Exhibit 10.7
EXECUTION VERSION
ASSIGNMENT, ASSUMPTION AND
AMENDMENT NO. 2 TO GUARANTY AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND
AMENDMENT NO. 2 TO GUARANTY AGREEMENT (this “
Amendment ”) is made as of May 21, 2007 by and
among TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP, a Delaware
limited partnership (“ TEPPCO ”), MARATHON
PETROLEUM COMPANY LLC, a Delaware limited liability company
formerly known as Marathon Ashland Petroleum LLC (“
MAP ”), and MARATHON OIL CORPORATION, a Delaware
corporation (“ MARATHON ”).
Recitals
A. Centennial Pipeline LLC, a
Delaware limited liability company (the “ Company
”), and The Prudential Insurance Company of America (“
Prudential ”) entered into a Master Shelf Agreement
dated as of May 4, 2001, as amended by Letter Amendment
No. 1 to Master Shelf Agreement dated as of the date hereof
(as so amended, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “
Shelf Agreement ”), pursuant to which the Company
issued and sold to Prudential the Company’s senior fixed rate
term notes, in the aggregate principal amount of $140,000,000 (the
“ Notes ”).
B. In connection with the Shelf
Agreement, Panhandle Eastern Pipe Line Company (“ PEPL
”), TEPPCO and MAP entered into a Guaranty Agreement dated as
of May 4, 2001, as amended by Assignment, Assumption and
Amendment No. 1 to Guaranty Agreement (such amendment, “
Amendment No. 1 ”; such Guaranty Agreement, as so
amended, as amended hereby, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “
Sponsor Guaranty ”). Capitalized terms used and not
otherwise defined herein shall have the respective meanings
ascribed to them in the Sponsor Guaranty.
C. Pursuant to Amendment
No. 1, PEPL assigned to each of TEPPCO and MAP, and TEPPCO and
MAP each assumed, 50% of the duties and obligations of PEPL under
the Sponsor Guaranty.
D. MAP is a wholly owned,
indirect subsidiary of Marathon.
E. MAP wishes to assign all of
its rights and obligations under the Sponsor Guaranty to Marathon,
and Marathon wishes to assume all of MAP’s rights and
obligations under the Sponsor Guaranty, (ii) MAP has requested
that it be released from all such obligations under the Sponsor
Guaranty, and (iii) TEPPCO and Marathon have requested certain
amendments to the Sponsor Guaranty.
F. TEPPCO, MAP and Marathon have
requested that Prudential consent and agree to such assignment,
assumption, release and amendments and, subject to the terms and
conditions set forth herein, Prudential is willing to consent and
agree thereto.
NOW, THEREFORE, in consideration of
the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. Assignment, Assumption
and Release .
(a) Assignment . MAP
hereby assigns to Marathon all of MAP’s right, title and
interest in, to and under the Sponsor Guaranty.
(b) Assumption .
Marathon hereby accepts the foregoing assignment and assumes and
agrees to perform all of MAP’s duties and obligations under
and with respect to the Sponsor Guaranty.
(c) Release . The
foregoing assignment and assumption is hereby approved, and MAP is
hereby absolutely, unconditionally and irrevocably released and
discharged from any and all obligations under the Sponsor
Guaranty.
SECTION 2. Amendments to Sponsor
Guaranty . The Sponsor Guaranty is hereby amended as
follows:
(a) Definition of
Guarantors . The term “Guarantors” shall be deemed
to refer collectively to TEPPCO and Marathon.
(b) Amendments to
Section 1(a) . Section 1(a) is amended as follows:
(i) The definition of
“Acceptable Credit Support” is amended by deleting
clause (v) thereof in its entirety and replacing such clause
(v) with the following:
“(v) at the sole option of
one or more of the other Guarantors, a guaranty of such
Guarantor’s Pro Rata Portion of the Guaranteed Obligations,
substantially in the form of this Guaranty Agreement and provided
by one or more of the other Guarantors which as of such date have a
senior unsecured long-term debt rating of BBB- or better from
S&P and Baa3 or better from Moody’s.”
(ii) The following new definitions
are hereby added to such Section 1(a), in the appropriate
alphabetical positions:
“‘ Covenant
Default ’ shall mean, with respect to any Guarantor, that
either (i) such Guarantor fails to perform or observe any term,
covenant or agreement contained in Section 10(b) of this Guaranty
Agreement or (ii) such Guarantor fails to perform or observe
any agreement or covenant contained in Section 10(a) of this
Guaranty Agreement, and, in the case of this clause (ii), such
failure shall not be remedied within 30 days after any
Responsible Officer of such Guarantor obtains actual knowledge
thereof.
‘ Marathon ’ shall
mean Marathon Oil Corporation, a Delaware corporation.
2
‘ Responsible Officer
’ shall mean, with respect to a Guarantor, the chief
executive officer, chief operating officer, chief financial officer
or chief accounting officer, or any other officer involved
principally in its financial administration or its controllership
function.”
(iii) The definition of “Pro
Rata Portion” is amended by deleting in its entirety the
table set forth therein and replacing it with the following:
“TEPPCO
50%
Marathon
50%”
(iv) The definitions of “Split
Rating”, “Sponsor Default Event” and
“Trigger Event” are amended by deleting such
definitions in their entirety and replacing them with the
following:
“ Split Rating ”
shall mean, with respect to any Guarantor, that such Guarantor
possesses either (i) a senior unsecured long-term debt rating
of BB+ from S&P and a senior unsecured long-term debt rating of
Baa3 or better from Moody’s or (ii) a senior unsecured
long-term debt rating of Ba1 from Moody’s and a senior
unsecured long-term debt rating of BBB- or better from
S&P.
“ Sponsor Default Event
” shall mean, with respect to any Guarantor, that such
Guarantor (i) possesses either of the following: (A) a
senior unsecured long-term debt rating of BB+ or worse from S&P
and a senior unsecured long-term debt rating of Ba2 or worse from
Moody’s, or (B) a senior unsecured long-term debt rating
of Ba1 or worse from Moody’s and a senior unsecured long-term
debt rating of BB or worse from S&P; or (ii) either
S&P or Moody’s ceases to maintain a senior unsecured
long-term debt rating for such Guarantor. With respect to any
Guarantor, a Sponsor Default Event shall also be deemed to have
occurred if such Guarantor fails to comply with the provisions of
either of clauses (a) or (b) of Section 12 hereof,
within the time periods specified therein.
“ Trigger Event ”
shall mean, with respect to any Guarantor, that such Guarantor
possesses any of the following: (i) a senior unsecured
long-term debt rating of BB+ from S&P and a senior unsecured
long-term debt rating of Ba1 from Moody’s;
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