Exhibit 10.1
Execution Version
COMMON UNIT PURCHASE AGREEMENT
among
REGENCY ENERGY PARTNERS LP
and
THE PURCHASERS PARTY HERETO

 

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Table of Contents

         
ARTICLE I DEFINITIONS
    1  
 
       
Section 1.01 Definitions
    1  
Section 1.02 Accounting Procedures and Interpretation
    5  
 
       
ARTICLE II AGREEMENT TO SELL AND PURCHASE
    5  
 
       
Section 2.01 Sale and Purchase
    5  
Section 2.02 Consideration
    5  
Section 2.03 Closing
    5  
Section 2.04 Conditions to Closing
    6  
Section 2.05 Regency Deliveries
    7  
Section 2.06 Purchasers’ Deliveries
    8  
Section 2.07 Independent Nature of Purchasers’ Obligations and Rights
    9  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATED TO REGENCY
    9  
 
       
Section 3.01 Partnership Existence
    9  
Section 3.02 Capitalization and Valid Issuance of Purchased Units
    9  
Section 3.03 Regency SEC Documents
    11  
Section 3.04 No Material Adverse Change
    11  
Section 3.05 Litigation
    12  
Section 3.06 No Violations; Compliance with Laws
    12  
Section 3.07 Authority, Enforceability
    12  
Section 3.08 Approvals
    12  
Section 3.09 MLP Status
    13  
Section 3.10 Valid Private Placement
    13  
Section 3.11 Investment Company Status
    13  
Section 3.12 Certain Fees
    13  
Section 3.13 No Side Agreements
    13  
Section 3.14 Insurance
    13  
Section 3.15 Internal Accounting Controls
    13  
Section 3.16 Listing and Maintenance Requirements
    14  
Section 3.17 Subsequent Offerings
    14  
Section 3.18 Confidential Information
    14  
Section 3.19 Taking of Necessary Action
    14  
Section 3.20 Non-Disclosure; Interim Public Filings
    14  
 
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS
    15  
 
       
Section 4.01 Existence
    15  
Section 4.02 Authorization, Enforceability
    15  
Section 4.03 No Breach
    15  

 

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Section 4.04 Certain Fees
    15  
Section 4.05 No Side Agreements
    15  
Section 4.06 Investment
    16  
Section 4.07 Nature of Purchaser
    16  
Section 4.08 Receipt of Information
    16  
Section 4.09 Legend
    17  
Section 4.10 Short Selling
    17  
Section 4.11 Trading Activities
    17  
Section 4.12 Taking of Necessary Action
    17  
Section 4.13 Short Selling Acknowledgement and Agreement
    17  
 
       
ARTICLE V INDEMNIFICATION, COSTS AND EXPENSES
    18  
 
       
Section 5.01 Indemnification by Regency
    18  
Section 5.02 Indemnification by the Purchasers
    18  
Section 5.03 Indemnification Procedure
    18  
 
       
ARTICLE VI MISCELLANEOUS
    19  
 
       
Section 6.01 Interpretation and Survival of Provisions
    19  
Section 6.02 Survival of Provisions
    19  
Section 6.03 No Waiver; Modifications in Writing
    20  
Section 6.04 Binding Effect; Assignment
    20  
Section 6.05 Confidentiality
    21  
Section 6.06 Removal of Legend
    21  
Section 6.07 Communications
    21  
Section 6.08 Entire Agreement
    23  
Section 6.09 Governing Law
    24  
Section 6.10 Waiver of Jury Trial
    24  
Section 6.11 Execution in Counterparts
    24  
Section 6.12 Costs and Expenses
    24  
Section 6.13 Distributions
    24  
Section 6.14 Termination
    24  
 
       
Exhibit A — Registration Rights Agreement
       
Exhibit B — LD Acquisition Agreement
       
Exhibit C — Joint Venture Term Sheet
       
Exhibit D — Legal Opinion
       
Schedule A — List of Purchasers and Allocated Purchase Price
       

 

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COMMON UNIT PURCHASE AGREEMENT
     This COMMON UNIT PURCHASE AGREEMENT, dated as of March 23, 2011 (this
“Agreement”), is by and between REGENCY ENERGY PARTNERS LP, a Delaware limited
partnership (“Regency”), and each of the purchasers set forth in Schedule A
hereto (the “Purchasers”).
     WHEREAS, to fund a portion of Regency’s capital contribution to the Joint
Venture (as defined below) to fund the purchase price for the LD Acquisition (as
defined below), Regency desires to sell to each of the Purchasers, and each of
the Purchasers desires, severally and not jointly, to purchase from Regency,
certain Common Units (as defined below), in accordance with the provisions of
this Agreement; and
     WHEREAS, Regency and the Purchasers will enter into a registration rights
agreement (the “Registration Rights Agreement”), substantially in the form
attached hereto as Exhibit A pursuant to which Regency will provide the
Purchasers with certain registration rights with respect to the Common Units
acquired pursuant hereto.
     NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
     Section 1.01 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
     “Affiliate” means, with respect to a specified Person, any other Person,
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
“control” (including, with correlative meanings, “controlling,” “controlled by,”
and “under common control with”) means the power to direct or cause the
direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
     “Allocated Purchase Price” means with respect to each Purchaser, the dollar
amount set forth opposite such Purchaser’s name under the heading “Allocated
Purchase Price” on Schedule A hereto.
     “Basic Documents” means, collectively, this Agreement, the Partnership
Agreement, the Confidentiality Agreement, the LD Acquisition Agreement, the
Joint Venture Agreement and any and all other agreements or instruments executed
and delivered by the Parties to evidence the execution, delivery and performance
of any of the Basic Documents, and any amendments, supplements, continuations or
modifications thereto.
     “Business Day” means any day other than a Saturday, Sunday, any federal
legal holiday or day on which banking institutions in the State of New York or
State of Texas are authorized or required by law or other governmental action to
close.

 

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     “Closing” shall have the meaning specified in Section 2.03.
     “Closing Date” shall have the meaning specified in Section 2.03.
     “Commission” means the United States Securities and Exchange Commission.
     “Commitment Fee” means a fee equal to 1.0% of each Purchaser’s Allocated
Purchase Price.
     “Common Units” means units representing limited partnership interests in
Regency.
     “Company Lock-Up Date” means 60 days from the Closing Date.
     “Confidentiality Agreement” means the Confidentiality Agreement by and
between each of the Purchasers and Regency entered into in connection with the
offering of the Purchased Units.
     “Delaware LLC Act” shall have the meaning specified in Section 3.02.
     “Delaware LP Act” shall have the meaning specified in Section 3.02.
     “Drop Dead Date” means the date that is sixty (60) days from the date
hereof.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations of the Commission promulgated
thereunder.
     “GAAP” means generally accepted accounting principles in the United States
of America in effect from time to time.
     “General Partner” means Regency GP LP, a Delaware limited partnership, and
includes Regency GP LLC, a Delaware limited liability company and the general
partner of Regency GP LP.
     “Governmental Authority” means, with respect to a particular Person, any
country, state, county, city and political subdivision in which such Person or
such Person’s Property is located or which exercises valid jurisdiction over any
such Person or such Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary
authority which exercises valid jurisdiction over any such Person or such
Person’s Property. Unless otherwise specified, all references to Governmental
Authority herein with respect to Regency means a Governmental Authority having
jurisdiction over Regency, its Subsidiaries or any of their respective
Properties.
     “HSR Act” means the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976,
as amended.
     “Indemnified Party” shall have the meaning specified in Section 5.03.
     “Indemnifying Party” shall have the meaning specified in Section 5.03.

