Document:

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                                                                   EXHIBIT 10.23

                          FINANCIAL ADVISORY AGREEMENT

         THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into effective as of December 1, 2004, by and among Regency Acquisition
LLC, a Delaware limited liability company ("Regency Acquisition"), Regency Gas
Services LLC, a Delaware limited liability company ("Regency"), Regency Waha LP,
LLC, a Delaware limited liability company ("Waha LP"), Regency NGL GP, LLC, a
Delaware limited liability company ("NGL GP"), Regency Treating GP, LLC, a
Delaware limited liability company ("Treating GP"), Regency Waha GP, LLC, a
Delaware limited liability company ("Waha GP"), Regency Intrastate Gas LLC, a
Delaware limited liability company ("Regency Intrastate"), Regency Midcon Gas
LLC, a Delaware limited liability company ("Regency Midcon"), Regency Liquids
Pipeline LLC, a Delaware limited liability company ("Regency Liquids"), Regency
Gas Gathering and Processing LLC, a Delaware limited liability company ("Regency
Gathering"), Gulf States Transmission Corporation, a Louisiana corporation
("Gulf States"), Regency NGL Marketing LP, a Delaware limited partnership
("Regency Marketing"), Regency Gas Treating LP, a Delaware limited partnership
("Regency Treating"), Regency Gas Services Waha, LP, a Delaware limited
partnership ("Regency Waha" and, collectively with Regency Acquisition, Regency,
Waha LP, NGL GP, Treating GP, Waha GP, Regency Intrastate, Regency Midcon,
Regency Liquids, Regency Gathering, Gulf States, Regency Marketing and Regency
Treating, the "Clients"), and Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership (together with its successors, "HMCo").

         WHEREAS, pursuant to the Purchase and Sale Agreement, dated October 21,
2004 (the "Acquisition Agreement"), by and among Regency Acquisition, Regency
Services, LLC, a Delaware limited liability company ("Parent"), Regency, the
members of Parent, and the partners of CB Offshore Equity Fund V - Holdings,
L.P., a Cayman Islands limited partnership, as of the date hereof Regency
Acquisition is purchasing all of the equity interests of Regency (the
"Acquisition"); and

         WHEREAS, the Clients have requested that HMCo render, and HMCo has
rendered, financial advisory services to them in connection with the negotiation
and implementation of the Acquisition and the debt and equity financing
transactions and certain other transactions related thereto (collectively with
the Acquisition, the "Transaction"); and

         WHEREAS, the Clients have requested that HMCo render financial
advisory, investment banking, and other similar services to them with respect to
future proposals for a tender offer, acquisition, sale, merger, exchange offer,
recapitalization, restructuring, refinancing, issuances of debt or equity
(whether in a private or a public offering) or other similar transaction
(including asset sales or acquisitions and purchases or sales of subsidiaries or
divisions directly or indirectly involving any Client or any of its subsidiaries
and any other person or entity (collectively, "Subsequent Transactions");

         NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo to the Clients, and to evidence the obligations of the Clients
to HMCo and the mutual covenants herein contained, the Clients hereby agree with
HMCo as follows:

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NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN SECTION 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT
HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR
THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY OTHER
INDEMNIFIED PERSON IDENTIFIED THEREIN.

         1. Retention.

                  (a) The Clients hereby acknowledge that they have retained
HMCo, and HMCo acknowledges that it has acted, as financial advisor to the
Clients in connection with the Transaction.

                  (b) The Clients acknowledge that they have retained HMCo as
their exclusive financial advisor in connection with any Subsequent Transactions
that may be consummated during the term of this Agreement, and that each Client
will not retain any other person or entity to provide such services in
connection with any such Subsequent Transaction without the prior written
consent of HMCo. HMCo agrees that it shall provide such financial advisory,
investment banking and other similar services in connection with any such
Subsequent Transaction as may be requested from time to time by the board of
directors, board of managers, members, or similar governing body of any Client.

         2. Term. The term of this Agreement shall continue until the earlier to
occur of (i) the tenth anniversary of the date hereof or (ii) the date on which
Hicks, Muse, Tate & Furst Incorporated ("HMTF") or its successors and their
respective affiliates (including, without limitation, any equity fund sponsored
by HMTF or its successors) shall cease to own beneficially, directly or
indirectly, any securities of any Client or its respective successors.

         3. Compensation.

                  (a) As compensation for HMCo's services as financial advisor
to the Clients in connection with the Transaction, the Clients hereby
irrevocably agree, jointly and severally, to pay to HMCo a cash fee equal to
$6,075,000, which will be payable at (and only if and when) the closing of the
Acquisition.

