Exhibit 10.4
Execution Version
AREA OF MUTUAL INTEREST AGREEMENT
     THIS AREA OF MUTUAL INTEREST AGREEMENT, dated as of March 17, 2009 (this
“Agreement”), is entered into by and among Regency Energy Partners LP, a
Delaware limited partnership (the “MLP”), RIGS Haynesville Partnership Co., a
Delaware general partnership (the “Company”), Regency Haynesville Intrastate Gas
LLC, a Delaware limited liability company (“Regency HIG”), Alinda Gas Pipeline
I, L.P., a Delaware limited partnership (“Alinda Investor 1”) and Alinda Gas
Pipeline II, L.P., a Delaware limited partnership (“Alinda Investor 2,” and
collectively with Alinda Investor 1, the “Alinda Investors”). The parties to
this Agreement are collectively referred to as the “Parties” and individually as
a “Party.” Capitalized terms used but not defined herein have the meanings
ascribed to them in that certain Contribution Agreement, dated as of
February 26, 2009, by and among Regency HIG, the Company, General Electric
Capital Corporation, a Delaware corporation, Alinda Investor 1 and Alinda
Investor 2 (the “Contribution Agreement”).
RECITALS:
     WHEREAS, upon the Closing, (a) Regency HIG, an indirect wholly owned
subsidiary of the MLP, will contribute a 99.999% limited partnership interest in
Regency Intrastate Gas LP (“RIGS”) to the Company, (b) RIGS SPE LLC, an indirect
wholly owned subsidiary of the MLP, will contribute a 0.001% general partnership
interest in RIGS to RIGS GP LLC, a wholly owned subsidiary of the Company, and
(c) the Company will issue the GP Units and pay the Regency Closing Payment to
Regency HIG, in each case as described in the Contribution Agreement; and
     WHEREAS, pursuant to the Contribution Agreement, this Agreement is to be
executed and delivered at Closing.
     NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the Parties undertake and agree as follows:
     Section 1. Creation of AMI Opportunity.
     (a) Certain Definitions.
          “AMI Acquisition” means the acquisition of any AMI Acquisition Assets.
          “AMI Acquisition Assets” means, with respect to any AMI Acquisition
Opportunity, the assets (including, without limitation, the Applicable Assets
included within such assets) and equity or other ownership interests subject to
such AMI Acquisition Opportunity.
          “AMI Acquisition Opportunity” means the opportunity to acquire either
of the following:
          (i) Assets (which includes Applicable Assets) from which 80% or more
of the gross revenues derived from such Assets (during the fiscal year ended
immediately prior to the

 

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year in which the acquisition in question is to occur) is derived from the
following two types of assets combined: (1) natural gas transported on such
Applicable Assets that was either received into such Applicable Assets at
receipt points located within the AMI Area or delivered from such Applicable
Assets at delivery points located within the AMI Area and/or (2) natural gas
storage infrastructure assets included in such Applicable Assets; or
          (ii) equity or other ownership interests of an entity which owns
Applicable Assets from which 80% or more of the gross revenues derived from such
entity’s Assets, on a consolidated basis (during the fiscal year ended
immediately prior to the year in which the acquisition in question is to occur)
is derived from (1) natural gas transported on such Applicable Assets that was
either received into such Applicable Assets at receipt points located within the
AMI Area or delivered from such Applicable Assets at delivery points located
within the AMI Area and/or (2) natural gas storage infrastructure assets
included in such Applicable Assets.
          For the avoidance of doubt, any portion of the “Assets” referred to in
clause (i) above and any subsidiary or affiliate of the “entity” referred to in
clause (ii) above shall not, on a stand alone basis, constitute an AMI
Acquisition Opportunity.
          “AMI Area” means that portion of the area within the State of
Louisiana that is designated as the “AMI Area” on Exhibit A hereto.
          “AMI Assets” means all AMI Acquisition Assets and AMI Greenfield
Assets.
          “AMI Greenfield Assets” means, with respect to any AMI Greenfield
Opportunity, the assets subject to such AMI Greenfield Opportunity.
          “AMI Greenfield Opportunity” means the opportunity to construct and
develop (as opposed to an acquisition of) additional Applicable Assets other
than any Company Specific Opportunity.
          “AMI Opportunity” means any AMI Acquisition Opportunity or AMI
Greenfield Opportunity.
          “Applicable Assets” means interstate and/or intrastate natural gas
transportation infrastructure assets (but specifically excluding any Natural Gas
Gathering Infrastructure Assets, natural gas treating infrastructure assets
and/or natural gas processing infrastructure assets) and natural gas storage
infrastructure assets that are located within the AMI Area.
          “Assets” means assets of any type or nature, including, without
limitation, Applicable Assets.
          “Available Capacity” means the maximum quantity of natural gas that
can be transported in a given period of time under normal operating conditions.
          “Change of Control Event” means any date on which the Ultimate Parent
(as defined in the Company Partnership Agreement) of Alinda Investor I Parent
and of Alinda Investor II Parent collectively no longer possesses, directly or
indirectly, through one or more