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     “Joint Venture” means ETP-Regency Midstream Holdings, LLC, a Delaware
limited liability company.
     “Joint Venture Agreement” means that certain Limited Liability Company
Agreement of ETP-Regency Midstream Holdings, LLC dated as of March 22, 2011, by
and between La Grange Acquisition, L.P. and Regency Midstream LLC.
     “Law” means any federal, state, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law, rule or regulation.
     “LD Acquisition” means the acquisition of the midstream assets contemplated
by the LD Acquisition Agreement.
     “LD Acquisition Agreement” means the Purchase Agreement dated as of
March 22, 2011, by and among the Joint Venture, LDH Energy Asset Holdings LLC, a
Delaware limited liability company, and Louis Dreyfus Highbridge Energy LLC, a
Delaware limited liability company, substantially in the form attached hereto as
Exhibit B.
     “Lien” means any mortgage, claim, encumbrance, pledge, lien (statutory or
otherwise), security agreement, conditional sale or trust receipt or a lease,
consignment or bailment, preference or priority or other encumbrance upon or
with respect to any property of any kind.
     “LTIP” shall have the meaning specified in Section 3.02(b).
     “NASDAQ” means the NASDAQ Global Select Market.
     “Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of Regency, dated February 15, 2006, as amended as of the date
hereof and from time to time.
     “Partnership Securities” means any class or series of equity interest in
Regency (but excluding any options, rights, warrants and appreciation rights
relating to an equity interest in Regency), including without limitation Common
Units, the Series A Preferred Units, and the Incentive Distribution Rights (as
defined in the Partnership Agreement).
     “Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.
     “Property” means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
     “Purchased Units” means with respect to each Purchaser, the number of
Common Units equal to the quotient determined by dividing (a) the Allocated
Purchase Price of such Purchaser by (b) the Purchased Unit Price, rounded to the
nearest whole number.
     “Purchased Unit Price” means $24.00 per Purchased Unit, subject to
adjustment pursuant to Section 6.13.

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     “Purchase Price” means $204,000,000.00 which is the aggregate of each
Purchaser’s Allocated Purchase Price as set forth on Schedule A hereto.
     “Purchaser Related Parties” shall have the meaning specified in
Section 5.01.
     “Purchasers” has the meaning set forth in the introductory paragraph of
this Agreement.
     “Regency” has the meaning set forth in the introductory paragraph.
     “Regency Credit Facility” means the Fifth Amended and Restated Credit
Agreement, dated as of December 1, 2004, as amended as of the date hereof and
from time to time, by and among Regency and the lenders named therein, as
amended as of the date hereof.
     “Regency Financial Statements” shall have the meaning specified in Section
3.03.
     “Regency Material Adverse Effect” means any material and adverse effect on
(a) the assets, liabilities, financial condition, business, operations, affairs
or prospects of Regency and its Subsidiaries taken as a whole; (b) the ability
of Regency and its Subsidiaries taken as a whole to carry on their business as
such business is conducted as of the date hereof or to meet their obligations
under the Basic Documents on a timely basis; (c) the ability of Regency to
consummate the transactions under any Basic Document or (d) the Interests as
defined in the LD Acquisition Agreement; provided, however, that a Regency
Material Adverse Effect shall not include any material and adverse effect on the
foregoing to the extent such material and adverse effect results from, arises
out of, or relates to (x) a general deterioration in the economy or changes in
the general state of the industries in which the Regency Parties operate, except
to the extent that the Regency Parties, taken as a whole, are adversely affected
in a disproportionate manner as compared to other industry participants, (y) the
outbreak or escalation of hostilities involving the United States, the
declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis, including acts of terrorism, or
(z) any change in accounting requirements or principles imposed upon Regency and
its Subsidiaries or their respective businesses or any change in applicable Law,
or the interpretation thereof.
     “Regency Parties” means Regency, the General Partner and all of Regency’s
Subsidiaries.
     “Regency Related Parties” shall have the meaning specified in Section 5.02.
     “Regency SEC Documents” shall have the meaning specified in Section 3.03.
     “Registration Rights Agreement” shall have the meaning set forth in the
recitals.
     “Representatives” of any Person means the officers, directors, managers,
employees, agents, counsel, accountants, investment bankers and other
representatives of such Person.
     “Securities Act” means the Securities Act of 1933, as amended from time to
time, and the rules and regulations of the Commission promulgated thereunder.

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     “Subsidiary” means, as to any Person, any corporation or other entity of
which: (i) such Person or a Subsidiary of such Person is a general partner or
manager; (ii) at least a majority of the outstanding equity interest having by
the terms thereof ordinary voting power to elect a majority of the board of
directors or similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity interest of any other
class or classes of such corporation or other entity shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more of its
Subsidiaries; or (iii) any corporation or other entity as to which such Person
consolidates for accounting purposes.
     “Walled Off Person” shall have the meaning set forth in Section 4.05.
     Section 1.02 Accounting Procedures and Interpretation. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all Regency Financial Statements and certificates and reports as to financial
matters required to be furnished to the Purchasers hereunder shall be prepared,
in accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q promulgated by the Commission)
and in compliance as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto.
ARTICLE II
AGREEMENT TO SELL AND PURCHASE
     Section 2.01 Sale and Purchase. Subject to the terms and conditions hereof,
Regency hereby agrees to issue and sell to each Purchaser, free and clear of any
and all Liens, and each Purchaser, severally and not jointly, hereby agrees to
purchase from Regency, the number of Purchased Units as set forth on Schedule A
(such number of Purchased Units set forth thereon with respect to each
Purchaser), and each Purchaser agrees to pay Regency its Allocated Purchase
Price.
     Section 2.02 Consideration. The amount per Common Unit each Purchaser will
pay to Regency to purchase the Purchased Units shall be the Purchased Unit
Price, subject to adjustment in accordance with Section 6.13. Upon payment of
each Purchaser’s Purchase Price at Closing, such Purchaser’s Purchased Units
shall be fully paid for.
     Section 2.03 Closing. Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Purchased Units hereunder (the
“Closing”) shall take place at 9:00 a.m., Central Daylight Time, on May 6, 2011
at the offices of Mayer Brown, 700 Louisiana Street, Ste 3400, Houston, Texas
77002-2730, or at such other location as mutually agreed by the Parties prior to
the Drop Dead Date as Regency and the Purchasers may agree (the “Closing Date”).
The parties agree that the Closing may occur via delivery of facsimiles of this
Agreement and the other closing deliveries.

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     Section 2.04 Conditions to Closing.
          (a) Mutual Conditions. The respective obligations of each party to
consummate the purchase and issuance and sale of the Purchased Units shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by a particular party on
behalf of itself in writing, in whole or in part, to the extent permitted by
applicable Law):

  (i)   no statute, rule, order, decree or regulation shall have been enacted or
promulgated, and no action shall have been taken, by any Governmental Authority
which temporarily, preliminarily or permanently restrains, precludes, enjoins or
otherwise prohibits the consummation of the transactions contemplated hereby or
makes the transactions contemplated hereby illegal;

  (ii)   there shall not be pending any suit, action or proceeding by any
Governmental Authority seeking to restrain, preclude, enjoin or prohibit the
transactions contemplated by this Agreement;

  (iii)   all authorizations, consents, orders, approvals, declarations, filings
or expiration of waiting periods imposed under the HSR Act shall have been
obtained or made; and

  (iv)   the closing of the LD Acquisition shall have occurred, or shall occur
concurrently with the Closing, in accordance with the terms and conditions of
the LD Acquisition Agreement, without any material amendment, modification or
waiver of such terms or conditions.

