Document:

exv10w1

 

Exhibit 10.1

Execution Version

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

BY AND BETWEEN

INDYMAC BANCORP, INC.

AND

MICHAEL W. PERRY

EFFECTIVE SEPTEMBER 18, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Page	 
	 	1.	 	 	Term.	 	 	1	 
	 	2.	 	 	Position, Duties and Responsibilities	 	 	1	 
	 	3.	 	 	Scope of This Agreement and Outside Affiliations	 	 	2	 
	 	4.	 	 	Compensation and Benefits.	 	 	2	 
	 	 	 	 	(a)		 	 	Base Salary
	 	 	2	 
	 	 	 	 	(b)		 	 	Incentive Compensation
	 	 	2	 
	 	 	 	 	(c)		 	 	Equity Compensation
	 	 	5	 
	 	 	 	 	(d)	 	 	 	Deferred Compensation
	 	 	5	 
	 	 	 	 	(e)	 	 	 	Additional Benefits.
	 	 	5	 
	 	 	 	 	(f)	 	 	 	Certain Perquisites.
	 	 	6	 
	 	 	 	 	(g)	 	 	 	Future Alternative Compensation Structure
	 	 	7	 
	 	5.	 	 	Termination	 	 	7	 
	 	 	 	 	(a)	 	 	 	Disability
	 	 	7	 
	 	 	 	 	(b)	 	 	 	Death
	 	 	8	 
	 	 	 	 	(c)	 	 	 	Cause
	 	 	9	 
	 	 	 	 	(d)	 	 	 	Other Than For Cause or Disability (not in connection with a Change in
Control)
	 	 	10	 
	 	 	 	 	(e)	 	 	 	Good Reason
	 	 	11	 
	 	 	 	 	(f)	 	 	 	Voluntary Resignation (other than Retirement or Expiration of the
Employment Term)
	 	 	12	 
	 	 	 	 	(g)	 	 	 	Change in Control
	 	 	12	 
	 	 	 	 	(h)	 	 	 	Notice of Termination
	 	 	13	 
	 	 	 	 	(i)	 	 	 	Expiration of Employment Term or Retirement
	 	 	13	 
	 	 	 	 	(j)	 	 	 	Retirement
	 	 	14	 
	 	6.	 	 	Certain Additional Payments by Employer	 	 	14	 
	 	7.	 	 	Reimbursement of Business Expenses	 	 	17	 
	 	8.	 	 	Indemnity	 	 	17	 

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	 	 	 	 	 	 	 	 	 	 	Page	 
	 	9.	 	 	Miscellaneous.	 	 	17	 
	 	 	 	 	(a)	 	 	 	Successorship
	 	 	17	 
	 	 	 	 	(b)	 	 	 	Notices
	 	 	17	 
	 	 	 	 	(c)	 	 	 	Entire Agreement
	 	 	17	 
	 	 	 	 	(d)	 	 	 	Waiver
	 	 	18	 
	 	 	 	 	(e)	 	 	 	California Law
	 	 	18	 
	 	 	 	 	(f)	 	 	 	Arbitration
	 	 	18	 
	 	 	 	 	(g)	 	 	 	Confidentiality
	 	 	18	 
	 	 	 	 	(h)	 	 	 	No Solicitation
	 	 	18	 
	 	 	 	 	(i)	 	 	 	Cooperation
	 	 	19	 
	 	 	 	 	(j)	 	 	 	Consideration; Remedies Of Employer
	 	 	19	 
	 	 	 	 	(k)	 	 	 	Reformation
	 	 	19	 
	 	 	 	 	(l)	 	 	 	Moral Obligation
	 	 	19	 
	 	 	 	 	(m)	 	 	 	Severability
	 	 	19	 
	 	 	 	 	(n)	 	 	 	No Obligation to Mitigate
	 	 	20	 
	 	 	 	 	(o)	 	 	 	Adjustment of Options
	 	 	20	 
	 	 	 	 	(p)	 	 	 	Legal Fees
	 	 	20	 
	 	 	 	 	(q)	 	 	 	Code Section 409A.
	 	 	20	 
	 	10.	 	 	Regulatory Authority	 	 	21	 
	 	11.	 	 	Sarbanes-Oxley	 	 	21	 
	APPENDIX A	 	 	A-1	 

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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of
September 18, 2006 by and between IndyMac Bancorp, Inc. (“Employer”) and Michael W. Perry
(“Officer”).

WITNESSETH:

          WHEREAS, Employer, Officer and IndyMac Bank, F.S.B. (“IndyMac Bank”) have previously
entered into that certain Amended and Restated Employment Agreement, effective as of February 1,
2002 (the “Prior Agreement”);

          WHEREAS, Employer and Officer desire to amend and restate the Prior Agreement immediately into
the form of this Agreement;

          WHEREAS, Employer desires to obtain the benefit of continued services of Officer and Officer
desires to continue to render services to Employer and its affiliates, including IndyMac Bank
(collectively, the “Affiliates”); and

          WHEREAS, Employer and Officer desire to set forth the terms and conditions of Officer’s
employment with Employer and its Affiliates under this Agreement.

          NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:

     1. Term.

          (a) Employer agrees to employ Officer and Officer agrees to serve Employer and its Affiliates,
in accordance with the terms hereof, for a term beginning on the date hereof and ending on December
31, 2011, unless earlier terminated in accordance with the provisions hereof (the “Employment
Term”).

          (b) On December 31, 2011, and on each of the next four (4) anniversaries thereof, this
Agreement shall automatically renew for an additional term of one (1) year from January 1 of the
next year to December 31 of such year, unless notice of non-renewal is provided by either Employer
or Officer at least twelve (12) months prior to the date of renewal. Unless extended thereafter by
mutual agreement, the Employment Term shall end on December 31, 2016.

     2. Position, Duties and Responsibilities. Employer and Officer hereby agree that, subject to
the provisions of this Agreement, Officer shall serve as Chief Executive Officer of Employer.
Employer agrees that Officer shall have the authority and duties customary for his positions in
similarly situated entities and such other duties, commensurate with his position, as assigned by
the Board of Directors of Employer (the “Board”) from time to time. Employer agrees that
Officer may serve as Chief Executive Officer and Chairman of IndyMac Bank but that any such
appointment or election is subject to the approval of and any agreement with the Board of Directors
of IndyMac Bank (the “IndyMac Bank Board”). Officer shall have such executive power and
authority as shall reasonably be required to enable him to discharge his

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duties in the offices which he may hold. All compensation paid to Officer by Employer or any
of its Affiliates shall be aggregated in determining whether Officer has received the benefits
provided for herein, but without prejudice to the allocation of costs among the entities to which
Officer renders services hereunder.

          Employer agrees that, as long as Officer serves on the Board, he shall serve as Chairman of
the Board. Employer shall cause Officer to be nominated for election to the Board.

     3. Scope of This Agreement and Outside Affiliations. During the term of this Agreement,
Officer shall devote his full business time and energy, except as expressly provided below, to the
business, affairs and interests of Employer and its Affiliates, and matters related thereto.
Officer shall report only to the Board and, if appointed to a management position at IndyMac Bank,
to the IndyMac Bank Board and shall perform his duties, subject to their authority. Officer agrees
to serve without additional remuneration as the chief executive officer or director of one or more
(direct or indirect) subsidiaries or Affiliates of Employer as the Board may from time to time
reasonably request, subject to appropriate authorization by the Affiliate or subsidiary involved
and any limitation under applicable law, provided that Officer shall be indemnified and covered by
directors’ and officers’ liability insurance of Employer as provided under Section 8 hereof with
regard to such service. Officer’s failure to discharge an order or perform a function because
Officer reasonably and in good faith believes such would violate a law or regulation or be
dishonest shall not be deemed a breach by him of his obligations or duties pursuant to any of the
provisions of this Agreement, including without limitation pursuant to Section 5(c) hereof.

          Officer may make and manage personal business investments of his choice and serve in any
capacity with any civic, educational or charitable organization, or any governmental entity or
trade association, without seeking or obtaining approval by the Board, provided such activities and
services do not materially interfere or conflict with the performance of his duties hereunder.
Officer may serve as a director (or on the advisory committee) of corporations or other business
enterprises with prior approval of the Management Development and Compensation Committee of the
Board (the “Compensation Committee”) which shall not be unreasonably withheld, provided
such activities or services do not materially interfere or conflict with the performance of
Officer’s duties hereunder.

     4. Compensation and Benefits.

          (a) Base Salary. During the Employment Term, Employer shall pay to Officer a base salary at
the annual rate of $1,000,000 (the “Base Salary”). At the sole discretion of the
Compensation Committee, the Base Salary may be increased from time to time but shall not be
reduced. Any increased rate shall thereafter be the rate of Base Salary hereunder.

          (b) Incentive Compensation. Except as otherwise provided herein, Officer shall receive an
annual bonus for 2006 in accordance with the terms of the Prior Agreement and the previously
approved award. Commencing with the 2007 fiscal year, Officer shall receive the following
incentive compensation for each fiscal year of the Employment Term:

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          (i) Short Term Annual Incentive Compensation. Pursuant to Employer’s short
term annual incentive plan, as in effect from time to time (which plan shall be intended to
be compliant with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”)), subject to Section 4(b)(iv) below, Officer shall receive Short Term Annual
Incentive Compensation (“STAIC”) for each fiscal year of the Employment Term. The
STAIC shall be calculated utilizing a base level amount equal to one percent (1%) of
Employer’s prior fiscal year net income as reflected in the Employer’s financial statements
for the prior fiscal year (subject to adjustment as provided herein) (the “Base
Level”), which Base Level shall be multiplied by a percentage determined by the one-year
earnings per share growth (“EPS”) as follows (the “Base Level Multiplier”)
and with linear interpolation between each Base Level Multiplier (except if below five
percent (5%) or above seventeen percent (17%)), subject to this Section 4(b)(i) and Section
4(b)(iv) below:

	 	 	 	 	 	 	 	 
	 
	 	EPS	 	 	Base Level Multiplier	 
	 	Below 5%

	 	 	 	0	 	 
	 	5%

	 	 	 	25	%	 
	 	10%

	 	 	 	50	%	 
	 	13%

	 	 	 	75	%	 
	 	15%

	 	 	 	100	%	 
	 	Greater than or equal to 17%

	 	 	 	125	%	 
	 

     The STAIC award may be adjusted downward from zero (0) to twenty percent (20%) based on
mutually agreed upon qualitative factors including, but not limited to, succession planning,
leadership, quality of earnings, quality and effectiveness of enterprise risk management and
quality of relationship and compliance with regulatory agencies that are, in good faith,
established at the beginning of the performance period by the Compensation Committee and
subjectively evaluated by the Compensation Committee at the end of the performance period.

Notwithstanding the foregoing definition of Base Level, in the event that Employer’s net
income for a prior year was negative or, in the sole discretion of the Compensation
Committee, reflected a substantial decline from the previous year, the Compensation
Committee may, in its sole discretion, within the time period permitted by section 162(m) of
the Code for setting such year’s annual bonus goals, elect to use one percent (1%) of
Employer’s current fiscal year net income (the “Alternative Base Level”). In such
event, Officer’s STAIC award for such fiscal year shall be the greater of the amount
calculated pursuant to the terms described in this Section 4(b)(i) without regard to the
prior sentence, or seventy-five percent (75%) of the Alternative Base Level.

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          (ii) Discretionary Annual Incentive Award. In the event the STAIC award
determined in accordance with Section 4(b)(i) above is less than $1,000,000, Officer shall
be eligible, in the sole discretion of the Compensation Committee, to a bonus in lieu of the
foregoing (which bonus in the aggregate shall not exceed $1,000,000) and shall be
conditioned on the determination by the Compensation Committee that Employer’s performance
was substantially better than that of key industry peers.

