Document:

Exhibit 4.2

 

Execution Version

 

May 26,
2009

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS
AGREEMENT dated May 26, 2009 (this “Agreement”) is entered
into by and among MarkWest Energy Partners L.P., a limited partnership
organized under the laws of the State of Delaware (the “Partnership”),
MarkWest Energy Finance Corporation, a corporation organized under the laws of
the State of Delaware (“Finance Corp” and, together with the
Partnership, the “Issuers”), the guarantors  listed
on the signature pages hereto (the “Guarantors”), and J.P. Morgan Securities Inc., RBC Capital
Markets Corporation, Wachovia Capital Markets, LLC, Deutsche Bank Securities
Inc., and U.S. Bancorp Investments, Inc. (collectively, the “Initial
Purchasers”).

 

The Issuers, the Guarantors
and the Initial Purchasers are parties to that certain Purchase Agreement dated
May 20, 2009 (the “Purchase Agreement”), which provides for the
sale by the Issuers to the Initial Purchasers of $150,000,000 aggregate
principal amount of the Issuers’ 6.875% Senior Notes due 2014 (the “Securities”)
that will be guaranteed on an unsecured senior basis by each of the
Guarantors.  The Securities will be
issued pursuant to an Indenture, dated as of May 26, 2009, among the
Issuers, the Guarantors and Wells Fargo Bank, National Association, as trustee
(the “Indenture”).  As an
inducement to the Initial Purchasers to enter into the Purchase Agreement, the
Issuers and the Guarantors have agreed to provide to the Initial Purchasers and
their direct and indirect transferees the registration rights set forth in this
Agreement.  The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.

 

In consideration of the
foregoing, the parties hereto agree as follows:

 

1.             Definitions.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Business
Day” shall have the meaning ascribed thereto in the Indenture.

 

“DTC” shall mean
the Depository Trust Company.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

“Exchange Dates”
shall have the meaning set forth in Section 2(a)(ii) hereof.

 

“Exchange
Offer” shall mean the exchange offer by the Issuers and the Guarantors of
Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

 

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“Exchange Offer
Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.

 

“Exchange Offer
Registration Statement” shall mean an exchange offer registration statement
on Form S-4 (or, if applicable, on another appropriate form) and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.

 

“Exchange Securities”
shall mean senior notes issued by the Issuers and guaranteed by the Guarantors
under the Indenture containing terms identical to the Securities (except that
the Exchange Securities will not be subject to restrictions on transfer or to
any increase in annual interest rate for failure to comply with this Agreement)
and to be offered to Holders of Securities in exchange for Securities pursuant
to the Exchange Offer.

 

“Finance Corp”
shall have the meaning set forth in the preamble and shall also include Finance
Corp’s successors.

 

“FINRA” shall mean
the Financial Industry
Regulatory Authority, Inc.

 

“Guarantors” shall
have the meaning set forth in the preamble and shall also include any Guarantor’s
successors.

 

“Holders” shall
mean the Initial Purchasers, for so long as they own any Registrable
Securities, and each of their successors, assigns and direct and indirect
transferees who become owners of Registrable Securities under the Indenture;
provided that for purposes of Sections 4 and 5 of this Agreement, the term “Holders”
shall include Participating Broker-Dealers.

 

“Indemnified Person”
shall have the meaning set forth in Section 5(c) hereof.

 

“Indemnifying Person”
shall have the meaning set forth in Section 5(c) hereof.

 

“Indenture” shall
have the meaning set forth in the recital.

 

“Initial Purchasers”
shall have the meaning set forth in the preamble.

 

“Inspector” shall
have the meaning set forth in Section 3(a)(xiii) hereof.

 

“Issuer FWP” shall
have the meaning set forth in Section 5(a) hereof.

 

“Issuers” shall
have the meaning set forth in the preamble.

 

“Majority Holders”
shall mean the Holders of a majority of the aggregate principal amount of the
outstanding Registrable Securities; provided that whenever the 

 

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consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, any Registrable Securities owned directly or
indirectly by the Issuers or any of their affiliates shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount; and provided, further, that if the Issuers shall
issue any additional Securities under the Indenture prior to consummation of
the Exchange Offer or, if applicable, the effectiveness of any Shelf
Registration Statement, such additional Securities and the Registrable
Securities to which this Agreement relates shall be treated together as one
class for purposes of determining whether the consent or approval of Holders of
a specified percentage of Registrable Securities has been obtained.

 

“Participating
Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

 

“Partnership”
shall have the meaning set forth in the preamble and shall also include the
Partnership’s successors.

 

“Person” shall
mean an individual, partnership, limited liability company, corporation, trust
or unincorporated organization, or a government or agency or political subdivision
thereof.

 

“Prospectus” shall
mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by a Shelf Registration Statement, and by all other amendments and supplements
to such prospectus, and in each case including any document incorporated by
reference therein.

 

“Purchase Agreement”
shall have the meaning set forth in the recital.

 

“Registrable
Securities” shall mean the Securities; provided that the Securities shall
cease to be Registrable Securities (i) when a Registration Statement with
respect to such Securities has been declared effective under the Securities Act
and such Securities have been exchanged or disposed of pursuant to such
Registration Statement, (ii) when such Securities are freely tradeable
pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A)
under the Securities Act by Persons other than any affiliate of either of the
Issuers (as such term is defined in Rule 144) or (iii) when such
Securities cease to be outstanding.

 

“Registration Expenses”
shall mean any and all expenses incident to performance of or compliance by the
Issuers and the Guarantors with this Agreement, including without limitation: (i) all
SEC, stock exchange or
FINRA registration and filing fees, (ii) all fees and expenses incurred in
connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel for any Underwriters or
Holders in connection with blue sky qualification of any Exchange Securities or
Registrable Securities), (iii) all expenses of any Persons in preparing or
assisting in 

 

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preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, any
underwriting agreements, securities sales agreements or other similar
agreements and any other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all
fees and disbursements relating to the qualification of the Indenture under
applicable securities laws, including without limitation the Trust Indenture
Act, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the
fees and disbursements of counsel for the Issuers and the Guarantors and, in
the case of a Shelf Registration Statement, the fees and disbursements of one
counsel for the Holders (which counsel shall be selected by the Majority
Holders and which counsel may also be counsel for the Initial Purchasers) and (viii) the
fees and disbursements of the independent public accountants of the Issuers and
the Guarantors, including the expenses of any special audits or “comfort”
letters required by or incident to the performance of and compliance with this
Agreement, but excluding fees and expenses of counsel to the Underwriters
(other than fees and expenses set forth in clause (ii) above) or the
Holders and underwriting discounts and commissions, brokerage commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.

 

“Registration
Statement” shall mean any registration statement of the Issuers and the
Guarantors that covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements
to any such registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto and
any document incorporated by reference therein.

 

“SEC” shall mean
the United States Securities and Exchange Commission.

 

“Securities” shall
have the meaning set forth in the recital.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended from time to time.

 

“Shelf Effectiveness
Period” shall have the meaning set forth in Section 2(b) hereof.

 

“Shelf Registration”
shall mean a registration effected pursuant to Section 2(b) hereof.

 

“Shelf Registration
Statement” shall mean a “shelf” registration statement of the Issuers and
the Guarantors that covers all or a portion of the Registrable Securities (but
no other securities unless approved by the Holders of a majority of the
Registrable Securities to be covered by such Shelf Registration Statement) on
an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and any document incorporated by reference therein.

 

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“Staff” shall mean
the staff of the SEC.

 

“Target Registration
Date” shall have the meaning set for in Section 2(d) hereof.

 

“Trust Indenture Act”
shall mean the Trust Indenture Act of 1939, as amended from time to time.

 

“Trustee” shall
mean the trustee with respect to the Securities under the Indenture.

 

“Underwriter”
shall have the meaning set forth in Section 3(f) hereof.

 

“Underwritten Offering”
shall mean an offering in which Registrable Securities are sold to an
Underwriter for reoffering to the public.

 

2.             Registration Under
the Securities Act.  (a)  To the
extent not prohibited by any applicable law or applicable interpretations of
the Staff, the Issuers and the Guarantors shall use their reasonable best
efforts to cause to be filed an Exchange Offer Registration Statement covering
an offer to the Holders to exchange all the Registrable Securities for Exchange
Securities.  The Issuers and the
Guarantors shall commence the Exchange Offer promptly after the Exchange Offer
Registration Statement is declared effective by the SEC and use their
reasonable best efforts to complete the Exchange Offer not later than 60 days
after such effective date.

 

The Issuers and the
Guarantors shall commence the Exchange Offer by mailing the related Prospectus,
appropriate letters of transmittal and other accompanying documents to each
Holder stating, in addition to such other disclosures as are required by
applicable law, substantially the following:

 

(i)            that
the Exchange Offer is being made pursuant to this Agreement and that all
Registrable Securities validly tendered and not properly withdrawn will be
accepted for exchange;

 

(ii)           the
dates of acceptance for exchange (which shall be a period of at least 20
Business Days from the date such notice is mailed) (the “Exchange Dates”);

 

(iii)          that any Registrable Security not tendered
will remain outstanding and continue to accrue interest but will not retain any
rights under this Agreement;

 

(iv)          that
any Holder electing to have a Registrable Security exchanged pursuant to the
Exchange Offer will be required, (x) in the case a Holder electing to
exchange a Registrable Security in global form, to comply with the applicable
procedures of DTC for book-entry tenders, and, (y) in the case of a Holder
electing to exchange a Registrable Security in certificated form, to surrender
such Registrable Security, together with the appropriate letters of
transmittal, to the institution and at the address (located in the Borough of
Manhattan, The City of New York) and in the 

 

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manner specified
in the notice, prior to the close of business on the last Exchange Date; and

 

(v)           that
any Holder will be entitled to withdraw its election, not later than the close
of business on the last Exchange Date, by, (x) in the case of a Holder
withdrawing its election to exchange a Registrable Security in global form,
complying with the applicable procedures of DTC for withdrawal of tenders, and,
(y) in the case of a Holder withdrawing its election to exchange a
Registrable Security in certificated form, sending to the institution and at
the address (located in the Borough of Manhattan, The City of New York)
specified in the notice, a telegram, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Registrable Securities
delivered for exchange and a statement that such Holder is withdrawing its
election to have such Securities exchanged.