          (b) Purchasers’ Conditions. The respective obligation of each
Purchaser to consummate the purchase of the Purchased Units shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions (any or all of which may be waived by such Purchaser in writing, in
whole or in part with respect to its Purchased Units, to the extent permitted by
applicable Law):

  (i)   since the date of this Agreement, no Regency Material Adverse Effect
shall have occurred and be continuing;

  (ii)   no notice of delisting shall have been received by Regency;

  (iii)   the representations and warranties of Regency contained in this
Agreement that are qualified by materiality or Regency Material Adverse Effect
shall be true and correct as of the Closing Date as if made on and as of the
Closing Date and all other representations and warranties shall be true and
correct in all material respects as of the Closing Date as if made on and as of
the Closing Date (except that representations made as of a specific date shall
be required to be true and correct as of such date only);

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  (iv)   the Purchased Units shall have been approved for listing on the NASDAQ,
subject to notice of issuance;

  (v)   the Joint Venture Agreement shall have been amended to conform to
substantially similar terms as those in the term sheet provided to the
Purchasers and attached hereto as Exhibit C;

  (vi)   Regency shall have obtained binding obligations to fund its capital
contribution to the Joint Venture to fund the LD Acquisition of (1) gross equity
proceeds of at least $150 million pursuant to this Agreement; and (2) at least
$427.5 million in cash from the issuance or incurrence of (A) borrowings under
the Regency Credit Facility, and/or (B) unsecured senior notes and/or (C) the
incurrence of unsecured senior bridge loans under an unsecured senior bridge
facility. The weighted average total effective yield for the aggregate of all
such debt shall be no more than 8.0%. Such requirement in clause (2) above shall
be reduced by any equity raised in excess of $150 million; and

  (vii)   Regency shall have delivered, or caused to be delivered, to the
Purchasers at the Closing, Regency’s closing deliveries described in
Section 2.05.

          (c) Regency’s Conditions. The obligation of Regency to consummate the
sale of the Purchased Units to each Purchaser shall be subject to the
satisfaction on or prior to the Closing Date of the following condition (which
may be waived by Regency in writing, in whole or in part, to the extent
permitted by applicable Law): the representations and warranties of such
Purchaser contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date as if made on and as of the Closing Date
(except that representations made as of a specific date shall be required to be
true and correct as of such date only).
     Section 2.05 Regency Deliveries. At the Closing, subject to the terms and
conditions hereof, Regency will deliver, or cause to be delivered, to the
Purchasers:
          (a) The Purchased Units by either (i) electronic delivery to The
Depository Trust Company on Purchasers’ behalf, registered in such name(s) as
Purchasers have designated or (ii) physical certificate(s) to the address(es)
provided by the Purchasers, in such name(s) as Purchasers have designated, at
the option of the Purchasers;
          (b) Copies of (i) the Certificate of Limited Partnership of Regency,
(ii) the Certificate of Limited Partnership of Regency GP LP and (iii) the
Certificate of Formation of Regency GP LLC, each certified by the Secretary of
State of the jurisdiction of its formation as of a recent date;
          (c) A certificate of the Secretary of State of the State of Delaware,
dated a recent date, that Regency is in good standing;

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          (d) A cross-receipt executed by Regency and delivered to each
Purchaser certifying that it has received the Allocated Purchase Price with
respect to such Purchaser as of the Closing Date;
          (e) An opinion addressed to the Purchasers from legal counsel to
Regency , dated as of the Closing Date, in the form and substance attached
hereto as Exhibit D;
          (f) The executed Registration Rights Agreement;
          (g) A certificate of the Secretary or Assistant Secretary of Regency
GP, LLC, on behalf of Regency, certifying as to and attaching (1) the
Partnership Agreement, (2) board resolutions authorizing the execution and
delivery of the Basic Documents and the consummation of the transactions
contemplated thereby, including the issuance of the Purchased Units, and (3) its
incumbent officers authorized to execute the Basic Documents, setting forth the
name and title and bearing the signatures of such officers; and
          (h) A certificate, dated the Closing Date and signed by (x) the Chief
Executive Officer and (y) the Chief Financial Officer of Regency GP, LLC, in
their capacities as such, stating that:

  (i)   Regency has performed and complied with the covenants and agreements
contained in this Agreement that are required to be performed and complied with
by Regency on or prior to the Closing Date; and

  (ii)   the representations and warranties of Regency contained in this
Agreement that are qualified by materiality or Regency Material Adverse Effect
were true and correct when made and as of the Closing Date and all other
representations and warranties were true and correct in all material respects
when made and are true and correct in all material respects as of the Closing
Date, in each case as though made at and as of the Closing Date (except that
representations made as of a specific date shall be required to be true and
correct as of such date only).

     Section 2.06 Purchasers’ Deliveries. At the Closing, subject to the terms
and conditions hereof, each Purchaser will deliver, or cause to be delivered, to
Regency:
          (a) Payment to Regency of each Purchaser’s Allocated Purchase Price by
wire transfer of immediately available funds to an account designated by Regency
in writing at least two Business Days prior to the Closing Date;
          (b) The executed Registration Rights Agreement; and
          (c) A cross-receipt executed by each Purchaser and delivered to
Regency certifying that it has received its respective Purchased Units as of the
Closing Date.

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     Section 2.07 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Basic Document are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Basic Document. The failure or waiver of performance under
any Basic Document by any Purchaser does not excuse performance by any other
Purchaser. Nothing contained herein or in any other Basic Document, and no
action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Basic Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other Basic
Documents, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
ARTICLE III
REPRESENTATIONS AND WARRANTIES AND COVENANTS
RELATED TO REGENCY
     Regency represents and warrants to and covenants with each Purchaser as
follows:
     Section 3.01 Partnership Existence. Regency (a) is a limited partnership
duly formed, validly existing and in good standing under the laws of the State
of Delaware; and (b) has all requisite power and authority, and has all
governmental licenses, authorizations, consents and approvals necessary, to own,
lease, use and operate its Properties and carry on its business as its business
is now being conducted, except where the failure to obtain such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Regency Material Adverse Effect. Each of Regency’s Subsidiaries has been duly
incorporated or formed, as the case may be, and is validly existing and in good
standing under the laws of the State or other jurisdiction of its incorporation
or organization, as the case may be, and has all requisite power and authority,
and has all governmental licenses, authorizations, consents and approvals
necessary, to own, lease, use or operate its respective Properties and carry on
its business as now being conducted, except where the failure to obtain such
licenses, authorizations, consents and approvals would not be reasonably likely
to have a Regency Material Adverse Effect. None of Regency nor any of its
Subsidiaries are in default in the performance, observance or fulfillment of any
provision of, in the case of Regency, the Partnership Agreement or its
Certificate of Limited Partnership or, in the case of any Subsidiary of Regency,
its respective certificate of incorporation, certification of formation, bylaws,
limited liability company agreement or other similar organizational documents.
Each of Regency and its Subsidiaries is duly qualified or licensed and in good
standing as a foreign limited partnership, limited liability company or
corporation, as applicable, and is authorized to do business in each
jurisdiction in which the ownership or leasing of its respective Properties or
the character of its respective operations makes such qualification necessary,
except where the failure to obtain such qualification, license, authorization or
good standing would not be reasonably likely to have a Regency Material Adverse
Effect.
     Section 3.02 Capitalization and Valid Issuance of Purchased Units. (a) As
of the date of this Agreement, prior to the issuance and sale of the Purchased
Units, as contemplated hereby, the issued and outstanding limited partner
interests of Regency consist of 137,328,148 Common