                  (b) In connection with any Subsequent Transaction consummated
during the term of this Agreement, the Clients hereby irrevocably agree, jointly
and severally, to pay to HMCo, at the closing of any such Subsequent
Transaction, a cash fee equal to 1.5% of the Transaction Value of such
Subsequent Transaction. As used herein, the term "Transaction Value" means the
total value of the Subsequent Transaction, including without limitation the
aggregate amount of the funds required to complete the Subsequent Transaction
(excluding any fees payable to this Section 3(b)), including without limitation
the amount of any indebtedness, equity or similar items issued, assumed or
remaining outstanding and the amount of any working capital items or other
assets retained by the seller in such Subsequent Transaction.

         4. Reimbursement of Expenses. In addition to the compensation to be
paid pursuant to Section 3 hereof, the Clients hereby irrevocably agree, jointly
and severally, to reimburse HMCo, promptly following demand therefor, together
with invoices or reasonably detailed

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descriptions thereof, for all reasonable disbursements and out-of-pocket
expenses (including without limitation fees and disbursements of counsel)
incurred by HMCo (i) as financial advisor to the Clients in connection with the
Transaction and (ii) in connection with the performance by it of the services
contemplated by Section l(b) hereof.

         5. Indemnification. The Clients jointly and severally shall indemnify
and hold harmless each of HMCo, its affiliates and their respective directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20(a) of the Securities Exchange
Act of 1934, as amended), if any, agents, independent contractors and employees
(HMCo, its affiliates and such other specified persons being collectively
referred to as "Indemnified Persons" and individually as an "Indemnified
Person") from and against any and all claims, liabilities, losses, damages and
expenses incurred by an Indemnified Person (including without limitation those
arising out of an Indemnified Person's negligence or gross negligence and
reasonable fees and disbursements of the respective Indemnified Person's
counsel) that (A) are related to or arise out of (i) actions taken or omitted to
be taken (including without limitation any untrue statements made or any
statements omitted to be made) by any of the Clients or (ii) actions taken or
omitted to be taken by an Indemnified Person with any Client's consent or in
conformity with any Client's instructions or any Client's actions or omissions
or (B) are otherwise related to or arise out of HMCo's engagement, and will
reimburse each Indemnified Person for all costs and expenses including, without
limitation fees and disbursements of any Indemnified Person's counsel, as they
are incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with HMCo's acting pursuant to
HMCo's engagement, whether or not any Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. None of the Clients
will, however, be responsible for any claims, liabilities, losses, damages or
expenses pursuant to clause (B) of the preceding sentence that have resulted
primarily from HMCo's bad faith or willful misconduct. The Clients also agree
that neither HMCo nor any other Indemnified Person shall have any liability to
any Client for or in connection with such engagement except for any such
liability for claims, liabilities, losses, damages or expenses incurred by any
Client that have resulted primarily from HMCo's bad faith or willful misconduct.
The Clients agree that in no event will HMCo be liable for any consequential,
exemplary or punitive damages in connection with its performance under this
Agreement. Each Client further agrees that it will not, without the prior
written consent of HMCo, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of HMCo and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. EACH CLIENT
HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL
CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE
ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OR GROSS NEGLIGENCE OF HMCO OR ANY OTHER
INDEMNIFIED PERSON.

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         The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim, which is
subject to this Agreement, is brought against HMCo or any other Indemnified
Person.

         It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagements may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagements.

         Each of the Clients further understands and agrees that if HMCo is
asked to furnish any Client a financial opinion letter or act for any Client in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.

         6. Confidential Information. In connection with the performance of the
services hereunder, HMCo agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to HMCo without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.

         7. Governing Law. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof. Each of the parties hereby (a) irrevocably
submits to the exclusive jurisdiction of the United States Federal District
Court for the Northern District of Texas, sitting in Dallas County, Texas, the
United States of America, in the event such court has jurisdiction or, if such
court does not have jurisdiction, to any district court sitting in Dallas
County, Texas, the United States of America, for the purpose of any suit,
action, or proceeding arising out of or relating to this Agreement, including
any claims by any Indemnified Persons for indemnity pursuant to Section 5,
hereof, (b) waives, and agrees not to assert in any such suit, action, or
proceeding, any claim that (i) it is not personally subject to the jurisdiction
of such court or of any other court to which proceedings in such court may be
appealed, (ii) such suit, action or proceeding is brought in an inconvenient
forum, or (iii) the venue of such suit, action, or proceeding is improper and
(c) expressly waives any requirement for the posting of a bond by the party
bringing such suit, action, or proceeding. Each of the parties consents to
process being served in any such suit, action, or proceeding by mailing,
certified mail, return receipt requested, a copy thereof to such party at the
address in effect for notices hereunder, and agrees that such services shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 7 shall affect or limit any right to serve process in any other
manner permitted by law.

