Document:

Exhibit 10.1

 

EXHIBIT
10.1

SOMAXON PHARMACEUTICALS, INC.

EMPLOYMENT AGREEMENT

     Employment Agreement (this “Agreement”) made and entered into as of March 28, 2007,
between Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and James
L’Italien, Ph.D., an individual (“Executive”).

W
I T N E S S E
T H:

     Whereas, the Company desires to employ Executive and Executive desires to accept
employment with Company upon the terms and conditions hereinafter set forth;

     Now, Therefore, in consideration of the premises and the mutual covenants hereinafter
set forth, and intending to be legally bound hereby, it is hereby agreed as follows:

          1. Position and Duties. Executive shall diligently and conscientiously devote
Executive’s full business time, attention, energy, skill and diligent efforts to the business of
the Company and the discharge of Executive’s duties hereunder. Executive’s duties under this
Agreement shall be to serve as Senior Vice President, Regulatory Affairs and Quality
Assurance, with the responsibilities, rights, authority and duties customarily pertaining to
such office and as may be established from time to time by or under the direction of the Board of
Directors of the Company (the “Board”) or its designees. Executive shall report to the Board and
the President and Chief Executive Officer of the Company. Executive shall also act as an officer
and/or director and/or manager of such affiliates of the Company as may be designated by the Board
from time to time, commensurate with Executive’s office, all without further compensation, other
than as provided in this Agreement. As an exempt, salaried employee, Executive will be expected to
work such hours as required by the nature of Executive’s work assignments.

          2. Place and Term of Employment. Executive’s performance of services under this
Agreement shall be rendered in San Diego County, California, subject to necessary travel
requirements of Executive’s position and duties hereunder. Executive’s employment shall not be for
a particular term and may be terminated by either Executive or the Company at any time, for any
reason or no reason, subject to the provisions contained in Paragraph 7.

          3. Compensation.

               (a) Base Salary. The Company shall pay to Executive base salary compensation at an
annual rate of $290,000. Following the end of the Company’s fiscal year 2007, and following each
fiscal year thereafter, the Board shall review Executive’s base salary in light of the performance
of Executive and the Company, and may, in its sole discretion, maintain or increase (but not
decrease) such base salary by an amount it determines to be appropriate. Executive’s annual base
salary payable hereunder, as it may be maintained or increased from time to time, is referred to
herein as “Base Salary.” Base Salary shall be paid in equal installments in accordance with the
Company’s payroll practices in effect from time to time for executive officers, but in no event
less frequently than monthly.

               (b) Bonus Plan. The Company shall adopt a bonus program providing for annual bonus
awards to Executive and the Company’s other eligible employees dependent upon, among other things,
the achievement of certain performance levels by the Company, the nature, magnitude and
quality of the services performed by Executive for the Company and the compensation paid for
positions of comparable responsibility and authority within the Company’s industry (the “Company
Employee

 

 

Bonus Plan”). Executive shall receive a one-time cash bonus payment of $100,000 payable on
March 16, 2008, contingent upon Executive’s being employed in good standing with the Company as of
that date. Notwithstanding anything to the contrary contained herein, such one-time bonus shall be
credited against any other bonus payable to Executive relating to the 2007 fiscal year under the
Company Employee Bonus Plan or any other bonus plan for the benefit of the Company’s employees.

               (c) Option Grant. As additional consideration for the services to be rendered by
Executive under this Agreement, the Company will grant to Executive stock options to purchase
95,000 shares of the Company’s common stock, subject to approval of the Board. The exercise price
per share of such options will be equal to the fair market value per share on the date Executive
commences full-time employment with the Company. The stock options will vest over four years, with
1/4 of the shares subject to the stock options vesting on the first anniversary of the date
Executive commences full-time employment with the Company, and the remainder vesting monthly at a
rate of 1/36th of such remainder on the first day of each calendar month thereafter until all
shares are vested. The stock options will be granted under the Company’s 2005 Equity Incentive
Award Plan (the “Option Plan”) and will be subject to the terms and conditions applicable to stock
options granted under that plan, as described in that plan and the applicable stock option
agreement.

          4. Benefits. Executive shall be eligible to participate in all employee benefit
programs of the Company offered from time to time during the term of Executive’s employment by the
Company to employees or executive officers of Executive’s rank, to the extent that Executive
qualifies under the eligibility provisions of the applicable plan or plans, in each case consistent
with the Company’s then-current practice as approved by the Board from time to time. Except to the
extent financially feasible for the Company, the foregoing shall not be construed to require the
Company to establish such plans or to prevent the modification or termination of such plans once
established, and no such action or failure thereof shall affect this Agreement. Executive
recognizes that the Company has the right, in its sole discretion, to amend, modify or terminate
its benefit plans without creating any rights in Executive.

          5. Vacation. Executive shall be entitled to paid vacation and sick time (“PTO”) of up
to four weeks per calendar year. Executive may roll-over unused PTO time from one calendar year to
another, subject to a maximum of six weeks of accrued PTO, which is to be accrued in accordance
with the Company’s PTO policy.

          6. Business Expenses. The Company shall promptly reimburse Executive for Executive’s
reasonable and necessary expenditures for travel, entertainment and similar items made in
furtherance of Executive’s duties under this Agreement consistent with the policies of the Company
as applied to all executive officers. Executive shall document and substantiate such expenditures
as required by the policies of the Company as applied to all executive officers, including an
itemized list of all expenses incurred, the business purposes for which such expenses were
incurred, and such receipts as Executive reasonably has been able to obtain.

          7. Termination of Employment.

               (a) Death or Disability.

                    (i) In the event of Executive’s death, Executive’s employment with the Company shall
automatically terminate.

                    (ii) Each of the Company and Executive shall have the right to terminate Executive’s
employment in the event of Executive’s Disability. “Disability” as used in this

 

 

Agreement shall have meaning set forth in Section 22(e)(3) of the Internal Revenue Code, which
as of the date of this Agreement is as follows: “An individual is permanently and totally disabled
if he is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.” A
termination of Executive’s employment by either party for Disability shall be communicated to the
other party by written notice, and shall be effective on the 10th day after receipt of such notice
by the other party (the “Disability Effective Date”), unless Executive returns to full-time
performance of Executive’s duties before the Disability Effective Date.

               (b) By the Company.

                    (i) The Company shall have the right to terminate Executive’s employment for Cause. “Cause”
as used in this Agreement shall mean:

                         (a) Executive’s breach of any of the covenants contained in Paragraphs 8, 9, and 10
of this Agreement;

                         (b) Executive’s conviction by, or entry of a plea of guilty or nolo contendere in, a
court of competent and final jurisdiction for any crime involving moral turpitude or punishable by
imprisonment in the jurisdiction involved;

                         (c) Executive’s commission of an act of fraud, whether prior to or subsequent to the
date hereof upon the Company;

                         (d) Executive’s continuing repeated willful failure or refusal to perform
Executive’s duties as required by this Agreement (including, without limitation, Executive’s
inability to perform Executive’s duties hereunder as a result of chronic alcoholism or drug
addiction and/or as a result of any failure to comply with any laws, rules or regulations of any
governmental entity with respect to Executive’s employment by the Company);

                         (e) Executive’s gross negligence, insubordination or material violation of any duty
of loyalty to the Company or any other material misconduct on the part of Executive;

                         (f) Executive’s intentional commission of any act which Executive knows (or
reasonably should know) is likely to be materially detrimental to the Company’s business or
goodwill; or

                         (g) Executive’s material breach of any other provision of this Agreement, provided
that termination of Executive’s employment pursuant to this subsection (g) shall not constitute
valid termination for good cause unless Executive shall have first received written notice from the
Board stating with specificity the nature of such breach and affording Executive at least twenty
days to correct the breach alleged.

Nothing in this Paragraph 7(b)(i) shall prevent Executive from challenging the Board’s
determination that Cause exists or that Executive has failed to cure any act (or failure to act)
that purportedly formed the basis for the Board’s determination, under the arbitration procedures
set forth in Paragraph 19 below.

                    (ii) The Company shall have the right to terminate Executive’s employment hereunder without
Cause at any time.

 

 

               (c) By Executive.

                    (i) Executive shall have the right to terminate his employment with the Company for Good
Reason (as defined below), upon 30 days’ written notice to the Board given within 60 days following
the occurrence of an event constituting Good Reason; provided that the Company shall have 20 days
after the date such notice has been given to the Board in which to cure the conduct specified in
such notice. Executive’s continued employment during such 20-day period shall not constitute
Executive’s consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.

                    (ii) For purposes of this Agreement “Good Reason” shall mean:

                         (a) a change in Executive’s position or responsibilities (including reporting
responsibilities) that represents a substantial reduction in the position or responsibilities as in
effect immediately prior thereto; the assignment to Executive of any duties or responsibilities
that are materially inconsistent with such position or responsibilities; or any removal of
Executive from or failure to reappoint or reelect Executive to any of such positions, except in
connection with the termination of Executive’s employment for Cause, as a result of his or her
Disability or death, or by Executive other than for Good Reason;

                         (b) a reduction in Executive’s Base Salary other than in connection with a general reduction
in wages for all employees of the Company and its parent and subsidiaries, if any;

                         (c) the Company requiring Executive (without Executive’s consent) to be based at any place
outside a 50-mile radius of his or her initial place of employment with the Company, except for
reasonably required travel on the Company’s business;

                         (d) the Company’s failure to provide Executive with compensation and benefits substantially
equivalent (in terms of benefit levels and/or reward opportunities) to those provided for under
each of the Company’s material employee benefit plans, programs and practices as in effect from
time to time; or

                         (e) any material breach by the Company of its obligations to Executive under this Agreement.

                    (iii) Executive shall have the right to terminate his or her employment hereunder without Good
Reason upon 30 days’ written notice to the Company, and such termination shall not in and of itself
be a breach of this Agreement.