          (iii) Long Term Annual Incentive Compensation. Officer shall receive an annual
Long Term Annual Incentive Compensation (“LTAIC”) award, which LTAIC award shall
generally be made at the same time as all other annual equity awards are made to senior
managers of Employer. Each such LTAIC shall consist of the following (which the parties
acknowledge is consistent with the current LTAIC arrangements of Employer’s senior
management team):

     (A) An amount equal to twenty-five percent (25%) of the sum of Officer’s Base
Salary and prior year’s STAIC (determined prior to any reduction under Section
4(b)(iv) below), which LTAIC award shall be awarded, in the discretion of the
Compensation Committee, in either (x) restricted stock under Employer’s 2002 Stock
Incentive Plan, as amended and restated or any successor plan (the “Plan”),
which award shall provide for a vesting schedule of no greater than three (3) years,
or (y) a cash amount, which amount shall be credited to Officer’s account under the
terms of Employer’s deferred compensation plan established for purposes of deferring
the portion of Officer’s LTAIC under this Section 4(b)(iii)(A)(y) (the “LTAIC
Deferral Plan”) and has an option to invest in Employer stock, which award in
either case shall have no forfeiture or clawback provisions based on Officer’s
post-employment activities (except as otherwise required by applicable law); and

     (B) An amount equal to fifty percent (50%) of Officer’s prior year’s STAIC
(determined prior to any reduction under Section 4(b)(iv) below), which amount shall
be awarded in the form of stock options pursuant to the terms of the Plan (measured
on the same basis as stock options are measured for purposes of all stock option
grants to senior managers of Employer) and which shall vest ratably on each of the
three anniversaries of the grant of such stock options and shall have no forfeiture
or clawback provisions based on Officer’s post-employment activities (except as
otherwise required by applicable law).

Notwithstanding the foregoing, Officer shall be eligible to receive an LTAIC award in 2007
(for 2006) under the terms of Sections 4(b)(i) and 4(b)(iii) (including, but not limited to,
being measured on the same basis as stock options are measured for purposes of all stock
option grants to senior managers of Employer), as if such programs were already in place and
paid generally at the same time as all other annual equity awards are made to senior
managers of Employer, provided that the portion of Officer’s LTAIC award under Section
4(b)(iii)(A) shall be paid in the form of stock options pursuant to the terms of the Plan
and which shall vest ratably on each of the first three (3) anniversaries of the grant of
such stock options.

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          (iv) Special Reduction. The annual STAIC payable to Officer pursuant to
Section 4(b)(i) above shall be reduced by ten percent (10%). Officer understands that it is
Employer’s intent to utilize such amount to help fund a scholarship program for children of
employees of Employer (the “Scholarship Program”).

          (c) Equity Compensation. The terms and conditions regarding Officer’s equity award grants
made pursuant to the Prior Agreement shall continue to vest and otherwise remain in effect with
their terms.

          (d) Deferred Compensation. On January 1, 2003 (the “Credit Date”), Employer credited
Officer’s account under the IndyMac Bancorp, Inc. Deferred Compensation Plan (the “Deferred
Compensation Plan”) with $5 million (the “Deferred Compensation Credit”). Such amount
plus any accrued earnings thereon (the “Deferred Amount”) is seventy-five percent (75%)
vested as of the date hereof and the remaining twenty-five percent (25%) will vest on January 1,
2007 or earlier as provided below. The Deferred Amount shall become payable to Officer in
accordance with Officer’s distribution election under the Deferred Compensation Plan but in no
event earlier than thirty (30) days following the Termination Date (as defined in Section 5(h)) or,
to the extent required by section 409A of the Code, no earlier than the earlier of the date six (6)
months following the Termination Date or Officer’s death. In the event of the termination of
Officer’s employment pursuant to Sections 5(c) or (f), any unvested portion of the Deferred Amount
shall be forfeited on the Termination Date. In all other cases, any unvested portion of the
Deferred Amount shall fully vest on Officer’s termination of employment.

          (e) Additional Benefits.

          (i) Officer shall also be entitled to participate, at a level commensurate with his
position, in any stock purchase plan, pension plan, deferred compensation plan, life and
medical insurance policy, or other plans or benefits, of Employer for senior officers
generally or for employees generally and that are not duplicative of the bonuses paid under
Section 4(b) of this Agreement, during the term of this Agreement as well as any benefits or
rights specifically provided for Officer (collectively, “Additional Benefits”);
provided, however, that Employer shall have no obligation to grant any stock options or
other equity awards to Officer except as provided in Section 4(b). Officer shall be
entitled to paid vacation in accordance with Employer’s vacation policy, but in no event
less than five (5) weeks per annum.

          (ii) Subject to Section 9(q) below, Officer shall also be entitled to Employer provided
medical, dental and vision insurance coverage for each of Officer’s and his spouse’s
lifetime (or solely for his spouse’s lifetime in the case of a termination of Officer’s
employment as a result of his death) and for any dependents until the maximum age for a
dependent allowable by Employer’s health and benefit plans offered to all employees
(“Eligible Dependents”) that, in conjunction with the coverage available to Officer
and his spouse pursuant to Medicare, if any, is substantially similar in the aggregate
(including percentage of premium cost sharing) to the coverage provided to Officer and his
spouse immediately prior to the Termination Date. The lifetime medical coverage available
to Officer, his spouse and Eligible Dependents pursuant to this Section 4(e)(ii) shall be
referred to throughout this Agreement as the “Lifetime Medical

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Coverage.” Employer will use its reasonable best efforts to provide the Lifetime
Medical Coverage in a manner that results in the exclusion of such benefits from the income
of Officer and his spouse. Employer will use its reasonable best efforts to provide the
Lifetime Medical Coverage such that Section 105(h) of the Code will not apply. If such
Lifetime Medical Coverage is provided through reimbursement of premiums paid by Officer, his
spouse and/or Eligible Dependents (as a result of agreement of Officer and Employer),
Officer, his spouse and/or Eligible Dependents shall provide to the company evidence of
coverage under any applicable health insurance policy or Medicare supplemental health
policy. To the extent the Lifetime Medical Coverage is subject to section 409A of the Code,
Section 9(q) shall apply.

          (iii) This Agreement shall not affect the provision of any other compensation,
retirement or other benefit program or plan of Employer, except as provided herein.

          (f) Certain Perquisites.

          (i) Club Memberships. Employer shall pay standard annual and monthly membership fees
and any business related charges for Officer’s participation in the California Club, the
Annandale Golf Club, and the Shady Canyon Golf Club (including, but not limited to, the
initial fee and monthly and other assessments) and such other memberships as may be approved
by the Compensation Committee from time to time (including prior to January 1, 2007, those
memberships that exist as of the date hereof). In addition, Employer shall pay standard
annual and monthly membership fees, travel expenses, and any business related charges for
Officer’s participation in the Young Presidents’ Organization.

          (ii) Car Allowance. Employer shall provide Officer with an appropriate luxury
automobile (as mutually agreed to by Officer and the Compensation Committee, but at no less
than the level of automobile provided by Employer to Officer on the Effective Date) for
Officer’s exclusive use and provide at Employer expense for car insurance, maintenance and
operating expenses. Officer shall have the right to replace the automobile every two (2)
years.

          (iii) Travel. In connection with business travel, Officer shall be permitted to travel
first class, or by chartered or other private plane service where appropriate, at Employer’s
expense, it being recognized that travel by charter or other private plane service will be
necessary for security reasons.

          (iv) Financial Planning Services. Employer shall pay for the financial planning and
tax services of AYCO for Officer, including a full tax gross-up for any imputed income to
Officer resulting from such benefit. The annual amount that Employer shall be required to
pay for such services shall not exceed $35,000, exclusive of the tax gross-up.

          (v) Life Insurance. In addition to the life insurance benefit provided by Employer to
all employees that Officer is eligible for and elects to avail, Employer

6

 

shall provide an
additional portable term or universal life insurance policy on the
life of Officer, for the benefit of a beneficiary designated by Officer, with a death
benefit equal to four (4) times Officer’s Base Salary, with Officer not being required to
make any payment thereon (other than payment of any tax obligations).

          (vi) Long Term Disability. Employer shall provide Officer long term disability
coverage which shall provide annual benefits to Officer equal to sixty-five percent (65%) of
his Base Salary during any period that Officer is disabled, if the disability arose during
the Employment Term. Any disability payments to Officer pursuant to coverage obtained
pursuant to this Section 4(f)(vi) shall not be subject to offset by severance benefits
payable to Officer pursuant to this Agreement.

          (g) Future Alternative Compensation Structure. The parties reserve the right at any time by
mutual agreement to amend this Agreement to provide for an alternative compensation structure that
they believe better reflects an identity of interest between Officer and stockholders.

     5. Termination. The compensation and benefits provided for herein and the employment of
Officer by Employer shall be terminated only as provided for below in this Section 5:

          (a) Disability. In the event that Officer shall fail, because of illness, injury or similar
incapacity, to render for six (6) consecutive months or for shorter periods aggregating one hundred
eighty (180) or more business days in any twelve (12) month period, the material services
contemplated by this Agreement (“Disability”), Officer’s full-time employment hereunder may
be terminated, by written Notice of Termination from Employer to Officer while Officer remains so
incapacitated; and thereafter, subject to Section 9(q):

          (i) Employer shall pay Officer a single severance payment as soon as practicable after
the Termination Date, but, in no event later than thirty (30) days thereafter, an amount in
cash equal to two (2) times the sum of: (A) the average of the Base Salary in effect for the
two (2) years immediately preceding the Termination Date, plus (B) an amount equal to
Officer’s prior year’s Base Level STAIC; provided however, that in no event shall the
aggregate amount payable under this Section 5(a)(i) be less than $7 million,

          (ii) Employer shall pay Officer an amount equal to Officer’s STAIC, pro-rated from
January 1 of the year in which the termination occurs through the Termination Date, based on
Employer’s actual performance for the year of termination (with no discretionary factor
reduction), payable at such time or times when Employer pays such bonuses to its executives;
provided, however, that in no event (other than in compliance with Section 9(q)) shall such
payment be made later than March 15th of the subsequent year (the “Pro Rata
Annual Bonus”),

          (iii) Employer shall pay Officer an amount equal to Officer’s LTAIC, pro-rated from
January 1 of the year in which the termination occurs through the Termination Date, based on
Employer’s actual performance for the year of termination,

7

 

payable at such time or
times when Employer pays such compensation to its executives
(the “Pro Rata Long Term Bonus”),

          (iv) Any of Officer’s outstanding unvested options and any other equity grants shall
become immediately vested, any vested options granted after the date hereof shall remain
exercisable until the earlier of twelve (12) months following the Termination Date or their
full-term expiration date and any vested options granted prior to the date hereof shall
remain exercisable in accordance with the terms of the grant and the Prior Agreement (the
“Equity Treatment”),

          (v) Officer, his spouse and Eligible Dependents shall be entitled to Lifetime Medical
Coverage,

          (vi) All unvested amounts, including any earnings, credited to Officer’s accounts under
the Deferred Compensation Plan and the LTAIC Deferral Plan shall immediately become vested
and nonforfeitable. The amounts in Officer’s accounts shall be payable to Officer in
accordance with Officer’s distribution election under the Deferred Compensation Plan and the
LTAIC Deferral Plan (the “Deferred Compensation Treatment”),

          (vii) To the full extent permitted by law, so long as Employer (or a successor)
maintains directors’ and officers’ liability insurance for its executives or directors,
Employer shall continue to provide Officer following the Termination Date with directors’
and officers’ liability insurance insuring Officer against insurable events which occur or
have occurred while Officer was a director or officer of Employer or an Affiliate or a
fiduciary of an employee benefit plan of any of the foregoing, such insurance to have policy
limits aggregating not less than the amount in effect immediately prior to the Termination
Date or, if higher, that provided to other officers or directors of Employer. In addition,
Officer’s rights of indemnification hereunder or otherwise with regard to service on behalf
of Employer or an Affiliate or a fiduciary of an employee benefit plan of any of the
foregoing prior to such termination (“Rights of Indemnification”) shall continue
(the “Coverage Protection”), and

          (viii) Officer shall be entitled to his accrued rights, including but not limited to
earned but unpaid Base Salary, accrued but unused vacations and earned but unpaid STAIC or
LTAIC for any prior completed fiscal year and any earned but unpaid benefits under any plan
or program of Employer (“Accrued Amounts”).