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Units, 4,371,586 Series A Preferred Units and the Incentive Distribution Rights
(as defined in the Partnership Agreement). The only issued and outstanding
general partner interests of Regency are the interests of the General Partner
described in the Partnership Agreement. All outstanding Common Units, Series A
Preferred Units and Incentive Distribution Rights and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Sections 17-303, 17-607
and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the
“Delaware LP Act”)).
          (b) Other than the Regency GP LLC Long-Term Incentive Plan (the
“LTIP”), Regency has no equity compensation plans that contemplate the issuance
of partnership interests of Regency (or securities convertible into or
exchangeable for partnership interests of Regency). No indebtedness having the
right to vote (or convertible into or exchangeable for securities having the
right to vote) on any matters on which Regency unitholders may vote are issued
or outstanding. Except as set forth in the first sentence of this
Section 3.02(b), as contemplated by this Agreement or as are provided in the
Partnership Agreement, there are no outstanding or authorized (i) options,
warrants, preemptive rights, subscriptions, calls, or other rights, convertible
or exchangeable securities, agreements, claims or commitments of any character
obligating Regency or any of its Subsidiaries to issue, transfer or sell any
partnership interests or other equity interest in, Regency or any of its
Subsidiaries or securities convertible into or exchangeable for such partnership
interests, (ii) obligations of Regency or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any partnership interests or equity interests of
Regency or any of its Subsidiaries or any such securities or agreements listed
in clause (i) of this sentence or (iii) voting trusts or similar agreements to
which Regency or any of its Subsidiaries is a party with respect to the voting
of the equity interests of Regency or any of its Subsidiaries.
          (c) (i) All of the issued and outstanding equity interests of each of
Regency’s Subsidiaries (except for Edwards Lime Gathering LLC, of which Regency
owns approximately 60% of the member interests, and RIGS Haynesville Partnership
Co., of which Regency owns 49.99% of the general partner interests) are owned,
directly or indirectly, by Regency free and clear of any Liens (except for such
restrictions as may exist under applicable Law and except for such Liens as may
be imposed under the Regency Credit Facility), and all such ownership interests
have been duly authorized, validly issued and are fully paid (to the extent
required in the organizational documents of Regency’s Subsidiaries, as
applicable) and non-assessable (except as such nonassessability may be affected
by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP
Act, Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act
(the “Delaware LLC Act”) and Section 101.206 of the Texas Business Organizations
Code) and free of preemptive rights and (ii) except as disclosed in the Regency
SEC Documents, neither Regency nor any of its Subsidiaries owns any shares of
capital stock or other securities of, or interest in, any other Person, or is
obligated to make any capital contribution to or other investment in any other
Person.
          (d) The Purchased Units being purchased by each of the Purchasers
hereunder and the limited partner interests represented thereby will be duly
authorized by Regency pursuant to the Partnership Agreement prior to the Closing
and, when issued and delivered to such Purchaser against payment therefor in
accordance with the terms of this Agreement, will be

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validly issued, fully paid (to the extent required by the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by matters
described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act) and will
be free of any and all Liens and restrictions on transfer, other than (i)
restrictions on transfer under the Partnership Agreement or this Agreement and
under applicable state and federal securities laws and (ii) such Liens as are
created by the Purchasers.
          (e) The Common Units are listed on the NASDAQ, and Regency has not
received any notice of delisting.
     Section 3.03 Regency SEC Documents. Regency has timely filed with the
Commission all forms, registration statements, reports, schedules and statements
required to be filed by it under the Exchange Act or the Securities Act (all
such documents, collectively the “Regency SEC Documents”). The Regency SEC
Documents, including, without limitation, any audited or unaudited financial
statements and any notes thereto or schedules included therein (the “Regency
Financial Statements”), at the time filed (in the case of registration
statements, solely on the dates of effectiveness) (except to the extent
corrected by a subsequently filed Regency SEC Document filed prior to the date
hereof) (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein (in light of the circumstances under which they were
made in the case of any prospectus) not misleading, (b) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act, as applicable, (c) complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto, (d) in the case of the Regency Financial
Statements, were prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto or,
in the case of unaudited statements, as permitted by Form 10-Q of the
Commission), and (e) in the case of the Regency Financial Statements, fairly
present (subject in the case of unaudited statements to normal, recurring and
year-end audit adjustments) in all material respects the consolidated financial
position of Regency and its Subsidiaries as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then
ended. KPMG LLP is an independent, registered public accounting firm with
respect to Regency and has not resigned or been dismissed as independent public
accountants of Regency as a result of or in connection with any disagreement
with Regency on a matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure.
     Section 3.04 No Material Adverse Change. Except as set forth in or
contemplated by the Regency SEC Documents filed with the Commission on or prior
to the date hereof, since the date of Regency’s most recent Form 10-K filing
with the Commission, Regency and its Subsidiaries have conducted their
respective businesses in the ordinary course, consistent with past practice, and
there has been no (a) change, event, occurrence, effect, fact, circumstance or
condition that has had or would be reasonably likely to have a Regency Material
Adverse Effect, (b) acquisition or disposition of any material asset by Regency
or any of its Subsidiaries or any contract or arrangement therefor (other than
with respect to the LD Acquisition), otherwise than for fair value in the
ordinary course of business or as disclosed in the Regency SEC Documents, or
(c) material change in Regency’s accounting principles, practices or methods.

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     Section 3.05 Litigation. Except as set forth in the Regency SEC Documents,
there is no action, suit, or proceeding pending (including any investigation,
litigation or inquiry) or, to Regency’s knowledge, contemplated or threatened
against or affecting any of the Regency Parties or any of their respective
officers, directors, properties or assets, which (a) questions the validity of
this Agreement or the right of Regency to enter into this Agreement or to
consummate the transactions contemplated hereby or (b) (individually or in the
aggregate) would be reasonably likely to result in a Regency Material Adverse
Effect.
     Section 3.06 No Violations; Compliance with Laws. As of the Closing Date,
the execution, delivery and performance by Regency of the Basic Documents and
compliance by Regency with the terms and provisions hereof and thereof, and the
issuance and sale by Regency of the Purchased Units, do not and will not
(a) assuming the accuracy of the representations and warranties of the
Purchasers contained herein and their compliance with the covenants contained
herein, violate any provision of any Law or Permit having applicability to
Regency or any of its Subsidiaries or any of their respective Properties,
(b) result in a violation or breach of any provision of the certificate of
limited partnership or other organizational documents of Regency, or the
Partnership Agreement, or any organizational documents of any of Regency’s
Subsidiaries, (c) require any consent, approval or notice (other than those
previously obtained or given) under or result in a violation or breach of or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
contract, agreement, instrument, obligation, note, bond, mortgage, license, loan
or credit agreement to which Regency or any of its Subsidiaries is a party or by
which Regency or any of its Subsidiaries or any of their respective Properties
may be bound, or (d) result in or require the creation or imposition of any Lien
upon or with respect to any of the Properties now owned or hereafter acquired by
Regency or any of its Subsidiaries, except in the case of clause (b) where any
such violation, default, breach, termination, cancellation, failure to receive
consent, approval or notice, or acceleration with respect to the foregoing
provisions of this Section 3.06 would not be, individually or in the aggregate,
reasonably likely to result in a Regency Material Adverse Effect.
     Section 3.07 Authority, Enforceability. Regency has all necessary
partnership power and authority to execute, deliver and perform its obligations
under the Basic Documents, and the execution, delivery and performance by
Regency of the Basic Documents have been duly authorized by all necessary action
on the part of the General Partner; and the Basic Documents constitute the
legal, valid and binding obligations of Regency, enforceable in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer and similar laws affecting creditors’ rights
generally or by general principles of equity and except as the rights to
indemnification may be limited by applicable law (regardless of whether such
enforceability is considered in a proceeding in law or in equity). No approval
from the holders of the Common Units or Series A Preferred Units is required in
connection with Regency’s issuance and sale of the Purchased Units to the
Purchasers.
     Section 3.08 Approvals. Except for the approvals that have already been
obtained and except for authorizations, consents, orders or approvals under, or
expiration of waiting periods imposed by, the HSR Act, no authorization,
consent, approval, waiver, license, qualification or written exemption from, nor
any filing, declaration, qualification or registration with, any Governmental
Authority or any other Person is required in connection with the execution,