 

 

               (d) Termination Payments.

                    (i) If Executive’s employment with the Company is terminated pursuant to Paragraph 7(a)(i)
(i.e., death), the Company shall pay to Executive (a) his or her accrued but unpaid Base Salary
through the date of termination (plus all accrued and unpaid expenses reimbursable in accordance
with Paragraph 6), (b) any accrued but unused PTO, and (c) at the discretion of the Board, an
annual bonus for the year in which Executive’s death occurs, prorated through the date of death,
based on the Board’s good-faith estimate of the actual amount, if any, that would have been payable
for such year under the Company Employee Bonus Plan (assuming Executive had remained employed by
the Company through the end of such year) in accordance with Paragraph 3(b).

                    (ii) If Executive’s employment with the Company is terminated pursuant to Paragraph 7(a)(ii)
(i.e., Disability), the Company shall pay to Executive (a) his or her accrued but unpaid Base
Salary through the date of termination (plus all accrued and unpaid expenses reimbursable in
accordance with Paragraph 6), (b) any accrued but unused PTO, (c) an amount equal to Executive’s
actual Base Salary (not including any bonus payable) for the 6 month period immediately prior to
such termination, payable in 6 equal installments during the 6 month period following such
termination, and (d) at the discretion of the Board, an annual bonus for the year in which
Executive’s Disability occurs, prorated through the date of termination, based on the Board’s
good-faith estimate of the actual amount, if any, that would have been payable for such year under
the Company Employee Bonus Plan (assuming Executive had remained employed by the Company through
the end of such year) in accordance with Paragraph 3(b).

                    (iii) If Executive’s employment with the Company is voluntarily terminated by Executive
pursuant to Paragraph 7(c)(i) (i.e., Good Reason), or if the Company terminates Executive’s
employment with the Company other than pursuant to Paragraphs 7(a) or 7(b)(i), then the Company
shall pay to Executive the following, which Executive acknowledges to be fair and reasonable, as
consideration for the Release described in Paragraph 7(f):

                         (a) Executive’s accrued but unpaid Base Salary through the date of termination (plus
all accrued and unpaid expenses reimbursable in accordance with Paragraph 6);

                         (b) any accrued but unused PTO;

                         (c) at the discretion of the Board, an annual bonus for the year in which
Executive’s employment is terminated, prorated through the date of termination, based on the
Board’s good-faith estimate of the actual amount, if any, that would have been payable for such
year under the Company Employee Bonus Plan (assuming Executive had remained employed by the Company
through the end of such year) in accordance with Paragraph 3(b);

                         (d) subject to Paragraphs 7(d)(vi) and 7(g) below, an amount equal to Executive’s
actual Base Salary (not including any bonus payable) for the 6 month period immediately prior to
such termination, payable in 6 equal installments during the 6 month period following such
termination;

                         (e) the Company shall pay all costs which the Company would otherwise have incurred
to maintain all of Executive’s health, welfare and retirement benefits (either on the same or
substantially equivalent terms and conditions) if Executive had continued to render services to the
Company for 6 continuous months after the date of his or her termination of employment; and

 

 

                         (f) notwithstanding any provision to the contrary in Executive’s options under the
Option Plan or other plan (including, without limitation, the expiration dates or vesting
provisions thereof) or any restricted stock agreement, (i) the unvested portion, if any, of
Executive’s outstanding options shall be deemed to have vested on the date of termination with
respect to the number of shares that would have vested had Executive remained employed by the
Company for 12 months following such termination, and Executive shall have the lesser of (A) 180
days or (B) the maximum period permitted under Section 409A of the Code from the date of
termination to exercise such options, and (ii) any restrictions with respect to any restricted
shares of the Company’s capital stock that Executive then holds shall immediately lapse with
respect to the number of restricted shares that would have vested had Executive remained employed
by the Company for 12 months following such termination.

                    (iv) If Executive’s employment with the Company is terminated by the Company pursuant to
Paragraph 7(b)(i) (i.e., for Cause), or Executive voluntarily terminates his employment with the
Company other than pursuant to Paragraphs 7(a) or 7(c)(i), without limiting or prejudicing any
other legal or equitable rights or remedies which the Company may have upon such breach by
Executive, the Company shall pay Executive his or her accrued but unpaid Base Salary and any
accrued but unused PTO (plus all accrued and unpaid expenses reimbursable in accordance with
Paragraph 6) through the date of termination.

                    (v) In addition to the foregoing, upon the termination of Executive’s employment, Executive
shall be entitled to any other rights, compensation and/or benefits as may be due to Executive in
accordance with the terms and provisions of any other benefit, compensation, incentive, medical,
disability or life insurance plans, programs or agreements of the Company in effect upon such
termination.

                    (vi) Executive shall not be required to mitigate amounts payable under this Agreement by
seeking other employment or otherwise; provided, however, if the termination giving rise to the
payments described in Paragraph 7(d)(iii)(d) above results from the Executive’s voluntary
termination of his employment with the Company pursuant to Paragraph 7(c)(i) (i.e., Good Reason),
then during the 6 month period specified in Paragraph 7(d)(iii)(d) above, any compensation, income,
or benefits earned by or paid to Executive (in cash or otherwise) by any company, business,
enterprise, or other employer other than the Company (whether as an employee of, or consultant or
independent contractor to, such employer, or otherwise) shall reduce the amount of severance
payments payable pursuant to Paragraph 7(d)(iii)(d) on a dollar-for-dollar basis. If any payment
to be made to Executive pursuant to Paragraph 7(d)(iii)(d) is delayed pursuant to Paragraph 7(g)
below, and such payment is reduced pursuant to this Paragraph 7(d)(iv), the net payment that would
be due to Executive absent the operation of Paragraph 7(g) shall be paid to Executive in a lump sum
as soon as permitted under Paragraph 7(g) below.

                    (vii) The termination payments described above shall supersede any severance program, plan or
policy that may be adopted by the Company with respect to its employees generally, and the terms of
this Paragraph 7(d) shall control in the event of any discrepancy with such severance program, plan
or policy.

               (e) Change in Control.

                    (i) In the event of any Change in Control (defined below) during the term of Executive’s
employment with the Company, notwithstanding any provision to the contrary in Executive’s options
under the Option Plan or other plan (including, without limitation, the expiration dates or vesting
provisions thereof) or any restricted stock agreement (1) (A) 50% of any

 

 

unvested portion of such options shall be deemed to have vested on the date of the Change in
Control and (B) the remaining unvested portion of such options shall vest on the date that is 12
months from the closing of such Change in Control, subject to Executive’s continuing service with
the Company or any parent or subsidiary or successor on such date, and (2) (A) the restrictions
with respect to 50% of the restricted shares of the Company’s capital stock that Executive then
holds shall immediately lapse on the date of the Change in Control and (B) the restrictions with
respect to any remaining restricted shares shall lapse on the date that is 12 months from the
closing of such Change in Control, subject to Executive’s continuing service with the Company or
any parent or subsidiary or successor on such date.

                    (ii) Following a Change in Control, if Executive’s employment with the Company is voluntarily
terminated by Executive pursuant to Paragraph 7(c)(i) (i.e., Good Reason), or if the Company
terminates Executive’s employment with the Company other than pursuant to Paragraphs 7(a) or
7(b)(i), then, in addition to the application of Paragraph 7(d)(iii) to such situation,
notwithstanding any provision to the contrary in Executive’s options under the Option Plan or other
plan (including, without limitation, the expiration dates or vesting provisions thereof) or any
restricted stock agreement, (1) any unvested portion of such options shall be deemed to have vested
on the date of termination and Executive shall have the lesser of (i) 180 days or (ii) the maximum
period permitted under Section 409A of the Internal Revenue Code (the “Code”)from the date of
termination to exercise such options and (2) any restrictions with respect to restricted shares of
the Company’s capital stock that Executive then holds shall immediately lapse on the date of
termination.

                    (iii) "Change in Control” means and includes each of the following:

                         (a) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the rules thereunder) of
“beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities
entitled to vote generally in the election of directors (“voting securities”) of the Company that
represent 50% or more of the combined voting power of the Company’s then outstanding voting
securities, other than:

                              (1) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company or any
person controlled by the Company or by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any person controlled by the Company, or

                              (2) an acquisition of voting securities by the Company or a corporation owned, directly
or indirectly by the stockholders of the Company in substantially the same proportions as
their ownership of the stock of the Company, or

                              (3) an acquisition of voting securities pursuant to a transaction described in
subsection (c) below that would not be a Change in Control under subsection (c);

          Notwithstanding the foregoing, the following event shall not constitute an “acquisition” by
any person or group for purposes of this Paragraph 7(e)(iii)(a): an acquisition of the Company’s
securities by the Company which causes the Company’s voting securities beneficially owned by a
person or group to represent 50% or more of the combined voting power of the Company’s then
outstanding voting securities; provided, however, that if a person or group shall become the
beneficial owner of 50% or more of the combined voting power of the Company’s then outstanding
voting securities by reason of share acquisitions by the Company as described above and shall,
after such share acquisitions by the
 

 

 

Company, become the beneficial owner of any additional voting securities of the Company, then such
acquisition shall constitute a Change in Control; or

                    (b) during any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Subparagraphs (a) or (c) of this Paragraph 7(e)(iii)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning of the two year
period or whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or

                    (c) the consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:

                         (1) which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted
into voting securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly, all or
substantially all of the Company’s assets or otherwise succeeds to the business of the
Company (the Company or such person, the “Successor Entity”)), directly or indirectly, at
least a majority of the combined voting power of the Successor Entity’s outstanding voting
securities immediately after the transaction, and

                         (2) after which no person or group beneficially owns voting securities representing 50%
or more of the combined voting power of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this paragraph (2) as beneficially owning
50% or more of combined voting power of the Successor Entity solely as a result of the
voting power held in the Company prior to the consummation of the transaction; or

                    (d) the Company’s stockholders approve a liquidation or dissolution of the Company.