          The determination of Disability shall be made only after Officer has failed to render services
for the above stated time periods and shall be made only after thirty (30) days notice to Officer
(which may run concurrently with the Notice of Termination). Prior to a termination of employment
as a result of Disability, Officer shall continue to receive his full compensation and benefits
during any period of incapacity.

          (b) Death. In the event of Officer’s death during the term of this Agreement, the Officer’s
estate shall be entitled to:

          (i) The Pro Rata Annual Bonus,

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          (ii) The Pro Rata Long Term Bonus,

          (iii) The Deferred Compensation Treatment,

          (iv) The Equity Treatment,

          (v) The Lifetime Medical Coverage (limited to Officer’s spouse and Eligible
Dependents),

          (vi) The Coverage Protection, and

          (vii) The Accrued Amounts.

          (c) Cause. Employer may terminate Officer’s employment under this Agreement for “Cause.” A
termination for Cause is a termination by reason of (i) a material breach of this Agreement by
Officer (other than as a result of incapacity due to physical or mental illness) that is committed
in bad faith or without reasonable belief that such breach is in the best interests of Employer and
which, for any breach that is remediable, or can be cured going forward, is not remedied or cured
within a reasonable period of time after receipt of written notice from Employer specifying such
breach, or (ii) Officer’s conviction by a court of competent jurisdiction of a felony involving
acts of fraud, embezzlement, dishonesty or moral turpitude, or (iii) entry of a final
non-appealable order duly issued by any federal or state regulatory agency having jurisdiction in
the matter removing Officer from office of IndyMac Bank or permanently prohibiting him from
participating in a material portion of the affairs of IndyMac Bank, provided that the order
resulted from act(s) of Officer which were committed in bad faith and without reasonable belief
that such act(s) were in the best interests of Employer.

          Notwithstanding the foregoing, Officer’s employment shall not be deemed to have been
terminated for Cause unless and until there have been delivered to Officer a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds of the non-employee directors of
the Board (the “Outside Directors”) (after reasonable notice to Officer and an opportunity
for Officer, together with Officer’s counsel, to be heard before the Outside Directors), finding
that in the Outside Directors’ good faith opinion Officer was guilty of conduct set forth above in
this Section 5(c) and specifying the particulars thereof in reasonable detail.

          If Officer shall be (A) convicted of a felony of a type set forth above or (B) shall be
suspended and/or temporarily prohibited from participating in the conduct of IndyMac Bank’s affairs
by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1)) by any federal or state regulatory authority having jurisdiction in the
matter, by the affirmative vote of two-thirds of the Outside Directors (after reasonable notice to
Officer and an opportunity for Officer, together with Officer’s counsel, to be heard before the
Outside Directors), provided that the provisions of the next paragraph have been complied with, the
Outside Directors may suspend Officer from some or all of his duties and authority while such
suspension or prohibition or conviction is in effect and, if they elect to do so, may also during
such period suspend Officer’s right to some or, if no duties are to be performed, all of Officer’s
Base Salary, STAIC and LTAIC accruing during such suspension period; provided, further that that if
the conviction is overturned on appeal or if the charges

9

 

resulting in such suspension or prohibition are finally dismissed or if a final judgment on
the merits of such charges is issued in favor of Officer, then Officer shall be reinstated in full
with back amounts for the suspension period plus accrued interest at the rate then payable on
judgments.

          With regard to clause (B) above, (1) Employer shall use its best efforts to oppose and defend
against any such notice of charges as to which there are reasonable defenses and to permit Officer
to participate in such effort by counsel of his selection fully paid by Employer; (2) in the event
the notice of charges is dismissed or otherwise resolved in a manner that will permit Employer to
resume its obligations to pay compensation hereunder, Employer shall promptly make such payment
hereunder; and (3) during the period of suspension, the vested rights of the contracting parties
shall not be affected except to the extent precluded by such notice.

          During the period that Employer’s obligations under Sections 4(a), 4(b), 4(d), 4(e) and 4(g)
hereof are suspended, Officer shall continue to be entitled to receive Additional Benefits under
Section 4(e) until the conviction of the felony has become final and non-appealable. When the
conviction of the felony has become final and non-appealable, all of Employer’s obligations
hereunder shall terminate; provided, however, that the termination of Officer’s employment pursuant
to this Section 5(c) shall not affect Officer’s entitlement to all benefits in which he has become
vested or which are otherwise payable in respect of periods ending prior to his Termination Date.
To the full extent permitted by law, so long as Employer (or a successor) maintains directors’ and
officers’ liability insurance for its executives or directors, Employer shall continue to provide
Officer following the Termination Date with directors’ and officers’ liability insurance insuring
Officer against insurable events which occur or have occurred while Officer was a director or
officer of Employer or an Affiliate or a fiduciary of an employee benefit plan of any of the
foregoing, such insurance to have policy limits aggregating not less than the amount in effect
immediately prior to the Termination Date or, if higher, that provided to other officers or
directors of Employer. In addition, Officer’s Rights of Indemnification shall continue. Officer
shall also be entitled to his Accrued Amounts.

          Upon termination for Cause, Officer is not entitled to any severance or bonus and all options
shall expire on the Termination Date. Anything herein to the contrary notwithstanding, termination
for Cause shall not include termination by reason of Officer’s job performance or a job performance
rating given to Officer for his job performance or the financial performance of Employer or any
affiliated company.

          (d) Other Than For Cause or Disability (not in connection with a Change in Control). If
during the term of this Agreement, Officer’s employment shall be terminated by Employer other than
for Cause or Disability (other than in connection with a Change in Control as provided in Section
5(g)), then, subject to Section 9(q):

          (i) Employer shall pay Officer in a single severance payment as soon as practicable
after the Termination Date, but, in no event later than thirty (30) days thereafter, an
amount in cash equal to two and one-half (2.5) times the sum of: (A) the average Base Salary
in effect for the two years immediately preceding the Termination Date and (B) an amount
equal to Officer’s prior year’s Base Level STAIC;
provided

10

 

however, that in no event shall the aggregate amount payable under this Section 5(d)(i)
be less than $7 million,

          (ii) Employer shall pay Officer the Pro Rata Annual Bonus,

          (iii) Employer shall pay Officer the Pro Rata Long Term Bonus,

          (iv) Officer shall be entitled to the Equity Treatment,

          (v) Officer shall be entitled to the Deferred Compensation Treatment,

          (vi) Officer, Officer’s spouse and Eligible Dependents shall be entitled to the
Lifetime Medical Coverage,

          (vii) Officer shall be entitled to the Protection Coverage, and

          (viii) Officer shall be entitled to his Accrued Amounts.

          (e) Good Reason. Officer may terminate Officer’s employment at any time for “Good Reason.”
“Good Reason” means that any one or more of the following have occurred without Officer’s written
consent (other than as a result of Officer’s Disability or termination of Officer’s employment for
Cause) which is not cured by Employer within thirty (30) days after written notice thereof is given
to Employer by Officer:

          (i) Other than temporarily as a result of Officer’s suspension as provided in Section
5(c), any diminution in Officer’s then titles or positions, including with IndyMac Bank, or
any material diminution in Officer’s then powers, reporting requirements, duties or
responsibilities, including with IndyMac Bank,

          (ii) Shareholders of Employer do not elect Officer to the Board or Officer is not
elected to the IndyMac Bank Board or Officer is removed from the Board or the IndyMac Bank
Board,

          (iii) Officer is not re-elected as Chairman of the Board and of the IndyMac Bank Board,

          (iv) Officer is required to relocate place of employment to a location which is more
than fifty (50) miles from IndyMac Bank’s current headquarters,

          (v) Officer resigning at the request of the majority of the Board for Officer to
resign,

          (vi) Employer gives to Officer a notice of non-renewal pursuant to Section 1(b), or

          (vii) Any material breach by Employer of the terms of this Agreement.

11

 

          If during the term of this Agreement, Officer’s employment shall be terminated by Officer for
Good Reason (other than in connection with a Change in Control as provided in Section 5(g)),
Officer shall receive the payments and benefits described in Section 5(d).

          (f) Voluntary Resignation (other than Retirement or Expiration of the Employment Term). If
during the term of this Agreement, Officer shall resign other than for Good Reason or pursuant to
Retirement, then, subject to Section 9(q):

          (i) All of his rights to payment or benefits hereunder shall immediately terminate;
provided, however, that the termination of Officer’s employment pursuant to this Section
5(f) shall not affect Officer’s entitlement to all benefits in which he has become vested or
which are otherwise payable in respect of periods ending prior to his termination of
employment,

          (ii) Any unvested options shall expire immediately and

     (A) Any vested stock options or other equity grants made to Officer after the
Effective Date of the Prior Agreement shall remain exercisable until the earlier of
three (3) months following the Termination Date or their full-term expiration, and

     (B) All vested options granted to Officer pursuant to the Prior Agreement shall
remain exercisable until the earlier of twelve (12) months following the Termination
Date or their full-term expiration,

          (iii) Officer shall be entitled to the Protection Coverage, and

          (iv) Officer shall be entitled to his Accrued Amounts.

          (g) Change in Control. During the term of this Agreement, if within two (2) years after a
Change in Control Officer’s employment is terminated (x) by Employer other than for Cause or
Disability or (y) by Officer for Good Reason, then, subject to Section 9(q):

          (i) Employer shall pay Officer in a single severance payment as soon as practicable
after the Termination Date, but, subject to Section 9(q) below, in no event later than
thirty (30) days thereafter, an amount in cash equal to three (3) times the sum of (A) the
average Base Salary in effect for the two (2) years immediately preceding termination and
(B) an amount equal to Officer’s prior year’s Base Level STAIC; provided however, that in no
event shall the aggregate amount payable under this Section 5(g)(i) be less than $11
million,

          (ii) Officer shall be entitled to the Pro Rata Annual Bonus, which for purposes of this
Section 5(g) shall be calculated based on the greatest of (A) Employer’s actual performance,
(B) the prior year’s Base Level, or (C) the current year’s Base Level,

          (iii) Officer shall be entitled to the Pro Rata Long Term Bonus, which for purposes of
this Section 5(g) shall be calculated based on the greatest of (A)

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Employer’s actual performance,
(B) the prior year’s Base Level, or (C) the current
year’s Base Level,

          (iv) Officer shall be entitled to the Equity Treatment,

          (v) Officer shall be entitled to the Deferred Compensation Treatment,

          (vi) Officer, Officer’s spouse and Eligible Dependents shall be entitled to the
Lifetime Medical Coverage,

          (vii) Officer shall be entitled to the Protection Coverage, and

          (viii) Officer shall be entitled to his Accrued Amounts.

          Notwithstanding anything contained herein, if a Change in Control occurs and Officer’s
employment with Employer is terminated other than for Cause or Disability or a Good Reason event
occurs prior to the Change in Control, and if such termination of employment or event was at the
request, suggestion or initiative of a third party who has taken steps reasonably calculated to
effect the Change in Control, then Officer upon occurrence of the Change in Control shall be
entitled to receive the payments and benefits set forth in this Section 5(g), in lieu of the
payments and benefits set forth in Section 5(d).

          (h) Notice of Termination. Any purported termination by Employer or by Officer shall be
communicated by a written Notice of Termination to the other party hereto which indicates the
specific termination provision in this Agreement, if any, relied upon and which sets forth in
reasonable detail the facts and circumstances, if any, claimed to provide a basis for termination
of Officer’s employment under the provision so indicated. For purposes of this Agreement, no such
purported termination shall be effective without such Notice of Termination. The “Termination
Date” shall mean the date specified in the Notice of Termination, which shall be no less than
thirty (30) or more than sixty (60) days from the date of the Notice of Termination.