 

As a condition to participating in the Exchange Offer, a
Holder will be required to represent to the Issuers and the Guarantors that (i) any
Exchange Securities to be received by it will be acquired in the ordinary
course of its business, (ii) at the time of the commencement of the Exchange
Offer it has no arrangement or understanding with any Person to participate in
the distribution (within the meaning of the Securities Act) of the Exchange
Securities in violation of the provisions of the Securities Act, (iii) it
is not an “affiliate” (within the meaning of Rule 405 under the Securities
Act) of either of the Issuers or any Guarantor and (iv) if such Holder is
a broker-dealer that will receive Exchange Securities for its own account in
exchange for Registrable Securities that were acquired as a result of
market-making or other trading activities, then such Holder will deliver a
Prospectus in connection with any resale of such Exchange Securities.

 

As soon as practicable
after the last Exchange Date, the Issuers and the Guarantors shall:

 

(i)            accept
for exchange Registrable Securities or portions thereof validly tendered and
not properly withdrawn pursuant to the Exchange Offer; and

 

(ii)           deliver,
or cause to be delivered, to the Trustee for cancellation all Registrable
Securities or portions thereof so accepted for exchange by the Issuers and
issue, and cause the Trustee to promptly authenticate and deliver to each
Holder, Exchange Securities equal in principal amount to the principal amount
of the Registrable Securities surrendered by such Holder.

 

The Issuers and the
Guarantors shall use their reasonable best efforts to complete the Exchange
Offer as provided above and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and regulations
in connection with the Exchange Offer. 
The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer does not violate any applicable law or applicable
interpretations of the Staff.

 

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(b)           In the event that (i) the
Issuers and the Guarantors determine that the Exchange Offer Registration
provided for in Section 2(a) above is not available or may not be
completed as soon as practicable after the last Exchange Date because it would
violate any applicable law or applicable interpretations of the Staff, (ii) the
Exchange Offer is not for any other reason completed by November 26, 2009
or (iii) any Initial Purchaser
shall so request in connection with any offer or sale of Registrable Securities
that are not eligible to be exchanged for Exchange Securities, the
Issuers and the Guarantors shall use their reasonable best efforts to cause to
be filed as soon as practicable after such determination, date or request, as
the case may be, a Shelf Registration Statement providing for the sale of all
the Registrable Securities by the Holders thereof and to have such Shelf
Registration Statement declared effective by the SEC.

 

In the event that the
Issuers and the Guarantors are required to file a Shelf Registration Statement
pursuant to clause (iii) of the preceding sentence, the Issuers and the
Guarantors shall use their reasonable best efforts to file and have declared
effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities and a Shelf Registration Statement (which
may be a combined Registration Statement with the Exchange Offer Registration
Statement) with respect to offers and sales of Registrable Securities held by
the Initial Purchasers after completion of the Exchange Offer.

 

The Issuers and the
Guarantors agree to use their reasonable best efforts to keep the Shelf
Registration Statement continuously effective for one year, or such shorter
period that will terminate when all the Registrable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement (the “Shelf Effectiveness Period”).  The Issuers and the Guarantors further agree
to supplement or amend the Shelf Registration Statement and the related
Prospectus if required by the rules, regulations or instructions applicable to
the registration form used by the Issuers for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder
for shelf registration or if reasonably requested by a Holder of Registrable
Securities with respect to information relating to such Holder, and to use
their reasonable best efforts to cause any such amendment to become effective and
such Shelf Registration Statement and Prospectus to become usable as soon as
thereafter practicable.  The Issuers and
the Guarantors agree to furnish to the Holders of Registrable Securities copies
of any such supplement or amendment promptly after its being used or filed with
the SEC.

 

(c)           The Issuers and the
Guarantors shall pay all Registration Expenses in connection with any
registration pursuant to Section 2(a) or Section 2(b) hereof.  Each Holder shall pay all underwriting
discounts and commissions, brokerage commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder’s Registrable Securities
pursuant to the Shelf Registration Statement.

 

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(d)           An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be
deemed to have become effective unless it has been declared effective by the
SEC.

 

In the event that either
the Exchange Offer is not completed or the Shelf Registration Statement, if
required hereby, is not declared effective on or prior to November 26,
2009 (the “Target Registration Date”), the interest rate on the
Registrable Securities will be increased by (i) 0.50% per annum for the
first 90-day period immediately following the Target Registration Date and (ii) an
additional 0.25% per annum with respect to each subsequent 90-day period, in
each case until the Exchange Offer is completed or the Shelf Registration
Statement, if required hereby, is declared effective by the SEC no longer
qualify as Registrable Securities, up to a maximum of 1.00% per annum of
additional interest; provided that if an obligation to file a Shelf
Registration Statement arises pursuant to Section 2(b)(iii) and the
applicable Initial Purchaser does not make the request to file a Shelf
Registration Statement by September 28, 2009, then the Target Registration
Date shall be extended by the number of days from and including September 28,
2009 to and including the date on which such request is made.

 

                If the Shelf
Registration Statement, if required hereby, has been declared effective and
thereafter either ceases to be effective or the Prospectus contained therein
ceases to be usable at any time during the Shelf Effectiveness Period, and such
failure to remain effective or usable exists for more than 60 days (whether or
not consecutive) in any 12-month period, then the interest rate on the
Registrable Securities will be increased by (i) 0.50% per annum commencing
on the 61st day in such 12-month period and (ii) an additional 0.25% per
annum with respect to each subsequent 90-day period (whether or not
consecutive) and ending on such date that the Shelf Registration Statement has
again been declared effective or the Prospectus again becomes usable, up to a
maximum of 1.00% per annum of additional interest.

 

(e)           Without limiting the
remedies available to the Initial Purchasers and the Holders, the Issuers and
the Guarantors acknowledge that any failure by the Issuers or the Guarantors to
comply with their obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Issuers’ and the
Guarantors’ obligations under Section 2(a) and Section 2(b) hereof.

 

3.             Registration
Procedures.  (a) In connection
with their obligations pursuant to Section 2(a) and Section 2(b) hereof,
the Issuers and the Guarantors shall as expeditiously as possible:

 

(i)            prepare and file with
the SEC a Registration Statement on the appropriate form under the Securities
Act, which form (x) shall be selected by the Issuers and the Guarantors, (y) shall,
in the case of a Shelf Registration, be available for the sale of the 

 

8

 

Registrable Securities by the Holders thereof and (z) shall comply
as to form in all material respects with the requirements of the applicable
form and include all financial statements required by the SEC to be filed
therewith; and use their reasonable best efforts to cause such Registration
Statement to become effective and remain effective for the applicable period in
accordance with Section 2 hereof;

 

(ii)           prepare and file with
the SEC such amendments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration Statement effective for
the applicable period in accordance with Section 2 hereof and cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
and keep each Prospectus current during the period described in Section 4(3) of
and Rule 174 under the Securities Act that is applicable to transactions
by brokers or dealers with respect to the Registrable Securities or Exchange
Securities;

 

(iii)          in the case of a Shelf
Registration, furnish to each Holder of Registrable Securities, to counsel for
the Initial Purchasers, to counsel for such Holders and to each Underwriter of
an Underwritten Offering of Registrable Securities, if any, without charge, as
many copies of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto, in order to facilitate the sale or other
disposition of the Registrable Securities thereunder; and the Issuers and the
Guarantors consent to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the Holders of
Registrable Securities and any such Underwriters in connection with the offering
and sale of the Registrable Securities covered by and in the manner described
in such Prospectus or any amendment or supplement thereto in accordance with
applicable law;

 

(iv)          use their reasonable
best efforts to register or qualify the Registrable Securities under all
applicable state securities or blue sky laws of such jurisdictions in the
United States as any Holder of Registrable Securities covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC; cooperate with such
Holders in connection with any filings required to be made with FINRA; and do any and all other acts
and things that may be reasonably necessary or advisable to enable each Holder
to complete the disposition in each such jurisdiction of the Registrable
Securities owned by such Holder; provided that none of the Issuers or
the Guarantors shall be required to (1) qualify as a foreign corporation
or other entity or as a dealer in securities in any such jurisdiction where it
would not otherwise be required to so qualify, (2) file any general
consent to service of process in any such jurisdiction or (3) subject
itself to taxation in any such jurisdiction if it is not so subject;

 

(v)           in the case of a Shelf
Registration, notify each Holder of Registrable Securities, counsel for such
Holders and counsel for the Initial Purchasers promptly and, if requested by
any such Holder or counsel, confirm such advice in writing (1) when a
Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (2) of any request
by the SEC or any state 

 

9

 

securities authority for amendments and supplements to a Registration
Statement and Prospectus or for additional information after the Registration
Statement has become effective, (3) of the issuance by the SEC or any
state securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose, (4) if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of either of the Issuers or any Guarantor contained in any
underwriting agreement, securities sales agreement or other similar agreement,
if any, relating to an offering of such Registrable Securities cease to be true
and correct in all material respects or if either of the Issuers or any
Guarantor receives any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, (5) of the happening of any
event during the period a Shelf Registration Statement is effective that makes
any statement made in such Registration Statement or the related Prospectus
untrue in any material respect or that requires the making of any changes in
such Registration Statement or Prospectus in order to make the statements
therein not misleading and (6) of any determination by either of the
Issuers or any Guarantor that a post-effective amendment to a Registration
Statement would be appropriate;