          For purposes of Subparagraph 7(e)(iii)(a) above, the calculation of voting power shall be made
as if the date of the acquisition were a record date for a vote of the Company’s stockholders, and
for purposes of Subparagraph 7(e)(iii)(c) above, the calculation of voting power shall be made as
if the date of the consummation of the transaction were a record date for a vote of the Company’s
stockholders.

               (f) Condition Precedent. If Executive’s employment with the Company is voluntarily
terminated by Executive pursuant to Paragraph 7(c)(i) (i.e., Good Reason) or if the Company
terminates Executive’s employment with the Company other than pursuant to Paragraphs 7(a) or
7(b)(i), prior to the receipt of any payments or benefits provided by Paragraphs 7(d)(iii) and
7(e)(ii) on account of the occurrence of such termination of Executive’s employment with the
Company, Executive shall execute a “Release” in the form attached hereto as Exhibit A or
Exhibit B, as appropriate. Such Release shall specifically relate to all of Executive’s
rights and claims in existence at the time of such execution and shall confirm Executive’s
obligations under the Proprietary Information and Inventions Agreement between Executive and the
Company. It is understood that, in the event that Executive is at least 40 years

 

 

old on the date of the termination of his or her employment with the Company, Executive has a
certain period to consider whether to execute such Release, and Executive may revoke such Release
within 7 business days after execution. In the event Executive does not execute such Release
within the applicable period, or if Executive revokes such Release within the subsequent 7 business
day period, Executive shall not be entitled to the aforesaid payments and benefits.

               (g) Delay of Payments. Notwithstanding anything to the contrary in this Paragraph 7,
the parties acknowledge and agree that any payment to be made, or benefit provided, to Executive
pursuant to this Paragraph 7 shall be delayed to the extent necessary for this Agreement and such
payment or benefit to comply with Section 409A of the Code; provided that if any payment to be made
to Executive is delayed pursuant to this Subparagraph 7(g), such payment or benefit shall be paid
to Executive in a lump sum as soon as permitted under Section 409A of the Code. In the event the
Company and Executive mutually determine that a change in applicable law following the Effective
Date causes the payments to be made, or benefits to be provided, to Executive pursuant to this
Paragraph 7 not to be subject to Section 409A of the Code, such payments and benefits payable
thereafter to Executive shall be paid in accordance with this Paragraph 7 without reference to this
Paragraph 7(g). In addition, in the event the Company and Executive mutually determine that a
change in applicable law following the Effective Date causes the payments to be made, or benefits
to be provided, to be payable to Executive without a delay but in another manner that complies with
Section 409A of the Code, the Company and Executive agree to amend this Agreement at such time to
reform the payment provisions of this Paragraph 7 to provide economic benefits to Executive that
are as close as possible to those contemplated by this Paragraph 7 without reference to this
Paragraph 7(g) but that still comply with Section 409A of the Code.

          8. Proprietary Information and Inventions Agreement. As a condition of continued
employment, Executive will be required to continue to sign and comply with the Company’s form of
Proprietary Information and Inventions Agreement. In Executive’s work for the Company, Executive
will be expected not to use or disclose any confidential information, including trade secrets, of
any former employer or other person to whom Executive has an obligation of confidentiality.
Rather, Executive will be expected to use only that information which is generally known and used
by persons with training and experience comparable to Executive’s, which is common knowledge in the
industry or otherwise legally in the public domain, or which is otherwise provided or developed by
the Company. Executive agrees that he or she will not bring onto Company premises any unpublished
documents or property belonging to any former employer or other person to whom Executive has an
obligation of confidentiality.

          9. Non-Solicitation.

               (a) Nonsolicitation of Employees or Consultants. Executive agrees that for a period
of one year after termination of Executive’s employment with the Company (the “Nonsolicitation
Period”), Executive will not directly or indirectly induce or solicit any of the Company’s
employees or consultants to leave their employment.

               (b) Nonsolicitation of Customers. Executive agrees that all customers of the Company
or any of its subsidiaries for which Executive has or will provide services during the term of
Executive’s employment with the Company, and all prospective customers from whom Executive has
solicited business while in the employ of the Company, shall be solely the customers of the Company
or such subsidiary. Executive agrees that, for the Nonsolicitation Period, Executive shall neither
directly nor indirectly solicit business as to products or services competitive with those of the
Company or any of its subsidiaries, from any of the Company’s or any of its subsidiaries’ customers
with whom Executive had contact within one year prior to Executive’s termination.

 

 

               (c) Scope of Covenants. Executive agrees that the covenants contained in this
Paragraph 9 are reasonable with respect to their duration, geographic area and scope. If, at the
time of enforcement of this Paragraph 9, a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing, the parties hereto agree that the maximum
period, scope or geographic area legally permissible under such circumstances will be substituted
for the period, scope or area stated herein.

               (d) Equitable Relief. In the event of a breach of this Paragraph 9 by Executive, the
Company shall, in addition to all other remedies available to it, be entitled to equitable relief
by way of an injunction and any other legal or equitable remedies.

          10. Nondisparagement. Executive will not at any time during or after the term of
Executive’s employment with the Company directly (or through any other person or entity) make any
public statements (whether orally or in writing) which are intended to be derogatory or damaging to
the Company or any of its subsidiaries, their respective businesses, activities, operations,
affairs, reputations or prospects or any of their respective officers, employees, directors,
partners, agents or shareholders; provided that Executive may comment generally on industry matters
in response to inquiries from the press and in other public speaking engagements. The Company
shall not at any time during or after the term of Executive’s employment with the Company, directly
(or through any other person or entity) make any public statements (whether oral or in writing)
which are intended to be derogatory or damaging concerning Executive.

          11. Indemnification; Directors & Officers Insurance.

               (a) The Company shall indemnify Executive to the maximum extent permitted by law and by the
charter and bylaws of Company if Executive is made a party, or threatened to be made a party, to
any threatened or pending legal action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Executive is or was an officer, director, manager,
member, partner or employee of the Company, in which capacity Executive is or was serving at the
Company’s request, against reasonable expenses (including reasonable attorneys’ fees), judgments,
fines and settlement payments incurred by him or her in connection with such action, suit or
proceeding.

               (b) The Company shall use reasonable commercial efforts to maintain directors & officers
insurance for the benefit of Executive and other executive officers and directors with a level of
coverage comparable to other companies in the Company’s industry at a similar stage of development.

               (c) Concurrently with entering into this Agreement, the Company and Executive will
enter into an Indemnification Agreement in the form attached hereto as Exhibit C.

          12. Representation of the Parties. Executive represents and warrants to the Company
that Executive has the capacity to enter into this Agreement and the other agreements referred to
herein, and that the execution, delivery and performance of this Agreement and such other
agreements by Executive will not violate any agreement, undertaking or covenant to which Executive
is party or is otherwise bound. The Company represents to Executive that it is duly formed and is
validly existing under the laws of the State of Delaware, that it is fully authorized and empowered
by action of its Board to enter into this Agreement and the other agreements referred to herein,
and that performance of its obligations under this Agreement and such other agreements will not
violate any agreement between it and any other person, firm or other entity.

          13. Key Man Insurance. The Company will have the right throughout the term of
Executive’s employment with the Company to obtain or increase insurance on Executive’s life in such

 

 

amount as the Board determines, in the name of the Company or and for its sole benefit or
otherwise, in the discretion of the Board. Upon reasonable advance notice, Executive will
cooperate in any and all necessary physical examinations without expense to Executive, supply
information, and sign documents, and otherwise cooperate fully with the Company as the Company may
request in connection with any such insurance. Executive warrants and represents that, to
Executive’s best knowledge, Executive is in good health and does not suffer from any medical
condition which might interfere with the timely performance of Executive’s obligations under this
Agreement. To the extent the Company elects to obtain a policy of insurance on the life of
Executive, unless an alternative life insurance benefit has been established for the Company’s
executive officers, including Executive, the Company shall also obtain and pay for a whole life
insurance policy providing for payment of not less than the equivalent of one year’s Base Salary in
benefits to Executive’s designated beneficiaries (this policy shall be in addition to any coverage
provided by the Company’s group life insurance plan provided to employees generally).

          14. Notices. All notices given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) three business days after being
mailed by first class certified mail, return receipt requested, postage prepaid, (c) one business
day after being sent by a reputable overnight delivery service, postage or delivery charges
prepaid, or (d) on the date on which a facsimile is transmitted to the parties at their respective
addresses stated below. Any party may change its address for notice and the address to which
copies must be sent by giving notice of the new addresses to the other parties in accordance with
this Paragraph 14, except that any such change of address notice shall not be effective unless and
until received.

If to the Company:

Somaxon Pharmaceuticals, Inc.

Attn: Kenneth Cohen

3721 Valley Centre Drive, Suite 500

San Diego, CA 92130

If to Executive:

James L’Italien, Ph.D.

P.O. Box 5000 PMB 157

Rancho Santa Fe, CA 92067

          15. Entire Agreement, Amendments, Waivers, Etc.

               (a) No amendment or modification of this Agreement shall be effective unless set forth in a
writing signed by the Company and Executive. No waiver by either party of any breach by the
other party of any provision or condition of this Agreement shall be deemed a waiver of any
similar or dissimilar provision or condition at the same or any prior or subsequent time. Any
waiver must be in writing and signed by the waiving party.

               (b) This Agreement, together with the Exhibits hereto and the documents referred to herein
and therein, sets forth the entire understanding and agreement of the parties with respect to the
subject matter hereof and supersedes all prior oral and written understandings and agreements.
There are no representations, agreements, arrangements or understandings, oral or written, among
the parties relating to the subject matter hereof which are not expressly set forth herein, and
no party hereto has been induced to enter into this Agreement, except by the agreements expressly
contained herein.