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         8. Assignment. This Agreement and all provisions contained herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of HMCo, which
may be assigned to any one or more of its principals or affiliates) by any of
the parties without the prior written consent of the other parties.

         9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.

         10. Certain Waivers. No (a) direct or indirect holder of any equity
interests or securities of HMCo (whether such holder is a limited or general
partner, member, stockholder or otherwise), (b) affiliate of HMCo, or (c) any
direct or indirect director, officer, employee, partner, affiliate, member,
controlling person, representative, or agent of HMCo, any of HMCo's respective
affiliates or any such direct or indirect holder of any equity interests or
securities of HMCo (collectively, the "Party Affiliates") shall have any
liability or obligation of any nature whatsoever in connection with or under
this letter or the transactions contemplated hereby, and each party hereto
hereby waives and releases all claims against such Party Affiliates related to
any such liability or obligation.

         11. Amendment and Waiver. Any provision of this Agreement may be
altered, supplemented, amended, or waived by the written consent of the Clients
and HMCo. No failure or delay by any party to this Agreement in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

         12. Notices. All notices, requests and other communications to any
party to this Agreement shall be in writing (including telex, facsimile
transmission or similar writing) and shall be given to such party by messenger,
telex, or facsimile transmission (a) at its address, facsimile number or telex
number set forth on the signature pages hereof, or (b) such other address,
facsimile number or telex number as a party may hereafter specify for the
purpose by notice to each of the other parties. Each such notice, request or
other communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section 12 and the appropriate
answer back is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in or pursuant to this Section 12
and electronic confirmation of receipt is received, (iii) if given by messenger
or any other means, when delivered at the address specified in or pursuant to
this Section 12.

         13. Section Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provisions hereof.

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         14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

         15. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, and if
the rights or obligations of the parties under this Agreement shall not be
materially and adversely affected thereby (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom, and (d) in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a legal, valid, and enforceable provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible.

         16. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to the
subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                    HICKS, MUSE & CO. PARTNERS, L.P.

                                    By:  HM PARTNERS INC.,
                                         its General Partner

                                         By: /s/ ERIC ALLEN
                                             -----------------------------------
                                             Eric Allen
                                             General Counsel and Assistant
                                              Secretary

                                             200 Crescent Court
                                             Suite 1600
                                             Dallas, Texas 75201

                                             Facsimile: (214)720-7888

                                    REGENCY ACQUISITION LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY GAS SERVICES LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY WAHA LP, LLC*

                                    BY: REGENCY GAS SERVICES LLC, ITS MANAGER

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                       S-1
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                                    REGENCY NGL GP, LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY TREATING GP, LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY WAHA GP, LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY INTRASTATE GAS LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY MIDCON GAS LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                       S-2
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                                    REGENCY LIQUIDS PIPELINE LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    GULF STATES TRANSMISSION CORPORATION*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY GAS GATHERING AND PROCESSING LLC*

                                    By: /s/ JAMES W. HUNT
                                        ----------------------------------------
                                        James W. Hunt
                                        President

                                    REGENCY NGL MARKETING LP*

                                        By:  REGENCY NGL GP, LLC,
                                             its General Partner

                                             By: /s/ JAMES W. HUNT
                                                 -------------------------------
                                                 James W. Hunt
                                                 President

                                    REGENCY GAS TREATING LP*

                                        By: REGENCY TREATING GP, LLC,
                                            its General Partner

                                       S-3
<PAGE>

                                             By: /s/ JAMES W. HUNT
                                                 -------------------------------
                                                 James W. Hunt
                                                 President

                                    REGENCY GAS SERVICES, WAHA, LP*

                                        By: REGENCY WAHA GP, LLC,
                                            its General Partner

                                             By: /s/ JAMES W. HUNT
                                                 -------------------------------
                                                 James W. Hunt
                                                 President

                                    * Address for Notices:

                                    1700 Pacific Avenue, Suite 2900
                                    Dallas, TX 75201
                                    Attn: James W. Hunt