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delivery or performance by Regency of any of the Basic Documents, except where
the failure to receive such authorization, consent, approval, waiver, license,
qualification or written exemption from, or to make such filing, declaration,
qualification or registration would not, individually or in the aggregate, be
reasonably likely to have a Regency Material Adverse Effect.
     Section 3.09 MLP Status. Regency has, for each taxable year beginning after
December 31, 2005, during which Regency was in existence, met the gross income
requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986, as
amended.
     Section 3.10 Valid Private Placement. Assuming the accuracy of the
representations and warranties of the Purchasers contained in this Agreement,
the sale and issuance of the Purchased Units to each of the Purchasers pursuant
to this Agreement is exempt from the registration requirements of the Securities
Act, and neither Regency nor, to the knowledge of Regency, any authorized agent
acting on its behalf has taken or will take any action hereafter that would
cause the loss of such exemptions.
     Section 3.11 Investment Company Status. Regency is not an “investment
company” or a company controlled by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
     Section 3.12 Certain Fees. No fees or commissions are or will be payable by
Regency to brokers, finders, or investment bankers with respect to the sale of
any of the Purchased Units or the consummation of the transactions contemplated
by this Agreement. Regency agrees that it will indemnify and hold harmless each
Purchaser from and against any and all claims, demands, or liabilities for
broker’s, finder’s, placement, or other similar fees or commissions incurred by
Regency or alleged to have been incurred by Regency in connection with the sale
of the Purchased Units or the consummation of the transactions contemplated by
this Agreement.
     Section 3.13 No Side Agreements. There are no agreements by, among or
between Regency or any of its Affiliates, on the one hand, and any Purchaser or
any of its Affiliates, on the other hand, with respect to the transactions
contemplated hereby other than the Basic Documents nor promises or inducements
for future transactions between or among any of such parties.
     Section 3.14 Insurance. Regency and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged. Regency does not have any reason to believe that it or any
Subsidiary will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business.
     Section 3.15 Internal Accounting Controls. Regency and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and
(iv) the recorded

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accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Regency is not aware of any failures of such internal accounting controls.
     Section 3.16 Listing and Maintenance Requirements. The issuance and sale of
the Purchased Units does not contravene NASDAQ rules and regulations.
     Section 3.17 Subsequent Offerings. Until the Company Lock-Up Date, without
the prior written consent of the holders of a majority of the Purchased Units,
Regency will not grant, issue or sell any Common Units or any securities
convertible into or exchangeable therefor or take any other action that may
result in the issuance of any of the foregoing, other than (i) the Purchased
Units, (ii) Common Units issued as restricted units upon the vesting of phantom
units or Common Units issued upon the exercise of options granted under the
LTIP, (iii) Common Units issued upon the conversion of Series A Preferred Units,
or (iv) the issuance or sale of Common Units at a price (less underwriting
discounts and commissions) no less than $24.00 per unit and in the aggregate
amount of no more than $196,000,000.
     Section 3.18 Confidential Information. To the knowledge of Regency, none of
its employees or executive officers has disclosed material non-public
information (other than the fact that Regency was contemplating a private
financing) to any prospective investor who has not entered into a
confidentiality or non-disclosure agreement between such prospective investor
and Regency relating to such information.
     Section 3.19 Taking of Necessary Action. Regency shall use its commercially
reasonable efforts promptly to take or cause to be taken all action and promptly
to do or cause to be done all things necessary, proper or advisable under
applicable Law and regulations to consummate and make effective the transactions
contemplated by this Agreement. Without limiting the foregoing, Regency shall
use its commercially reasonable efforts to make all filings and obtain all
consents of Governmental Authorities that may be necessary or, in the reasonable
opinion of the other Parties, as the case may be, advisable for the consummation
of the transactions contemplated by the Basic Documents.
     Section 3.20 Non-Disclosure; Interim Public Filings. Regency shall, on or
before 8:30 a.m., New York time, on the first Business Day following execution
of this Agreement, issue a press release disclosing all material terms of the
transactions contemplated hereby. On or before the fourth Business Day following
the date hereof, Regency shall file a Current Report on Form 8-K with the
Commission (the “8-K Filing”) describing the terms of the transactions
contemplated by this Agreement and the other Basic Documents and in the LD
Acquisition Agreement and including as exhibits to such 8-K Filing, the other
Basic Documents and the LD Acquisition Agreement, in the form required by the
Exchange Act.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES AND COVENANTS
OF THE PURCHASERS
     Each Purchaser, severally and not jointly, hereby represents and warrants
and covenants to Regency that:
     Section 4.01 Existence. Such Purchaser is duly organized and validly
existing and in good standing under the laws of its state of formation, with all
necessary power and authority to own properties and to conduct its business as
currently conducted.
     Section 4.02 Authorization, Enforceability. Such Purchaser has all
necessary legal power and authority to enter into, deliver and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by such Purchaser and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary legal
action, and no further consent or authorization of such Purchaser is required.
This Agreement has been duly executed and delivered by such Purchaser and
constitutes legal, valid and binding obligations of such Purchaser; provided
that, the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general principles of equity and
except as the rights to indemnification may be limited by applicable law
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
     Section 4.03 No Breach. The execution, delivery and performance of this
Agreement by such Purchaser and the consummation by such Purchaser of the
transactions contemplated hereby will not (a) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material agreement to which such Purchaser is a party or by
which the Purchaser is bound or to which any of the property or assets of such
Purchaser is subject, (b) conflict with or result in any violation of the
provisions of the organizational documents of such Purchaser, or (c) violate any
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Purchaser or the property or assets of such
Purchaser, except in the case of clauses (a) and (c), for such conflicts,
breaches, violations or defaults as would not prevent the consummation of the
transactions contemplated by this Agreement.
     Section 4.04 Certain Fees. No fees or commissions are or will be payable by
such Purchaser to brokers, finders, or investment bankers with respect to the
purchase of any of the Purchased Units or the consummation of the transactions
contemplated by this Agreement. Such Purchaser agrees, severally and not jointly
with any other Purchaser, that it will indemnify and hold harmless Regency from
and against any and all claims, demands or liabilities for broker’s, finder’s,
placement, or other similar fees or commissions incurred by such Purchaser or
alleged to have been incurred by such Purchaser in connection with the purchase
of the Purchased Units or the consummation of the transactions contemplated by
this Agreement.
     Section 4.05 No Side Agreements. There are no other agreements by, among or
between such Purchaser and any of its Affiliates, on the one hand, and Regency
or any of its Affiliates, on the other hand, with respect to the transactions
contemplated hereby other than the

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Basic Documents, and there are no promises or inducements for future
transactions between or among any of such parties; provided, however, that,
subject to such Purchaser’s compliance with its obligations under the U.S.
federal securities laws and its internal policies: (a) such Purchaser, for
purposes hereof, shall not be deemed to include any employees, subsidiaries or
Affiliates that are effectively walled off by appropriate “Chinese Wall”
information barriers approved by Purchaser’s legal or compliance department (and
thus have not been privy to any information concerning this transaction) (a
“Walled Off Person”) and (b) the foregoing representations in this paragraph
shall not apply to any transaction by or on behalf of Purchaser that was
effected by a Walled Off Person in the ordinary course of trading without the
advice or participation of Purchaser or receipt of confidential or other
information regarding this transaction provided by Purchaser to such entity.
     Section 4.06 Investment. The Purchased Units are being acquired for such
Purchaser’s own account, the account of its Affiliates, or the accounts of
clients for whom such Purchaser exercises discretionary investment authority
(all of whom such Purchaser hereby represents and warrants are “accredited
investors” within the meaning of Rule 501(a) of Regulation D or “qualified
institutional buyers” within the meaning of Rule 144A promulgated by the
Commission pursuant to the Securities Act), not as a nominee or agent, and with
no present intention of distributing the Purchased Units or any part thereof,
and that such Purchaser has no present intention of selling or granting any
participation in or otherwise distributing the same in any transaction in
violation of the securities Laws of the United States of America or any state,
without prejudice, however, to such Purchaser’s right at all times to sell or
otherwise dispose of all or any part of the Purchased Units under a registration
statement under the Securities Act and applicable state securities Laws or under
an exemption from such registration available thereunder (including, without
limitation, if available, Rule 144 promulgated thereunder). If such Purchaser
should in the future decide to dispose of any of the Purchased Units, such
Purchaser understands and agrees (a) that it may do so only (i) in compliance
with the Securities Act and applicable state securities law, as then in effect,
or pursuant to an exemption therefrom (including Rule 144 under the Securities
Act) or (ii) in the manner contemplated by any registration statement pursuant
to which such securities are being offered, and (b) that stop-transfer
instructions to that effect will be in effect with respect to such securities.
Notwithstanding the foregoing, any Purchaser may at any time transfer Purchased
Units to an Affiliate of such Purchaser provided that any such transaction is
exempt from registration under the Securities Act and that such Affiliate agrees
to be bound by the terms and conditions of this Agreement.
     Section 4.07 Nature of Purchaser. Such Purchaser represents and warrants
to, and covenants and agrees with, Regency that, (a) it is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated by the
Commission pursuant to the Securities Act and (b) by reason of its business and
financial experience it has such knowledge, sophistication and experience in
making similar investments and in business and financial matters generally so as
to be capable of evaluating the merits and risks of the prospective investment
in the Purchased Units, is able to bear the economic risk of such investment
and, at the present time, would be able to afford a complete loss of such
investment.
     Section 4.08 Receipt of Information. Such Purchaser acknowledges that it
has (a) had access to Regency’s periodic filings with the Commission and
(b) been provided a reasonable

