder hereby represents and warrants to Parent as follows:

     5.1 Authorization, etc. Stockholder has the absolute and unrestricted right, power, authority
and capacity to execute and deliver this Agreement and the Proxy and to perform his, her or its
obligations hereunder and thereunder. This Agreement and the Proxy have been duly executed and
delivered by Stockholder and constitute legal, valid and binding obligations of Stockholder,
enforceable against Stockholder in accordance with their terms, subject to (a) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of law
governing specific performance, injunctive relief and other equitable remedies. If Stockholder is
a general or limited partnership, then Stockholder is a partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it was organized. If
Stockholder is a limited liability company, then Stockholder is a limited liability company duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it was
organized.

     5.2 No Conflicts or Consents.

     (a) The execution and delivery of this Agreement and the Proxy by Stockholder do not,
and the performance of this Agreement and the Proxy by Stockholder will not: (i) conflict
with or violate any law, rule, regulation, order, decree or judgment applicable to
Stockholder or by which he, she or it or any of his, her or its properties is or may be
bound or affected; or (ii) result in or constitute (with or without notice or lapse of time)
any breach of or default under, or give to any other Person (with or without notice or lapse
of time) any right of termination, amendment, acceleration or cancellation of, or result
(with or without notice or lapse of time) in the creation of any encumbrance or restriction
on any of the Subject Securities pursuant to, any contract to which Stockholder is a party
or by which Stockholder or any of his, her or its affiliates or properties is or may be
bound or affected, except, in the case of each of (i) and (ii) above, for such conflicts,
violations, breaches, defaults, terminations, amendments, accelerations, cancellations or
encumbrances or restrictions which would not, individually or in the aggregate, adversely
affect the ability of the Stockholder to fully perform its covenants and obligations under
this Agreement and the Proxy.

     (b) The execution and delivery of this Agreement and the Proxy by Stockholder do not,
and the performance of this Agreement and the Proxy by Stockholder will not, require any
consent or approval of any Person.

     5.3 Title to Securities. As of the date of this Agreement, Stockholder: (a) holds of record
(free and clear of any encumbrances or restrictions) the number of outstanding shares of Company
Common Stock set forth under the heading “Shares Held of Record” on the signature page hereof; (b)
holds (free and clear of any encumbrances or restrictions) the options, warrants and other rights
to acquire shares of Company Common Stock set forth under the heading “Options and Other Rights” on
the signature page hereof; (c) Owns the additional securities of the Company set forth under the
heading “Additional Securities Beneficially Owned” on the signature page hereof; and (d) does not
directly or indirectly Own any shares of capital stock or other securities of the Company, or any
option, warrant or other right to acquire (by purchase,

4.

 

conversion or otherwise) any shares of capital stock or other securities of the Company, other
than the shares and options, warrants and other rights set forth on the signature page hereof.

     5.4 Accuracy of Representations. The representations and warranties contained in this
Agreement are accurate in all respects as of the date of this Agreement, and, with the exception of
the representations and warranties given in Section 5.3 hereof which are given only as of the date
hereof, will be accurate in all respects at all times through the Voting Covenant Expiration Date
(except with respect to the exercise of Company Options between the date hereof and the Voting
Covenant Expiration Date).

SECTION 6. Additional Covenants of Stockholder

     6.1 Further Assurances. From time to time and without additional consideration, Stockholder
shall (at Stockholder’s sole expense) execute and deliver, or cause to be executed and delivered,
such additional transfers, assignments, endorsements, proxies, consents and other instruments, and
shall (at Stockholder’s sole expense) take such further actions, as Parent may request for the
purpose of carrying out and furthering the intent of this Agreement.

     6.2 Legends. If requested by Parent, immediately after the execution of this Agreement (and
from time to time upon the acquisition by Stockholder of Ownership of any shares of Company Common
Stock prior to the Voting Covenant Expiration Date), Stockholder shall cause each certificate
evidencing any outstanding shares of Company Common Stock or other securities of the Company Owned
by Stockholder to be surrendered so that the transfer agent for such securities may affix thereto a
legend in the following form:

THE SECURITY OR SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF A
VOTING AGREEMENT DATED AS OF SEPTEMBER 19, 2010, AS IT MAY BE AMENDED, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.