 

(vi)          use their reasonable
best efforts to obtain the withdrawal of any order suspending the effectiveness
of a Registration Statement at the earliest possible moment and provide
immediate notice to each Holder of the withdrawal of any such order;

 

(vii)         in the case of a Shelf
Registration, furnish to each Holder of Registrable Securities, without charge,
at least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without any documents incorporated therein by
reference or exhibits thereto, unless requested);

 

(viii)        in the case of a Shelf
Registration, cooperate with the Holders of any Registrable Securities in
certificated form to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends and enable such Registrable Securities to be issued in such
denominations and registered in such names (consistent with the provisions of
the Indenture) as such Holders may reasonably request at least one Business Day
prior to the closing of any sale of Registrable Securities in certificated
form;

 

(ix)           in the case of a Shelf
Registration, upon the occurrence of any event contemplated by Section 3(a)(v)(5) hereof,
use their reasonable best efforts to prepare and file with the SEC a supplement
or post-effective amendment to such Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to purchasers of the
Registrable Securities, such Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the Issuers and the Guarantors shall notify the
Holders of Registrable Securities to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event,

 

10

 

and such Holders hereby
agree to suspend use of the Prospectus until the Issuers and the Guarantors
have amended or supplemented the Prospectus to correct such misstatement or
omission;

 

(x)            a reasonable time
prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a
Prospectus or of any document that is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a Registration
Statement, provide copies of such document to the Initial Purchasers and their
counsel (and, in the case of a Shelf Registration Statement, to the Holders of
Registrable Securities and their counsel) and make such of the representatives
of the Issuers and the Guarantors as shall be reasonably requested by the
Initial Purchasers or their counsel (and, in the case of a Shelf Registration
Statement, the Holders of Registrable Securities or their counsel) available
for discussion of such document; and the Issuers and the Guarantors shall not,
at any time after initial filing of a Registration Statement, file any
Prospectus, any amendment of or supplement to a Registration Statement or a
Prospectus, or any document that is to be incorporated by reference into a
Registration Statement or a Prospectus, of which the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, the Holders
of Registrable Securities and their counsel) shall not have previously been
advised and furnished a copy or to which the Initial Purchasers or their
counsel (and, in the case of a Shelf Registration Statement, the Holders of
Registrable Securities or their counsel) shall object; provided, that
this clause shall not apply to any filing by the Partnership of any Annual
Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report
on Form 8-K with respect to matters unrelated to the Securities and the
offering or exchange therefor;

 

(xi)           obtain a CUSIP number
for all Exchange Securities or Registrable Securities, as the case may be, not
later than the effective date of a Registration Statement;

 

(xii)          cause the Indenture to
be qualified under the Trust Indenture Act in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be;
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and execute, and use their
reasonable best efforts to cause the Trustee to execute, all documents as may
be required to effect such changes and all other forms and documents required
to be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;

 

(xiii)         in the case of a Shelf
Registration, make available for inspection by a representative of the Holders
of the Registrable Securities (an “Inspector”), any Underwriter
participating in any disposition pursuant to such Shelf Registration Statement,
any attorneys and accountants designated by the Holders of Registrable
Securities and any attorneys and accountants designated by such Underwriter, at
reasonable times and in a reasonable manner, all pertinent financial and other
records, documents and properties of the Issuers and the Guarantors, and cause
the respective 

 

11

 

officers, directors and employees of the Issuers and the Guarantors to
supply all information reasonably requested by any such Inspector, Underwriter,
attorney or accountant in connection with a Shelf Registration Statement; provided that if any such information is identified by either of the Issuers or
any Guarantor as being confidential or proprietary, each Person receiving such
information shall take such actions as are reasonably necessary to protect the
confidentiality of such information to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and
interests of any Inspector, Holder or Underwriter);

 

(xiv)        in the case of a Shelf
Registration, use their reasonable best efforts to cause all Registrable
Securities to be listed on any securities exchange or any automated quotation
system on which similar securities issued or guaranteed by either of the
Issuers or any Guarantor are then listed if requested by the Majority Holders,
to the extent such Registrable Securities satisfy applicable listing
requirements;

 

(xv)         if reasonably requested
by any Holder of Registrable Securities covered by a Shelf Registration Statement,
promptly include in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably requests to
be included therein and make all required filings of such Prospectus supplement
or such post-effective amendment as soon as the Issuers have received
notification of the matters to be so included in such filing; and

 

(xvi)        in the case of a Shelf
Registration, enter into such customary agreements and take all such other
actions in connection therewith (including those requested by the Holders of a
majority in principal amount of the Registrable Securities being sold) in order
to expedite or facilitate the disposition of such Registrable Securities
including, but not limited to, an Underwritten Offering and in such connection,
(1) to the extent possible, make such representations and warranties to
the Holders and any Underwriters of such Registrable Securities with respect to
the business of the Issuers and their subsidiaries and the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (2) obtain opinions of counsel to
the Issuers and the Guarantors (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling Holder and
Underwriter of Registrable Securities, covering the matters customarily covered
in opinions requested in underwritten offerings, (3) obtain “comfort”
letters from the independent registered public accounting firm of the Issuers
and the Guarantors (and, if necessary, any other independent registered public
accounting firm of any subsidiary of either of the Issuers or any Guarantor, or
of any business acquired by either of the Issuers or any Guarantor for which
financial statements and financial data are or are required to be included in
the Registration Statement) addressed to each selling Holder and Underwriter of
Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in “comfort” letters in connection with
underwritten offerings and (4) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in principal 

 

12

 

amount of the Registrable Securities being sold or the Underwriters,
and which are customarily delivered in underwritten offerings, to evidence the
continued validity of the representations and warranties of the Issuers and the
Guarantors made pursuant to clause (1) above and to evidence compliance
with any customary conditions contained in an underwriting agreement.

 

(b)           The Issuers shall not,
without the prior consent of the Initial Purchasers (such consent not to be
unreasonably withheld), make any offer relating to the Securities that would
reasonably be expected to constitute a “free writing prospectus,” as defined in
Rule 405 under the Securities Act.

 

(c)           In the case of a Shelf
Registration Statement, the Issuers may require each Holder of Registrable
Securities to furnish to the Issuers such information regarding such Holder and
the proposed disposition by such Holder of such Registrable Securities as the
Issuers and the Guarantors may from time to time reasonably request in writing.

 

(d)           In the case of a Shelf
Registration Statement, each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Issuers and the Guarantors of the happening of
any event of the kind described in Section 3(a)(v)(3) or 3(a)(v)(5) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Shelf Registration Statement until such Holder’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(a)(ix) hereof
and, if so directed by the Issuers and the Guarantors, such Holder will deliver
to the Issuers and the Guarantors all copies in its possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Registrable Securities that is current at the time of receipt of
such notice.

 

(e)           If the Issuers and the
Guarantors shall give any notice pursuant to Section 3(d) hereof to
suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement, the Issuers and the Guarantors shall extend the period
during which such Shelf Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders of such Registrable Securities shall have received copies of the
supplemented or amended Prospectus necessary to resume such dispositions.  Any such suspensions shall not, in the
aggregate, exceed 90 days during any 365-day period.

 

(f)            The Holders of
Registrable Securities covered by a Shelf Registration Statement who desire to
do so may sell such Registrable Securities in an Underwritten Offering.  In any such Underwritten Offering, the
investment bank or investment banks and manager or managers (each an “Underwriter”)
that will administer the offering will be selected by the Holders of a majority
in principal amount of the Registrable Securities included in such offering.

 

4.             Participation of
Broker-Dealers in Exchange Offer.  (a) 
The Staff has taken the position that any broker-dealer that receives Exchange
Securities for its own 

 

13

 

account in the Exchange Offer in exchange for Securities that were
acquired by such broker-dealer as a result of market-making or other trading
activities (a “Participating Broker-Dealer”) may be deemed to be an “underwriter”
within the meaning of the Securities Act and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Securities.

 

The Issuers and the
Guarantors understand that it is the Staff’s position that if the Prospectus
contained in the Exchange Offer Registration Statement includes a plan of
distribution containing a statement to the above effect and the means by which
Participating Broker-Dealers may resell the Exchange Securities, without naming
the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the
Securities Act in connection with resales of Exchange Securities for their own
accounts, so long as the Prospectus otherwise meets the requirements of the
Securities Act.

 

(b)           In light of the above,
and notwithstanding the other provisions of this Agreement, the Issuers and the
Guarantors agree to amend or supplement the Prospectus contained in the
Exchange Offer Registration Statement for a period of up to 180 days after the
last Exchange Date (as such period may be extended pursuant to Section 3(e) of
this Agreement), if requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above.  The Issuers and the Guarantors further agree
that Participating Broker-Dealers shall be authorized to deliver such
Prospectus during such period in connection with the resales contemplated by
this Section 4.

 

(c)           The Initial Purchasers
shall have no liability to either of the Issuers, any Guarantor or any Holder
with respect to any request that they may make pursuant to Section 4(b) above.

 

5.             Indemnification
and Contribution.  (a)  Each
Issuer and each Guarantor, jointly and severally, agree to indemnify and hold
harmless each Initial Purchaser and each Holder, their respective affiliates,
directors and officers and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), that
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any “issuer free writing prospectus,” as defined in Rule 433
under the Securities Act (“Issuer FWP”), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities arise out of, or are based upon,
any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Initial 

 

14

 

Purchaser or information relating to any Holder furnished to the
Issuers in writing by or on behalf of such Initial Purchaser or selling Holder
expressly for use therein.  In connection
with any Underwritten Offering permitted by Section 3, the Issuers and the
Guarantors, jointly and severally, will also indemnify the Underwriters, if
any, selling brokers, dealers and similar securities industry professionals
participating in the distribution, their respective affiliates and each Person
who controls such Persons (within the meaning of the Securities Act and the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders, if requested in connection with any
Registration Statement.