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intermediaries, (i) more than 25% of the outstanding voting interest in the
Company and (ii) more than 25% of the economic or beneficial interest in the
Company.
          “Company Specific Opportunity” means any intrastate and/or interstate
natural gas transportation infrastructure assets the sole purpose of which are
to increase the Available Capacity of the Company’s or RIGS’ existing natural
gas transportation infrastructure assets.
          “Management Company” means Regency Employees Management LLC.
          “MC Member” shall have the meaning ascribed to such term in the
Company Partnership Agreement.
          “Natural Gas Gathering Infrastructure Assets” means pipelines and
other facilities (including all interconnections, laterals, storage facilities,
meters, dehydration facilities, compression facilities, junction heaters,
separators, electric power lines, communication cables, roads and other related
facilities and equipment, including all easements located thereon) used to
transport gas from a current production facility to a transmission line or main
line.
          “RIGS System” means the gas transportation system consisting of the
intrastate pipeline owned by RIGS as of the Closing Date and as thereafter
expanded from time-to-time.
          “Services Agreement” means the Master Services Agreement between the
Partnership and the Management Company, as amended or modified from time to
time, pursuant to which the Management Company manages the day-to-day operations
of the Company.
          “Subject Person” means the MLP, any direct or indirect wholly owned
subsidiary of the MLP and any Affiliate of the MLP that is directly or
indirectly controlled by the MLP; provided, that “Subject Person” shall not
include the Company, RIGS or any of their direct or indirect subsidiaries or any
Person that directly or indirectly owns any interest in the MLP.
          “Termination Date” means the earlier to occur of (i) the first date on
which the MLP and/or its Affiliates, directly or indirectly, owns 75% or more of
the GP Units in the Company, (ii) the date on which the Services Agreement is
terminated and (iii) the occurrence of a Change of Control Event.
     (b) Term of this Agreement. The term of this Agreement (the “Term”) shall
begin on the Closing Date and shall end on the Termination Date. During the
Term, the MLP shall, and shall cause each other Subject Person to, comply with
all of the provisions of this Agreement and each other Party shall comply with
all of the provisions of this Agreement. For the avoidance of doubt, this
Agreement shall terminate for all purposes upon the expiration of the Term.
     (c) AMI Acquisition Opportunities.
          (i) In the event that a Subject Person identifies an AMI Acquisition
Opportunity that such Subject Person desires to pursue or reasonably believes
the Company should pursue, such Subject Person shall promptly notify the Alinda
Investors of such opportunity and shall, subject to the Alinda Investors
executing and delivering to the Subject Person a confidentiality agreement in
form and substance reasonably satisfactory to the Subject