          (i) Expiration of Employment Term or Retirement. At the expiration of the Employment Term or
upon Retirement as defined in Section 5(j), then, subject to Section 9(q):

          (i) Officer shall be entitled to the Pro Rata Annual Bonus,

          (ii) Officer shall be entitled to the Pro Rata Long Term Bonus,

          (iii) Officer shall be entitled to the Equity Treatment,

          (iv) Officer shall be entitled to the Deferred Compensation Treatment,

          (v) Officer, Officer’s spouse and Eligible Dependents shall be entitled to the Lifetime
Medical Coverage,

          (vi) Officer shall be entitled to the Protection Coverage, and

13

 

          (vii) Officer shall be entitled to his Accrued Amounts.

          (j) Retirement. Officer may terminate employment for reason of Retirement at any time after
satisfying the conditions for Retirement set forth below and shall be entitled to the compensation
and benefits described in Section 5(i) above. For purposes of this Agreement, “Retirement” shall
mean Officer’s retirement or resignation from the Company: (i)(1) if Officer is less than 55 years
of age, with at least 75 points or (2) if Officer is 55 years of age or older, with at least 65
points, and (ii) Officer has at least five (5) consecutive years of employment with Employer.
Officer shall receive one (1) point for every consecutive year of employment with Employer and one
(1) point for every year of age. Based upon Officer’s age and employment start date of January 4,
1993, Officer would be eligible for Retirement in 2015. This definition of Retirement is the same
definition as currently utilized in the Employer’s 2002 Stock Incentive Plan.

     6. Certain Additional Payments by Employer. Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment or distribution to Officer or for
Officer’s benefit (whether paid or payable or distributed or distributable) pursuant to the terms
of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any restriction on or the vesting or exercisability
of any of the foregoing (the “Payments”) would be subject to the excise tax imposed by
section 4999 of the Code by reason of being “contingent on a change in the ownership or control” of
Employer, within the meaning of Section 280G of the Code or to any similar tax imposed by state or
local law, or any interest or penalties with respect to such excise tax (such tax or taxes,
together with any such interest or penalties, are collectively referred to as the “Excise
Tax”), then Officer shall be entitled to receive from Employer an additional payment (the
“Gross-Up Payment”) in an amount such that the net amount of the Payments and the Gross-Up
Payment retained by Officer after the calculation and deduction of all Excise Taxes (including any
interest or penalties imposed with respect to such taxes) on the payment and all federal, state and
local income tax, employment tax and Excise Tax (including any interest or penalties imposed with
respect to such taxes) on the Gross-Up Payment provided for in this Section 6, and taking into
account any lost or reduced tax deductions on account of the Gross-Up Payment, shall be equal to
the Payments;

          (a) All determinations required to be made under this Section 6, including whether and when
the Gross-Up Payment is required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations shall be made by the Accountants (as defined below)
which shall provide Officer and Employer with detailed supporting calculations with respect to such
Gross-Up Payment within fifteen (15) business days of the receipt of notice from Officer or
Employer that Officer has received or will receive a Payment. For purposes of making the
determinations and calculations required herein, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999 of the Code, provided that the
Accountant’s determinations must be made on the basis of “substantial authority” (within the
meaning of Section 6662 of the Code). For the purposes of this Section 6, the “Accountants” shall
mean Employer’s independent certified public accountants serving immediately prior to the Change in
Control. In the event that the

14

 

Accountants are also serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Officer shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting firm shall then be
referred to as the Accountants hereunder). All fees and expenses of the Accountants shall be borne
solely by Employer.

          (b) For the purposes of determining whether any of the Payments will be subject to the Excise
Tax and the amount of such Excise Tax, such Payments will be treated as “parachute payments” within
the meaning of section 280G of the Code, and all “parachute payments” in excess of the “base
amount” (as defined under section 280G(b)(3) of the Code) shall be treated as subject to the Excise
Tax, unless and except to the extent that in the opinion of the Accountants such Payments (in whole
or in part) either do not constitute “parachute payments” or represent reasonable compensation for
services actually rendered (within the meaning of section 280G(b)(4) of the Code) in excess of the
“base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax. For
purposes of determining the amount of the Gross-Up Payment Officer shall be deemed to pay Federal
income taxes at the highest applicable marginal rate of Federal income taxation for the calendar
year in which the Gross-Up Payment is to be made and to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for the calendar year in which the
Gross-Up Payment is to be made, net of the maximum reduction in Federal income taxes which could be
obtained from the deduction of such state or local taxes if paid in such year (determined without
regard to limitations on deductions based upon the amount of Officer’s adjusted gross income); and
to have otherwise allowable deductions for Federal, state and local income tax purposes at least
equal to those disallowed because of the inclusion of the Gross-Up Payment in Officer’s adjusted
gross income. To the extent practicable, any Gross-Up Payment with respect to any Payment shall be
paid by Employer at the time Officer is entitled to receive the Payments and in no event will any
Gross-Up Payment be paid later than five days after the receipt by Officer of the Accountant’s
determination. Any determination by the Accountants shall be binding upon Employer and Officer.

          (c) As a result of uncertainty in the application of section 4999 of the Code at the time of
the initial determination by the Accountants hereunder, it is possible that the Gross-Up Payment
made will have been an amount less than Employer should have paid pursuant to this Section 6 (the
“Underpayment”). In the event that Employer exhausts its remedies pursuant to Section 6(e)
and Officer is required to make a payment of any Excise Tax, the Underpayment shall be promptly
paid by Employer to or for Officer’s benefit.

          (d) Officer and Employer shall each provide the Accountants access to and copies of any books,
records and documents in the possession of Employer or Officer, as the case may be, reasonably
requested by the Accountants, and otherwise cooperate with the Accountants in connection with the
preparation and issuance of the determination contemplated by this Section 6.

          (e) Officer shall notify Employer in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by Employer of the Gross-Up Payment. Such
notification shall be given as soon as practicable after Officer is informed in writing of such
claim and shall apprise Employer of the nature of such claim and the date on

15

 

which such claim is requested to be paid. Officer shall not pay such claim prior to the
expiration of the 30-day period following the date on which Officer give such notice to Employer
(or such shorter period ending on the date that any payment of taxes, interest and/or penalties
with respect to such claim is due). If Employer notifies Officer in writing prior to the
expiration of such period that it desires to contest such claim, Officer shall:

          (i) give Employer any information reasonably requested by Employer relating to such
claim;

          (ii) take such action in connection with contesting such claim as Employer shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by
Employer;

          (iii) cooperate with Employer in good faith in order to effectively contest such claim;
and

          (iv) permit Employer to participate in any proceedings relating to such claims;
provided, however, that Employer shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify Officer for and hold Officer harmless from, on an after-tax basis, any
Excise Tax or income tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of all related costs and expenses. Without
limiting the foregoing provisions of this Section 6, Employer shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and conferences with the taxing authority
in respect of such claim and may, at its sole option, either direct Officer to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and Officer
agree to prosecute such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as Employer shall
determine; provided, however, that if Employer directs Officer to pay such claim and sue for
a refund, Employer shall advance the amount of such payment to Officer, on an interest-free
basis, and shall indemnify Officer for and hold Officer harmless from, on an after-tax
basis, any Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with respect to
such advance (including as a result of any forgiveness by Employer of such advance);
provided, further that any extension of the statute of limitations relating to the payment
of taxes for the taxable year of Officer with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, Employer’s
control of the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Officer shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

          (f) Nothing in this Section 6 is intended to violate the Sarbanes-Oxley Act of 2002 and to the
extent that any advance or repayment obligation hereunder would so, such

16

 

obligation shall be modified so as to
make the advance a nonrefundable payment to Officer and
the repayment obligation null and void to the extent required by such Act.

          These rights shall be deemed fully vested rights, not subject to suspension or forfeiture and
shall survive any termination of employment; provided, however, that all payments made pursuant to
this Section 6 shall be subject to Section 9(q) below.

     7. Reimbursement of Business Expenses. During the term of this Agreement, Employer shall
reimburse Officer promptly for all reasonable and appropriate business expenditures to the extent
that such expenditures are substantiated by Officer as required by the Internal Revenue Service and
rules and policies of Employer.

     8. Indemnity. To the fullest extent permitted by applicable law, the Certificate of
Incorporation and the By-Laws of Employer (as from time to time in effect) and any indemnity
agreements entered into from time to time between Employer and Officer, Employer shall indemnify
Officer and hold him harmless for actions or inactions as an Officer or Director of Employer or any
Affiliate or as a fiduciary of any employee benefit plan of any of the foregoing and shall maintain
coverage for him under liability insurance policies of a minimum amount of $80 million, or such
higher amount as provided for any other officers or directors of Employer. This provision shall in
all events survive any termination of this Agreement.

     9. Miscellaneous.

          (a) Successorship. This Agreement shall inure to the benefit of and shall be binding upon
Employer, its successors and assigns, but without the prior written consent of Officer, this
Agreement may not be assigned other than in connection with a merger or sale of all or
substantially all the assets of Employer or similar transaction to or with a company with a larger
net worth, higher credit rating and greater profit than Employer. The failure of any successor to
or assignee of Employer’s business and/or assets in such transaction to expressly assume all
obligations of Employer hereunder in a writing promptly delivered to Officer shall be deemed a
material breach of this Agreement by Employer.

          (b) Notices. Any notices provided for in this Agreement shall be sent to Employer at its
corporate headquarters, Attention: Corporate Counsel/Secretary, with a copy to the Chairman of the
Compensation Committee at the same address, or to such other address as Employer may from time to
time in writing designate, and to Officer at such address as he may from time to time in writing
designate (or his business address of record in the absence of such designation). All notices
shall be deemed to have been given two (2) business days after they have been deposited as
certified mail, return receipt requested, postage paid and properly addressed to the designated
address of the party to receive the notices. Notices may be delivered personally or by overnight
service.

          (c) Entire Agreement. This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and it replaces and supersedes any prior agreements between the
parties relating to said subject matter (except to the extent specifically provided herein);
provided, however, that the parties hereby expressly acknowledge that the parties have executed
IndyMac Bank’s standard Mutual Agreement to Arbitrate Claims which is not replaced

17

 

or superseded by this Agreement; provided, further that this Agreement does not supersede any
outstanding equity grants or awards or existing rights under any plan or program except as
specifically provided herein. No modifications or amendments of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

          (d) Waiver. The waiver of the breach of any term or of any condition of this Agreement shall
not be deemed to constitute the waiver of any other breach of the same or any other term or
condition.

          (e) California Law. This Agreement shall be construed and interpreted in accordance with the
laws of California without reference to principles of conflict of laws.

          (f) Arbitration. Any disagreement, dispute, controversy or claim arising out of or relating
to this Agreement or the interpretation of this Agreement or arrangements relating to this
Agreement or contemplated in this Agreement shall be settled by arbitration in accordance with the
terms of IndyMac Bank’s Mutual Agreement to Arbitrate Claims, as executed by Officer and IndyMac
Bank on the date hereof.

          (g) Confidentiality. Officer agrees that he will not divulge or otherwise disclose, directly
or indirectly, any trade secret or other confidential information concerning the business or
policies of Employer or any of its Affiliates which he may have learned as a result of his
employment during the term of this Agreement or prior thereto as an employee, officer or director
of or consultant to Employer or any of its Affiliates, except to the extent such use or disclosure
is: (i) decided in good faith by Officer to be necessary or desirable to the performance of
Officer’s duties, (ii) required by applicable law or in response to an inquiry from a governmental
or regulatory authority, (iii) lawfully obtainable from other sources, or (iv) authorized by
Employer or IndyMac Bank. The provisions of this subsection shall survive the expiration,
suspension or termination, for any reason, of this Agreement.