 

 

               (c) Nothing herein contained shall be construed so as to require the commission of any act
contrary to law, and wherever there is a conflict between any provision of this Agreement and any
present or future statute, law, ordinance or regulation, the latter shall prevail, but in such
event the provision of this Agreement affected shall be curtailed and limited only to the extent
necessary to bring it within legal requirements.

               (d) This Agreement shall inure to the benefit of and be enforceable by Executive and
Executive’s heirs, executors, administrators and legal representatives, and by the Company and
its successors and assigns. This Agreement and all rights hereunder are personal to Executive
and shall not be assignable. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, by operation of law or by agreement in form and substance
reasonably satisfactory to Executive, to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place.

               (e) If any provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect the other provisions or application of this Agreement that can be
given effect without the invalid provisions or application, and to this end the provisions of
this Agreement are declared to be severable.

          16. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California without reference to principles of conflict of laws.

          17. Taxes. All payments required to be made to Executive hereunder, whether during
the term of Executive’s employment hereunder or otherwise, shall be subject to all applicable
federal, state and local tax withholding laws.

          18. Headings, Etc. The headings set forth herein are included solely for the purpose
of identification and shall not be used for the purpose of construing the meaning of the provisions
of this Agreement. Unless otherwise provided, references herein to Exhibits and Paragraphs refer
to Exhibits to and Paragraphs of this Agreement.

          19. Arbitration. Any dispute or controversy between Company and Executive, arising
out of or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled
by arbitration in San Diego, California administered by the American Arbitration Association in
accordance with its National Rules for the Resolution of Employment Disputes then in effect and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief that a court of
competent jurisdiction could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this arbitration provision,
apply to any court having jurisdiction over such dispute or controversy and seek interim
provisional, injunctive or other equitable relief until the arbitration award is rendered or the
controversy is otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim relief, neither a party
nor an arbitrator may disclose the existence, content or results of any arbitration hereunder
without the prior written consent of Company and Executive. The Company shall pay all of the
direct costs and expenses in any arbitration hereunder and the arbitrator’s fees and costs;
provided, however, that the arbitrator shall have the discretion to award the prevailing party
reimbursement of its, his or her reasonable attorney’s fees and costs.

 

 

          20. Survival. Executive’s obligations under the provisions of Paragraphs 8, 9 and 10,
as well as the provisions of Paragraphs 6, 7(d), 7(e)(ii), 11 and 15 through and including 23,
shall survive the termination or expiration of this Agreement.

          21. Confidentiality. The parties agree that the existence and terms of this Agreement
are and shall remain confidential. The parties shall not disclose the fact of this Agreement or any
of its terms or provisions to any person without the prior written consent of the other party
hereto; provided, however, that nothing in this Paragraph 21 shall prohibit disclosure of such
information to the extent required by law, nor prohibit disclosure of such information by Executive
to any legal or financial consultant, all of whom shall first agree to be bound by the
confidentiality provisions of this Paragraph 21, nor prohibit disclosure of such information within
the Company in the ordinary course of its business to those persons with a need to know, as
reasonably determined by the Company, or by the Company to any legal or financial consultant.

          22. Construction. Each party has cooperated in the drafting and preparation of this
Agreement. Therefore, in any construction to be made of this Agreement, the same shall not be
construed against any party on the basis that the party was the drafter.

          23. Section 409A of the Code. Subject to Subparagraph 7(g), this Agreement shall be
interpreted, construed and administered in a manner that satisfies the requirements of Section 409A
of the Code. Notwithstanding any provision of this Agreement to the contrary, the Company may
adopt such amendments to this Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the
Company determines are necessary to comply with the requirements of Section 409A of the Code;
provided that prior to taking any such action Company shall confer with Executive and take
Executive’s input into account in good faith.

(Signature Page Follows)

 

 

     In Witness Whereof, the parties have executed this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	Somaxon Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Meg M. McGilley	 	 
	 

	 	 	 	 

Name: Meg M. McGilley
	 	 
	 

	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ James L’Italien

	 

	 	James L’Italien, Ph.D.

 

 

Exhibit A

RELEASE

(Individual Termination)

     Certain capitalized terms used in this Release are defined in the Employment Agreement by and
between Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and James
L’Italien, Ph.D. (“Executive”) dated as of the 28th day of March, 2007 (the “Agreement”) which
Executive has previously executed and of which this Release is a part.

     Pursuant to the Agreement, and in consideration of and as a condition precedent to the
payments and benefits provided under Paragraphs 7(d)(iii) and 7(e)(ii) of the Agreement, Executive
hereby furnishes the Company with this Release.

     Executive hereby confirms his/her obligations under the Company’s proprietary information and
inventions agreement.

     On Executive’s own behalf and on behalf of Executive’s heirs, estate and beneficiaries,
Executive hereby waives, releases, acquits and forever discharges the Company, and each of its
Subsidiaries and affiliates, and each of their respective past or present officers, directors,
agents, servants, employees, shareholders, predecessors, successors and assigns, and all persons
acting by, through, under, or in concert with them, or any of them, of and from any and all suits,
debts, liens, contracts, agreements, promises, claims, liabilities, demands, causes of action,
costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in
law, equity, or otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (“Claims”), from the beginning of time to the date hereof, including
without limitation, Claims that arose as a consequence of Executive’s employment with the Company,
or arising out of the termination of such employment relationship, or arising out of any act
committed or omitted during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not limited to, Claims
which were, could have been, or could be the subject of an administrative or judicial proceeding
filed by Executive or on Executive’s behalf under federal, state or local law, whether by statute,
regulation, in contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for personal injury;
(3) Claims or demands related to salary, bonuses, commissions, stock, stock options, or any other
ownership interest in the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, front pay, back pay or any other form of compensation; (4) Claims for breach of contract; (5)
Claims for any form of retaliation, harassment, or discrimination; (6) Claims pursuant to any
federal, state or local law or cause of action including, but not limited to, the federal Civil
Rights Act of 1964, as amended, the federal Age Discrimination in Employment Act of 1967, as
amended (“ADEA”), the federal Employee Retirement Income Security Act of 1974, as amended, the
federal Americans with Disabilities Act of 1990, the California Fair Employment and Housing Act, as
amended, and the California Labor Code; and (7) all other Claims based on tort law, contract law,
statutory law, common law, wrongful discharge, constructive discharge, fraud, defamation, emotional
distress, pain and suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys’ fees, and reinstatement or re-employment.
If any court rules that Executive’s waiver of the right to file any administrative or judicial
charges or complaints is ineffective, Executive agrees not to seek or accept any money damages or
any other relief upon the filing of any such administrative or judicial charges or complaints.

     Executive acknowledges that he/she has read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims which the creditor
does

1

 

not know or suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with the debtor.”
Executive hereby expressly waives and relinquishes all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to his/her release of any unknown Claims
Executive may have against the Company.

     Notwithstanding the foregoing, nothing in this Release shall constitute a release by Executive
of any claims or damages based on any right Executive may have to enforce the Company’s executory
obligations under the Agreement, any right Executive may have to vested or earned compensation and
benefits, or Executive’s eligibility for indemnification under applicable law, Company governance
documents, Executive’s indemnification agreement with the Company or under any applicable insurance
policy with respect to Executive’s liability as an employee or officer of the Company.

     If Executive is 40 years of age or older at the time of the termination, Executive
acknowledges that he/she is knowingly and voluntarily waiving and releasing any rights he/she may
have under ADEA. Executive also acknowledges that the consideration given under the Agreement for
the Release is in addition to anything of value to which he/she was already entitled. Executive
further acknowledges that he/she has been advised by this writing, as required by the ADEA, that:
(A) his/her waiver and release do not apply to any rights or claims that may arise on or after the
date he/she executes this Release; (B) Executive has the right to consult with an attorney prior to
executing this Release; (C) Executive has 21 days to consider this Release (although he/she may
choose to voluntarily execute this Release earlier); (D) Executive has 7 days following the
execution of this Release to revoke the Release; and (E) this Release shall not be effective until
the date upon which the revocation period has expired, which shall be the 8th day after this
Release is executed by Executive, without Executive’s having given notice of revocation.

     Executive further acknowledges that Executive has carefully read this Release, and knows and
understands its contents and its binding legal effect. Executive acknowledges that by signing this
Release, Executive does so of Executive’s own free will, and that it is Executive’s intention that
Executive be legally bound by its terms.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	James L’Italien, Ph.D.	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

2

 

Exhibit B

RELEASE

(Group Termination)

     Certain capitalized terms used in this Release are defined in the Employment Agreement by and
between Somaxon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and James
L’Italien, Ph.D. (“Executive”) dated as of the 28th day of March, 2007 (the “Agreement”) which
Executive has previously executed and of which this Release is a part.

     Pursuant to the Agreement, and in consideration of and as a condition precedent to the
payments and benefits provided under Paragraphs 7(d)(iii) and 7(e)(ii) of the Agreement, Executive
hereby furnishes the Company with this Release.

     Executive hereby confirms his/her obligations under the Company’s proprietary information and
inventions agreement.