                                    Facsimile: (214)750-1749

                                       S-4<PAGE>
                                                                   EXHIBIT 10.24

                       MONITORING AND OVERSIGHT AGREEMENT

         This MONITORING AND OVERSIGHT AGREEMENT (this "Agreement") is entered
into this 1st day of December, 2004, by and among Regency Acquisition LLC, a
Delaware limited liability company ("Regency Acquisition"), Regency Gas Services
LLC, a Delaware limited liability company ("Regency"), Regency Waha LP, LLC, a
Delaware limited liability company ("Waha LP"), Regency NGL GP, LLC, a Delaware
limited liability company ("NGL GP"), Regency Treating GP, LLC, a Delaware
limited liability company ("Treating GP"), Regency Waha GP, LLC, a Delaware
limited liability company ("Waha GP"), Regency Intrastate Gas LLC, a Delaware
limited liability company ("Regency Intrastate"), Regency Midcon Gas LLC, a
Delaware limited liability company ("Regency Midcon"), Regency Liquids Pipeline
LLC, a Delaware limited liability company ("Regency Liquids"), Regency Gas
Gathering and Processing LLC, a Delaware limited liability company ("Regency
Gathering"), Gulf States Transmission Corporation, a Louisiana corporation
("Gulf States"), Regency NGL Marketing LP, a Delaware limited partnership
("Regency Marketing"), Regency Gas Treating LP, a Delaware limited partnership
("Regency Treating"), Regency Gas Services Waha, LP, a Delaware limited
partnership ("Regency Waha" and, collectively with Regency Acquisition, Regency,
Waha LP, NGL GP, Treating GP, Waha GP, Regency Intrastate, Regency Midcon,
Regency Liquids, Regency Gathering, Gulf States, Regency Marketing and Regency
Treating, the "Clients")) and Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership (together with its successors, "HMCo").

         1. Retention. The Clients hereby acknowledge that they have retained
HMCo to, and HMCo acknowledges that, subject to reasonable advance notice in
order to accommodate scheduling, HMCo will provide financial oversight and
monitoring services to the Clients as requested by the board of managers or
similar managing body of Regency Acquisition during the term of this Agreement.

         2. Term. The term of this Agreement shall continue until the earlier to
occur of (i) the tenth anniversary of the date hereof or (ii) the date on which
Hicks, Muse, Tate & Furst Incorporated ("HMTF") or its successors and their
respective affiliates (including, without limitation, any equity fund sponsored
by HMTF or its successors) shall cease to own beneficially, directly or
indirectly, any securities of any of the Clients or their respective successors.

         3. Compensation.

                  (a) As compensation for HMCo's services to the Clients under
this Agreement, the Clients hereby irrevocably agree, jointly and severally, to
pay to HMCo (i) a fee equal to $83,350.00, payable December 31, 2004 (the
"Initial Fee"), and (ii) an annual fee (the "Monitoring Fee") equal to the
greater of (A) $ 1 million or (B) an amount equal to the product of (x) budgeted
consolidated annual EBITDA for Regency and its subsidiaries for the fiscal year
beginning in January 2005 multiplied by (y) 1.5% (the greater of (A) and (B),
the "Base Fee"), with the Monitoring Fee subject to adjustment pursuant to
paragraphs (b) and (c) below and prorated on a daily basis for any partial
fiscal year during the term of this Agreement. The Monitoring Fee shall be
payable in equal quarterly installments on each of March 31, June 30, September
30 and December 31 during the term of this Agreement (each a "Payment Date").

<PAGE>

beginning with March 31, 2005. All payments shall be made by wire transfer of
immediately available funds to the account described on Exhibit A hereto (or
such other account as HMCo may hereafter designate in writing).

NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN SECTION 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT
HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR
THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OR GROSS NEGLIGENCE OF HMCO OR
ANY OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.

                  (b) On the first day of each fiscal year during the term of
this Agreement, beginning with the fiscal year beginning after the fiscal year
ended in December 2005, the Monitoring Fee shall be adjusted so that the
Monitoring Fee, as adjusted, shall be equal to the greater of (a) the Base Fee
and (b) the product of (i) budgeted consolidated annual EBITDA of Regency and
its subsidiaries for the then current fiscal year, multiplied by (ii) 1.5% (the
"Percentage"). For purposes of this Agreement, "EBITDA" means gross revenue
(other than extraordinary gains or losses from the sale of assets) less
operating expenses (including direct and indirect expenses and corporate
overhead expenses of the Clients, but excluding depreciation and amortization).