 

(b)           Each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Issuers, the
Guarantors, the Initial Purchasers and the other selling Holders, the directors
of the Issuers and the Guarantors, each officer of the Issuers and the
Guarantors who signed the Registration Statement and each Person, if any, who
controls the Issuers, the Guarantors, any Initial Purchaser and any other
selling Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above,
but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to such Holder furnished to the Issuers in writing by such
Holder expressly for use in any Registration Statement, any Prospectus and any
Issuer FWP.

 

(c)           If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Person in respect of which
indemnification may be sought pursuant to either paragraph (a) or (b) above,
such Person (the “Indemnified Person”) shall promptly notify the Person
against whom such indemnification may be sought (the “Indemnifying Person”)
in writing; provided that the failure to notify the Indemnifying Person
shall not relieve it from any liability that it may have under this Section 5
except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section 5. 
If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 5 that the Indemnifying Person
may designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) 

 

15

 

the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them.  It is understood
and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred.  Any
such separate firm (x) for any Initial Purchaser, its affiliates,
directors and officers and any control Persons of such Initial Purchaser shall
be designated in writing by J.P. Morgan Securities Inc., (y) for any
Holder, its directors and officers and any control Persons of such Holder shall
be designated in writing by the Majority Holders and (z) in all other
cases shall be designated in writing by the Issuers.  The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the Indemnifying Person agrees to indemnify each Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at
any time an Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement.  No Indemnifying
Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (A) includes
an unconditional release of such Indemnified Person, in form and substance
reasonably satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and (B) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.

 

(d)           If the indemnification
provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuers and the
Guarantors from the offering of the Securities and the Exchange Securities, on
the one hand, and by the Holders from receiving Securities or Exchange
Securities registered under the Securities Act, on the other hand, or (ii) if
the allocation provided by clause (i) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Issuers and
the Guarantors on the one hand and the Holders on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.  The relative 

 

16

 

fault of the Issuers and
the Guarantors on the one hand and the Holders on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Issuers and the Guarantors
or by the Holders, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

(e)           The
Issuers, the Guarantors and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to
in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim.  Notwithstanding the provisions of this Section 5,
in no event shall a Holder be required to contribute any amount in excess of
the amount by which the total price at which the Securities or Exchange
Securities sold by such Holder exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

(f)            The remedies provided
for in this Section 5 are not exclusive and shall not limit any rights or
remedies that may otherwise be available to any Indemnified Person at law or in
equity.

 

(g)           The indemnity and
contribution provisions contained in this Section 5 shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Initial
Purchasers or any Holder or any Person controlling any Initial Purchaser or any
Holder, or by or on behalf of the Issuers or the Guarantors or the officers or
directors of or any Person controlling the Issuers or the Guarantors, (iii) acceptance
of any of the Exchange Securities and (iv) any sale of Registrable
Securities pursuant to a Shelf Registration Statement.

 

6.             General.

 

(a)           No
Inconsistent Agreements.   The Issuers and the Guarantors represent,
warrant and agree that (i) the rights granted to the Holders hereunder do
not in any way conflict with and are not inconsistent with the rights granted
to the holders of any other outstanding securities issued or guaranteed by
either of the Issuers or any Guarantor under any other agreement and (ii) neither
the Issuers nor any Guarantor has entered into, or on or after the date of this
Agreement will enter into, any agreement that is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof.

 

17

 

(b)           Amendments
and Waivers.   The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Issuers and the Guarantors have obtained the written consent
of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or consent; provided that no amendment, modification,
supplement, waiver or consent to any departure from the provisions of Section 5
hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. 
Any amendments, modifications, supplements, waivers or consents pursuant
to this Section 6(b) shall be by a writing executed by each of the
parties hereto.

 

(c)           Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such
Holder to the Issuers by means of a notice given in accordance with the
provisions of this Section 6(c), which address initially is, with respect
to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if
to the Issuers and the Guarantors, initially at the Issuers’ address set forth
in the Purchase Agreement and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 6(c); and (iii) to
such other persons at their respective addresses as provided in the Purchase
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(c).  All such notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the
next Business Day if timely delivered to an air courier guaranteeing overnight
delivery.  Copies of all such notices,
demands or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.

 

(d)           Successors
and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement or the Indenture.  If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all the terms of this Agreement,
and by taking and holding such Registrable Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.  The Initial
Purchasers (in their capacity as Initial Purchasers) shall have no liability or
obligation to the Issuers or the Guarantors with respect to any failure by a
Holder to comply with, or any breach by any Holder of, any of the obligations
of such Holder under this Agreement.

 

18

 

(e)           Third Party
Beneficiaries.  Each Holder
shall be a third party beneficiary to the agreements made between the Issuers
and the Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of other Holders hereunder.

 

(f)            Counterparts.
This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

 

(g)           Headings.  The headings in this Agreement are
for convenience of reference only, are not a part of this Agreement and shall
not limit or otherwise affect the meaning hereof.

 

(h)           Governing
Law.  This Agreement shall be
governed by and construed in accordance
with the laws of the State of New York.

 

(j)            Miscellaneous.  This
Agreement contains the entire agreement between the parties relating to the
subject matter hereof and supersedes all oral statements and prior writings
with respect thereto.  If any term,
provision, covenant or restriction contained in this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable or against
public policy, the remainder of the terms, provisions, covenants and
restrictions contained herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. 
The Issuers, the Guarantors and the Initial Purchasers shall endeavor in
good faith negotiations to replace the invalid, void or unenforceable
provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, void or unenforceable provisions.

 

19

 

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

 

	
   

  	
   

  	
  Issuers:

  	
   

  
	
   

  	
   

  	
  MARKWEST
  ENERGY FINANCE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MARKWEST
  ENERGY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

[Registration Rights Agreement]

 

 

	
   

  	
   

  	
  Subsidiary
  Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MARKWEST
  HYDROCARBON, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MARKWEST
  ENERGY GP, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MASON
  PIPELINE LIMITED LIABILITY COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Hydrocarbon, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
						

 

[Registration Rights Agreement]

 

 

	
   

  	
   

  	
  MARKWEST
  ENERGY OPERATING COMPANY, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BASIN
  PIPELINE L.L.C. 

  
	
   

  	
   

  	
  WEST
  SHORE PROCESSING COMPANY, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Operating Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  Sole Member and Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

[Registration Rights Agreement]

 

 

	
   

  	
  MARKWEST BLACKHAWK, L.L.C.

  
	
   

  	
  MARKWEST ENERGY APPALACHIA, L.L.C.

  
	
   

  	
  MARKWEST
  ENERGY EAST TEXAS GAS COMPANY, L.L.C.

  
	
   

  	
  MARKWEST GAS MARKETING, L.L.C.

  
	
   

  	
  MARKWEST GAS SERVICES, L.L.C.

  
	
   

  	
  MARKWEST JAVELINA COMPANY, L.L.C.

  
	
   

  	
  MARKWEST JAVELINA PIPELINE COMPANY, L.L.C.

  
	
   

  	
  MARKWEST LIBERTY GAS GATHERING, L.L.C.

  
	
   

  	
  MARKWEST MARKETING, L.L.C.

  
	
   

  	
  MARKWEST NEW MEXICO, L.L.C.

  
	
   

  	
  MARKWEST PINNACLE, L.L.C.

  
	
   

  	
  MARKWEST PIONEER, L.L.C.

  
	
   

  	
  MARKWEST PIPELINE COMPANY, L.L.C.

  
	
   

  	
  MARKWEST PNG UTILITY, L.L.C.

  
	
   

  	
  MARKWEST POWER TEX, L.L.C.

  
	
   

  	
  MARKWEST TEXAS PNG UTILITY, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest Energy Operating Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
   

  	
  its Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  MarkWest Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

[Registration Rights Agreement]

 

 

	
   

  	
  MARKWEST MICHIGAN PIPELINE COMPANY, L.L.C.

  
	
   

  	
  MARKWEST OKLAHOMA GAS COMPANY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Operating Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

[Registration Rights Agreement]

 

 

	
   

  	
  MATREX,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Basin
  Pipeline L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  Sole Member and Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Operating Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  Sole Member and Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARKWEST
  MCALESTER, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Oklahoma Gas Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Operating Company, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MarkWest
  Energy GP, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nancy K. Buese

  
	
   

  	
  Name:

  	
  Nancy
  Buese

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

[Registration Rights Agreement]

 

 

Confirmed and accepted as
of the date first above written:

 

J.P.
MORGAN SECURITIES INC.

RBC
CAPITAL MARKETS, LLC

WACHOVIA
CAPITAL MARKETS, LLC

BARCLAYS
CAPITAL INC.

DEUTSCHE
BANK SECURITIES INC.

U.S.
BANCORP INVESTMENTS, INC.

 

 

By:  J.P. MORGAN SECURITIES INC.

 

	
  By:

  	
  /s/
  Lawrence S. Landry

  	
   

  
	
   

  	
  Name:
  Lawrence S. Landry

  
	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:
  RBC CAPITAL MARKETS, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Nicholas Daisotis

  	
   

  
	
   

  	
  Name:
  Nicholas Daisotis

  
	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  WACHOVIA
  CAPITAL MARKETS, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Todd Schanzlin

  	
   

  
	
   

  	
  Name:
  Todd Schanzlin

  
	
   

  	
  Title:
  Director

  

 

Signature Page to Registration
Rights AgreementEXHIBIT
10.31

 

ARYX
THERAPEUTICS, INC.