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Person, (A) make available to the Alinda Investors all information in its
possession related to such AMI Acquisition Opportunity as may be reasonably
requested by the Alinda Investors from time to time, including all information
concerning and analysis of the business, operations and finances of the
applicable AMI Acquisition Assets and the terms of any proposed acquisition
agreement, (B) frequently consult with the Alinda Investors in evaluating the
AMI Acquisition Opportunity and (C) keep the Alinda Investors reasonably
informed as to the status of the AMI Acquisition Opportunity to the extent
requested by the Alinda Investors from time-to-time, in each case, subject to
any confidentiality restrictions applicable to such Subject Person. Each Subject
Person shall use commercially reasonably efforts to cause any confidentiality
agreement entered into by such Subject Person in connection with any AMI
Acquisition Opportunity to allow disclosures of confidential information to the
Alinda Investors.
          (ii) If the Subject Person executes an acquisition agreement for any
AMI Acquisition Opportunity, it shall use commercially reasonable efforts to
cause the applicable acquisition agreement and all other related agreements and
materials (including due diligence materials) (A) to be fully assignable to the
Company without the consent of any other Person and (B) to be promptly delivered
to the Alinda Investors. The Alinda Investors shall have the lesser of
(x) 15 days following the delivery to the Alinda Investors of a complete and
accurate copy of the applicable acquisition agreement and all other related
agreements in the Subject Person’s possession, or (y) the number of days between
the delivery of such agreements and the anticipated closing date thereunder in
which to cause the Company to elect to purchase the applicable AMI Acquisition
Assets in accordance with the terms of the Company Partnership Agreement (the
“AMI Acquisition Election Period”).
          (iii) If the Alinda Investors elect to cause the Company to acquire
the AMI Acquisition Opportunity, the Subject Person shall, to the extent
permitted by the applicable acquisition agreement and other related agreements,
assign its rights thereunder and related materials (including due diligence
materials) to the Company, and the Company shall assume all of the Subject
Person’s rights and obligations thereunder and (whether or not such agreements
can be assigned) agree to protect, defend, indemnify and hold harmless such
Subject Person from all liabilities arising out of or related to such
acquisition agreement and related agreements. In addition, at the time of such
assignment of the applicable acquisition agreement, the Company shall reimburse
the Subject Person for all costs and expenses incurred by such Subject Person
(and its Affiliates) in connection with such AMI Acquisition Opportunity. If the
Alinda Investors elect to cause the Company to acquire the AMI Acquisition
Opportunity but the Subject Person is unable to assign the applicable
acquisition agreement to the Company, then the Subject Person shall hold the
applicable acquisition and related agreements in trust for the benefit of the
Company, and, at the time of such election, the Company shall reimburse the
Subject Person (and its Affiliates) for all costs and expenses incurred by such
Subject Person (and its Affiliates) in connection with such AMI Acquisition
Opportunity. In addition, the Subject Person shall use commercially reasonable
efforts to cause the AMI Acquisition Assets to be assigned to the Company at the
closing or as soon as reasonably practicable thereafter and shall (at the
Company’s expense and direction) use commercially reasonable efforts to assign
to the Company (or enforce for the benefit of the Company) all of the benefits
of the applicable agreements, and, upon such assignment of AMI Acquisition
Assets, the Company shall reimburse such Subject Person for any additional costs
and expenses incurred by such Subject

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Person (and its Affiliates) in connection with the acquisition and assignment of
such AMI Acquisition Assets. If the Subject Person is unable to assign the AMI
Acquisition Assets at the closing, the Subject Person shall hold such AMI
Acquisition Assets in trust for the benefit of Company, and the Company shall
reimburse the Subject Person for all costs and expenses incurred by such Subject
Person (and its Affiliates) in connection with such AMI Acquisition Assets. Any
assignment of the applicable acquisition agreement, related agreements,
materials or AMI Acquisition Assets pursuant to this Section 1(c) by a Subject
Person to the Company shall be on an “AS IS, WHERE IS” basis, without any
representations, warranties, covenants, indemnification or other agreements
given by any Subject Person other than that all of the rights of the Subject
Person in the assigned agreements or AMI Acquisition Assets is free of all Liens
arising by, through or under such Subject Person but not otherwise.
          (iv) With respect to any particular AMI Acquisition Assets, any
Subject Person and its Affiliates shall be free to pursue such AMI Acquisition
Assets and such AMI Acquisition Assets shall no longer be subject to this
Agreement if the Alinda Investors do not elect to cause the Company to acquire
the AMI Acquisition Opportunity prior to the expiration of the AMI Acquisition
Election Period.
     (d) AMI Greenfield Opportunities.
          (i) In the event a Subject Person identifies an AMI Greenfield
Opportunity that such Subject Person desires to pursue or reasonably believes
the Company should pursue, such Subject Person shall promptly notify the Company
of such opportunity and provide the Company all information in its possession
related thereto.
          (ii) The Company shall have the exclusive right to purse the AMI
Greenfield Opportunity until such time as there is a good faith, irreconcilable
and material disagreement between the Alinda Investors and any Subject Person on
the design, revenue or cost structure or risk profile for or other material
matter relating to the AMI Greenfield Opportunity (a “Trigger Event”). If a
Trigger Event occurs, then any Subject Person and its Affiliates shall be free
to pursue such AMI Greenfield Opportunity without the participation by the
Company or the Alinda Investors. If, following a Trigger Event, a Subject Person
pursues an AMI Greenfield Opportunity outside of the Partnership, then such
Subject Person and the Company (without the participation of the MC Member
designated by Regency HIG) shall negotiate in good faith to determine the amount
of the costs and expenses incurred by the Company with respect to such AMI
Greenfield Opportunity to be reimbursed by such Subject Person, if any, and the
timing thereof. In the event that, during the continued development of the AMI
Greenfield Opportunity the Subject Person modifies the AMI Greenfield
Opportunity in such a manner consistent with the position of the Alinda
Investors in the dispute between the Alinda Investors and the Subject Person
that resulted in the Trigger Event, then such opportunity shall become a new AMI
Greenfield Opportunity subject to the provisions in Section 1(d)(i) and this
Section 1(d)(ii), and the Alinda Investors shall have 30 days after receipt of
notice of such new AMI Greenfield Opportunity to (x) cause the Company to elect
to pursue such AMI Greenfield Opportunity, and (y) (if the Alinda Investors
cause the Company to so elect) reimburse the Subject Person for all of its costs
and expenses associated with such AMI Greenfield Opportunity (equitability
adjusted to account for any costs and expenses that would not have been incurred
with respect to such AMI Greenfield Opportunity but for the Subject Person’s
decision to pursue the AMI Greenfield