                  (c) On each occasion that Regency or any of its subsidiaries
shall acquire another entity or business during the term of this Agreement, (i)
any such entity or any newly-formed entity otherwise holding or conducting such
business shall promptly execute and deliver to HMCo a joinder to this Agreement
in the form attached as Exhibit C hereto and thereby become a party to, and a
Client for all purposes under, this Agreement from and after such execution and
delivery, but effective as of the time of the closing of such acquisition, and
(ii) the annual Monitoring Fee for the fiscal year in which such acquisition
occurs shall be adjusted prospectively (i.e., for periods subsequent to such
acquisition until the next adjustment pursuant to clause (b) above), as of the
closing of such acquisition, to an annual amount equal to the product of (A) the
pro forma combined budgeted consolidated annual EBITDA of Regency and its
subsidiaries for the entire then current fiscal year of Regency (including the
budgeted EBITDA of the acquired or newly-formed entity or business for such
entire fiscal year, on a pro forma basis), multiplied by (B) the Percentage;
provided, however, that in no event shall the annual Monitoring Fee be less than
the Base Fee.

                  (d) The Initial Fee and the Monitoring Fee will be paid in
full, free of any deductions or withholdings, unless a Client is compelled by
law to make payments subject to any such taxes. In such event the Client shall
pay to HMCo such additional amounts as may be necessary that HMCo receives a net
amount equal to the full amount which would have been receivable had payment not
been made subject to such tax.

                  (e) All past due payments in respect of the Initial Fee and
the Monitoring Fee shall bear interest at the lesser of the highest rate of
interest which may be charged under applicable law or the prime commercial
lending rate per annum of The Chase Manhattan Bank or its successors (which rate
is a reference rate and is not necessarily its lowest or best rate of

                                       2
<PAGE>

interest actually charged to any customer) (the "Prime Rate") as in effect from
time to time, plus five percent (5%), from the due date of such payment to and
including the date on which payment is made to HMCo in full, including such
interest accrued thereon.

         4. Reimbursement of Expenses. In addition to the compensation to be
paid pursuant to Section 3 hereof, the Clients agree, jointly and severally, to
pay or reimburse HMCo for all "Reimbursable Expenses," which shall consist of
(i) all reasonable disbursements and out-of-pocket expenses (including, without
limitation, costs of travel, postage, deliveries, communications, etc.) incurred
by HMCo or its affiliates for the account of any Client or in connection with
the performance by HMCo of the services contemplated by Section 1 hereof and
(ii) the Client's Pro Rata Share of Allocable Expenditures (as defined in
Exhibit B hereto). Promptly (but not more than 10 days) after request by or
notice from HMCo, the applicable Client shall pay HMCo, by wire transfer of
immediately available funds to the account described on Exhibit A hereto (or
such other account as HMCo may hereafter designate in writing), the Reimbursable
Expenses for which HMCo has provided such Client invoices or reasonably detailed
descriptions. All past due payments in respect of the Reimbursable Expenses
shall bear interest at the lesser of the highest rate of interest which may be
charged under applicable law or the Prime Rate plus five percent (5%) from the
Payment Date to and including the date on which such Reimbursable Expenses plus
accrued interest thereon are fully paid to HMCo.

         5. Indemnification. The Clients jointly and severally shall indemnify
and hold harmless each of HMCo, its affiliates, and their respective directors,
officers, and controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20(a) of the Securities Exchange
Act of 1934, as amended), if any, agents, independent contractors and employees
(HMCo, its affiliates, and such other specified persons being collectively
referred to as "Indemnified Persons," and individually as an "Indemnified
Person") from and against any and all claims, liabilities, losses, damages and
expenses incurred by any Indemnified Person (including those arising out of an
Indemnified Person's ordinary negligence or gross negligence and reasonable fees
and disbursements of the respective Indemnified Person's counsel) which (A) are
related to or arise out of (i) actions taken or omitted to be taken (including
without limitation any untrue statements made or any statements omitted to be
made) by the any of the Clients or (ii) actions taken or omitted to be taken by
an Indemnified Person with the any Client's consent or in conformity with any
Client's instructions or any Client's actions or omissions or (B) are otherwise
related to or arise out of HMCo's engagement, and will reimburse each
Indemnified Person for all costs and expenses, including without limitation fees
and disbursements of any Indemnified Person's counsel, as they are incurred, in
connection with investigating, preparing for, defending or appealing any action,
formal or informal claim, investigation, inquiry or other proceeding, whether or
not in connection with pending or threatened litigation, caused by or arising
out of or in connection with HMCo's acting pursuant to HMCo's engagement,
whether or not any Indemnified Person is named as a party thereto and whether or
not any liability results therefrom. None of the Clients will, however, be
responsible for any claims, liabilities, losses, damages or expenses pursuant to
clause (B) of the preceding sentence that have resulted primarily from HMCo's
bad faith or willful misconduct. The Clients also agree that neither HMCo nor
any other Indemnified Person shall have any liability to any Client for or in
connection with such engagement except for any such liability for claims,
liabilities, losses, damages or expenses incurred by any Client that have
resulted primarily from HMCo's bad faith or willful misconduct. The Clients
agree that in no event will HMCo be liable

                                       3
<PAGE>

for any consequential, exemplary or punitive damages in connection with its
performance under this Agreement. Each Client further agrees that it will not,
without the prior written consent of HMCo, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any Indemnified Person is an actual or potential party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of HMCo and each other Indemnified Person
hereunder from all liability arising out of such claim, action, suit or
proceeding. EACH CLIENT HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL
BE APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE
RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE
SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OR GROSS NEGLIGENCE OF HMCO OR ANY
OTHER INDEMNIFIED PERSON.