 

EXECUTIVE SEVERANCE BENEFIT PLAN

 

Section 1.                                         INTRODUCTION.

 

The ARYx Therapeutics, Inc. Executive Severance Benefit Plan (the
“Plan”) is hereby established
effective May 20, 2009.  The purpose
of the Plan is to provide for the payment of severance benefits to certain
executive employees of ARYx Therapeutics, Inc. (the “Company”)
upon the termination of their employment under specified circumstances.  This Plan shall supersede any executive
severance benefit agreement, plan, policy or practice previously maintained or
entered into by the Company for or with any Eligible Employee (as defined in Section 2(a)(1) below).  This Plan document is also the Summary Plan
Description for the Plan.

 

Section 2.                                         ELIGIBILITY
FOR BENEFITS.

 

(a)                                General
Rules.  Subject to the requirements
set forth herein, the Company will grant severance benefits under the Plan to
Eligible Employees.

 

(1)                                 Definition
of “Eligible Employee.”  For purposes of this Plan, Eligible Employees
shall be those employees of the Company who are approved for participation in
the Plan by the Company’s Board of Directors (the “Board”)
as listed in APPENDIX A hereto and who sign and
return a Participation Agreement in the form attached hereto as APPENDIX B within thirty (30) days following his or her
notification of selection for participation in the Plan.  The determination of whether an employee is
an Eligible Employee shall be made by the Board, in its sole discretion, and
such determination shall be binding and conclusive on all persons.  If an employee who is deemed an Eligible
Employee by the Board has an individually negotiated employment agreement with
the Company relating to severance benefits that is in effect on his or her
termination date, the provisions of that agreement relating to severance
benefits shall be superseded by the terms of this Plan; provided,
however, that all other remaining provisions of that agreement shall
remain in effect.

 

(2)                                 Release of Claims.  To be eligible to receive benefits under the Plan, an Eligible
Employee must execute a general waiver and release in substantially the form
attached hereto as EXHIBIT A, EXHIBIT B or EXHIBIT C, as
appropriate, within the time provided therein, and such release must become
effective in accordance with its terms, but in all cases the release must
become effective within 60 days following the date of the Eligible Employee’s
“separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)).  The Company, in its sole discretion, may modify
the form of the required release to comply with applicable law and shall
determine the form of the required release, which may be incorporated into a
termination agreement or other agreement with the Eligible Employee.  Such release shall include non-competition
and non-solicitation provisions as deemed appropriate by the Company in its
sole discretion, in accordance with applicable law.

 

(3)                                 Return of Property.  To be eligible to receive benefits under the
Plan, an Eligible Employee must return all Company property which he or she has
had in his or her possession at any time, including but not limited to any
materials which contain or embody any proprietary or confidential information
of the Company and any computers, mobile telephones or other physical property.

 

 

(b)                                Exceptions
to Benefit Entitlement.  An employee,
including an employee who otherwise is an Eligible Employee, will not receive
benefits under the Plan if the employee is terminated for Cause (as defined
herein), if the employee resigns without Good Reason (as defined herein), or if
the employee’s employment is terminated as a result of the employee’s death or
disability, in each case as determined by the Company pursuant to Sections 3(c)(1) and
3(c)(2) below.

 

Section 3.                                         AMOUNT
OF BENEFIT.

 

(a)                                Termination without Cause or Resignation for
Good Reason.  If at any time
the Company terminates an Eligible Employee’s employment without Cause (as
defined herein), or the Eligible Employee resigns for Good Reason (as defined
herein), and such termination constitutes a “separation from service” (as
defined above), the Company shall provide the Eligible Employee with the
following severance benefits:

 

(1)                                 A
cash severance benefit in an amount equal to six (6) months of the
Eligible Employee’s Base Salary (as defined herein), subject to withholdings
and deductions, which aggregate amount shall be paid in a single lump sum
payment.  On the first regular payroll
date following the effective date of the Eligible Employee’s release of claims,
the Company will pay the Eligible Employee this cash severance benefit;

 

(2)                                 Acceleration
of the vesting of the unvested shares of common stock held by the Eligible
Employee that were issued pursuant to his or her compensatory equity awards and
the unvested shares of common stock subject to unexercised stock options then
held by the Eligible Employee such that the shares that would have vested under
such awards had the Eligible Employee remained employed by the Company for six (6) months
following the termination of the Eligible Employee’s employment shall vest and,
in the case of options, become immediately exercisable (or, if no shares would
vest during such time under an award due to a cliff vesting provision, then the
number of shares vesting and becoming exercisable pursuant to this paragraph
shall equal the product of (i) the total number of shares subject to the
award and (ii) a fraction, the numerator of which is six (6) and the
denominator of which is the total number of months in the vesting schedule),  with such vesting occurring as of the date of the Eligible
Employee’s termination (such acceleration of vesting, the “6 Month Acceleration”);
and

 

(3)                                 Provided
that the Eligible Employee is eligible to continue coverage under a health,
dental, or vision  plan sponsored by the Company
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at the time of the Eligible
Employee’s termination and timely elects such continuation of coverage under
COBRA, the Company will pay COBRA premiums on behalf of the Eligible Employee
for a period of up to six (6) months following the Eligible Employee’s
termination of employment (but in no event longer that the date on which the
Eligible Employee ceases to be eligible for COBRA).  Upon the conclusion of such period of
insurance premium payments made by the Company, the Eligible Employee will be
responsible for the entire payment of premiums required under COBRA for the
duration of the COBRA period.  No
provision of this Plan will affect the continuation coverage

 

2

 

rules under COBRA,
except that the Company’s payment of any applicable insurance premiums will be
credited as payment by the Eligible Employee for purposes of the Eligible
Employee’s payment required under COBRA. 
Therefore, the period during which an Eligible Employee may elect to
continue the Company’s health, dental, or vision plan coverage at his or her
own expense under COBRA, the length of time during which COBRA coverage will be
made available to the Eligible Employee, and all other rights and obligations
of the Eligible Employee under COBRA (except the obligation to pay insurance
premiums that the Company pays in accordance with the foregoing) will be
applied in the same manner that such rules would apply in the absence of
this Plan.  For purposes of this Section 3(a)(3),
(i) references to COBRA shall be deemed to refer also to analogous
provisions of state law and (ii) any applicable insurance premiums that
are paid by the Company shall not include any amounts payable by the Eligible
Employee under an Internal Revenue Code Section 125 health care
reimbursement plan, which amounts, if any, are the sole responsibility of the
Eligible Employee.

 

(b)                                Termination without Cause or Resignation for
Good Reason Following a Change of Control. 
If the Company terminates an Eligible Employee’s employment
without Cause, or the Eligible Employee resigns for Good Reason, at any time
during the period commencing on the effective date of a Change of Control (as
defined herein) and ending thirteen (13) months following the effective date of
the Change of Control, and provided such termination constitutes a separation
from service, then the Eligible Employee shall be entitled to the benefits set
forth in Section 3(a); provided, however,
that in lieu of the 6 Month Acceleration, the vesting (and, in the case of
options, exercisability) of each then-unvested equity award held by the
Eligible Employee shall be fully accelerated, such that 100% of the shares
shall be vested and exercisable effective as of the date of the Eligible
Employee’s termination of employment.

 

(c)                                Definitions.

 

(1)                                 For
purposes of this Plan, “Cause”
shall mean that the Eligible Employee
committed, or there has occurred, one or more of the following: (a) conviction
of, a guilty plea with respect to, or a plea of nolo
contendere to a charge that the Eligible Employee has committed a
felony under the laws of the United States or of any state of a crime involving
moral turpitude, including, but not limited to, fraud, theft, embezzlement or
any crime that results in or is intended to result in personal enrichment at
the expense of the Company; (b) material breach of any agreement entered
into between the Eligible Employee and the Company that impairs the Company’s
interest therein; (c) willful misconduct, or gross neglect by such
Eligible Employee of his or her duties, if such conduct is not cured within
seven (7) days of the Eligible Employee’s receipt of written notice
(provided that such conduct can reasonably be cured); (d) an unauthorized
use or disclosure of the Company’s confidential information or trade secrets;
or (e) engagement in any activity that constitutes a material conflict of
interest with the Company.  The Eligible
Employee’s death or physical or mental disability shall also constitute Cause
for termination hereunder.  Cause to
terminate employment based on the Eligible Employee’s physical or mental
disability shall exist if any illness, disability or other incapacity renders
the Eligible Employee physically or mentally unable to regularly perform his or
her duties hereunder for a period in excess of sixty (60) consecutive days or
more than ninety (90) days in any consecutive twelve (12) month period.  The Board of Directors shall make a good faith
determination of whether the Eligible Employee is physically or mentally unable
to regularly perform his or her duties, subject to its review and consideration
of any physical and/or mental health information provided to it by the Eligible
Employee.

 

3

 

(2)                                 For
purposes of this Plan, “Good
Reason” shall mean the
Eligible Employee’s resignation from all positions he or she then-holds with
the Company if any one of the following events occurs on or after the
commencement of the Eligible Employee’s employment without his or her
consent:  (A) (I) any material
reduction of the Eligible Employee’s then current annual base salary, except to
the extent that the annual base salary of all other officers of the Company is
similarly reduced; (II) any material diminution of the Eligible Employee’s
duties, responsibilities or authority; (III) any requirement that the
Eligible Employee relocate to a work site that would increase his or her
one-way commute distance by more than thirty-five (35) miles; or (IV) any
material breach by the Company of its obligations under the employment
agreement between the Company and the Eligible Employee, (B) the Eligible
Employee provides written notice to the Company’s Chief Executive Officer
within the 90-day period immediately following such material change or
reduction, (C) such material change or reduction is not remedied by the
Company within forty-five (45) days following the Company’s receipt of such
written notice, and (D) the Eligible Employee’s resignation is effective
not later than thirty (30) days after the expiration of such cure period.