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opportunity to ask questions of and receive answers from Representatives of
Regency regarding such matters.
     Section 4.09 Legend. It is understood that any certificates evidencing the
Purchased Units will bear the following legend: “These securities have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or the securities laws of any state or other jurisdiction. These securities may
not be sold or offered for sale except pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption from registration
thereunder, in each case in accordance with all applicable securities laws of
the United States and any states or other jurisdictions, and in the case of a
transaction exempt from registration, such securities may only be transferred if
the transfer agent for such securities has received documentation satisfactory
to it that such transaction does not require registration under the Securities
Act.”
     Section 4.10 Short Selling. Such Purchaser has not entered into any short
sales of the Common Units owned by it between the time it first began discussion
with Regency about the transactions contemplated by this Agreement and the date
hereof (it being understood that the entering into of a total return swap shall
not be considered a short sale of Common Units); provided, however, that,
subject to such Purchaser’s compliance with its obligations under the U.S.
federal securities laws and its internal policies: (a) such Purchaser, for
purposes hereof, shall not be deemed to include any Walled Off Person and
(b) the foregoing representations in this paragraph shall not apply to any
transaction by or on behalf of Purchaser that was effected by a Walled Off
Person in the ordinary course of trading without the advice or participation of
Purchaser or receipt of confidential or other information regarding this
transaction provided by Purchaser to such entity.
     Section 4.11 Trading Activities. Such Purchaser’s trading activities, if
any, with respect to the Common Units will be in compliance with all applicable
state and federal securities laws, rules and regulations and the rules and
regulations of the NASDAQ.
     Section 4.12 Taking of Necessary Action. Such Purchaser shall use its
commercially reasonable efforts promptly to take or cause to be taken all action
and promptly to do or cause to be done all things necessary, proper or advisable
under applicable Law and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the foregoing,
Purchaser shall use its commercially reasonable efforts to assist Regency in
making all filings and obtaining all consents of Governmental Authorities that
may be necessary or, in the reasonable opinion of the other Parties, as the case
may be, advisable for the consummation of the transactions contemplated by the
Basic Documents.
     Section 4.13 Short Selling Acknowledgement and Agreement. Each Purchaser
understands and acknowledges, severally and not jointly with any other
Purchaser, that the Commission currently takes the position that coverage of
Short Sales of securities “against the box” prior to the effective date of a
registration statement or prior to the time a Purchaser is eligible to sell such
securities under Rule 144 is a violation of Section 5 of the Securities Act.
Each Purchaser agrees, severally and not jointly, that it will not engage in any
Short Sales that result in the disposition of the Common Units acquired
hereunder by such Purchaser until such time as the Resale Registration Statement
(as defined in the Registration Rights Agreement) is

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declared or deemed effective by the Commission or such Common Units are no
longer subject to any restrictions on resale.
ARTICLE V
INDEMNIFICATION, COSTS AND EXPENSES
     Section 5.01 Indemnification by Regency. Regency agrees to indemnify each
Purchaser and its Representatives (collectively, “Purchaser Related Parties”)
from, and hold each of them harmless against, any and all losses, actions,
suits, proceedings (including any investigations, litigation or inquiries),
demands, and causes of action, and, in connection therewith, and promptly upon
demand, pay or reimburse each of them for all reasonable costs, losses,
liabilities, damages, or expenses of any kind or nature whatsoever, including,
without limitation, the reasonable fees and disbursements of counsel and all
other reasonable expenses incurred in connection with investigating, defending
or preparing to defend any such matter that may be incurred by them or asserted
against or involve any of them as a result of, arising out of, or in any way
related to the breach of any of the representations, warranties or covenants of
Regency contained herein, provided such claim for indemnification relating to a
breach of any representation or warranty is made prior to the expiration of such
representation or warranty.
     Section 5.02 Indemnification by the Purchasers. Each Purchaser agrees,
severally and not jointly, to indemnify Regency, the General Partners and their
respective Representatives (collectively, “Regency Related Parties”) from, and
hold each of them harmless against, any and all losses, actions, suits,
proceedings (including any investigations, litigation or inquiries), demands,
and causes of action, and, in connection therewith, and promptly upon demand,
pay or reimburse each of them for all reasonable costs, losses, liabilities,
damages, or expenses of any kind or nature whatsoever, including, without
limitation, the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such matter that may be incurred by them or asserted
against or involve any of them as a result of, arising out of, or in any way
related to the breach of any of the representations, warranties or covenants of
such Purchaser contained herein, provided such claim for indemnification
relating to a breach of any representation or warranty is made prior to the
expiration of such representation or warranty, provided, however, that the
liability of each Purchaser shall not be greater in amount than such Purchaser’s
Allocated Purchase Price.
     Section 5.03 Indemnification Procedure. Promptly after any Regency Related
Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has
received notice of any indemnifiable claim hereunder, or the commencement of any
action, suit or proceeding by a third person, which the Indemnified Party
believes in good faith is an indemnifiable claim under this Agreement, the
Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such action, suit or
proceeding, but failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability it may have to such Indemnified Party
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure. Such notice shall state the nature and the basis of
such claim to the extent then known. The Indemnifying Party shall have the right
to defend and settle, at its own expense and by its own counsel, any such matter
as long as the Indemnifying Party pursues the same diligently and in good faith.
If the Indemnifying Party undertakes to defend or settle, it shall promptly
notify the Indemnified Party of its intention to do

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so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in all commercially reasonable respects in the defense thereof and
the settlement thereof. Such cooperation shall include, but shall not be limited
to, furnishing the Indemnifying Party with any books, records and other
information reasonably requested by the Indemnifying Party and in the
Indemnified Party’s possession or control. Such cooperation of the Indemnified
Party shall be at the cost of the Indemnifying Party. After the Indemnifying
Party has notified the Indemnified Party of its intention to undertake to defend
or settle any such asserted liability, and for so long as the Indemnifying Party
diligently pursues such defense, the Indemnifying Party shall not be liable for
any additional legal expenses incurred by the Indemnified Party in connection
with any defense or settlement of such asserted liability; provided, however,
that the Indemnified Party shall be entitled (i) at its expense, to participate
in the defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense
and employ counsel or (B) if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and counsel to the Indemnified
Party shall have concluded that there may be reasonable defenses available to
the Indemnified Party that are different from or in addition to those available
to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, then the Indemnified Party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred. Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not settle any indemnified claim without
the consent of the Indemnified Party, unless the settlement thereof imposes no
liability or obligation on, and includes a complete release from liability of,
and does not contain any admission of wrong doing by, the Indemnified Party.
ARTICLE VI
MISCELLANEOUS
     Section 6.01 Interpretation and Survival of Provisions. Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified. All references to instruments, documents, contracts, and agreements
are references to such instruments, documents, contracts, and agreements as the
same may be amended, supplemented, and otherwise modified from time to time,
unless otherwise specified. The word “including” shall mean “including but not
limited to.” Whenever Regency has an obligation under the Basic Documents, the
expense of complying with that obligation shall be an expense of Regency unless
otherwise specified. Whenever any determination, consent, or approval is to be
made or given by the Purchasers, such action shall be in such Purchaser’s sole
discretion unless otherwise specified in this Agreement. If any provision in the
Basic Documents is held to be illegal, invalid, not binding, or unenforceable,
such provision shall be fully severable and the Basic Documents shall be
construed and enforced as if such illegal, invalid, not binding, or
unenforceable provision had never comprised a part of the Basic Documents, and
the remaining provisions shall remain in full force and effect.
     Section 6.02 Survival of Provisions. The representations and warranties set
forth in Sections 3.02, 3.07, 3.08, 3.11, 3.12, 4.02, 4.04 and 4.05 hereunder
shall survive the execution and delivery of this Agreement indefinitely, and the
other representations and warranties set forth