     On Executive’s own behalf and on behalf of Executive’s heirs, estate and beneficiaries,
Executive hereby waives, releases, acquits and forever discharges the Company, and each of its
Subsidiaries and affiliates, and each of their respective past or present officers, directors,
agents, servants, employees, shareholders, predecessors, successors and assigns, and all persons
acting by, through, under, or in concert with them, or any of them, of and from any and all suits,
debts, liens, contracts, agreements, promises, claims, liabilities, demands, causes of action,
costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in
law, equity, or otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (“Claims”), from the beginning of time to the date hereof, including
without limitation, Claims that arose as a consequence of Executive’s employment with the Company,
or arising out of the termination of such employment relationship, or arising out of any act
committed or omitted during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not limited to, Claims
which were, could have been, or could be the subject of an administrative or judicial proceeding
filed by Executive or on Executive’s behalf under federal, state or local law, whether by statute,
regulation, in contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for personal injury;
(3) Claims or demands related to salary, bonuses, commissions, stock, stock options, or any other
ownership interest in the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, front pay, back pay or any other form of compensation; (4) Claims for breach of contract; (5)
Claims for any form of retaliation, harassment, or discrimination; (6) Claims pursuant to any
federal, state or local law or cause of action including, but not limited to, the federal Civil
Rights Act of 1964, as amended, the federal Age Discrimination in Employment Act of 1967, as
amended (“ADEA”), the federal Employee Retirement Income Security Act of 1974, as amended, the
federal Americans with Disabilities Act of 1990, the California Fair Employment and Housing Act, as
amended, and the California Labor Code; and (7) all other Claims based on tort law, contract law,
statutory law, common law, wrongful discharge, constructive discharge, fraud, defamation, emotional
distress, pain and suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys’ fees, and reinstatement or re-employment.
If any court rules that Executive’s waiver of the right to file any administrative or judicial
charges or complaints is ineffective, Executive agrees not to seek or accept any money damages or
any other relief upon the filing of any such administrative or judicial charges or complaints.

     Executive acknowledges that he/she has read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims which the creditor
does

1

 

not know or suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with the debtor.”
Executive hereby expressly waives and relinquishes all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to his/her release of any unknown Claims
Executive may have against the Company.

     Notwithstanding the foregoing, nothing in this Release shall constitute a release by Executive
of any claims or damages based on any right Executive may have to enforce the Company’s executory
obligations under the Agreement, any right Executive may have to vested or earned compensation and
benefits, or Executive’s eligibility for indemnification under applicable law, Company governance
documents, Executive’s indemnification agreement with the Company or under any applicable insurance
policy with respect to Executive’s liability as an employee or officer of the Company.

     If Executive is 40 years of age or older at the time of the termination, Executive
acknowledges that he/she is knowingly and voluntarily waiving and releasing any rights he/she may
have under ADEA. Executive also acknowledges that the consideration given under the Agreement for
the Release is in addition to anything of value to which he/she was already entitled. Executive
further acknowledges that he/she has been advised by this writing, as required by the ADEA, that:
(A) his/her waiver and release do not apply to any rights or claims that may arise on or after the
date he/she executes this Release; (B) Executive has the right to consult with an attorney prior to
executing this Release; (C) Executive has 45 days to consider this Release (although he/she may
choose to voluntarily execute this Release earlier); (D) Executive has 7 days following the
execution of this Release to revoke the Release; (E) this Release shall not be effective until the
date upon which the revocation period has expired, which shall be the 8th day after this Release is
executed by Executive, without Executive’s having given notice of revocation; and (F) Executive has
received with this Release a detailed list of job titles and ages of all employees who were
terminated in this group termination and the ages of all employees of the Company in the same job
classification or organizational unit who were not terminated.

     Executive further acknowledges that Executive has carefully read this Release, and knows and
understands its contents and its binding legal effect. Executive acknowledges that by signing this
Release, Executive does so of Executive’s own free will, and that it is Executive’s intention that
Executive be legally bound by its terms.

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	James L’Italien, Ph.D.	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

2

 

Exhibit C

Indemnification agreement

[Attached]exv10w1

 

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is being entered into on April
2, 2007, between Regency Energy Partners LP, a Delaware limited partnership (the
“Registrant”), and each member of Bear Cub (as defined below) (each a “Holder,” and
collectively, the “Holders”).

RECITALS

     WHEREAS, this Agreement is made in connection with the issuance of Common Units (as defined
below) of the Registrant to the Holders pursuant to that certain Stock Purchase Agreement, dated as
of April 2, 2007 (the “Stock Purchase Agreement”), by and among the Registrant, the
Holders, Pueblo Holdings, Inc., a Delaware corporation and wholly owned subsidiary of the
Registrant, Bear Cub Investments, LLC, a Colorado limited liability company (“Bear Cub”),
and Robert J. Clark, as Sellers’ Representative;

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

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

     NOW, THEREFORE, in consideration of the premises and the representations, warranties and
agreements contained herein, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

     1.1 Definitions.

     “Aggregate Registrable Securities Value” means the product of (i) the aggregate number
of Registrable Securities multiplied by (ii) $26.61.

     “Agreement” shall have the meaning provided in the preamble to this Agreement.

     “Advice” shall have the meaning provided by Section 2.3.

     “Affiliate” means, with respect to any Person, any other Person who, directly or
indirectly, controls, is controlled by or is under common control with the Person. For purposes of
this definition, “control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.

     “Bear Cub” shall have the meaning provided in the Recitals.

     “Business Day” shall mean any day, other than Saturday and Sunday, on which
federally-insured commercial banks in Dallas, Texas are generally open for business and capable of
sending and receiving wire transfers.

1

 

     “Closing Date” shall have the meaning give such term in Section 2.1.5(b).

     “Common Units” means units representing limited partner interests of the Registrant
designated as “Common Units” and having the rights, obligations and such other terms as set forth
in the Partnership Agreement.

     “Controlling Holders” means (a) Thomas J. Edelman and Robert J. Clark, acting
unanimously, as long as each holds any Registrable Securities (or securities convertible into
Registrable Securities), (b) Thomas J. Edelman, if he holds Registrable Securities (or securities
convertible into Registrable Securities) and Robert J. Clark does not hold any Registrable
Securities, (c) Robert J. Clark, if he holds Registrable Securities (or securities convertible into
Registrable Securities) but Thomas J. Edelman does not hold any Registrable Securities, or (d) if
neither Thomas J. Edelman nor Robert J. Clark hold any Registrable Securities (or securities
convertible into Registrable Securities), the Holders holding a majority of the outstanding
Registrable Securities (or securities convertible into Registrable Securities).

     “Damages” shall have the meaning provided in Section 2.5.1.

     “Equity Interest” means the equity ownership rights in a business entity, whether a
corporation, company, joint stock company, limited liability company, general or limited
partnership, joint venture, bank, association, trust, trust company, land trust, business trust,
sole proprietorship or other business entity or organization, and whether in the form of capital
stock, ownership unit, limited liability company interest, limited or general partnership interest
or any other form of ownership. For the avoidance of doubt, Equity Interests shall include
Partnership Interests.

     “Equity Interest Equivalents” means all rights, warrants, options, convertible
securities or indebtedness, exchangeable securities or other instruments, or other rights that are
outstanding and exercisable for or convertible or exchangeable into, directly or indirectly, any
Equity Interest at the time of issuance or upon the passage of time or occurrence of some future
event.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated by the SEC thereunder.

     “Governing Body” shall mean the board of directors of Regency GP, LLC, a Delaware
limited liability company.

     “Governmental Authority” means any federal, state, local or foreign government, or
other governmental, regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial or arbitral body.

     “Holder” and “Holders” shall have the meaning provided in the preamble to this
Agreement.

     “Holder Affiliates” shall have the meaning provided in Section 2.5.1.

     “Inspectors” shall have the meaning provided in Section 2.2(f).

2

 

     “Law” means any federal, state, local or foreign statute, law, ordinance, regulation,
rule, order, code, governmental restriction, decree, injunction or other requirement of law of any
Governmental Authority or any judicial or administrative interpretation thereof.

     “Liquidated Damages” shall have the meaning provided in Section 2.1.2.

     “Partnership Agreement” means the Amended and Restated Limited Partnership Agreement
of Registrant, dated as of February 3, 2006, as amended by Amendment No. 1 dated August 15, 2006
and Amendment No. 2 dated September 21, 2006, as may be amended.

     “Partnership Interest” shall have the meaning given such term in the Partnership
Agreement, together with all Equity Interests and Equity Interest Equivalents representing an
interest in the Registrant issued or distributed with respect to any Partnership Interest, into
which any Partnership Interest is converted or reclassified or for which any Partnership Interest
is exchanged.

     “Person” or “person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.

     “Records” shall have the meaning provided in Section 2.2(f).

     “Registrable Securities” means Common Units held by a Holder that have been (a)
distributed to the Holder in compliance with the Partnership Agreement and (b) that were originally
issued in connection with the transactions contemplated by the Stock Purchase Agreement;
provided, however, that Registrable Securities shall not include any Common Units
(i) the sale of which has been registered pursuant to the Securities Act and that have been sold
pursuant to such registration, (ii) that have been sold on any U.S. national securities exchange or
quotation system on which the Common Units are then listed or traded, pursuant to Rule 144 or
otherwise, (iii) that may then be sold pursuant to Rule 144 if the Holder thereof holds in the
aggregate less than 1% of the outstanding Common Units or (iv) that have otherwise been sold,
transferred, or disposed of by a Holder.

     “Registrant” shall have the meaning provided in the preamble to this Agreement.

     “Registrant’s SEC Documents” means the Prospectus dated January 30, 2006, comprising a
part of the Registrant’s Registration Statement on Form S-1 (Registration No. 333-128332), and all
reports filed by the Registrant under Section 13(a) of the Exchange Act since December 31, 2005 and
all other reports filed by the Registrant with the SEC.

     “Registration Expenses” shall have the meaning provided in Section 2.4.

     “Registration Statement” shall have the meaning provided in Section 2.1.1.

     “Repurchase Notice” shall have the meaning provided in Section 2.1.5(a).

     “Repurchase Price” shall mean the greater of (i) the Aggregate Registrable Securities
Value, and (ii) the product of (A) the aggregate number of Registrable Securities multiplied by (B)
the average of the closing prices of the Common Units on the Nasdaq Global Select Market

3

 

or such other national securities exchange on which such Common Units are then listed for the
ten trading days prior to delivery of written notice by the Partnership to the Controlling Holders
exercising the Partnership’s Repurchase Right.