         The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim subject to
this Agreement is brought against HMCo or any other Indemnified Person.

         It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagement(s) may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s), and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagements.

         Each of the Clients further understands and agrees that if HMCo is
asked to furnish any Client a financial opinion letter or act for any Client in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.

         6. Confidential Information. In connection with the performance of the
services hereunder, HMCo agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to HMCo without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.

         7. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof. Each of the parties hereby (a) irrevocably
submits to the exclusive jurisdiction of the United States Federal District
Court for the Northern District of Texas, sitting in Dallas County, Texas, the
United States of America, in the event such court has jurisdiction or, if such
court does not

                                       4
<PAGE>

have jurisdiction, to any district court sitting in Dallas County, Texas, the
United States of America, for the purpose of any suit, action, or proceeding
arising out of or relating to this Agreement, including any claims by any
Indemnified Persons for indemnity pursuant to Section 5 hereof, (b) waives, and
agrees not to assert in any such suit, action, or proceeding, any claim that (i)
it is not personally subject to the jurisdiction of such court or of any other
court to which proceedings in such court may be appealed, (ii) such suit, action
or proceeding is brought in an inconvenient forum or (iii) the venue of such
suit, action or proceeding is improper and (c) expressly waives any requirement
for the posting of a bond by the party bringing such suit, action or proceeding.
Each of the parties consents to process being served in any such suit, action or
proceeding by mailing, certified mail, return receipt requested, a copy thereof
to such party at the address in effect for notices hereunder, and agrees that
such services shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7 shall affect or limit any right to serve
process in any other manner permitted by law.

         8. Assignment. This Agreement and all provisions contained herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights and obligations of HMCo, which
may be assigned to any one or more of its principals or affiliates) by any of
the parties hereto without the prior written consent of the other parties.

         9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.

         10. Certain Waivers. No (a) direct or indirect holder of any equity
interests or securities of HMCo (whether such holder is a limited or general
partner, member, stockholder or otherwise), (b) affiliate of HMCo, or (c) any
direct or indirect director, officer, employee, partner, affiliate, member,
controlling person, representative or agent of HMCo, any of HMCo's respective
affiliates or any such direct or indirect holder of any equity interests or
securities of HMCo (collectively, the "Party Affiliates") shall have any
liability or obligation of any nature whatsoever in connection with or under
this Agreement or the transactions contemplated hereby, and each party hereto
herby waives and releases all claims against such Party Affiliates related to
any such liability or obligation.

         11. Other Understandings. All discussions, understanding and agreements
heretofore made between any of the parties hereto with respect to the subject
matter hereof are merged in this Agreement, which alone fully and completely
expresses the Agreement of the parties hereto. All calculations of the
Monitoring Fee and Reimbursable Expenses shall be made by HMCo and, in the
absence of mathematical error, shall be final and conclusive.

         12. Amendment and Waiver. Any provision of this Agreement may be
altered, supplemented, amended, or waived by the written consent of the Clients
and HMCo. No failure or delay by any party to this Agreement in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights

                                       5
<PAGE>

and remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.

         13. Notices. All notices, requests and other communications to any
party to this Agreement shall be in writing (including telex, facsimile
transmission or similar writing) and shall be given to such party by messenger,
telex or facsimile transmission (a) at its address, facsimile number or telex
number set forth on the signature pages hereof or (b) such other address,
facsimile number or telex number as a party may hereafter specify for the
purpose by notice to each of the other parties. Each such notice, request or
other communication shall be effective (i) if given by telex, when such telex is
transmitted and the appropriate answer back is received, (ii) if given by
facsimile transmission, when transmitted and electronic confirmation of receipt
is received and (iii) if given by messenger or any other means, when delivered
and a receipt of delivery is received.

         14. Section Headings. Headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provisions hereof.

         15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

         16. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of the parties under this Agreement shall not be
materially and adversely affected thereby, (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Release as of
the date first above written.

                                         HICKS, MUSE & CO. PARTNERS, L.P.