          (h) No Solicitation. Officer agrees that during employment and for a period of one (1) year
following an early termination of this Agreement, pursuant to the terms described in Section 5(a),
5(c), (d), (e), (f), (g), (i) or (j) hereof, Officer shall not: (i) solicit, or cause to be
solicited, any customers of Employer or IndyMac Bank or their subsidiaries if it is for the
purposes of promoting or selling any products or services competitive with those of Employer or
IndyMac Bank, (ii) solicit business from, or perform services for, any company or other business
entity which at any time during the two (2) year period immediately preceding Officer’s termination
of employment with Employer was a customer of Employer, IndyMac Bank or their subsidiaries, or
(iii) solicit for employment, offer, or cause to be offered, employment, either on a full time,
part time, or consulting basis, to any person who was employed by Employer or its Affiliates on the
date Officer’s employment terminated, unless Officer shall have received the prior written consent
of Employer or IndyMac Bank, such person has ceased for six (6) months to be employed by Employer
or its Affiliates or Officer was not involved, directly or indirectly, in the termination of such
person’s employment with Employer or its Affiliates. The foregoing clauses (i) through (iii) shall
be violated only by the personal solicitation or personally directed and targeted solicitation by
Officer and not by (A) general marketing or solicitation, (B) solicitation by other employees of
entities employing Officer of companies, other business entities or individuals who are not
specifically identified by Officer, or (C) the providing of

18

 

services by Officer’s new employer to companies or other business entities not so solicited by
Officer.

          (i) Cooperation. Upon the receipt of reasonable notice from Employer (including outside
counsel), Officer agrees that while employed by Employer and thereafter, Officer will reasonably
provide information and reasonable assistance to Employer, its Affiliates and their respective
representatives in defense of any claims that may be made against Employer or its Affiliates, to
the extent that such claims may relate to the period of Officer’s employment with Employer (or any
predecessor), provided that Officer shall need not cooperate to the extent his counsel, in good
faith, advises that Officer’s interests may differ from those of Employer. Furthermore, Employer
shall reimburse all reasonable expenses incurred by Officer, including, but not limited to, those
for separate counsel.

          (j) Consideration; Remedies Of Employer. The consideration for Officer’s covenants set forth
in Sections 9(g), (h) and (i), the sufficiency of which is hereby acknowledged, is Employer’s
agreement to continue to employ Officer and provide compensation and benefits pursuant to this
Agreement, including but not limited to Section 5(d). Officer acknowledges and agrees that
Employer’s remedies at law for a breach or threatened breach of any of the provisions of this
Section would be inadequate and, in recognition of this fact, Officer agrees that, in the event of
such a breach or threatened breach, in addition to any remedies at law, Employer, without posting
any bond, shall be entitled to seek equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other equitable remedy
which may then be available.

          (k) Reformation. The provisions of Sections 9(g), (h) and (i) are intended to restrict
Officer only to the extent permitted by law in the jurisdiction where Officer is then a resident.
To the extent any of such provisions would otherwise be determined invalid or unenforceable by a
Court of competent jurisdiction, such Court shall exercise its discretion in reforming the
provisions of this Section to the end that Officer shall be subject to reasonable provisions that
are enforceable by Employer under the laws of the jurisdiction where Officer is then a resident.
If the laws of the state where the Officer is then a resident completely prohibit any form of the
foregoing covenants, then Employer and Officer understand and agree that the foregoing covenants
are of no effect.

          (l) Moral Obligation. The parties recognize that a non-competition provision would be
desirable and equitable in this Agreement, but that one cannot be included because of applicable
law. The parties further recognize that, notwithstanding the foregoing and legal unenforceability
of such a provision, Officer should and does have a moral and ethical obligation to Employer, its
shareholders and its employees not to compete with Employer within one (1) year after any
resignation from his position.

          (m) Severability. If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstance.

19

 

          (n) No Obligation to Mitigate. Officer shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise and no payment
hereunder shall be offset or reduced by the amount of any compensation or benefits provided to
Officer in any subsequent employment except as expressly otherwise provided by Section 5.
Employer’s obligation to make any payment provided for in this Agreement shall not be subject to
set-off, counterclaim or recoupment.

          (o) Adjustment of Options. The number of shares of common stock subject to the stock options
granted to Officer pursuant to the Prior Agreement shall be equitably adjusted by the Committee
pursuant to Section 6 of the Plan in the event of the occurrence of any of the events described
therein.

          (p) Legal Fees. Employer shall promptly (and in any event prior to March 15, 2007) pay
Officer’s reasonable legal fees and costs associated with entering into this Agreement, and to the
extent such payment is taxed to Officer, Employer shall provide Officer a full tax gross-up for any
imputed income to Officer resulting from such payment.

          (q) Code Section 409A.

          (i) If any provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause Officer to incur any additional tax or interest
under section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder, Employer shall, after consulting with Officer, reform such provision to comply
with section 409A of the Code, provided that Employer agrees to maintain, to the maximum
extent practicable, the original intent and economic benefit Officer of the applicable
provision without violating the provisions of section 409A of the Code. Employer shall
indemnify and hold Officer harmless, on an after-tax basis, for any additional tax
(including interest and penalties with respect thereto) that may be imposed on Officer by
section 409A of the Code.

          (ii) Notwithstanding any provision to the contrary in this, if Officer is deemed on the
Termination Date to be a “specified employee” within the meaning of that term under section
409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit
that is required to be delayed in compliance with section 409A(a)(2)(B) of the Code such
payment or benefit shall not be made or provided (subject to the last sentence hereof) prior
to the earlier of (A) the expiration of the six (6)-month period measured from the date of
his “separation from service” (as such term is defined under section 409A of the Code) or
(B) the date of his death (the “Delay Period”). Upon the expiration of the Delay
Period, all payments and benefits delayed pursuant to this section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such delay)
shall be paid or reimbursed Officer in a lump sum, and any remaining payments and benefits
due under this Agreement shall be paid or provided in accordance with the normal payment
dates specified for them herein. Notwithstanding the foregoing, to the extent that the
foregoing applies to the provision of any ongoing welfare benefits to Officer that would not
be required to be delayed if the premiums therefore were paid by Officer, Officer shall pay
the full cost of premiums for such welfare benefits during the Delay Period and Employer
shall pay Officer an amount

20

 

equal to the amount of such premiums paid by Officer during the Delay Period promptly
after its conclusion.

     10. Regulatory Authority. Any payments made to Officer pursuant to this Agreement or
otherwise are subject to and conditioned upon their not being in violation of 12 U.S.C. Section
1828(k) and FDIC regulation 12 C.F.R. Part 359, Golden Parachutes and Indemnification Payments, as
applicable.

     11. Sarbanes-Oxley. Officer acknowledges he has been informed that pursuant to Section 304 of
the Sarbanes-Oxley Act of 2002, Officer may be subject in certain circumstances to an obligation to
pay back to Employer:

          (a) Any bonus or other incentive-based or equity-based compensation received by Officer from
Employer during the twelve (12)-month period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of the financial document embodying
such financial reporting requirement; and

          (b) Any profits realized from the sale of securities of Employer during such twelve (12)-month
period.

[Remainder of Page Left Blank]

21

 

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

	 	 	 	 	 
	 	EMPLOYER

 	 
	 	By:  	                 /s/ Sen. John F. Seymour (ret.)
 	 
	 	 	Name:  	Sen. John F. Seymour (ret.) 	 
	 	 	Title:  	Chairman, Management Development and
Compensation Committee 	 
	 
	 	OFFICER

 	 
	 	By:  	                       /s/ Michael W. Perry
 	 
	 	 	Michael W. Perry 	 
	 	 	 	 

22

 

	 	 	 	 	 

APPENDIX A

     A “Change in Control” shall mean the occurrence during the term of the Agreement, of any one
of the following events:

          A. An acquisition of any common stock or other “Voting Securities” (as hereinafter defined) of
IndyMac Bancorp, Inc. (“Employer”) by any “Person” (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), immediately after which such Person has “Beneficial Ownership” (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of the then
outstanding shares of Employer’s common stock or the combined voting power of Employer’s then
outstanding Voting Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a “Non-Control Acquisition” (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in Control. For purposes
of this Agreement, (1) “Voting Securities” shall mean Employer’s outstanding voting securities
entitled to vote generally in the election of directors and (2) a “Non-Control Acquisition” shall
mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained
by (A) Employer or (B) any corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or indirectly, by Employer (for
purposes of this definition; a “Subsidiary”), (ii) Employer or any of its Subsidiaries, or
(iii) any Person in connection with a “Non-Control Transaction” (as hereinafter defined).

          B. The individuals who, as of the date of the Agreement are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least a majority of the members
of the Board; provided, however, that if the election, or nomination for election by Employer’s
common stockholders, of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member
of the Incumbent Board; provided, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or

          C. The consummation of:

          (i) A merger, consolidation, or reorganization involving Employer, unless such merger,
consolidation, or reorganization is a “Non-Control Transaction.” A “Non Control
Transaction” shall mean a merger, consolidation or reorganization of Employer where:

          (a) the stockholders of Employer, immediately before such merger, consolidation
or reorganization, own directly or indirectly immediately following such merger,
consolidation or reorganization more than fifty percent (50%) of the combined voting
power of the outstanding Voting Securities of the corporation resulting from such
merger, consolidation or

A-1

 

reorganization (the “Surviving Corporation”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization; provided, however, that if the stockholders
of Parent, immediately before such merger, consolidation or reorganization, own
directly or indirectly immediately following such merger, consolidation or
reorganization forty-five percent to fifty percent (45% to 50%) of the combined
voting power of the outstanding Voting Securities of the Surviving Corporation in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, then a Change in
Control shall be deemed to have occurred unless the members of the Incumbent Board
who are not employees of Parent determine otherwise; and

          (b) no Person other than (i) Employer, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereat) maintained by Employer, the
Surviving Corporation or any Subsidiary, or (iv) any Person who, immediately prior
to such merger, consolidation or reorganization had Beneficial Ownership of
twenty-five percent (25%) or more of the then outstanding Voting Securities or
common stock of Employer, has Beneficial Ownership of twenty-five percent (25%) or
more of the combined voting power of the Surviving Corporation’s then outstanding
Voting Securities or its common stock;

          (ii) Employer’s stockholders approve a complete liquidation or dissolution of Employer;

          (iii) The sale or other disposition of all or substantially all of the assets of
Employer to any Person or Persons (other than a transfer to a Subsidiary); or

          (iv) The sale or other disposition of all or substantially all of the stock or assets
of IndyMac Bank, F.S.B. to any Person or Persons (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted
amount of the then outstanding common stock or Voting Securities as a result of the acquisition of
common stock or Voting Securities by Employer which, by reducing the number of shares of common
stock or Voting Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person; provided, however, that if a Change of Control would
occur (but for the operation of this sentence) as a result of the acquisition of common stock or
Voting Securities by Employer, and after such share acquisition by Employer, the Subject Person
becomes the Beneficial Owner of any additional common stock or Voting Securities which increases
the percentage of the then outstanding common stock or Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.

A-2exv4w1

 

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

Dated as of September 21, 2006

BY AND AMONG

REGENCY ENERGY PARTNERS LP

AND

KAYNE ANDERSON MLP INVESTMENT COMPANY

LEHMAN BROTHERS MLP PARTNERS, L.P.