     “Repurchase Right” shall have the meaning provided in Section 2.1.5.

     “Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended, and the General Rules
and Regulations promulgated by the SEC thereunder.

     “Stock Purchase Agreement” has the meaning provided in the Recitals.

     “Suspension Notice” shall have the meaning provided in Section 2.3.

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

     1.2 Rules of Construction. Unless the context otherwise requires:

          (1) a term has the meaning assigned to it;

          (2) “or” is not exclusive;

          (3) words in the singular include the plural, and words in the
plural include the singular;

          (4) “including” means “including without limitation;”

          (5) provisions apply to successive events and transactions;

          (6) “herein,” “hereof” and other words of similar import refer
to this Registration Rights Agreement as a whole and not to any particular
Article, Section or other subdivision.

ARTICLE 2

REGISTRATION RIGHTS

     2.1 Registration of Registrable Securities.

          2.1.1 Registration Statement. The Registrant shall use its commercially reasonable
efforts to prepare and file a registration statement on Form S-3 filed pursuant to Rule 415
promulgated under the Securities Act, or an amendment to a previously filed registration statement
on Form S-3, to register for resale by the Holders all of the Registrable Securities (the
“Registration Statement”) as promptly as practicable following the date hereof and shall
use its commercially reasonable efforts to cause the Registration Statement to become effective as
soon as practicable thereafter and to maintain the effectiveness of such registration statement

4

 

continuously for two years or such shorter period of time that shall terminate the day after
the date on which all of the Registrable Securities that are covered by the Registration Statement
have been sold pursuant to the registration statement or the first day on which there shall cease
to be any Registrable Securities. The Registrant shall not be obligated to include in the
Registration Statement any Registrable Securities held by a Holder, and no Liquidated Damages shall
accrue with respect to any Registrable Securities held by a Holder, until at least five Business
Days after such Holder shall have delivered to the Registrant in writing such information and
affidavits as the Registrant reasonably requests for use in connection with the Registration
Statement.

          2.1.2 Failure to File. If the Registerable Securities are not included in a
Registration Statement pursuant to Section 2.1.1 filed with the SEC for any reason on or
prior to April 30, 2007, then, beginning on May 1, 2007, and on the first day of each calendar
month thereafter occurring until such date that the Registrable Securities are included in a
Registration Statement pursuant to Section 2.1.1 with the SEC by the Partnership, each
Holder shall be entitled to a payment (pro-rata based on the number of Registrable Securities held
by such Holder as a percentage of all Registrable Securities), as liquidated damages and not as a
penalty, of an amount equal to the product of 1.50% multiplied by the Aggregate Registrable
Securities Value (the “Liquidated Damages”).

          2.1.3 Failure to Go Effective. If the Registration Statement required by Section
2.1.1 is not declared effective by the SEC for any reason on or prior to July 31, 2007, then,
beginning on August 1, 2007, and on the first day of each calendar month thereafter occurring until
such date that the Registration Statement is declared effective by the SEC, each Holder shall be
entitled to Liquidated Damages (calculated in the same manner as provided in Section
2.1.2); provided that no Liquidated Damages shall be due or payable under this Section
2.1.3 for any period with respect to which Liquidated Damages are payable pursuant to
Section 2.1.2.

          2.1.4 Payment of Liquidated Damages. The Liquidated Damages shall be paid to each
Holder in cash within 10 Business Days following the first day of the month in which Holders become
entitled to such Liquidated Damages and shall constitute the Holders’ sole and exclusive remedy for
any failure by the Partnership to have complied with Section 2.1.1.

          2.1.5 Repurchase Right.

          (a) Notwithstanding anything contained in this Agreement to the contrary, in lieu of
paying Liquidated Damages pursuant to Section 2.1.2 or Section 2.1.3, the
Registrant shall have the option to purchase all, but not less than all, of the Registrable
Securities from the Holders for an aggregate consideration equal to the Repurchase Price at
any time on or after May 1, 2007, by delivering written notice (the “Repurchase
Notice”) to the Controlling Holders of such election (the “Repurchase Right”);
provided, however, that (i) if the Registrant exercises the Repurchase
Right, the Registrant shall be obligated to pay any Liquidated Damages accrued pursuant to
Section 2.1.2 or Section 2.1.3 on or before the fifth Business Day prior to
the date such Repurchase Notice is delivered to the Controlling Holders and the Registrant
shall not be obligated to pay any Liquidated Damages accrued after the fifth Business Day
prior to the date the Repurchase Notice is delivered to the Controlling Holders and (ii) the
Registrant shall not be obligated to repurchase any Registrable Securities that are not
tendered to the Registrant in accordance with Section 2.1.5(b).

5

 

          (b) The repurchase of the Registrable Securities pursuant to Section 2.1.5(a)
shall be effected within 10 Business Days after the date the Repurchase Notice is delivered
to the Controlling Holders (such date, the “Closing Date”), and each Holder shall be
entitled to receive such Holder’s pro-rata portion of the Repurchase Price upon delivery to
the Registrant on the Closing Date, or at any time after the Closing Date (but before such
Registrable Securities are included in a Registration Statement declared effective by the
SEC after the Closing Date), of (i) the certificate or certificates representing the Common
Units to be repurchased, duly endorsed for transfer to the Registrant or accompanied by duly
executed stock powers transferring such Registrable Securities to the Registrant and (ii) a
written representation in form and substance reasonably satisfactory to the Registrant that
such Holder has good and valid title to such Common Units free and clear of all liens and
encumbrances and, in the case of a Holder other than an individual, is authorized to
transfer such Common Units to the Registrant.

          (c) From and after the delivery to the Controlling Holders of a Repurchase Notice, the
Registrant shall have no further obligations under this Agreement other than to purchase the
Registrable Securities pursuant to this Section 2.1.5 and, upon the purchase by the
Registrant of all Registrable Securities from a Holder pursuant to this Section
2.1.5, the Registrant shall have no further liability to such Holder pursuant to this
Agreement, whether as a result of the failure of the Registrant to comply with Section
2.1.1 or effect the registration of the resale of the Registrable Securities pursuant
thereto or otherwise.

     2.2 Registration Procedures. The Registrant will use its commercially reasonable
efforts to effect the registration of the sale of the Registrable Securities in accordance with the
intended method of distribution thereof as set forth on Exhibit A attached hereto, and
pursuant thereto the Registrant will as expeditiously as possible:

          (a) prepare and file with the SEC such amendments, post-effective amendments, and
supplements to the Registration Statement and the prospectus used in connection therewith as
may be necessary to keep the Registration Statement effective for a period of not less than
two years (or until there are no longer any Registrable Securities) and to comply with the
provisions of the Securities Act with respect to the disposition of all securities covered
by the Registration Statement during such period in accordance with the intended methods of
distribution by the sellers thereof set forth in the Registration Statement;

          (b) furnish to each seller of Registrable Securities being registered such number of
copies of the Registration Statement, each amendment and supplement thereto, the prospectus
included in the Registration Statement (including each preliminary prospectus), any
documents incorporated by reference therein and such other documents as such seller may
reasonably request in order to facilitate the distribution of the Registrable Securities
owned by such seller (it being understood that, subject to Section 2.3 and the
requirements of the Securities Act and applicable state securities laws, the Registrant
consents to the use of the prospectus and any amendment or supplement thereto by each seller
in connection with the offering and sale of the Registrable Securities covered by the
Registration Statement);

6

 

          (c) promptly notify the Holders and (if requested by any such Holders) confirm such
notice in writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of the issuance of any
state securities or other regulatory authority of any order suspending the qualification or
exemption from qualification of any of the Registrable Securities under the state securities
or “blue sky” laws or the initiation of any proceedings for that purpose, and (iii) of the
happening of any event that makes any statement made in the Registration Statement or
related prospectus untrue in any material respect or that requires the making of any changes
in the Registration Statement, prospectus or documents so that they will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, as promptly as
practicable thereafter, prepare and file with the SEC and furnish a supplement or amendment
to such prospectus so that, as thereafter deliverable to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue statement of a material fact or omit
a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;

          (d) as promptly as practicable after the filing with the SEC of any document that is
incorporated by reference into the Registration Statement (in the form in which it was
incorporated), make a copy of each such document available to the Holders;

          (e) cooperate with the Holders to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless required under applicable
law) representing securities sold under the Registration Statement, and cause such
securities to be prepared in such denominations and registered in such names as the Holders
may request and keep available and make available to the Registrant’s transfer agent prior
to the effectiveness of the Registration Statement a supply of such certificates;

          (f) promptly make available for inspection by the Holders and any attorney, accountant
or other agent or representative retained by any such seller (collectively, the
“Inspectors”) all financial and other records, pertinent corporate documents and
properties of the Registrant (collectively, the “Records”), as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and cause the
Registrant’s officers, directors and employees to supply all information reasonably
requested by any such Inspector in connection with the Registration Statement;
provided, that unless the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the Registration Statement or the release of such
Records is ordered pursuant to a subpoena or other order of a court of competent
jurisdiction, the Registrant shall not be required to provide any information under this
subparagraph (f) if (i) the Registrant believes, after consultation with counsel for the
Registrant, that to do so would cause the Registrant to forfeit an attorney-client privilege
that was applicable to such information or (ii) either (A) the Registrant has requested and
been granted from the SEC confidential treatment of such information contained in any filing
with the SEC or documents provided supplementally or otherwise or (B) the Registrant
reasonably determines in good faith that such Records are confidential and so notifies the
Inspectors in writing, unless in the case of (i) or (ii), the Holders requesting

7

 

such information enter into a confidentiality agreement in customary form and subject
to customary exceptions; and provided, further that each Holder agrees that
it will, upon learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Registrant and allow the Registrant, at its expense, to
undertake appropriate action and to prevent disclosure of the Records deemed confidential;

          (g) furnish to the Holders a signed counterpart of (i) an opinion or opinions of
counsel to the Registrant, and (ii) a comfort letter or comfort letters from the
Registrant’s independent public accountants, each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters, as the case may be,
as the sellers reasonably request;

          (h) use all its commercially reasonable efforts to cause the Registrable Securities
included in any Registration Statement to be listed on the Nasdaq Global Select Market and
on each other securities exchange, if any, on which similar securities issued by the
Registrant are then listed;

          (i) provide a CUSIP number for the Registrable Securities included in the Registration
Statement not later than the effective date of the Registration Statement;

          (j) cooperate with the Holders and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers, Inc.
(“NASD”);

          (k) during the period when the prospectus is required to be delivered under the
Securities Act, timely file all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;

          (l) notify the Holders promptly of any request by the SEC for the amending or
supplementing of the Registration Statement or prospectus or for additional information, and
provide the Holders with copies of all correspondence with or from the SEC, the NASD or any
Governmental Authority in connection with the proposed registration;

          (m) prepare and file with the SEC promptly any amendments or supplements to the
Registration Statement or prospectus that, in the opinion of counsel for the Registrant, are
required in connection with the distribution of the Registrable Securities; and

          (n) advise the Holders, promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the SEC suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding for such purpose
and promptly use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such stop order should
be issued.