 

(3)                                 Change of Control. For purposes of
the Plan, a “Change of Control” shall have
the meaning given to the term “Change in Control” as set forth in the Company’s
2007 Equity Incentive Plan in effect on the date hereof and as amended and/or
restated from time to time.

 

(4)                                 For
purposes of calculating Plan benefits, “Base Salary”
shall mean the Eligible Employee’s base pay (excluding incentive pay, premium
pay, commissions, overtime, bonuses and other forms of variable compensation),
at the rate in effect during the last regularly scheduled payroll period
immediately preceding the Eligible Employee’s termination (ignoring any
reduction in Base Salary that is the basis for the Eligible Employee’s
resignation for Good Reason, as applicable).

 

(d)                                Other
Employee Benefits.  All other
benefits (such as life insurance, disability coverage, and 401(k) plan
coverage) terminate as of the Eligible Employee’s termination date (except to
the extent that a conversion privilege may be available thereunder).

 

(e)                                Certain
Reductions.  The Company shall reduce
an Eligible Employee’s severance benefits, in whole or in part, by any other
severance benefits, pay in lieu of notice, or other similar benefits payable to
the Eligible Employee by the Company that become payable in connection with the
Eligible Employee’s termination of employment pursuant to (i) any
applicable legal requirement, including, without limitation, the Worker
Adjustment and Retraining Notification Act (the “WARN
Act”), or (ii) any Company policy or practice providing for
the Eligible Employee to remain on the payroll for a limited period of time
after being given notice of the termination of the Eligible Employee’s
employment.  The benefits provided under
this Plan are intended to satisfy, in whole or in part, any and all statutory
obligations that may arise out of an Eligible Employee’s termination of employment,
and the Plan Administrator shall so construe and implement the terms of the
Plan.  In the Company’s sole discretion,
such reductions may be applied on a retroactive basis, with severance benefits
previously paid being recharacterized as payments pursuant to the Company’s
statutory obligation.

 

4

 

Section 4.                                         LIMITATIONS
ON PAYMENTS.

 

(a)                                Taxes and Offsets.  All
payments under the Plan will be subject to applicable withholding for federal,
state and local taxes.  If an Eligible
Employee is indebted to the Company at his or her termination date, the Company
reserves the right to offset any severance payments under the Plan by the
amount of such indebtedness.  In no event
shall payment of any Plan benefit be made prior to the Eligible Employee’s separation
from service or prior to the effective date of the release described in Section 2(a)(2).

 

(b)                                Best After Tax.  If any payment or benefit
(including payments and benefits pursuant to this Agreement) that an Eligible
Employee would receive in connection with a Change of Control from the Company
or otherwise (“Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but
for this sentence, be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise
Tax”), then the Company shall cause to be determined, before any
amounts of the Payment are paid to the Eligible Employee, which of the
following two alternative forms of payment would maximize the Eligible
Employee’s after-tax proceeds: (i) payment in full of the entire amount of
the Payment (a “Full
Payment”), or (ii) payment of only a part of the Payment so
that the Eligible Employee receives the largest payment possible without the
imposition of the Excise Tax (a “Reduced Payment”), whichever amount results
in the Participant’s
receipt, on an after-tax basis, of the greater amount of the Payment
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax.  For purposes of determining
whether to make a Full Payment or a Reduced Payment, the Company shall cause to
be taken into account all applicable federal, state and local income and
employment taxes and the Excise Tax (all computed at the highest applicable marginal
rate, net of the maximum reduction in federal income taxes which could be
obtained from a deduction of such state and local taxes).  If a Reduced Payment is made, (i) the
Payment shall be paid only to the extent permitted under the Reduced Payment alternative,
and the Eligible Employee shall have no rights to any additional payments
and/or benefits constituting the
Payment, and (ii) reduction in payments and/or benefits shall occur in the
following order: (1) reduction of cash payments; (2) cancellation of
accelerated vesting of equity awards other than stock options; (3) cancellation
of accelerated vesting of stock options; and (4) reduction of other
benefits paid to the Eligible Employee.  In the event that acceleration
of compensation from the Eligible Employee’s equity awards is to be reduced, such acceleration of vesting shall
be canceled in the reverse order of the date of grant.

 

The independent professional firm engaged by the
Company for general tax audit purposes as of the day prior to the effective
date of the Change of Control shall make all determinations required to be made
under this Section 4(b).  If the
firm so engaged by the Company is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Company shall
appoint a nationally recognized independent professional firm to make the
determinations required hereunder.  The
Company shall bear all expenses with respect to the determinations by such firm
required to be made hereunder.

 

5

 

The firm engaged to make the determinations hereunder
shall provide its calculations, together with detailed supporting
documentation, to the Company and the Eligible Employee within fifteen (15)
calendar days after the date on which the Eligible Employee’s right to a
Payment is triggered (if requested at that time by the Company or the Eligible
Employee) or such other time as requested by the Company or the Eligible
Employee.  If the firm determines that no
Excise Tax is payable with respect to a Payment, either before or after the
application of the Reduced Amount, it shall furnish the Company and the
Eligible Employee with a statement reasonably acceptable to the Eligible
Employee that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the firm
made hereunder shall be final, binding and conclusive upon the Company and the
Eligible Employee.

 

(c)                                Code Section 409A. 
If the Company (or, if
applicable, the successor entity thereto) determines that the severance
payments and benefits provided under the Plan (the “Plan
Payments”) constitute “deferred compensation” under Code Section 409A
(together, with any state law of similar effect, “Section 409A”) and an Eligible
Employee is a “specified employee” of the Company or any successor entity
thereto, as such term is defined in Section 409A(a)(2)(B)(i) (a “Specified Employee”)
on his or her separation from service, then, solely to the extent necessary to
avoid the incurrence of the adverse personal tax consequences under Section 409A,
the timing of the Plan Payments shall be delayed as follows:  on the earlier to occur of (i) the
date that is six months and one day after the date of his or her separation
from service or (ii) the date of the Eligible Employee’s death (such
earlier date, the “Delayed
Initial Payment Date”), the Company (or the successor entity
thereto, as applicable) shall (A) pay to the Eligible Employee a lump sum
amount equal to the sum of the Plan Payments that the Eligible Employee would
otherwise have received through the Delayed Initial Payment Date (including
reimbursement for any premiums paid by the Eligible Employee for health
insurance coverage under COBRA) if the commencement of the payment of the Plan
Payments had not been delayed pursuant to this Section 4(c) and (B) commence
paying the balance of the Plan Payments in accordance with the applicable
payment schedules set forth in Section 3 above.  It is intended that (i) each installment
of the Plan Payments provided under this Plan is a separate “payment” for
purposes of Section 409A, (ii) all of the Plan Payments satisfy, to
the greatest extent possible, the exemptions from the application of Section 409A
provided under of Treasury Regulation 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9), and this Plan will be construed to the greatest extent possible
as consistent with those provisions.

 

Section 5.                                         REEMPLOYMENT.

 

In the event of an Eligible Employee’s reemployment by
the Company during the period of time in respect of which Plan Payments have
been paid, the Company, in its sole discretion, may require such Eligible
Employee to repay to the Company all or a portion of such Plan Payments as a
condition of reemployment.

 

Section 6.                                         RIGHT
TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

 

(a)                                Exclusive
Discretion.  The Plan Administrator
(set forth in Section 11(d)) shall have the exclusive discretion and
authority to establish rules, forms, and procedures for the administration of
the Plan and to construe and interpret the Plan and to decide any and all
questions of fact, interpretation, definition, computation or administration
arising in connection with the operation of the Plan, including, but not
limited to, the eligibility to participate in the Plan and amount of benefits
paid under the Plan.  The rules,
interpretations, computations and other actions of the Plan Administrator shall
be binding and conclusive on all persons.

 

6

 

(b)                                Amendment
or Termination.  The Company reserves
the right to amend or terminate this Plan (including Appendix A) or the
benefits provided hereunder at any time prior to a Change of Control; provided, however, that no such amendment or termination
shall materially adversely impair the rights of any Eligible Employee under the
Plan without his or her written consent.

 

Section 7.                                         NO
IMPLIED EMPLOYMENT CONTRACT.

 

The Plan shall not be deemed to (i) give any employee or other
person any right to be retained in the employ of the Company or (ii) interfere
with the right of the Company to discharge any employee or other person at any
time, with or without cause, which right is hereby reserved.

 

Section 8.                                         LEGAL
CONSTRUCTION.

 

This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not
preempted by ERISA, the laws of the State of Florida.

 

Section 9.                                         CLAIMS,
INQUIRIES AND APPEALS.

 

(a)                                Applications
for Benefits and Inquiries.  Any
application for benefits, inquiries about the Plan or inquiries about present
or future rights under the Plan must be submitted to the Plan Administrator in
writing by an applicant (or his or her authorized representative).

 

(b)                                Denial
of Claims.  In the event that any application
for benefits is denied in whole or in part, the Plan Administrator must provide
the applicant with written or electronic notice of the denial of the
application, and of the applicant’s right to review the denial.  Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
The notice of denial will be set forth in a manner designed to be
understood by the applicant and will include the following:

 

(1)                                 the
specific reason or reasons for the denial;

 

(2)                                 references
to the specific Plan provisions upon which the denial is based;

 

(3)                                 a
description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such
information or material is necessary; and

 

(4)                                 an
explanation of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the applicant’s right to bring a
civil action under section 502(a) of ERISA following a denial on review of
the claim, as described in Section 9(d) below.