GPS INCOME FUND LP

GPS HIGH YIELD EQUITIES FUND LP

GPS INCOME FUND (CAYMAN) LTD

AND

RCH ENERGY MLP FUND, LP

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I.
	 	DEFINITIONS	 	 	1	 
	Section 1.01
	 	Definitions	 	 	1	 
	Section 1.02
	 	Registrable Securities	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	REGISTRATION RIGHTS	 	 	2	 
	Section 2.01
	 	Shelf Registration	 	 	3	 
	Section 2.02
	 	Piggyback Rights	 	 	4	 
	Section 2.03
	 	Underwritten Offering	 	 	6	 
	Section 2.04
	 	Sale Procedures	 	 	6	 
	Section 2.05
	 	Cooperation by Holders	 	 	9	 
	Section 2.06
	 	Restrictions on Public Sale by Holders of Registrable Securities	 	 	9	 
	Section 2.07
	 	Expenses	 	 	9	 
	Section 2.08
	 	Indemnification	 	 	10	 
	Section 2.09
	 	Rule 144 Reporting	 	 	12	 
	Section 2.10
	 	Transfer or Assignment of Registration Rights	 	 	12	 
	Section 2.11
	 	Limitation on Subsequent Registration Rights	 	 	13	 
	Section 2.12
	 	Lock-Up	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	MISCELLANEOUS	 	 	13	 
	Section 3.01
	 	Communications	 	 	13	 
	Section 3.02
	 	Successor and Assigns	 	 	13	 
	Section 3.03
	 	Assignment of Rights	 	 	13	 
	Section 3.04
	 	Aggregation of Purchased Class C Units	 	 	13	 
	Section 3.05
	 	Recapitalization, Exchanges, etc. Affecting the Common Units	 	 	13	 
	Section 3.06
	 	Specific Performance	 	 	14	 
	Section 3.07
	 	Counterparts	 	 	14	 
	Section 3.08
	 	Headings	 	 	14	 
	Section 3.09
	 	Governing Law	 	 	14	 
	Section 3.10
	 	Severability of Provisions	 	 	14	 
	Section 3.11
	 	Entire Agreement	 	 	14	 
	Section 3.12
	 	Amendment	 	 	14	 
	Section 3.13
	 	No Presumption	 	 	14	 

 

 

REGISTRATION RIGHTS AGREEMENT

               THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
September 21, 2006, by and among Regency Energy Partners LP, a Delaware limited partnership
(“Regency”), and Kayne Anderson MLP Investment Company (“Kayne”), Lehman Brothers MLP
Partners, L.P. (“Lehman”), RCH Energy MLP Fund, LP (“RCH”) and GPS Income Fund LP, GPS High Yield
Equities Fund LP, and GPS Income Fund (Cayman) Ltd (“GPS”) (each of Kayne, Lehman, RCH and GPS a
“Purchaser” and collectively, the “Purchasers”).

     WHEREAS, this Agreement is made in connection with the Closing of the issuance and sale of the
Purchased Class C Units pursuant to the Class C Unit Purchase Agreement, dated as of September 21,
2006, by and among Regency and the Purchasers (the “Purchase Agreement”);

     WHEREAS, Regency has agreed to provide the registration and other rights set forth in this
Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and

     WHEREAS, it is a condition to the obligations of each Purchaser and Regency under the Purchase
Agreement that this Agreement be executed and delivered.

     NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I .

DEFINITIONS

     Section 1.01 Definitions.

     Capitalized terms used herein without definition shall have the meanings ascribed to them in
the Purchase Agreement. The terms set forth below are used herein as so defined:

     “Effectiveness Period” has the meaning specified therefor in Section 2.01 of
this Agreement.

     “Holder” means the record holder of any Registrable Securities.

     “Included Registrable Securities” has the meaning specified therefor in Section
2.02(a) of this Agreement.

     “Liquidated Damages” has the meaning specified therefor in Section 2.01(a) of this
Agreement.

     “Losses” has the meaning specified therefor in Section 2.08(a) of this
Agreement.

     “Managing Underwriter” means, with respect to any Underwritten Offering, the
book-running lead manager of such Underwritten Offering.

1

 

     “Other Holder” has the meaning specified in Section 2.02(b).

     “Piggyback Registration” has the meaning specified therefor in Section 2.02(a)
of this Agreement.

     “Purchase Agreement” has the meaning specified therefor in the Recitals of this
Agreement.

     “Purchaser” and “Purchasers” have the meanings specified therefor in the introductory
paragraph of this Agreement.

     “Registrable Securities” means: (i) the Common Units into which the Class C Units are
convertible and (ii) any Common Units issued as Liquidated Damages pursuant to Section 2.01(a)(ii)
of this Agreement.

     “Registration Expenses” has the meaning specified therefor in Section 2.07(a)
of this Agreement.

     “Selling Expenses” has the meaning specified therefor in Section 2.07(a) of
this Agreement.

     “Selling Holder” means a Holder who is offering Registrable Securities for sale
pursuant to a registration statement.

     “Shelf Registration Statement” means a registration statement under the Securities Act
to permit the resale of the Registrable Securities from time to time, as permitted by Rule 415 of
the Securities Act (or any similar provision then in force under the Securities Act) or otherwise.

     “Termination Date” has the meaning specified therefor in Section 3.13 of this
Agreement.

     “Underwritten Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a “bought deal” with one or more investment
banks.

     Section 1.02 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and such Registrable Security has been sold or disposed of
pursuant to such registration statement; (b) such Registrable Security has been disposed of
pursuant to any section of Rule 144 (or any similar provision then in force under the Securities
Act); (c) such Registrable Security is held by Regency or one of its subsidiaries; or (d) such
Registrable Security has been sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned to the transferee of such securities.

2

 

ARTICLE II .

REGISTRATION RIGHTS

     Section 2.01 (a) Shelf Registration.

               (i) Deadline to go Effective. As soon as practicable following the Closing, but in any event
by March 31, 2007, Regency shall prepare and file a Shelf Registration Statement under the Act with
respect to all of the Registrable Securities. Regency shall use its commercially reasonable
efforts to cause the Shelf Registration Statement to become effective no later than 165 days after
March 31, 2007. A Shelf Registration Statement filed pursuant to this Section 2.01 shall
be on an appropriate registration form under the Securities Act selected by Regency; provided,
however, that, if a prospectus supplement will be used in connection with the marketing of an
Underwritten Offering from the Shelf Registration Statement and the Managing Underwriter at any
time shall notify Regency in writing that, in the sole judgment of such Managing Underwriter,
inclusion of detailed information to be used in such prospectus supplement is of material
importance to the success of the Underwritten Offering of such Registrable Securities, Regency
shall use its commercially reasonable efforts to include such information in the prospectus.
Regency will use its commercially reasonable efforts to cause the Shelf Registration Statement
filed pursuant to this Section 2.01 to be continuously effective under the Securities Act
until the earlier of (i) the date as of which all such Registrable Securities have been sold by the
Purchaser or (ii) the second anniversary of the date on which the Shelf Registration Statement is
declared effective by the Commission (the “Effectiveness Period”). The Shelf Registration
Statement when declared effective (including the documents incorporated therein by reference) shall
comply as to form with all applicable requirements of the Securities Act and the Exchange Act and
shall not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.

               (ii) Failure To Go Effective. If the Shelf Registration Statement required by Section
2.01 is not declared effective within 165 days after March 31, 2007, then each Purchaser shall
be entitled to a payment (with respect to each of such Purchaser’s Purchased Class C Units), as
liquidated damages and not as a penalty, of 0.25% of the Purchase Price per 30-day period for the
first 60 days following the 165th day, increasing by an additional 0.25% of the Purchase Price per
30-day period for each subsequent 60 days, up to a maximum of 1.00% of the Purchase Price per
30-day period (the “Liquidated Damages”), which shall accrue on a daily basis and be
payable within 10 Business Days following the end of such 30-day period. In any event, the
aggregate amount of Liquidated Damages paid to the Purchasers pursuant to this Section 2.01(a)(ii)
shall not to exceed 10% of the Purchase Price. The Liquidated Damages shall be paid to each
Purchaser in cash; provided, however, if Regency certifies that it is unable to pay the Liquidated
Damages in cash because such payment would result in a breach under any of Regency’s or Regency’s
Subsidiaries’ credit facilities filed as exhibits to Regency’s SEC Documents, then Regency may pay
the Liquidated Damages in kind in the form of the issuance of additional Common Units (which shall,
for this purpose, be valued at the closing price of Common Units on The Nasdaq Global Market or
such other national securities exchange on which such Common Units are then listed on the trading
day immediately prior to the issuance thereof). Upon any issuance of Common Units as Liquidated
Damages, Regency shall promptly prepare and file an amendment to the Shelf Registration Statement
prior

3

 

to its effectiveness adding such Common Units to such Shelf Registration Statement as
additional Registrable Securities.

               (iii) Waiver of Liquidated Damages. If Regency is unable to cause a Shelf Registration
Statement to go effective within 165 days after March 31, 2007, as a result of an acquisition,
merger, reorganization, disposition or other similar transaction, then Regency may request a waiver
of the Liquidated Damages, which may be granted or withheld by the consent of the holders of a
majority of the Purchased Class C Units, in their sole discretion. Purchaser’s rights (and any
transferee’s rights pursuant to Section 2.10) under this Section 2.01 shall terminate when such
Registrable Securities become eligible for resale under Rule 144(k) (or any similar provision then
in force under the Securities Act); provided, however, that such termination will not affect
Purchaser’s right to receive Liquidated Damages that have accumulated prior to such time.

          (b) Delay Rights. Notwithstanding anything to the contrary contained herein, Regency
may, upon written notice to any Selling Holder whose Registrable Securities are included in the
Shelf Registration Statement, suspend such Selling Holder’s use of any prospectus that is a part of
the Shelf Registration Statement (in which event the Selling Holder shall discontinue sales of the
Registrable Securities pursuant to the Shelf Registration Statement) if (i) Regency is pursuing an
acquisition, merger, reorganization, disposition or other similar transaction and Regency
determines in good faith that Regency’s ability to pursue or consummate such a transaction would be
materially adversely affected by any required disclosure of such transaction in the Shelf
Registration Statement or (ii) Regency has experienced some other material non-public event the
disclosure of which at such time, in the good faith judgment of Regency, would materially adversely
affect Regency; provided, however, in no event shall the Purchasers be suspended for a period
exceeding an aggregate of ninety (90) days (exclusive of days covered by any lock-up agreement
executed by a Purchaser in connection with any Underwritten Offering by Regency or a Purchaser) in
any 365-day period. Upon disclosure of such information or the termination of the condition
described above, Regency shall provide prompt notice to the Selling Holders whose Registrable
Securities are included in the Shelf Registration Statement, and shall promptly terminate any
suspension of sales it has put into effect and shall take such other actions to permit registered
sales of Registrable Securities as contemplated in this Agreement.

     Section 2.02 Piggyback Rights.

          (a) Participation. If at any time Regency proposes to file (i) a prospectus
supplement to an effective shelf registration statement, other than the Shelf Registration
Statement contemplated by Section 2.01, or (ii) a registration statement, other than a
shelf registration statement, in either case, for the sale of Common Units in an Underwritten
Offering for its own account and/or another Person, then as soon as practicable but not less than
three (3) Business Days prior to the filing of (x) any preliminary prospectus supplement relating
to such Underwritten Offering pursuant to Rule 424(b), (y) the prospectus supplement relating to
such Underwritten Offering pursuant to Rule 424(b) (if no preliminary prospectus supplement is
used) or (z) such registration statement, as the case may be, then, Regency shall give notice of
such proposed Underwritten Offering to the Holders and such notice shall offer the Holders the
opportunity to include in such Underwritten Offering such

4

 

number of Registrable Securities (the “Included Registrable Securities”) as each such Holder may request in writing;
provided, however, that, if Regency has been advised by the Managing Underwriter that the inclusion
of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on
the price, timing or distribution of the Common Units, then the amount of Registrable Securities to
be offered for the accounts of Holders shall be determined based on the provisions of Section
2.02(b). The notice required to be provided in this Section 2.02(a) to Holders shall be
provided on a Business Day pursuant to Section 3.01 hereof and receipt of such notice shall
be promptly confirmed by Holder. Holder shall then have (x) in the case of Regency filing a
prospectus supplement, one Business Day and (y) in the case of Regency filing a registration
statement, other than a shelf registration statement, five Business Days; after such Holder
confirms receipt of the notice to request inclusion of Registrable Securities in the Underwritten
Offering. If no request for inclusion from a Holder is received within the specified time, such
Holder shall have no further right to participate in such Underwritten Offering. If, at any time
after giving written notice of its intention to undertake an Underwritten Offering and prior to the
closing of such Underwritten Offering, Regency shall determine for any reason not to undertake or
to delay such Underwritten Offering, Regency may, at its election, give written notice of such
determination to the Selling Holders and, (x) in the case of a determination not to undertake such
Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable
Securities in connection with such terminated Underwritten Offering, and (y) in the case of a
determination to delay such Underwritten Offering, shall be permitted to delay offering any
Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any
Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such
Selling Holder’s Registrable Securities in such offering by giving written notice to Regency of
such withdrawal up to and including the time of pricing of such offering. Each Holder’s rights
under this Section 2.02(a) shall terminate when such Holder holds less than $15 million (based on
the Purchase Price of Registrable Securities) of Purchased Class C Units.