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herein shall survive for a period of twelve (12) months following the Closing
Date regardless of any investigation made by or on behalf of Regency or the
Purchasers. The covenants made in this Agreement or any other Basic Document
shall survive the Closing of the transactions described herein and remain
operative and in full force and effect regardless of acceptance of any of the
Purchased Units and payment therefor and repayment or repurchase thereof. All
indemnification obligations of Regency and the Purchasers and the provisions of
Article V shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing referencing that individual
Section, regardless of any purported general termination of this Agreement.
     Section 6.03 No Waiver; Modifications in Writing.
          (a) Delay. No failure or delay on the part of any party in exercising
any right, power, or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power, or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power, or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to a party at law or in
equity or otherwise.
          (b) Specific Waiver. Except as otherwise provided herein, no
amendment, waiver, consent, modification, or termination of any provision of
this Agreement or any other Basic Document (except in the case of the
Partnership Agreement for amendments adopted pursuant to Sections 13.1, 13.2 or
13.3 thereof) shall be effective unless signed by each of the parties hereto or
thereto affected by such amendment, waiver, consent, modification, or
termination. Any amendment, supplement or modification of or to any provision of
this Agreement or any other Basic Document, any waiver of any provision of this
Agreement or any other Basic Document, and any consent to any departure by
Regency from the terms of any provision of this Agreement or any other Basic
Document shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on Regency in any case shall entitle
Regency to any other or further notice or demand in similar or other
circumstances.
     Section 6.04 Binding Effect; Assignment.
          (a) Binding Effect. This Agreement shall be binding upon Regency, each
Purchaser, and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.
          (b) Assignment of Rights. All or any portion of the rights and
obligations of each Purchaser under this Agreement may be transferred by such
Purchaser to any Affiliate of such Purchaser without the consent of Regency. No
portion of the rights and obligations of each Purchaser under this Agreement may
be transferred by such Purchaser to a non-Affiliate without the written consent
of Regency.

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     Section 6.05 Confidentiality. Notwithstanding anything herein to the
contrary, the Confidentiality Agreement shall remain in full force and effect
regardless of any termination of this Agreement. Other than the Form 8-Ks to be
filed in connection with this Agreement and any press release provided for in
Section 3.20 and the other Basic Documents, Regency, the General Partner, their
respective Subsidiaries and any of their respective Representatives shall
disclose the identity of, or any other information concerning, any Purchaser or
any of its Affiliates only after providing such Purchaser a reasonable
opportunity to review and comment on such disclosure; provided, however, that
nothing in this Section 6.05 shall delay any required filing or other disclosure
with the Commission, NASDAQ or any Governmental Authority or otherwise hinder
Regency, the General Partner, their respective Subsidiaries or their
Representatives’ ability to timely comply with all laws or rules and regulations
of the Commission, NASDAQ or other Governmental Authority.
     Section 6.06 Removal of Legend. In connection with a sale of the Purchased
Units by a Purchaser in reliance on Rule 144, the applicable Purchaser or its
broker shall deliver to Regency a broker representation letter providing any
information Regency deems necessary to determine that the sale of the Purchased
Units is made in compliance with Rule 144, including, as may be appropriate, a
certification that such Purchaser is not an affiliate of Regency and regarding
the length of time the Purchased Units have been held. Upon receipt of such
representation letter, Regency shall as soon as reasonably practicable exchange
any unit certificates bearing the legend described in Section 4.09 for unit
certificates without such legend. After any Purchaser or its permitted assigns
have held the Purchased Units for one year, if such Purchased Units still bear
the legend described in Section 4.09, such Purchaser may request Regency to
remove the legend and Regency agrees to take all steps necessary to effect the
removal of the legend as soon as reasonably practicable. Regency shall bear all
direct costs and expenses associated with the removal of a legend pursuant to
this Section 6.06 (including without limitation reasonable fees of legal counsel
in connection with any legal opinion letters required to be issued in connection
with such removal), regardless of whether the request is made in connection with
a sale or otherwise, so long as such Purchaser or its permitted assigns provide
to Regency any information Regency deems necessary to determine that the legend
is no longer required under the Securities Act or applicable state laws,
including a certification that the holder is not an Affiliate of Regency and
regarding the length of time the Purchased Units have been held.
     Section 6.07 Communications. All notices and demands provided for hereunder
shall be in writing and shall be given by registered or certified mail, return
receipt requested, telecopy, air courier guaranteeing overnight delivery or
personal delivery to the following addresses:
          (a) If to Kayne Anderson MLP Investment Company, Kayne Anderson Energy
Total Return Fund, Inc., Kayne Anderson Midstream/Energy Fund, Inc., Kayne
Anderson Energy Development Company, Kayne Anderson Capital Income Partners
(QP), LP, Kayne Anderson Midstream Institutional Fund, LP, Kayne Anderson MLP
Fund, LP or Kayne Anderson Non-Traditional Investments, LP:

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1800 Avenue of the Stars, 2nd Floor
Los Angeles, California 90067
Attention: David Shladovsky, Esq.
Facsimile: (310) 284-6490
Internet electronic mail: dshladovsky@kaynecapital.com
717 Texas Avenue, Suite 3100
Houston, Texas 77002
Attn: James C. Baker
Facsimile: (713) 655-7359
Internet electronic mail: jbaker@kaynecapital.com
          with a copy to:
Baker Botts L.L.P.
98 San Jacinto Blvd., Ste 1500
Austin, Texas 78701
Attention: Laura L. Tyson, Esq.
Facsimile: (512) 322-8377
Internet electronic mail: laura.tyson@bakerbotts.com
          (b) If to Tortoise Energy Infrastructure Corporation, Tortoise Energy
Capital Corporation, Tortoise North American Energy Corporation, Tortoise MLP
Fund, Inc. or Tortoise Capital Resources Corporation:
Tortoise Capital Advisors, LLC
11550 Ash Street, Suite 300
Leawood, Kansas 66211
Attention: Terry Matlack
Facsimile: (913) 345-2763
Internet electronic mail: tmatlack@tortoiseadvisors.com
          with a copy to:
Husch Blackwell LLP
4801 Main street, Suite 100
Kansas City, MO 64112
Attention: Eric Gervais
Facsimile: (816) 983.8080
Internet electronic mail: eric.gervais@huschblackwell.com
          (c) If to Fiduciary/Claymore MLP Opportunity Fund, Nuveen Energy MLP
Total Return Fund, MLP & Strategic Equity Fund or Teachers’ Retirement System of
Oklahoma:

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Fiduciary Asset Management LLC
8235 Forsyth Blvd, Suite 700
St. Louis, Missouri 63105
Attention: Quinn Kiley
Facsimile: (314) 446-6701
Internet electronic mail: qkiley@famco.com
          with a copy to:
Baker Botts L.L.P.
98 San Jacinto Blvd., Ste 1500
Austin, Texas 78701
Attention: Laura L. Tyson, Esq.
Facsimile: (512) 322-8377
Internet electronic mail: laura.tyson@bakerbotts.com
          (d) If to Regency:
Regency Energy Partners LP
2001 Bryan Street, Ste 3700
Dallas, Texas 75201
Attention: Paul M. Jolas, Executive Vice President and Chief Legal Officer
Facsimile: (214) 840-5208
Internet electronic mail: paul.jolas@regencygas.com
          with a copy to:
Mayer Brown
700 Louisiana Street, Ste 3400
Houston, Texas 77002-2730
Attention: Dan Fleckman
Facsimile: (713) 238-4718
Internet electronic mail: dfleckman@mayerbrown.com
or to such other address as Regency or such Purchaser may designate in writing.
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; upon actual receipt if sent by
certified or registered mail, return receipt requested, or regular mail, if
mailed; upon actual receipt of the overnight courier copy, if sent via
facsimile; and upon actual receipt when delivered to an air courier guaranteeing
overnight delivery.
     Section 6.08 Entire Agreement. This Agreement, the other Basic Documents
and the other agreements and documents referred to herein are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained

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herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or the other
Basic Documents with respect to the rights granted by Regency or any of its
Affiliates or the Purchasers or any of their Affiliates set forth herein or
therein. This Agreement, the other Basic Documents and the other agreements and
documents referred to herein or therein supersede all prior agreements and
understandings between the parties with respect to such subject matter.
     Section 6.09 Governing Law. This Agreement will be construed in accordance
with and governed by the laws of the State of Texas without regard to principles
of conflicts of laws.
     Section 6.10 Waiver of Jury Trial. Each party to this Agreement irrevocably
waives the right to a trial by jury in connection with any matter arising out of
this Agreement to the fullest extent permitted by applicable law.
     Section 6.11 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
     Section 6.12 Costs and Expenses. Each Party shall be responsible for such
Party’s own expenses in connection with this Agreement and the transactions
contemplated hereby, except that Regency will pay Baker Botts L.L.P. up to
$50,000 for legal fees incurred by Baker Botts L.L.P. as counsel to the
Purchasers. Any fees in excess of $50,000 shall be paid pro rata by all
Purchasers in proportion to the aggregate number of Purchased Units set forth
opposite the names of such Purchasers on Schedule A.
     Section 6.13 Distributions. If the Closing Date is after the record date
relating to a distribution to be made to holders of Common Units with respect to
the fiscal quarter ended March 31, 2011 or any other distribution to be made to
holders of Common Units, then the Purchasers shall not be entitled to receive
such distribution but the Purchased Unit Price shall be reduced by an amount
equal to such per unit distribution and the number of Purchased Units set forth
on Schedule A shall be increased accordingly.
     Section 6.14 Termination.
          (a) Notwithstanding anything herein to the contrary, this Agreement
may be terminated at any time at or prior to the Closing by the written consent
of a majority in interest of the Purchasers, upon a breach in any material
respect by Regency of any covenant or agreement set forth in this Agreement.
          (b) Notwithstanding anything herein to the contrary, in the event that
any condition to Regency’s obligation to close specified in Sections 2.04(a) or
2.04(c) is not satisfied or waived on the Closing Date, Regency may terminate
this Agreement upon written notice to the Purchasers.
          (c) Notwithstanding anything herein to the contrary, this Agreement
shall automatically terminate at any time at or prior to the Closing:

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               (i) if a Law shall have been enacted or promulgated, or if any
action shall have been taken by any Governmental Authority of competent
jurisdiction that permanently restrains, permanently precludes, permanently
enjoins or otherwise permanently prohibits the consummation of the transactions
contemplated by any of the other Basic Documents or makes the transactions
contemplated by any of the Basic Documents illegal;
          (ii) upon the termination of the LD Acquisition Agreement; or
          (iii) if the Closing shall not have occurred by the Drop Dead Date.
          (d) In the event of the termination of this Agreement as provided in
this Section 6.14 (1) this Agreement shall forthwith become null and void,
(2) within two (2) Business Days following such termination, Regency shall pay
the Commitment Fee to each Purchaser in immediately available funds by wire
transfer, and (3) there shall be no liability on the part of any Party hereto,
except as set forth in Section 6.12 and except with respect to the requirement
to comply with the Confidentiality Agreement; provided that nothing herein shall
relieve any Party from any liability or obligation with respect to any willful
breach of this Agreement.
[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as
of the date first above written.

            REGENCY ENERGY PARTNERS LP
      By:   Regency GP LP, its general partner         By: Regency GP LLC, its
general partner                      By:   /s/ Thomas E. Long         Thomas E.
Long        Executive Vice President and Chief
Financial Officer   

[Signature Page to Common Unit Purchase Agreement]

 

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            KAYNE ANDERSON MLP INVESTMENT
COMPANY
      By:   /s/ James C. Baker         James C. Baker        Executive Vice
President        KAYNE ANDERSON ENERGY TOTAL
RETURN FUND, INC.
      By:   /s/ James C. Baker         James C. Baker        Executive Vice
President        KAYNE ANDERSON MIDSTREAM/ENERGY
FUND, INC.
      By:   /s/ James C. Baker         James C. Baker        Executive Vice
President        KAYNE ANDERSON ENERGY
DEVELOPMENT COMPANY
      By:   /s/ James C. Baker         James C. Baker        Executive Vice
President   

[Signature Page to Common Unit Purchase Agreement]

 

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            KAYNE ANDERSON CAPITAL INCOME
PARTNERS (QP), LP
      By:   /s/ David Shladovsky         David Shladovsky        General Counsel
of Kayne Anderson Capital
Advisors, L.P.        KAYNE ANDERSON MIDSTREAM
INSTITUTIONAL FUND, LP
      By:   /s/ David Shladovsky         David Shladovsky        General Counsel
of Kayne Anderson Capital
Advisors, L.P.        KAYNE ANDERSON MLP FUND, LP
      By:   /s/ David Shladovsky         David Shladovsky        General Counsel
of Kayne Anderson Capital
Advisors, L.P.        KAYNE ANDERSON NON-TRADITIONAL
INVESTMENTS, LP
      By:   /s/ David Shladovsky         David Shladovsky        General Counsel
of Kayne Anderson Capital
Advisors, L.P.   

[Signature Page to Common Unit Purchase Agreement]

 

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            TORTOISE ENERGY INFRASTRUCTURE
CORPORATION
      By:   /s/ Zachary A. Hamel         Zachary A. Hamel        Senior Vice
President        TORTOISE ENERGY CAPITAL
CORPORATION
      By:   /s/ Zachary A. Hamel         Zachary A. Hamel        Senior Vice
President        TORTOISE NORTH AMERICAN ENERGY
CORPORATION
      By:   /s/ Zachary A. Hamel         Zachary A. Hamel        Senior Vice
President        TORTOISE MLP FUND, INC.
      By:   /s/ Zachary A. Hamel         Zachary A. Hamel        Senior Vice
President        TORTOISE CAPITAL RESOURCES
CORPORATION
      By:   /s/ Zachary A. Hamel         Zachary A. Hamel        Senior Vice
President   

[Signature Page to Common Unit Purchase Agreement]

 

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            FIDUCIARY/CLAYMORE MLP
OPPORTUNITY FUND
      By:   /s/ Quinn T. Kiley         Quinn T. Kiley, Vice President           
    NUVEEN ENERGY MLP TOTAL RETURN
FUND
      By:   /s/ Quinn T. Kiley         Quinn T. Kiley, Portfolio Manager       
        MLP & STRATEGIC EQUITY FUND
      By:   /s/ Quinn T. Kiley         Quinn T. Kiley, Portfolio Manager       
        TEACHERS’ RETIREMENT SYSTEM OF
OKLAHOMA
      By:   /s/ Quinn T. Kiley         Quinn T. Kiley, Portfolio Manager       
   

[Signature Page to Common Unit Purchase Agreement]

 

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Exhibit A — Form of Registration Rights Agreement

 

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Exhibit B — Form of LD Acquisition Agreement

 

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Exhibit C — Joint Venture Term Sheet

 

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Exhibit D — Form of Opinion of Regency Counsel