 

7

 

This notice of denial will be given to the applicant within ninety (90)
days after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application.  If an extension of time for
processing is required, written notice of the extension will be furnished to
the applicant before the end of the initial ninety (90) day period.

 

This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application.

 

(c)                                Request
for a Review.  Any person (or that
person’s authorized representative) for whom an application for benefits is
denied, in whole or in part, may appeal the denial by submitting a request for
a review to the Plan Administrator within sixty (60) days after the application
is denied.  A request for a review shall
be in writing and shall be addressed to the Plan Administrator.

 

A request for review must
set forth all of the grounds on which it is based, all facts in support of the
request and any other matters that the applicant feels are pertinent.  The applicant (or his or her representative)
shall have the opportunity to submit (or the Plan Administrator may require the
applicant to submit) written comments, documents, records, and other
information relating to his or her claim. 
The applicant (or his or her representative) shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim.  The review shall take into account all
comments, documents, records and other information submitted by the applicant
(or his or her representative) relating to the claim, without regard to whether
such information was submitted or considered in the initial benefit
determination.

 

(d)                                Decision
on Review.  The Plan Administrator
will act on each request for review within sixty (60) days after receipt of the
request, unless special circumstances require an extension of time (not to
exceed an additional sixty (60) days), for processing the request for a
review.  If an extension for review is
required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period. 
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the review. 
The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will set forth, in a
manner calculated to be understood by the applicant, the following:

 

(1)                                 the
specific reason or reasons for the denial;

 

(2)                                 references
to the specific Plan provisions upon which the denial is based;

 

8

 

(3)                                 a
statement that the applicant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim; and

 

(4)                                 a
statement of the applicant’s right to bring a civil action under section 502(a) of
ERISA.

 

(e)                                Rules and
Procedures.  The Plan Administrator
will establish rules and procedures, consistent with the Plan and with
ERISA, as necessary and appropriate in carrying out its responsibilities in
reviewing benefit claims.  The Plan
Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so
at the applicant’s own expense.

 

(f)                                  Exhaustion
of Remedies.  No legal action for
benefits under the Plan may be brought until the applicant (i) has
submitted a written application for benefits in accordance with the procedures
described by Section 9(a) above, (ii) has been notified by the
Plan Administrator that the application is denied, (iii) has filed a
written request for a review of the application in accordance with the appeal
procedure described in Section 9(c) above, and (iv) has been
notified that the Plan Administrator has denied the appeal.  Notwithstanding the foregoing, if the Plan
Administrator does not respond to a Participant’s claim or appeal within the
relevant time limits specified in this Section 9, the Participant may
bring legal action for benefits under the Plan pursuant to Section 502(a) of
ERISA.

 

Section 10.                                  BASIS
OF PAYMENTS TO AND FROM PLAN.

 

The Plan shall be unfunded, and all cash payments under the Plan shall
be paid only from the general assets of the Company.

 

Section 11.                                  OTHER
PLAN INFORMATION.

 

(a)                                Employer
and Plan Identification Numbers.  The
Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used
in ERISA) by the Internal Revenue Service is 77-0456039.  The Plan Number assigned to the Plan
by the Plan Sponsor pursuant to the instructions of the Internal Revenue
Service is  2009.

 

(b)                                Ending
Date for Plan’s Fiscal Year.  The
date of the end of the fiscal year for the purpose of maintaining the Plan’s
records is December 31.

 

(c)                                Agent
for the Service of Legal Process. 
The agent for the service of legal process with respect to the Plan is
the Plan Administrator.

 

(d)                                Plan
Sponsor and Administrator.  The “Plan
Sponsor” and the “Plan Administrator” of the Plan is:

 

ARYx Therapeutics, Inc.

6300 Dumbarton Circle

Fremont,
CA 94555

 

9

 

The Plan Sponsor’s and
Plan Administrator’s telephone number is (510) 585-2200.  The Plan Administrator is the named fiduciary
charged with the responsibility for administering the Plan.

 

Section 12.                                  STATEMENT
OF ERISA RIGHTS.

 

Participants in
this Plan (which is a welfare benefit plan sponsored by ARYx Therapeutics, Inc.)
are entitled to certain rights and protections under ERISA.  If you are an Eligible Employee, you are
considered a participant in the Plan and, under ERISA, you are entitled to:

 

(a)                                Receive
Information About Your Plan and Benefits

 

(1)                                 Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series), if applicable, filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of
the Employee Benefits Security Administration;

 

(2)                                 Obtain,
upon written request to the Plan Administrator, copies of documents governing
the operation of the Plan and copies of the latest annual report (Form 5500
Series), if applicable, and an updated (as necessary) Summary Plan
Description.  The Administrator may make
a reasonable charge for the copies; and

 

(3)                                 Receive
a summary of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to
furnish each participant with a copy of this summary annual report.

 

(b)                                Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the operation
of the employee benefit plan.  The people
who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of you and other Plan participants and
beneficiaries.  No one, including your
employer, your union or any other person, may fire you or otherwise
discriminate against you in any way to prevent you from obtaining a Plan
benefit or exercising your rights under ERISA.

 

(c)                                Enforce Your Rights.  If your claim for a Plan benefit
is denied or ignored, in whole or in part, you have a right to know why this
was done, to obtain copies of documents relating to the decision without
charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are
steps you can take to enforce the above rights. 
For instance, if you request a copy of Plan documents or the latest
annual report from the Plan, if applicable, and do not receive them within 30
days, you may file suit in a Federal court. 
In such a case, the court may require the Plan Administrator to provide
the materials and pay you up to $110 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of the
Plan Administrator.

 

10

 

If you have a claim for
benefits which is denied or ignored, in whole or in part, you may file suit in
a state or Federal court.

 

If you are discriminated
against for asserting your rights, you may seek assistance from the U.S.
Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court
costs and legal fees.  If you are
successful, the court may order the person you have sued to pay these costs and
fees.  If you lose, the court may order
you to pay these costs and fees, for example, if it finds your claim is
frivolous.

 

(d)                                Assistance with Your Questions.  If you have any questions about
the Plan, you should contact the Plan Administrator.  If you have any questions about this
statement or about your rights under ERISA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical Assistance
and Inquiries, Employee Benefits Security Administration, U.S. Department of
Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration.

 

Section 13.                                  GENERAL
PROVISIONS.

 

(a)                                Notices.  Any notice, demand or request required or
permitted to be given by either the Company or an Eligible Employee pursuant to
the terms of this Plan shall be in writing and shall be deemed given when
delivered personally or deposited in the U.S. mail with postage prepaid, and
addressed to the parties, in the case of the Company, at the address set forth
in Section 11(d) and, in the case of an Eligible Employee, at the
address as set forth in the Company’s employment file maintained for the
Participant as previously furnished by the Participant or such other address as
a party may request by notifying the other in writing.

 

(b)                                Transfer
and Assignment.  The rights and
obligations of an Eligible Employee under this Plan may not be transferred or
assigned without the prior written consent of the Company.  This Plan shall be binding upon any person
who is a successor by merger, acquisition, consolidation or otherwise to the
business formerly carried on by the Company without regard to whether or not
such person or entity actively assumes the obligations hereunder.

 

(c)                                Waiver.
 Any party’s failure to enforce any
provision or provisions of this Plan shall not in any way be construed as a
waiver of any such provision or provisions, nor prevent any party from
thereafter enforcing each and every other provision of this Plan.  The rights granted the parties herein are
cumulative and shall not constitute a waiver of any party’s right to assert all
other legal remedies available to it under the circumstances.

 

(d)                                Severability.
 Should any provision of this Plan
(including any appendices hereto) be declared or determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.

 

(e)                                Section Headings.  Section headings in this Plan are
included for convenience of reference only and shall not be considered part of
this Plan for any other purpose.

 

11

 

Section 14.                                  CIRCULAR
230 DISCLAIMER.

 

THE FOLLOWING DISCLAIMER
IS PROVIDED IN ACCORDANCE WITH THE INTERNAL REVENUE SERVICE’S CIRCULAR 230 (21
CFR PART 10).  ANY ADVICE IN THIS
PLAN IS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED BY YOU FOR
THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON YOU.  ANY ADVICE IN THIS PLAN WAS WRITTEN TO
SUPPORT THE PROMOTION OR MARKETING OF PARTICIPATION IN THE COMPANY’S SEVERANCE
BENEFIT PLAN.  YOU SHOULD SEEK ADVICE
BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

 

Section 15.                                  EXECUTION.

 

To record the adoption of the Plan as set forth herein, effective as of
May 20, 2009, the Company has caused its duly authorized officer to
execute the same as of May 27, 2009.

 

 

	
   

  	
  ARYX THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Goddard

  
	
   

  	
   

  	
  Paul Goddard, Ph.D.

  
	
   

  	
   

  	
  Chairman of the Board
  and Chief Executive Officer

  

 

12

 

For Employees Age 40 or
Older

Individual
Termination

 

EXHIBIT A

 

RELEASE
AGREEMENT

 

I understand and agree completely to the terms set
forth in the ARYx Therapeutics, Inc. Executive Severance Benefit Plan (the
“Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between ARYx
Therapeutics, Inc. (the “Company”)
and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under the Company’s proprietary
information and inventions agreement.