          (b) Priority of Piggyback Rights. In connection with an Underwritten Offering under
Section 2.02(a), if the Managing Underwriter or Underwriters of any proposed Underwritten Offering
of Common Units included in an Underwritten Offering involving Included Registrable Securities
advises Regency that the total amount of Common Units that the Selling Holders and any other
Persons intend to include in such offering exceeds the number that can be sold in such offering
without being likely to have an adverse effect on the price, timing or distribution of the Common
Units offered or the market for the Common Units, then the Common Units to be included in such
Underwritten Offering shall include the number of Registrable Securities that such Managing
Underwriter or Underwriters advises Regency can be sold without having any such adverse effect,
with such number to be allocated (i) first, to Regency; (ii) second, to Regency’s pre-IPO investors
as provided in Article 7.12 of the Partnership’s Amended and Restated Agreement of Limited
Partnership dated February 3, 2006, as amended by Amendment No. 1 dated August 15, 2006 and
Amendment No. 2 dated September 21, 2006 (the “Partnership Agreement”); (iii) third, to certain
members of the previous management of TexStar as provided in the Registration Rights Agreement
dated August 15, 2006 and (iv) fourth, pro rata among the Selling Holders who have
requested participation in such Underwritten Offering based, for each Selling Holder, on the
fraction derived by dividing (x) the number of Common Units proposed to be sold by such Selling
Holder in such Underwritten Offering by (y) the aggregate number of Common Units proposed to be
sold by all

5

 

Selling Holders in such Underwritten Offering. As of the date of execution of this
Agreement, there are no Persons with rights of registration under the Securities Act relating to Common
Units, Subordinated Units or Class B Units of the Partnership other than as described in this
Section 2.02(b).

     Section 2.03 Underwritten Offering Initiated by Holders.

          (a) Request for Underwritten Offering. If one or more Selling Holders elect to
dispose of Registrable Securities under the Shelf Registration Statement pursuant to an
Underwritten Offering and reasonably anticipate aggregate gross proceeds of greater than $15
million from such Underwritten Offering, Regency shall, at the request of such Selling Holders,
enter into an underwriting agreement in customary form with the Managing Underwriter or
Underwriters, which shall include, among other provisions, indemnities to the effect and to the
extent provided in Section 2.08, and shall take all such other reasonable actions as are
requested by the Managing Underwriter to expedite or facilitate the disposition of the Registrable
Securities, including causing appropriate officers of Regency or its Affiliates to participate in a
“road show” or similar marketing effort if the Managing Underwriter indicates that such
participation would expedite or facilitate the disposition of the Registrable Securities.

          (b) Priority of Underwritten Offering Initiated by Holders. In connection with an
Underwritten Offering under Section 2.03(a), if the Managing Underwriter or Underwriters of any
proposed Underwritten Offering of Common Units included in an Underwritten Offering involving
Included Registrable Securities advises Regency that the total amount of Common Units that the
Selling Holders and any other Persons intend to include in such offering exceeds the number that
can be sold in such offering without being likely to have an adverse effect on the price, timing or
distribution of the Common Units offered or the market for the Common Units, then the Common Units
to be included in such Underwritten Offering shall include the number of Registrable Securities
that such Managing Underwriter or Underwriters advises Regency can be sold without having any such
adverse effect, with such number to be allocated (i) first, to Regency; (ii) second, to the Selling
Holders requesting the Underwritten Offering under Section 2.03(a); (iii) third, to the other
Selling Holders; (iv) fourth, to Regency’s pre-IPO investors as provided in Article 7.12 of the
Partnership Agreement; (v) fifth, to certain members of the previous management of TexStar as
provided in the Registration Rights Agreement dated August 15, 2006 and (vi) sixth, pro rata among
any other holder hereafter granted registration rights by Regency who have requested participation
in such Underwritten Offering based, for each such holder, on the fraction derived by dividing (x)
the number of Common Units proposed to be sold by such holder in such Underwritten Offering by (y)
the aggregate number of Common Units proposed to be sold by all holders in such Underwritten
Offering.

          (c) General Procedures. In connection with any Underwritten Offering under this
Agreement, Regency shall be entitled to select the Managing Underwriter or Underwriters. In
connection with an Underwritten Offering under Section 2.01 or Section 2.03 hereof,
each Selling Holder and Regency agree to enter into an underwriting agreement that contains such
representations, covenants, indemnities and other rights and obligations as are customary in
underwriting agreements for firm commitment offerings of securities. No Selling Holder may
participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes and

6

 

executes all questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting agreement. Each Selling Holder may, at its
option, require that any or all of the representations and warranties by, and the other agreements
on the part of, Regency to and for the benefit of such underwriters also be made to and for such
Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement also be conditions precedent to its obligations. No
Selling Holder shall be required to make any representations or warranties to or agreements with
Regency or the underwriters other than representations, warranties or agreements regarding such
Selling Holder and its ownership of the securities being registered on its behalf, its intended
method of distribution and any other representation required by law. If any Selling Holder
disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom by
notice to Regency and the Managing Underwriter; provided, however, that such withdrawal must be
made prior to the time in the penultimate sentence of Section 2.02(a) hereof to be effective. No
such withdrawal or abandonment shall affect Regency’s obligation to pay Registration Expenses.

     Section 2.04 Sale Procedures. In connection with its obligations contained in
Section 2.01 and Section 2.03, Regency will, as expeditiously as possible:

          (a) prepare and file with the Commission such amendments and supplements to the Shelf
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
the Shelf Registration Statement effective for the Effectiveness Period and as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Shelf Registration Statement;

          (b) furnish to each Selling Holder (i) as far in advance as reasonably practicable before
filing the Shelf Registration Statement or any other registration statement contemplated by this
Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete
drafts of all such documents proposed to be filed (including exhibits and each document
incorporated by reference therein to the extent then required by the rules and regulations of the
Commission), and provide each such Selling Holder the opportunity to object to any information
pertaining to such Selling Holder and its plan of distribution that is contained therein and make
the corrections reasonably requested by such Selling Holder with respect to such information prior
to filing the Shelf Registration Statement or such other registration statement or supplement or
amendment thereto and (ii) such number of copies of the Shelf Registration Statement or such other
registration statement and the prospectus included therein and any supplements and amendments
thereto as such Persons may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such Shelf Registration Statement or other
registration statement;

          (c) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Shelf Registration Statement or any other registration
statement contemplated by this Agreement under the securities or blue sky laws of such
jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided, however, that Regency shall not be required to
qualify generally to transact business in any jurisdiction where it is not then required to so

7

 

qualify or to take any action which would subject it to general service of process in any such
jurisdiction where it is not then so subject;

          (d) promptly notify each Selling Holder and each underwriter of Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered by any of them under the
Securities Act, of (i) the filing of the Shelf Registration Statement or any other registration
statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in
connection therewith, or any amendment or supplement thereto, and, with respect to such Shelf
Registration Statement or such other registration statement or any post-effective amendment
thereto, when the same has become effective; and (ii) any written comments from the Commission with
respect to any filing referred to in clause (i) and any written request by the Commission for
amendments or supplements to the Shelf Registration Statement or such other registration statement
or any prospectus or prospectus supplement thereto;

          (e) immediately notify each Selling Holder and each underwriter of Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under the Securities Act,
of (i) the happening of any event as a result of which the prospectus or prospectus supplement
contained in the Shelf Registration Statement or any other registration statement contemplated by
this Agreement, as then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; (ii) the issuance or threat of
issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration
Statement or such other registration statement, or the initiation of any proceedings for that
purpose; or (iii) the receipt by Regency of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the applicable securities or blue sky
laws of any jurisdiction. Following the provision of such notice, Regency agrees to amend or
supplement the prospectus or prospectus supplement as promptly as practicable or to take other
appropriate action so that the prospectus or prospectus supplement does not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the circumstances then
existing and to take such other action as is necessary to remove a stop order, suspension, threat
thereof or proceedings related thereto;

          (f) Upon request and subject to appropriate confidentiality obligations, furnish to each
Selling Holder copies of any and all transmittal letters or other correspondence with the
Commission or any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to such offering of
Registrable Securities;

          (g) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel
for Regency, dated the date of the closing under the underwriting agreement, and (ii) a “cold
comfort” letter, dated the effective date of the applicable registration statement or the date of
any amendment or supplement thereto and a letter of like kind dated the date of the closing under
the underwriting agreement, in each case, signed by the independent public accountants who have
certified Regency’s financial statements included or incorporated by reference into the applicable
registration statement, and each of the opinion and the “cold

8

 

comfort” letter shall be in customary form and covering substantially the same matters with
respect to such registration statement (and the prospectus and any prospectus supplement included
therein) as are customarily covered in opinions of issuer’s counsel and in accountants’ letters
delivered to the underwriters in Underwritten Offerings of securities and such other matters as
such underwriters may reasonably request;

          (h) otherwise use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

          (i) make available to the appropriate representatives of the Managing Underwriter and Selling
Holders access to such information and Regency personnel as is reasonable and customary to enable
such parties to establish a due diligence defense under the Securities Act; provided, however, that
Regency need not disclose any information to any such representative unless and until such
representative has entered into a confidentiality agreement with Regency satisfactory to Regency;

          (j) cause all such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange or nationally recognized quotation system on which similar securities
issued by Regency are then listed;

          (k) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of Regency to enable the Selling Holders to consummate the
disposition of such Registrable Securities;

          (l) provide a transfer agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such registration statement; and

          (m) enter into customary agreements and take such other actions as are reasonably requested by
the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition
of such Registrable Securities.

     Each Selling Holder, upon receipt of notice from Regency of the happening of any event of the
kind described in subsection (e) of this Section 2.04, shall forthwith discontinue
disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04 or
until it is advised in writing by Regency that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings incorporated by reference in the
prospectus, and, if so directed by Regency, such Selling Holder will deliver, or will request the
managing underwriter or underwriters, if any, to deliver, to Regency (at Regency’s expense) all
copies in their possession or control, other than permanent file copies then in such Selling
Holder’s possession, of the prospectus covering such Registrable Securities current at the time of
receipt of such notice.

     Section 2.05 Cooperation by Holders. Regency shall have no obligation to include in the Shelf Registration Statement or in a
Underwritten Offering pursuant to Section 2.02 units of a

9

 

Selling Holder that has failed to furnish timely such information that, in the opinion of
counsel to Regency, is reasonably required in order for the registration statement or prospectus
supplement, as applicable, to comply with the Securities Act.

     Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities that are included in the Shelf Registration Statement
agrees not to effect any public sale or distribution of the Registrable Securities during the 30
calendar day period following completion of a public offering of equity securities by Regency,
provided, however, that the duration of the foregoing restrictions shall be no longer than the
duration of the shortest restriction imposed by the underwriters on the officers or directors or
any other unitholder of Regency on whom a restriction is imposed in connection with such public
offering and provided further that such Selling Holder owns more than $15 million (based on the
Purchase Price of Registrable Securities ).

     Section 2.07 Expenses.