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Opportunity in a manner inconsistent with the position of the Alinda Investors
in the dispute between the Alinda Investors and the Subject Person that resulted
in the Trigger Event); provided, that if the Alinda Investors fail to cause the
Company to make such election or reimburse the Subject Person for such costs and
expenses during such 30 day period, then the Company shall be deemed to have
waived any rights under this Agreement to participate in such new AMI Greenfield
Opportunity and the Subject Person shall be free to pursue such AMI Greenfield
Opportunity without the participation by the Company or the Alinda Investors.
     (e) Scope of Obligation to Offer. The MLP and any other Subject Person
shall only be required to offer AMI Acquisition Assets and AMI Greenfield Assets
to the Company for purchase or development, as applicable, by the Company upon
the terms and conditions contained in this Section 1. Except as provided in this
Section 1, each Subject Person shall be free to engage in any business activity
whatsoever, including those that may be in direct competition with the Company.
For the avoidance of doubt, the Parties hereby acknowledge and agree that the
obligations of the Parties set forth in Section 1 shall not apply to any Company
Specific Opportunity.
     (f) Non-Compete.
          (i) If and for so long as the Alinda Investors are participating with
a Subject Person in the analysis of an identified AMI Acquisition Opportunity
pursuant to Section 1(c) and thereafter if the Alinda Investors have caused the
Company to acquire the AMI Acquisition Company, then neither of the Alinda
Investors shall pursue such AMI Acquisition Opportunity and each of Alinda
Investor 1 and Alinda Investor 2 shall cause Alinda Investor I Parent and Alinda
Investor II Parent, respectively, to not pursue such AMI Acquisition Opportunity
directly or through a Person directly or indirectly wholly owned by Alinda
Investor I Parent and Alinda Investor II Parent, respectively, formed solely for
the purpose of pursuing and acquiring such AMI Acquisition Opportunity.
          (ii) If the Company is pursuing an AMI Greenfield Opportunity, then
until the occurrence of a Trigger Event, neither of the Alinda Investors shall
pursue such AMI Greenfield Opportunity and each of Alinda Investor 1 and Alinda
Investor 2 shall cause Alinda Investor I Parent and Alinda Investor II Parent,
respectively, to not pursue such AMI Greenfield Opportunity directly or through
a Person directly or indirectly wholly owned by Alinda Investor I Parent and
Alinda Investor II Parent, respectively, formed solely for the purpose of
pursuing and acquiring such AMI Greenfield Opportunity.
     Section 2. Confidentiality. Each Party covenants and agrees that all
information submitted to it by any Subject Person under this Agreement will be
considered proprietary, confidential and the property of the Subject Person and
will be used only for the purpose of determining whether or not to exercise its
rights in Section 1 and, if such election is exercised, for use in the
development and operation of the applicable AMI Opportunity; provided, however
such information shall become the property of the Company at such time that the
Company elects to pursue an AMI Opportunity as provided in Section 1; provided,
further, if a Trigger Event occurs with respect to any AMI Greenfield
Opportunity, any applicable information shall revert back to the applicable
Subject Person.