SECTION 7. Miscellaneous

     7.1 Survival of Representations, Warranties and Agreements. All representations, warranties,
covenants and agreements made by Stockholder in this Agreement shall survive (a) the consummation
of the Merger, (b) any termination of the Merger Agreement, and (c) the Voting Covenant Expiration
Date.

     7.2 Expenses. All costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such costs and expenses.

     7.3 Notices. Any notice or other communication required or permitted to be delivered to
either party under this Agreement shall be in writing and shall be deemed properly delivered, given
and received when delivered (by hand, by registered mail, by courier or express delivery service or
by facsimile) to the address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party shall have specified in
a written notice given to the other party):

5.

 

if to Stockholder:

at the address set forth on the signature page hereof; and

if to Parent:

Rudy Acquisition Corp.

c/o Battery Ventures

930 Winter Street, Suite 2500

Waltham, MA 02451

Attention: Morgan Jones

Facsimile: (781) 478-6601

with a copy (which shall not constitute notice) to:

Cooley LLP

500 Boylston Street

Boston, MA 02116

Attention: Alfred L. Browne III

Facsimile: 617-937-2400

     7.4 Severability. Any term or provision of this Agreement that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties
hereto agree that the court making such determination shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified. In the event such court does not exercise the power granted
to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term
or provision with a valid and enforceable term or provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid or unenforceable term.

     7.5 Entire Agreement. This Agreement, the Proxy and any other documents delivered by the
parties in connection herewith constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and supersede all prior agreements and understandings between
the parties with respect thereto. No addition to or modification of any provision of this
Agreement shall be binding upon either party unless made in writing and signed by both parties.

     7.6 Confidentiality. Stockholder shall hold any information regarding this Agreement and the
Merger in strict confidence and shall not divulge any such information to any third person until
the Parent has publicly disclosed the Merger and this Agreement. Neither the Stockholder, nor any
of its affiliates shall issue or cause the publication of any press release or other public
announcement with respect to this Agreement, the Merger, the Merger Agreement or the other
transactions contemplated thereby without the prior written consent of the Parent,

6.

 

except as may be required by law or by any listing agreement with, or the policies of, The New
York Stock Exchange Amex in which circumstance such announcing party shall make reasonable efforts
to consult with the Parent to the extent practicable.

     7.7 Assignment; Binding Effect. Except as provided herein, neither this Agreement nor any of
the interests or obligations hereunder may be assigned or delegated by Stockholder, and any
attempted or purported assignment or delegation of any of such interests or obligations shall be
void. Subject to the preceding sentence, this Agreement shall be binding upon Stockholder and his
or her heirs, estate, executors and personal representatives and his, her or its successors and
assigns, and shall inure to the benefit of Parent and its successors and assigns. Without limiting
any of the restrictions set forth in Section 2 or Section 6.1 or elsewhere in this Agreement, this
Agreement shall be binding upon any Person to whom any Subject Securities are transferred. Nothing
in this Agreement is intended to confer on any Person (other than Parent and its successors and
assigns) any rights or remedies of any nature.

     7.8 Indemnification. Stockholder shall hold harmless and indemnify Parent and Parent’s
affiliates from and against, and shall compensate and reimburse Parent and Parent’s affiliates for,
any loss, damage, claim, liability, fee (including attorneys’ fees), demand, cost or expense
(regardless of whether or not such loss, damage, claim, liability, fee, demand, cost or expense
relates to a third-party claim) that is directly or indirectly suffered or incurred by Parent or
any of Parent’s affiliates, or to which Parent or any of Parent’s affiliates otherwise becomes
subject, and that arises directly or indirectly from, or relates directly or indirectly to, (a) any
inaccuracy in or breach of any representation or warranty contained in this Agreement, or (b) any
failure on the part of Stockholder to observe, perform or abide by, or any other breach of, any
restriction, covenant, obligation or other provision contained in this Agreement or in the Proxy.

     7.9 Specific Performance. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement or the Proxy were not performed in accordance with
their specific terms or were otherwise breached. Stockholder agrees that, in the event of any
breach or threatened breach by Stockholder of any covenant or obligation contained in this
Agreement or in the Proxy, Parent shall be entitled (in addition to any other remedy that may be
available to it, including monetary damages) to seek and obtain (a) a decree or order of specific
performance to enforce the observance and performance of such covenant or obligation, and (b) an
injunction restraining such breach or threatened breach. Stockholder further agrees that neither
Parent nor any other Person shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred to in this Section
7.9, and Stockholder irrevocably waives any right he, she or it may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.