          (a) Certain Definitions. “Registration Expenses” means all expenses incident
to Regency’s performance under or compliance with this Agreement to effect the registration of
Registrable Securities the Shelf Registration Statement pursuant to Section 2.01, an Underwritten
Offering pursuant to Section 2.02 or Section 2.03, and the disposition of such securities,
including, without limitation, all registration, filing, securities exchange listing and The Nasdaq
Global Market fees, all registration, filing, qualification and other fees and expenses of
complying with securities or blue sky laws, fees of the National Association of Securities Dealers,
Inc., transfer taxes and fees of transfer agents and registrars, all word processing, duplicating
and printing expenses, the fees and disbursements of counsel and independent public accountants for
Regency, including the expenses of any special audits or “cold comfort” letters required by or
incident to such performance and compliance.

          (b) Expenses. Regency will pay all reasonable Registration Expenses as determined in
good faith, whether or not any sale is made pursuant to the related registration statement. Except
as otherwise provided in Section 2.08 hereof, Regency shall not be responsible for legal
fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder or for
any “Selling Expenses,” which means all underwriting fees, discounts and selling
commissions allocable to the sale of the Registrable Securities. Each Selling Holder shall pay all
Selling Expenses in connection with any sale of its Registrable Securities hereunder.

     Section 2.08 Indemnification.

          (a) By Regency. In the event of an offering of any Registrable Securities under the
Securities Act pursuant to this Agreement, Regency will indemnify and hold harmless each Selling
Holder thereunder, its directors and officers, and each underwriter, pursuant to the applicable
underwriting agreement with such underwriter, of Registrable Securities thereunder and each Person,
if any, who controls such Selling Holder or underwriter within the meaning of the Securities Act
and the Exchange Act, against any losses, claims, damages, expenses or liabilities (including
reasonable attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to
which such Selling Holder or underwriter or controlling Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or

10

 

proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained in the Shelf
Registration Statement or any other registration statement contemplated by this Agreement, any
preliminary prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein (in the
case of a prospectus, in light of the circumstances under which they were made) not misleading, and
will reimburse each such Selling Holder, its directors and officers, each such underwriter and each
such controlling Person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Loss or actions or proceedings; provided, however, that
Regency will not be liable in any such case if and to the extent that any such Loss arises out of
or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Selling Holder, such underwriter or such
controlling Person in writing specifically for use in the Shelf Registration Statement or such
other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such Selling
Holder or any such director, officer or controlling Person, and shall survive the transfer of such
securities by such Selling Holder.

          (b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to
indemnify and hold harmless Regency, its directors and officers, and each Person, if any, who
controls Regency within the meaning of the Securities Act and the Exchange Act to the same extent
as the foregoing indemnity from Regency to the Selling Holders, but only with respect to
information regarding such Selling Holder furnished in writing by or on behalf of such Selling
Holder expressly for inclusion in the Shelf Registration Statement or such registration statement,
any preliminary prospectus or final prospectus included therein or any amendment or supplement
thereto; provided, however, that the liability of each Selling Holder shall not be greater in
amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such
Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

          (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party other than under this Section 2.08. The indemnifying
party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake
the defense thereof with counsel reasonably satisfactory to such indemnified party and, after
notice from the indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 2.08 for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed
to assume the defense and employ counsel or (ii) if the defendants in any such action include both
the indemnified party and the indemnifying party and counsel to the indemnified party shall have
concluded that there may be reasonable defenses available to the
indemnified party that are different from or additional to those available to the indemnifying

11

 

party, or if the interests of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, then the indemnified party shall have the right to select a
separate counsel and to assume such legal defense and otherwise to participate in the defense of
such action, with the reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying party as incurred.
Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action
brought against it with respect to which it is entitled to indemnification hereunder without the
consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation
on, and includes a complete and unconditional release from all liability of, the indemnifying
party.

          (d) Contribution. If the indemnification provided for in this Section 2.08 is
held by a court or government agency of competent jurisdiction to be unavailable to any indemnified
party or is insufficient to hold them harmless in respect of any Losses, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Loss in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of such
indemnified party on the other in connection with the statements or omissions which resulted in
such Losses, as well as any other relevant equitable considerations; provided, however, that in no
event shall such Selling Holder be required to contribute an aggregate amount in excess of the
dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale
of Registrable Securities giving rise to such indemnification. The relative fault of the
indemnifying party on the one hand and the indemnified party 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 has been made by, or relates to,
information supplied by such party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this paragraph were to
be determined by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to herein. The amount paid by an indemnified
party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed
to include any legal and other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any Loss that is the subject of this paragraph. 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 is not guilty of such fraudulent misrepresentation.

          (e) Other Indemnification. The provisions of this Section 2.08 shall be in
addition to any other rights to indemnification or contribution that an indemnified party may have
pursuant to law, equity, contract or otherwise.

     Section 2.09 Rule 144 Reporting.
With a view to making available the benefits of certain rules and regulations of the
Commission that may permit the sale of the Registrable Securities to the public without
registration, Regency agrees to use its commercially reasonable efforts to:

12

 

          (a) Make and keep public information regarding Regency available, as those terms are
understood and defined in Rule 144 of the Securities Act, at all times from and after the date
hereof;

          (b) File with the Commission in a timely manner all reports and other documents required of
Regency under the Securities Act and the Exchange Act at all times from and after the date hereof;
and

          (c) So long as a Holder owns any Registrable Securities, furnish, unless otherwise not
available by access electronically to the Commission’s EDGAR filing system, to such Holder
forthwith upon request a copy of the most recent annual or quarterly report of Regency, and such
other reports and documents so filed as such Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell any such securities without
registration.

     Section 2.10 Transfer or Assignment of Registration Rights.
The rights to cause Regency to register Registrable Securities granted to the Purchasers by
Regency under this Article II may be transferred or assigned by any Purchaser to one or more
transferee(s) or assignee(s) of such Registrable Securities, provided, however, that (a) unless
such transferee is an Affiliate of such Purchaser, each such transferee or assignee holds
Registrable Securities representing at least $15 million (based on the Purchase Price of
Registrable Securities) of the Purchased Class C Units, (b) Regency is given written notice prior
to any said transfer or assignment, stating the name and address of each such transferee and
identifying the securities with respect to which such registration rights are being transferred or
assigned, and (c) each such transferee assumes in writing responsibility for its portion of the
obligations of such Purchaser under this Agreement.

     Section 2.11 Limitation on Subsequent Registration Rights. From and after the date hereof, Regency shall not, without the prior written consent of the
Holders of a majority of the outstanding Registrable Securities, enter into any agreement with any
current or future holder of any securities of Regency that would allow such current or future
holder to require Regency to include securities in any registration statement filed by Regency on a
basis that is superior in any way to the piggyback rights granted to Purchaser hereunder.

ARTICLE III.

MISCELLANEOUS

     Section 3.01 Communications. All notices and other communications provided for or permitted hereunder shall be made in
writing by facsimile, courier service or personal delivery:

          (a) if to Purchaser, to the address set forth under that Purchaser’s signature block in
accordance with the provisions of this Section 3.01,

          (b) if to a transferee of Purchaser, to such Holder at the address provided pursuant to
Section 2.10 above, and

          (c) if to Regency, at 1700 Pacific, Suite 1900, Dallas, Texas 75201, notice of which is given
in accordance with the provisions of this Section 3.01.

13

 

     All such notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
sent via Internet electronic mail; and when actually received, if sent by any other means.

     Section 3.02 Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties, including subsequent Holders of Registrable Securities to the extent permitted
herein.

     Section 3.03 Assignment of Rights. All or any portion of the rights and obligations of any Purchaser under this Agreement may be
transferred or assigned by such Purchaser in accordance with Section 2.10 hereof.

     Section 3.04 Aggregation of Purchased Class C Units. All Purchased Class C Units held or acquired by Persons who are Affiliates of one another shall
be aggregated together for the purpose of determining the availability of any rights under this
Agreement.

     Section 3.05 Recapitalization, Exchanges, etc. Affecting the Common Units. The provisions of this Agreement shall apply to the full extent set forth herein with respect
to any and all units of Regency or any successor or assign of Regency (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or
in substitution of, the Registrable Securities, and shall be appropriately adjusted for
combinations, unit splits, recapitalizations and the like occurring after the date of this
Agreement.

     Section 3.06 Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not
impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and
without limiting any other remedy or right it may have, will have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any such breach, and
enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby
waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the
court to grant such an injunction or other equitable relief. The existence of this right will not
preclude any such Person from pursuing any other rights and remedies at law or in equity which such
Person may have.

     Section 3.07 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which counterparts, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.

     Section 3.08 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

     Section 3.09 Governing Law. The laws of the State of Texas shall govern this Agreement without regard to principles of
conflict of laws.

     Section 3.10 Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions

14

 

hereof or affecting or impairing the validity or
enforceability of such provision in any other jurisdiction.

     Section 3.11 Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein with respect to the
rights granted by Regency set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

     Section 3.12 Amendment. This Agreement may be amended only by means of a written amendment signed by Regency and the
Holders of a majority of the then outstanding Registrable Securities; provided, however,
that no such amendment shall materially and adversely affect the rights of any Holder hereunder
without the consent of such Holder.

     Section 3.13 Termination. This Agreement shall terminate and be of no further force or effect immediate following the
earliest to occur of: (i) the date as of which all Registrable Securities have ceased to be
Registrable Securities in accordance with Section 1.02 or (ii) December 31, 2009 (such
date, the “Termination Date”).

     Section 3.14 No Presumption. If any claim is made by a party relating to any conflict, omission, or ambiguity in this
Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact
that this Agreement was prepared by or at the request of a particular party or its counsel.

15

 

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

	 	 	 	 	 
	 	REGENCY ENERGY PARTNERS LP

By: Regency GP LP, its general partner

By: Regency GP LLC, its general partner 

	 
	 	By:  	/s/ Stephen L. Arata
 	 
	 	 	Name:  	Stephen L. Arata 	 
	 	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 

Signature Page to the

Class C Unit Registration Rights Agreement

 

 

	 	 	 	 	 
	 	LEHMAN BROTHERS MLP PARTNERS, L.P.

By: Lehman Brothers MLP Associates, L.P., its general partner

By: LB I Group Inc., its general partner

 	 
	 	By:  	/s/ Michael J. Cannon
 	 
	 	 	Name:  	Michael J. Cannon 	 
	 	 	Title:  	Managing Director 	 
	 

Signature Page to the

Class C Unit Registration Rights Agreement

 

 

	 	 	 	 	 
	 	KAYNE ANDERSON MLP INVESTMENT COMPANY

 	 
	 	By:  	/s/ James C. Baker 	 
	 	 	Name:  	James C. Baker 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to the

Class C Unit Registration Rights Agreement

 

 

	 	 	 	 	 
	 	RCH ENERGY MLP FUND, LP

By: RCH Energy MLP Fund GP, LP, its general partner

By: RR Advisors, LLC, its general partner
 	 
	 	By:  	/s/ Robert Raymond 	 
	 	 	Robert Raymond, its sole member 	 
	 	 	 	 
	 

Signature Page to the

Class C Unit Registration Rights Agreement

 

 

	 	 	 	 	 
	 	GPS INCOME FUND LP

By: GPS Partners LLC, its general partner
 	 
	 	By:  	/s/ Brett Messing
 	 
	 	 	Name:  	Brett Messing 	 
	 	 	Title:  	Managing Member 	 
	 

	 	 	 	 	 
	 	GPS HIGH YIELD EQUITIES FUND LP

By: GPS Partners LLC, its general partner

 	 
	 	By:  	/s/ Brett Messing
	 
	 	 	Name:  	Brett Messing 	 
	 	 	Title:  	Managing Member 	 
	 
	 	GPS INCOME FUND (CAYMAN) LTD

 	 
	 	By:  	/s/ Brett Messing	 
	 	 	Name:  	Brett Messing 	 
	 	 	Title:  	Director 	 
	 

Signature Page to the

Class C Unit Registration Rights Agreement

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