     2.3 Suspension of Dispositions. Each Holder agrees by acquisition of any Registrable
Securities that, upon receipt of any notice (a “Suspension Notice”) from the Registrant of
the happening of any event of the kind described in Section 2.2(c)(ii) or Section
2.2(c)(iii), each

8

 

Holder will forthwith discontinue disposition of Registrable Securities of the Registrant to
which the Suspension Notice relates until its receipt of the copies of the supplemented or amended
prospectus, or until it is advised in writing (the “Advice”) by the Registrant that the use
of the prospectus may be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the prospectus, and, if so directed by the Registrant, such
Holder will deliver to the Registrant all copies, other than permanent file copies, then in such
Holder’s possession of the prospectus covering such Registrable Securities current at the time of
receipt of such Suspension Notice. If the Registrant shall give any Suspension Notice, the time
period regarding the effectiveness of the Registration Statement set forth in Section
2.2(a) hereof shall be extended by the number of days during the period from and including the
date of the giving of the Suspension Notice to and including the date when such Holder shall have
received the copies of the supplemented or amended prospectus or the Advice. The Registrant shall
use its commercially reasonable efforts and take such actions as are reasonably necessary to render
the Advice as promptly as practicable; provided that if the Governing Body determines that the
action required to render the Advice would be materially detrimental to the Registrant and its
partners because such action would (x) materially interfere with a significant acquisition,
disposition, reorganization or other similar transaction involving the Registrant, (y) require
premature disclosure of material information that the Registrant has a bona fide business purpose
for preserving as confidential or (z) render the Registrant unable to comply with requirements
under applicable securities laws, the Registrant may delay the taking of such action for such times
as the Registrant reasonably may determine is necessary and advisable (provided the Registration
may not take any such delays pursuant hereto for more than 90 days in any 360-day period).

     2.4 Registration Expenses. All expenses incident to the Registrant’s performance of
or compliance with the provisions of this Agreement, including all registration and filing fees,
all fees and expenses associated with filings required to be made with the NASD as may be required
by the rules and regulations of the NASD, fees and expenses of compliance with securities or “blue
sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky”
qualifications of the Registrable Securities), rating agency fees, printing expenses (including
expenses of printing certificates for the Registrable Securities in a form eligible for deposit
with Depository Trust Company and of printing prospectuses if the printing of prospectuses is
requested by a holder of Registrable Securities), messenger and delivery expenses, the Registrant’s
internal expenses (including all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with any listing of the
Registrable Securities, fees and expenses of counsel for the Registrant and its independent
certified public accountants, securities acts liability insurance (if the Registrant elects to
obtain such insurance), the fees and expenses of any special experts retained by the Registrant in
connection with such registration, and the fees and expenses of other Persons retained by the
Registrant and reasonable fees and expenses of one legal counsel for the Holders (which shall be
selected by the Controlling Holders, subject to approval by the Registrant, such approval not to be
unreasonably withheld, conditioned or delayed) (all such expenses being herein called
“Registration Expenses”), will, subject to any other expense provision of this Agreement,
be borne by the Registrant whether or not the Registration Statement becomes effective;
provided that in no event shall Registration Expenses include any underwriting discounts,
commissions, or fees attributable to the sale of the Registrable Securities or any counsel (except
as provided above), accountants, or other Persons retained or employed by any Holder.

9

 

     2.5 Indemnification.

          2.5.1 The Registrant agrees to indemnify and reimburse, to the fullest extent permitted by
law, each Holder of Registrable Securities and each of its employees, advisors, agents,
representatives, partners, officers, shareholders, members and directors and any agent or
investment advisor thereof (collectively, the “Holder Affiliates”) against any and all
losses, claims, damages, liabilities, and expenses, joint or several (including attorneys’ fees and
disbursements except as limited by Section 2.5.3 hereof) and any investigation, legal or
other expenses reasonably incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted (collectively, “Damages”) to which such
Person may become subject under the Securities Act, the Exchange Act or other federal or state
securities laws or regulation, at common law or otherwise, insofar as such Damages are based upon,
arise out of or result from (a) any untrue or alleged untrue statement of a material fact contained
in the Registration Statement, prospectus, or preliminary prospectus relating to the offer and sale
of Registrable Securities of the Registrant or any amendment thereof or supplement thereto, or any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (b) any violation or alleged violation by the Registrant
of the Securities Act, the Exchange Act or any state securities or blue sky laws in connection with
the Registration Statement, prospectus or preliminary prospectus or any amendment or supplement
thereto, except insofar as the same are (A) made in reliance upon and in conformity with
information furnished in writing to the Registrant by or on behalf of such Holder or any Holder
Affiliate specifically for inclusion in the Registration Statement, or (B) made in any prospectus
if such untrue statement or omission was corrected in an amendment or supplement to such prospectus
delivered to the Holder prior to the sale of Registrable Securities and the Holder failed to
deliver such amendment or supplement prior to or concurrently with the sale of Registrable
Securities to the party asserting the claim underlying such Damages. The reimbursements required
by this Section 2.5.1 will be made promptly by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.

          2.5.2 In connection with the Registration Statement each Holder will furnish to the Registrant
in writing such information and affidavits as the Registrant reasonably requests for use in
connection with the Registration Statement or prospectus and, to the fullest extent permitted by
law, each Holder will indemnify the Registrant and its directors and officers and each Person who
controls the Registrant (within the meaning of the Securities Act or the Exchange Act) against any
and all Damages based upon, arising out of, related to or resulting from any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, prospectus, or
any preliminary prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and in conformity with
any information or affidavit so furnished in writing by such Holder or any of its Holder Affiliates
specifically for inclusion in the Registration Statement; provided, that the obligation to
indemnify will be several, not joint and several, among the Holders of Registrable Securities, and
the liability of each Holder of Registrable Securities will be in proportion to, and will be
limited to, the net amount received by such seller from the sale of Registrable Securities pursuant
to the Registration Statement; provided further, that such Holder shall not be
liable in any such case to the extent that, prior to the filing of the Registration

10

 

Statement or prospectus or amendment thereof or supplement thereto, such Holder has furnished
in writing to the Registrant information expressly for use in the Registration Statement or
prospectus or any amendment thereof or supplement thereto that corrected or made not misleading
information previously furnished to the Registrant. The Registrant and each Holder shall be
entitled to receive indemnities from selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, to the same extent as customarily
furnished by such Persons in similar circumstances.

          2.5.3 Any Person entitled to indemnification hereunder shall (a) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification
(provided, that the failure to give such notice shall not limit the rights of such Person
except to the extent that the indemnifying party is materially prejudiced thereby) and (b) permit
such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party; provided, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the expense of such
Person unless (i) the indemnifying party has agreed to pay such fees or expenses, (ii) the
indemnifying party shall have failed to assume the defense of such claim and to employ counsel
reasonably satisfactory to such Person, (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such indemnified party and the indemnifying party,
and such indemnified party shall have been advised by counsel in writing that there is a conflict
of interest on the part of counsel employed by the indemnifying party to represent such indemnified
party or (iv) the indemnified party’s counsel shall have advised the indemnified party that there
are defenses available to the indemnified party that are different from or in addition to those
available to the indemnifying party and that the indemnifying party is not able to assert on behalf
of or in the name of the indemnified party (in which case of either (iii) or (iv), if such
indemnified party notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action or proceeding on behalf of such indemnified party but shall
have the right to participate through its own counsel). If such defense is not assumed by the
indemnifying party as permitted hereunder, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). If such defense is assumed by the indemnifying party pursuant
to the provisions hereof, such indemnifying party shall not settle or otherwise compromise the
applicable claim unless (c) such settlement or compromise contains a full and unconditional release
of the indemnified party or (d) the indemnified party otherwise consents in writing. An
indemnifying party who is not entitled to assume, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless, in the reasonable
judgment of any indemnified party, a conflict of interest may exist between such indemnified party
and any other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and disbursements of such
additional counsel or counsels.