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     Section 3. Binding Effect. This Agreement will be binding upon, and will
inure to the benefit of, the Parties and their respective successors, permitted
assigns and legal representatives and each of the Partners shall cause the
obligations under this Agreement to be assumed by any its successors or assigns
of any interest in the Company.
     Section 4. No Third Party Rights. The provisions of this Agreement are
intended to bind the Parties as to each other and are not intended to and do not
create rights in any other person or confer upon any other person any benefits,
rights or remedies and no person is or is intended to be a third party
beneficiary of any of the provisions of this Agreement.
     Section 5. No Waiver. No waiver or consent, express or implied, by any
Party to or of any breach or default by any person in the performance by such
person of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such person
of the same or any other obligations of such person hereunder. Failure on the
part of a Party to complain of any act of any person or to declare any person in
default, irrespective of how long such failure continues, shall not constitute a
waiver by such Party of its rights hereunder until the applicable statute of
limitations period has run.
     Section 6. Applicable Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. A PARTY MAY
BRING AN ACTION ARISING UNDER OR RELATING TO THIS AGREEMENT, IF AT ALL, ONLY IN
A FEDERAL OR STATE COURT OF COMPETENT JURISDICTION IN WILMINGTON, DELAWARE. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON-CONVENIENCE, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF SUCH
ACTION OR PROCEEDING IN ANY SUCH RESPECTIVE JURISDICTION.
     Section 7. Severability. If any of the provisions of this Agreement are
held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the Parties as expressed in this Agreement at the time of
execution of this Agreement.
     Section 8. Amendment or Modification. This Agreement may be amended,
modified or supplemented from time to time only by a written agreement executed
by all Parties other than the Company.
     Section 9. Assignment. No Party shall have the right to assign its rights
or obligations under this Agreement without the prior written consent of the
other Parties; provided, that any Alinda Investor may assign its rights and
obligations under this Agreement to any Affiliate of such Alinda Investor that
is a permitted transferee of such Alinda Investor’s GP

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Units (as defined in the Company Partnership Agreement) in accordance with the
terms of the Company Partnership Agreement but no such permitted assignment
shall be deemed to be a limitation on Section 1(b).
     Section 10. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all Parties had signed the same
document. All counterparts shall be construed together and shall constitute one
and the same instrument. Execution and delivery of this Agreement by exchange of
facsimile or other electronically transmitted counterparts bearing the signature
of a Party shall be equally as effective as delivery of a manually executed
counterpart by such Party.
     Section 11. No Recourse. For the avoidance of doubt, except as expressly
provided herein, the provisions of this Agreement shall not give rise to any
right of recourse against any directors, members, managers, stockholders,
owners, officers, partners, employees, agents, consultants, attorneys or
representatives of any Party.
     Section 12. Entire Agreement; Supersedure. This Agreement and the
instruments referenced herein and therein supersede all previous understandings
or agreements among the Parties, whether oral or written, with respect to their
subject matter. This Agreement and such instruments contain the entire
understanding of the Parties with respect to the subject matter hereof and
thereof. No understanding, representation, promise or agreement, whether oral or
written, is intended to be or shall be included in or form part of this
Agreement unless it is contained in a written amendment hereto executed by the
Parties after the date hereof except as provided in Section 8.
     Section 13. No Partnership, Agency, Etc. The relationship created hereby
between the Parties is contractual. Nothing herein shall be deemed to create a
partnership, agency, independent contractor or other relationship between the
parties for any purpose.
[Signature Page Follows]

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties 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/ Byron R. Kelley         Name:   Byron R.
Kelley        Title:   President and Chief Executive Officer        RIGS
HAYNESVILLE PARTNERSHIP CO.
      By:   /s/ Byron R. Kelley         Name:   Byron R. Kelley        Title:  
Authorized Person        REGENCY HAYNESVILLE INTRASTATE GAS LLC
      By:   Regency Gas Services LP, its sole member       By:   Regency OLP GP
LLC, its general partner             By:   /s/ Byron R. Kelley         Name:  
Byron R. Kelley        Title:   President        ALINDA GAS PIPELINE I, L.P.
      By:   Alinda Gas Pipeline I GP LLC, its General Partner              
By:   /s/ Chris Beale       Name:   Chris Beale       Title:   President      
ALINDA GAS PIPELINE II, L.P.
      By:   Alinda Gas Pipeline II GP LLC, its General Partner             By:  
/s/ Chris Beale       Name:   Chris Beale       Title:   President  

Signature Page to AMI Agreement

 

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EXHIBIT A
AMI AREA
(MAP OF LOUISIANA) [d66792d6679204.gif]

A-1