                                         By: HM PARTNERS INC.,
                                             its General Partner

                                         By: /s/ ERIC ALLEN
                                             -----------------------------------
                                             Eric Allen
                                             General Counsel and Assistant
                                             Secretary

                                             200 Crescent Court
                                             Suite 1600
                                             Dallas, Texas 75201

                                             Facsimile: (214)720-7888

                                         REGENCY ACQUISITION LLC*

                                         By: /s/ JAMES W. HUNT
                                             -----------------------------------
                                             James W. Hunt
                                             President

                                         REGENCY GAS SERVICES LLC*

                                         By: /s/ JAMES W. HUNT
                                             -----------------------------------
                                             James W. Hunt
                                             President

                                       S-l
<PAGE>

                                       REGENCY WAHA LP, LLC*

                                       By: Regency Gas Services LLC, its manager

                                              By: /s/ JAMES W. HUNT
                                                  ------------------------------
                                                  James W. Hunt
                                                  President

                                       REGENCY NGL GP, LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY TREATING GP, LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY WAHA GP, LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY INTRASTATE GAS LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY MIDCON GAS LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       S-2
<PAGE>

                                       REGENCY LIQUIDS PIPELINE LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY GAS GATHERING AND
                                       PROCESSING LLC*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       GULF STATES TRANSMISSION CORPORATION*

                                       By: /s/ JAMES W. HUNT
                                           -------------------------------------
                                           James W. Hunt
                                           President

                                       REGENCY NGL MARKETING LP*

                                             By:  Regency NGL GP, LLC,
                                                  its General Partner

                                             By:  /s/ JAMES W. HUNT
                                                  ------------------------------
                                                  James W. Hunt
                                                  President

                                       REGENCY GAS TREATING LP*

                                             By: Regency Treating GP, LLC,
                                                 its General Partner

                                             By: /s/ JAMES W. HUNT
                                                 -------------------------------
                                                 James W. Hunt
                                                 President

                                       S-3
<PAGE>

                                       REGENCY GAS SERVICES WAHA, LP*

                                             By: Regency Waha GP, LLC,
                                                 its General Partner

                                             By: /s/ JAMES W. HUNT
                                                 -------------------------------
                                                 James W. Hunt
                                                 President

                                                 *Address for Notice:
                                                  1700 Pacific Avenue
                                                  Suite 2900
                                                  Dallas, Texas 75201
                                                  Attn: James W. Hunt
                                                  Facsimile: (214)750-1749

                                       S-4
<PAGE>

                                    EXHIBIT A
                           WIRE TRANSFER INSTRUCTIONS

                        Bank: JPMorgan Chase Bank, Texas

                                ABA#: 113 000 609

                 Account name: HICKS, MUSE & CO. PARTNERS, L.P.

                              Accounts 088-05113824

                           Reference: Regency M&O Fee

                      Attention: Lila McDermed 214-740-7320

                                       A-l
<PAGE>

                                    EXHIBIT B
        PRO RATA SHARE OF ALLOCABLE EXPENDITURES AND RELATED DEFINITIONS

         "Pro Rata Share of Allocable Expenditures" means the product obtained
by multiplying (i) the sum of all Allocable Expenditures that have not
previously been paid or reimbursed to HMCo by the Clients and other
Participating Acquired Companies by (ii) a fraction, the numerator of which
shall equal the total amount of Invested Capital (as from time to time
outstanding) that any Fund has invested in the Client's respective securities or
instruments and the denominator of which shall equal the total amount of
Invested Capital (as from time to time outstanding) that any Fund has invested
in the securities or instruments of any and all Participating Acquired
Companies.

The capitalized terms used in the foregoing definitions have the meanings set
forth below:

         "Allocable Expenditures" means all variable, fixed and other costs,
expenses, expenditures, charges or obligations (including, without limitation,
letters of credit, deposits, etc.) that are related to assets utilized, services
provided, or programs administered by HMCo or its affiliates in connection with
the performance by HMCo of financial oversight and monitoring services on behalf
of the Clients and other Participating Acquired Companies, including without
limitation corporate airplanes, charitable contributions, retainers for
lobbyists and other professionals and premiums and finance charges for director
and officer insurance maintained for representatives of HMCo or its affiliates.

         "Fund" means any one or more of the equity funds now or hereafter
sponsored by Hicks, Muse, Tate & Furst Incorporated or its successors, including
any LP Investment Entity (as defined in the limited partnership agreement for
any such equity fund) formed under or with respect to any such equity fund.