     7.10 Non-Exclusivity. The rights and remedies of Parent under this Agreement are not
exclusive of or limited by any other rights or remedies which it may have, whether at law, in
equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without
limiting the generality of the foregoing, the rights and remedies of Parent under this Agreement,
and the obligations and liabilities of Stockholder under this Agreement, are in addition to their
respective rights, remedies, obligations and liabilities under common law requirements and under
all applicable statutes, rules and regulations.

7.

 

     7.11 Governing Law; Venue.

     (a) This Agreement and the Proxy shall be construed in accordance with, and governed in
all respects by, the laws of the State of Delaware (without giving effect to principles of
conflicts of laws).

     (b) Any legal action or other legal proceeding relating to this Agreement or the Proxy
or the enforcement of any provision of this Agreement or the Proxy may be brought or
otherwise commenced in any state or federal court located in the State of Delaware.
Stockholder:

     (i) expressly and irrevocably consents and submits to the jurisdiction of each
state and federal court located in the State of Delaware in connection with any such
legal proceeding;

     (ii) agrees that service of any process, summons, notice or document by U.S.
mail addressed to him, her or it at the address set forth on the signature page
hereof shall constitute effective service of such process, summons, notice or
document for purposes of any such legal proceeding;

     (iii) agrees that each state and federal court located in the State of Delaware
shall be deemed to be a convenient forum; and

     (iv) agrees not to assert (by way of motion, as a defense or otherwise), in any
such legal proceeding commenced in any state or federal court located in the State
of Delaware, any claim that Stockholder is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought in an
inconvenient forum, that the venue of such proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be enforced in or by such
court.

Nothing contained in this Section 7.11 shall be deemed to limit or otherwise affect the
right of Parent to commence any legal proceeding or otherwise proceed against Stockholder in
any other forum or jurisdiction.

     (c) STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY
LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE PROXY OR THE ENFORCEMENT OF ANY PROVISION
OF THIS AGREEMENT OR THE PROXY.

     7.12 Counterparts. This Agreement may be executed in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.

     7.13 Captions. The captions contained in this Agreement are for convenience of reference
only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection
with the construction or interpretation of this Agreement.

8.

 

     7.14 Attorneys’ Fees. If any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought against Stockholder, the
prevailing party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements
(in addition to any other relief to which the prevailing party may be entitled).

     7.15 Waiver. No failure on the part of Parent to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of Parent in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege
or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right, privilege or remedy.
Parent shall not be deemed to have waived any claim available to Parent arising out of this
Agreement, or any power, right, privilege or remedy of Parent under this Agreement, unless the
waiver of such claim, power, right, privilege or remedy is expressly set forth in a written
instrument duly executed and delivered on behalf of Parent; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is given.

     7.16 Fiduciary Duties. Notwithstanding anything in this Agreement to the contrary: (a)
Stockholder makes no agreement or understanding herein in any capacity other than in Stockholder’s
capacity as a record holder and beneficial owner of the Subject Securities, and not in such
Stockholder’s capacity as a director, officer or employee of the Company or any of the Company’s
Subsidiaries or in such Stockholder’s capacity as a trustee or fiduciary of any Company Benefit
Plan, and (b) nothing herein will be construed to limit or affect any action or inaction by
Stockholder or any representative of Stockholder, as applicable, serving on the Board of Directors
or on the board of directors of any Subsidiary of the Company or as an officer or fiduciary of the
Company or any Subsidiary of the Company, acting in such person’s capacity as a director, officer,
employee or fiduciary of the Company or any Subsidiary of the Company.

     7.17 Construction.

     (a) For purposes of this Agreement, whenever the context requires: the singular number
shall include the plural, and vice versa; the masculine gender shall include the feminine
and neuter genders; the feminine gender shall include the masculine and neuter genders; and
the neuter gender shall include masculine and feminine genders.

     (b) The parties agree that any rule of construction to the effect that ambiguities are
to be resolved against the drafting party shall not be applied in the construction or
interpretation of this Agreement.

     (c) As used in this Agreement, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be
followed by the words “without limitation.”