 

While employed by the Company and for two (2) years
immediately following the date on which I cease to be employed by the Company
for any reason, I agree not to (whether directly or indirectly, personally or
through others): (a) encourage, induce, attempt to induce, solicit or
attempt to solicit any employee of the Company or any of the Company’s
subsidiaries to leave his or her employment with the Company or any of the
Company’s subsidiaries, (b) encourage, induce, attempt to induce, solicit
or attempt to solicit any customer of the Company or any of the Company’s
subsidiaries to reduce or terminate its customer relationship with the Company,
or (c) be or become an officer, director, stockholder, owner, co-owner,
affiliate, partner, promoter, employee, agent, representative, designer, consultant,
advisor, manager, licensor, sublicensor, licensee or sublicensee of, for or to,
or otherwise be or become associated with or acquire or hold (of record,
beneficially or otherwise) any direct or indirect interest in, any entity that
engages directly or indirectly in competition with the Company; provided, however, that I may, without violating this
paragraph, provide services to a business division of a competing entity if
such business division does not compete with the Company and my services to the
competing entity are limited to such business division, and provided further, that I may own, as a
passive investor, an equity interest of any competing entity, so long as my
holdings in such entity do not in the aggregate constitute more than 1% of the
voting stock of such entity.  I
acknowledge that, due to the nature of the Company ‘s business and the products
and services provided by the Company, it is possible to compete with the
Company from any location within the world, and I acknowledge and agree that it
is thus impossible to identify or otherwise limit the geographic scope of this
agreement and that it is reasonable for the restrictions contained herein to
apply on a worldwide basis.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and its and their partners, members, directors,
officers, employees, stockholders, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns, from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are
in any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date I sign this Release.  This general release includes, but is not
limited to: (a) all claims arising out of or in any way 

 

1

 

related to my
employment with the Company or the termination of that employment; (b) all
claims related to my compensation or benefits, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Family and Medical Leave Act (“FMLA”), the
California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the
California Fair Employment and Housing Act (as amended) and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify me
pursuant to agreement or applicable law or to prohibit me for contesting a
claim for indemnification made by the Company or any of the other persons
released hereunder.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my
waiver and release do not apply to any rights or claims that may arise after
the date I sign this Release; (b) I
should consult with an attorney prior to signing this Release (although I may
choose voluntarily not do so);
(c) I have twenty-one (21) days to consider this Release
(although I may choose voluntarily to sign this Release earlier); (d) I have seven
(7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) this Release shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after I sign this Release.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, pursuant to FMLA, CFRA, or otherwise, and
I have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than twenty-one (21)
days following the later of the date of the termination of my employment and
the date it is provided to me.

 

2

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

3

 

For Employees Age 40 or
Older

Group Termination

 

EXHIBIT B

 

RELEASE
AGREEMENT

 

I understand and agree completely to the terms set
forth in the ARYx Therapeutics, Inc. Executive Severance Benefit Plan (the
“Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between ARYx
Therapeutics, Inc. (the “Company”)
and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under the Company’s proprietary
information and inventions agreement.

 

While employed by the Company and for two (2) years immediately
following the date on which I cease to be employed by the Company for any
reason, I agree not to (whether directly or indirectly, personally or through
others): (a) encourage, induce, attempt to induce, solicit or attempt to
solicit any employee of the Company or any of the Company’s subsidiaries to
leave his or her employment with the Company or any of the Company’s
subsidiaries, (b) encourage, induce, attempt to induce, solicit or attempt
to solicit any customer of the Company or any of the Company’s subsidiaries to
reduce or terminate its customer relationship with the Company, or (c) be
or become an officer, director, stockholder, owner, co-owner, affiliate,
partner, promoter, employee, agent, representative, designer, consultant,
advisor, manager, licensor, sublicensor, licensee or sublicensee of, for or to,
or otherwise be or become associated with or acquire or hold (of record,
beneficially or otherwise) any direct or indirect interest in, any entity that
engages directly or indirectly in competition with the Company; provided, however, that I may, without violating this
paragraph, provide services to a business division of a competing entity if
such business division does not compete with the Company and my services to the
competing entity are limited to such business division, and provided further, that I may own, as a
passive investor, an equity interest of any competing entity, so long as my
holdings in such entity do not in the aggregate constitute more than 1% of the
voting stock of such entity.  I
acknowledge that, due to the nature of the Company ‘s business and the products
and services provided by the Company, it is possible to compete with the
Company from any location within the world, and I acknowledge and agree that it
is thus impossible to identify or otherwise limit the geographic scope of this
agreement and that it is reasonable for the restrictions contained herein to
apply on a worldwide basis.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and its and their partners, members, directors,
officers, employees, stockholders, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns, from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are
in any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date I sign this Release.  This general release includes, but is not
limited to: (a) all claims arising out of or in any way 

 

1

 

related to my
employment with the Company or the termination of that employment; (b) all
claims related to my compensation or benefits, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Family and Medical Leave Act (“FMLA”), the
California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the
California Fair Employment and Housing Act (as amended) and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify me
pursuant to agreement or applicable law or to prohibit me for contesting a
claim for indemnification made by the Company or any of the other persons
released hereunder.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my
waiver and release do not apply to any rights or claims that may arise after
the date I sign this Release; (b) I
should consult with an attorney prior to signing this Release (although I may
choose voluntarily not to do so); (c) I have forty-five (45) days to
consider this Release (although I may choose voluntarily to sign this Release
earlier); (d) I
have seven (7) days following the date I sign this Release to revoke the
Release by providing written notice to an office of the Company; (e) this Release
shall not be effective until the date upon which the revocation period has
expired, which shall be the eighth day after I sign this Release; and (f) I
have received with this Release a detailed list of the job titles and ages of
all employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, pursuant to FMLA, CFRA, or otherwise, and
I have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.

 

2

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than forty-five (45)
days following the later of the date of the termination of my employment and
the date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

3

 

For Employees Under Age 40

Individual and
Group Termination

 

EXHIBIT C

 

RELEASE
AGREEMENT

 

I understand and agree completely to the terms set
forth in the ARYx Therapeutics, Inc. Executive Severance Benefit Plan (the
“Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between ARYx
Therapeutics, Inc. (the “Company”)
and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under the Company’s proprietary
information and inventions agreement.

 

While employed by the Company and for two (2) years
immediately following the date on which I cease to be employed by the Company
for any reason, I agree not to (whether directly or indirectly, personally or
through others): (a) encourage, induce, attempt to induce, solicit or
attempt to solicit any employee of the Company or any of the Company’s
subsidiaries to leave his or her employment with the Company or any of the
Company’s subsidiaries, (b) encourage, induce, attempt to induce, solicit
or attempt to solicit any customer of the Company or any of the Company’s
subsidiaries to reduce or terminate its customer relationship with the Company,
or (c) be or become an officer, director, stockholder, owner, co-owner,
affiliate, partner, promoter, employee, agent, representative, designer,
consultant, advisor, manager, licensor, sublicensor, licensee or sublicensee
of, for or to, or otherwise be or become associated with or acquire or hold (of
record, beneficially or otherwise) any direct or indirect interest in, any
entity that engages directly or indirectly in competition with the Company; provided, however, that I may, without violating this
paragraph, provide services to a business division of a competing entity if
such business division does not compete with the Company and my services to the
competing entity are limited to such business division, and provided further, that I may own, as a
passive investor, an equity interest of any competing entity, so long as my
holdings in such entity do not in the aggregate constitute more than 1% of the
voting stock of such entity.  I
acknowledge that, due to the nature of the Company ‘s business and the products
and services provided by the Company, it is possible to compete with the
Company from any location within the world, and I acknowledge and agree that it
is thus impossible to identify or otherwise limit the geographic scope of this
agreement and that it is reasonable for the restrictions contained herein to
apply on a worldwide basis.

 

Except as otherwise set forth in this Release, I hereby generally and
completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and its and their partners, members, directors,
officers, employees, stockholders, shareholders, agents, attorneys,
predecessors, insurers, affiliates and assigns, from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are
in any way related to events, acts, conduct, or omissions occurring at any time
prior to and including the date I sign this Release.  This general release includes, but is not
limited to: (a) all claims arising out of or in any way 

 

1

 

related to my
employment with the Company or the termination of that employment; (b) all
claims related to my compensation or benefits, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Family and Medical Leave Act (“FMLA”), the
California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the
California Fair Employment and Housing Act (as amended) and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify me
pursuant to agreement or applicable law or to prohibit me for contesting a
claim for indemnification made by the Company or any of the other persons
released hereunder.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked, I have received all the leave and leave benefits and
protections for which I am eligible, pursuant to FMLA, CFRA, or otherwise, and
I have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than fourteen (14) days
following the later of the date of the termination of my employment and the
date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

 

ARYX
THERAPEUTICS, INC.

EXECUTIVE
SEVERANCE BENEFIT PLAN

 

APPENDIX
A

 

The Company’s
Board of Directors has deemed the following executive employees to be eligible
for severance benefits under the ARYx Therapeutics, Inc. Executive
Severance Benefit Plan (“Eligible Employees”):

 

John
Varian

Daniel
Canafax

Pascal
Druzgala

David
Nagler

 

1

 

ARYX
THERAPEUTICS, INC.

EXECUTIVE
SEVERANCE BENEFIT PLAN

 

APPENDIX
B

 

Participation
Agreement

 

By signing below, I hereby accept and agree to the terms of the ARYx
Therapeutics, Inc. Executive Severance
Benefit Plan (the “Plan”).  I understand that my rights under the Plan
supersede and replace in their entirety any rights I have under any other prior
agreements with the Company to receive accelerated vesting of my compensatory
equity awards upon a Change of Control and/or upon any termination of my
employment with the Company.  I also
understand and agree that the defined terms used in this Plan, including but
not limited to “Cause”, “Good Reason” and “Change of Control” supersede and
replace in their entirety for all purposes any such definitions or similarly
defined concepts that exist in any other agreements I have entered into with
the Company.  Capitalized terms used in
this Participation Agreement have the meanings set forth in the Plan.

 

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

1

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