         "Invested Capital" means the total amount of partner capital that a
Fund from time to time invests in the purchase of securities or instruments of a
Participating Acquired Company, less the total cash distributions that
constitute a return of such partner capital with proceeds from the disposition
of all or any part of such securities or instruments. For each period for which
the Pro Rata Share of Allocable Expenditures is being made, the applicable
Invested Capital shall equal the amount outstanding as of the end of the
respective period.

         "Participating Acquired Company" means any partnership, corporation,
trust, limited liability company or other entity that is, for the period for
which the Pro Rata Share of Allocable Expenditures is being determined, a party
to a monitoring agreement or similar contract with HMCo or its affiliates and
is, as of the end of such period, designated by HMCo to bear a portion of such
allocable expenditures. HMCo may, in its sole and absolute discretion, determine
not to designate an entity as a Participating Acquired Company with respect to
such period. HMCo may make such determination of non-designation for no reason
or for any reason, including without limitation the respective entity's
bankruptcy or other temporary or permanent inability to pay fees or expenses to
HMCo or its affiliates.

                                       B-l
<PAGE>

                                    EXHIBIT C

                                   JOINDER TO
                       MONITORING AND OVERSIGHT AGREEMENT

         This JOINDER to the Monitoring and Oversight Agreement
dated_____________, 2004 (the "Agreement"), by and among Regency Acquisition
LLC, a Delaware limited liability company ("Regency Acquisition") Regency Gas
Services LLC, a Delaware limited liability company ("Regency"), Regency Waha LP,
LLC, a Delaware limited liability company ("Waha LP"), Regency NGL GP, LLC, a
Delaware limited liability company ("NGL GP"), Regency Treating GP, LLC, a
Delaware limited liability company ("Treating GP"), Regency Waha GP, LLC, a
Delaware limited liability company ("Waha GP"), Regency Intrastate Gas LLC, a
Delaware limited liability company ("Regency Intrastate"), Regency Midcon Gas
LLC, a Delaware limited liability company ("Regency Midcon"), Regency Liquids
Pipeline LLC, a Delaware limited liability company ("Regency Liquids"), Regency
Gas Gathering and Processing LLC, a Delaware limited liability company ("Regency
Gathering"), Gulf States Transmission Corporation, a Louisiana corporation
("Gulf States"), Regency NGL Marketing LP, a Delaware limited partnership
("Regency Marketing"), Regency Gas Treating LP, a Delaware limited partnership
("Regency Treating"), Regency Gas Services Waha, LP, a Delaware limited
partnership ("Regency Waha" and, collectively with Regency Acquisition, Regency,
Waha LP, NGL GP, Treating GP, Waha GP, Regency Intrastate, Regency Midcon,
Regency Liquids, Regency Gathering, Gulf States, Regency Marketing and Regency
Treating, the "Clients"), and Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership ("HMCo"), is entered into this _________ day of ______________,
200_, by and between HMCo and_______________________________ ("Subsidiary"), to
be effective as of _____________________, 200__ (the "Effective Date").

         WHEREAS, pursuant to Section 3(c) of the Agreement, in the event
Regency Acquisition or any of its subsidiaries shall acquire another entity or
business during the term of the Agreement, the Clients are obligated to cause
any such entity or any newly-formed entity that shall hold or conduct such
acquired business to execute this Joinder and thereby, effective as of the
closing of such acquisition, become a party to the Agreement and a "Client" for
all purposes thereunder; and

         WHEREAS, Subsidiary is an entity acquired by or is newly-formed to hold
or conduct a business acquired by Regency Acquisition or any of its
subsidiaries.

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Subsidiary hereby agrees as follows:

         1. Agreement to be Bound. Upon execution of this Joinder, effective as
of the Effective Date, Subsidiary shall (i) become a party to and be bound by
the Agreement and all of the terms and conditions thereof and (ii) be deemed a
"Client" for all purposes under the Agreement.

                                       C-l
<PAGE>

         2. Successors and Assigns. This Joinder shall bind and inure to the
benefit of and be enforceable by HMCo, each Client and their respective
successors and assigns.

         3. Notices. All notices, demands or other communications made to
Subsidiary under or with respect to the Agreement shall be directed to the
address set forth on the signature page hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       C-2

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Joinder to
Monitoring and Oversight Agreement effective as of the date first above written.

                                       [SUBSIDIARY]

                                       By:
                                               ---------------------------------
                                       Name:
                                               ---------------------------------
                                       Title:
                                               ---------------------------------

                                               [STREET ADDRESS]
                                               [CITY/STATE/ZIP CODE]
                                               Attention: [OFFICE]

                                               Facsimile: [___ ___-_____]

                            SIGNATURE PAGE TO JOINDER

                                       C-3

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