     (d) Except as otherwise indicated, all references in this Agreement to “Sections” and
“Exhibits” are intended to refer to Sections of this Agreement and Exhibits to this
Agreement.

9.

 

     In Witness Whereof, Parent and Stockholder have caused this Agreement to be executed
as of the date first written above.

	 	 	 	 	 
	 	Rudy Acquisition Corp.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

10.

 

	 	 	 	 	 

     In Witness Whereof, Parent and Stockholder have caused this Agreement to be executed
as of the date first written above.

	 	 	 	 	 	 	 

	 	 	Stockholder	 	 
	 
	 	 	 	 	 	 
	 	 	[                                                        ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Facsimile:	 	 	 	 
	 

	 	 	 	 

	 	 

11.

 

	 	 	 	 	 
	 	 	 	 	Additional
	 	 	 	 	Securities
	Shares Held Of Record	 	Options And Other Rights	 	Beneficially Owned
	[                    ]                                   

	 	[                    ]	 	[                    ]

			
		 	

12.

 

Exhibit A

Form Of Irrevocable Proxy

     The undersigned stockholder (the “Stockholder”) of Rae Systems Inc., a Delaware
corporation (the “Company”), hereby irrevocably (to the fullest extent permitted by law) appoints
and constitutes Battery Ventures VIII, L.P., Battery Ventures VIII Side Fund, L.P. and
Rudy Acquisition Corp., a Delaware corporation (“Parent”), and each of them, the attorneys
and proxies of the Stockholder with full power of substitution and resubstitution, to the full
extent of the Stockholder’s rights with respect to (i) the outstanding shares of capital stock of
the Company owned of record by the Stockholder as of the date of this proxy, which shares are
specified on the final page of this proxy, and (ii) any and all other shares of capital stock of
the Company which the Stockholder may acquire on or after the date hereof. (The shares of the
capital stock of the Company referred to in clauses “(i)” and “(ii)” of the immediately preceding
sentence are collectively referred to as the “Shares.”) Upon the execution hereof, all prior
proxies given by the Stockholder with respect to any of the Shares are hereby revoked, and the
Stockholder agrees that no subsequent proxies will be given with respect to any of the Shares.

     This proxy is irrevocable, is coupled with an interest and is granted in connection with the
Voting Agreement, dated as of the date hereof, between Parent and the Stockholder (the “Voting
Agreement”), and is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, Rudy Merger Sub Corp., a Delaware corporation
and the wholly owned subsidiary of Parent (“Merger Sub”) and the Company (the “Merger Agreement”).
This proxy will terminate on the Voting Covenant Expiration Date (as defined in the Voting
Agreement).

     The attorneys and proxies named above will be empowered, and may exercise this proxy, to vote
the Shares at any time until the earlier to occur of the valid termination of the Merger Agreement
or the effective time of the merger contemplated thereby (the “Merger”) at any meeting of the
stockholders of the Company, however called, and in connection with any written action by consent
of stockholders of the Company:

     (i) in favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the adoption and approval of the Merger Agreement and the terms thereof; and

     (ii) against any Acquisition Proposal; and

     (iii) against any other action which would reasonably be expected to impede, interfere
with, delay, postpone, discourage or adversely affect the Merger or any of the other
transactions contemplated by the Merger Agreement.

     The Stockholder may vote the Shares on all other matters not referred to in this proxy, and
the attorneys and proxies named above may not exercise this proxy with respect to such other
matters.

     This proxy shall be binding upon the heirs, estate, executors, personal representatives,
successors and assigns of the Stockholder (including any transferee of any of the Shares).

     Any term or provision of this proxy that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining terms and

A-1

 

provisions hereof or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or unenforceable, the
Stockholder agrees that the court making such determination shall have the power to limit the term
or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this proxy shall be
enforceable as so modified. In the event such court does not exercise the power granted to it in
the prior sentence, the Stockholder agrees to replace such invalid or unenforceable term or
provision with a valid and enforceable term or provision that will achieve, to the extent possible,
the economic, business and other purposes of such invalid or unenforceable term.

Dated: ____________, 2010

	 	 	 

	 

	 	 
	 

	 	Name
	 
	 	 
	 

	 	Number of shares of common stock of the
Company owned of record as of the date of this
proxy:
	 
	 	 
	 

	 	 

A-2

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