          2.5.4 Each party hereto agrees that, if for any reason the indemnification provisions
contemplated by Section 2.5.1 or Section 2.5.2 are unavailable to or insufficient
to hold harmless an indemnified party in respect of any Damages (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable

11

 

by such indemnified party as a result of such Damages (or actions in respect thereof) (a) in
such proportion as is appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the actions which resulted in the Damages or (b) if the
allocation provided by clause (a) above is not permitted by applicable law, in such proportion as
is appropriate to reflect the relative benefits of the indemnified party and indemnifying party
from the offering of the securities covered by the Registration Statement, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified 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 contribution
pursuant to this Section 2.5.4 were determined by pro rata allocation (even if the Holders
were treated as one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in this Section 2.5.4. The amount
paid or payable by an indemnified party as a result of the Damages referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party
in connection with investigating or, except as provided in Section 2.5.3, defending any
such action or claim. Notwithstanding the provisions of this Section 2.5.4, no Holder
shall be required to contribute an amount greater than the dollar amount by which the proceeds
received by such Holder with respect to the sale of any Registrable Securities exceeds the amount
of Damages that such Holder has otherwise been required to pay by reason of any and all untrue or
alleged untrue statements of material fact or omissions or alleged omissions of material fact made
in any Registration Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto related to such sale of Registrable Securities. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The Holder’s
obligations in this Section 2.5.4 to contribute shall be several in proportion to the
amount of Registrable Securities registered by it and not joint.

     If indemnification is available under this Section 2.5, the indemnifying parties shall
indemnify each indemnified party to the full extent provided in Section 2.5.1 and
Section 2.5.2 without regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration provided for in this Section 2.5.4.

     The indemnification and contribution provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the indemnified party or
any officer, director, or controlling Person of such indemnified party and will survive the
transfer of securities.

     2.6 Rule 144 and Rule 144A. At all times during which the Registrant is subject to
the periodic reporting requirements of the Exchange Act, the Registrant covenants that it will use
commercially reasonable efforts to file, on a timely basis, the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as any Holder may reasonably request (including
compliance with the current public information requirements of Rule 144(c) under the Securities
Act), all to the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation of the conditions

12

 

provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to
time or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of a
Holder, the Registrant will provide reasonable and customary assistance (other than in connection
with the registration of any such offering pursuant to a Registration Statement) to facilitate such
Holder’s sale of Registrable Securities in block trades or other similar transactions.
Notwithstanding the foregoing, nothing in this Section 2.6 shall be deemed to require such
Registrant to register any of its securities pursuant to the Exchange Act.

     2.7 Underwritten Offerings. From and after the date hereof, the Holders covenant that
they shall not effect dispositions of the Registrable Securities pursuant to the Registration
Statement only in accordance with the methods of distribution described on Exhibit A
attached hereto and shall not dispose of any of the Registrable Securities pursuant to an
Underwritten Offering under the Registration Statement.

ARTICLE 3

TERMINATION

     3.1 Termination. The provisions of this Agreement shall terminate on the earlier to
occur of (a) two years after the date of this Agreement, and (b) the first date on which no Holder
holds any Registrable Securities; provided, the provisions of Section 2.5 shall
survive any termination of this Agreement.

ARTICLE 4

MISCELLANEOUS

     4.1 Notices. Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery, by telex, by
Telecopier or registered or certified mail, postage prepaid, return receipt requested, addressed as
follows (or at such other address as may be substituted by notice given as herein provided):

If to the Controlling Holders or the Holders collectively:

Bear Cub Investments, LLC

216 16th Street, Suite 1000

Denver, Colorado 80202

Attn: Robert J. Clark

Facsimile: (303) 626-8259

with a copy to:

Beatty & Wozniak, P.C.

216 16th Street

Columbine Place Building, Suite 1100

Denver, Colorado 80202

Attn: Michael J. Wozniak

Facsimile: (303) 407-4494

     If to a Holder individually, to the address or facsimile specified on such Holder’s signature
page hereto.

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If to Registrant:

Regency Energy Partners LP

1700 Pacific Avenue, Suite 2900

Dallas, TX 75201

Attn: Chief Legal Officer

Facsimile: 214-750-1749

     Any notice or communication hereunder shall be deemed to have been given or made as of the
date so delivered if personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and five calendar days after mailing if sent by registered or
certified mail (except that a notice of change of address shall not be deemed to have been given
until actually received by the addressee). Failure to mail a notice or communication to a Holder
or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.

     4.2 Governing Law; Venue; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS (EXCLUSIVE OF THE CHOICE OF LAW
PROVISIONS THEREOF) OF THE STATE OF TEXAS AS TO ALL MATTERS, INCLUDING MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES. Each party hereto hereby agrees that any action
arising out of or relating to this Agreement (including any action concerning the violation or
threatened violation of this Agreement) may be instituted in a federal or state court sitting in
Dallas County, Texas. Each party hereby waives any objection that it may now or hereafter have to
the laying of venue of any such action, and irrevocably submits to the non-exclusive jurisdiction
of any such court in any such action and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any court that any such lawsuit, claim or other proceeding brought
in any such court has been brought in any inconvenient forum. In addition, each party consents to
process being served in any such lawsuit, action or proceeding by mailing, certified mail, return
receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and
agrees that such services shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 4.2 shall affect or limit any right to serve process in
any other manner permitted by law.

     4.3 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY
REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

14

 

     4.4 Successors and Assigns. The provisions of this Agreement shall not be for the
benefit of, applicable to or enforceable by any transferee of Registrable Securities, and such
transferee shall not be deemed to be a Holder for purposes of this Agreement. Subject to the
preceding sentence, this Agreement shall be binding upon the Registrant, each Holder, and their
respective successors and permitted assigns.

     4.5 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any applicable law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party to this Agreement. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Governmental Authority making
such determination is authorized and instructed to modify this Agreement so as to effect the
original intent of the parties as closely as possible in order that the transactions contemplated
hereby are consummated as originally contemplated to the fullest extent possible.

     4.6 Specific Performance. The Registrant recognizes that, if the Registrant refuses
to perform under the provisions of this Agreement, monetary damages alone will not be adequate to
compensate the Holders for their injury. The Holders shall therefore be entitled, in addition to
any other remedies that may be available, to obtain specific performance of the terms of this
Agreement and to seek appropriate remedies in furtherance thereof, including injunctions, without
the necessity of posing bond or proving actual damages.

     4.7 No Waivers; Amendments.

          4.7.1 No failure or delay on the part of the Registrant or any Holder in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies provided for herein are cumulative and
are not exclusive of any remedies that may be available to the Registrant or any Holder at law or
in equity or otherwise.

          4.7.2 Any provision of this Agreement may be amended or waived if, but only if, such amendment
or waiver is with the written consent of the Registrant and the Controlling Holders.

     4.8 No Affiliate Liability. The partners, members, officers, directors, stockholders
and Affiliates of the Registrant or their respective Affiliates shall not have any personal
liability or obligation to any Person arising under this Agreement in such capacities.

     4.9 Recapitalization, Exchanges Etc., Affecting Securities. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the Registrable
Securities and to any and all securities of the Registrant or any successor or assign of the
Registrant that may be issued in respect of an conversion of, in exchange for, or in substitution
for Registrable Securities (whether by merger, consolidation, sale of assets or otherwise,
including securities issued by a parent company in connection with a triangular merger) and shall
be appropriately adjusted for any stock dividends, splits, reverse splits, combinations,
reclassifications and the like occurring after the date hereof.

15

 

     4.10 Further Assurances. Each party shall cooperate and shall take such further
action and shall execute and deliver such further documents as may be reasonably requested by any
other party in order to carry out the provisions and purposes of this Agreement.

     4.11 Entire Agreement. This Agreement (including all schedules and exhibits hereto)
contains the entire agreement among the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, with respect to such
matters.

     4.12 Counterparts; Facsimile Signatures. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original Agreement, and all of which shall
constitute one Agreement between each of the parties hereto, notwithstanding that all of the
parties are not signatories to the original or the same counterpart. Each party hereto hereby
acknowledges the effectiveness of, and agrees to accept, facsimile signatures of any other party
hereto for purposes of executing this Agreement.

[SIGNATURE PAGES FOLLOW]

16

 

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

	 	 	 	 	 	 	 	 	 
	Registrant:	 	REGENCY ENERGY PARTNERS LP	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	Regency GP LP, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Regency GP LLC, its General Partner
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ William E. Joor III
 

	 	 
	 

	 	 	 	 	 	William E. Joor III	 	 
	 

	 	 	 	 	 	Executive Vice President and	 	 
	 

	 	 	 	 	 	Chief Legal and Administrative	 	 
	 

	 	 	 	 	 	Officer	 	 

	 	 	 	 	 	 	 
	Holders:	 	Bruce A. Duval	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Robert J. Clark
	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	349 Jackson St.

Denver, Colorado 80206	 	 
	 
	 	 	 	 	 	 
	 

	 	Christine M. Eklund	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	858 Palmer Road

Bronxville, New York 10708	 	 

S-1 

 

	 	 	 	 	 	 	 
	 	 	Cindy K. Rucker	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 
	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	1177 Race St. #907

Denver, Colorado 80206	 	 
	 
	 	 	 	 	 	 
	 	 	Donald H. Anderson	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	2727 E. Cedar #6

Denver, Colorado 80209	 	 
	 
	 	 	 	 	 	 
	 	 	Ingrid O. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 
	 
	 	 	 	 	 	 
	 	 	Jon R. Whitney	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	4845 Langdale Way

Colorado Springs, Colorado 80906	 	 

S-2 

 

	 	 	 	 	 	 	 
	 	 	Michael J. Wozniak	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	216 16th Street, Suite 1100

Denver, Colorado 80202	 	 
	 
	 	 	 	 	 	 
	 	 	Michael R. Henderson	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	2103 S Van Buren

Enid, Oklahoma 73703	 	 
	 
	 	 	 	 	 	 
	 	 	Nicholas Aretakis	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	2324 E. Stratford Ct.

Highlands Ranch, Colorado 80126	 	 
	 
	 	 	 	 	 	 
	 	 	R&K Ventures, LLLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	455 Spring Ranch Dr.

Golden, Colorado 80401	 	 

S-3 

 

	 	 	 	 	 	 	 
	 	 	Robert J. Clark	 	 
	 
	 	 	 	 	 	 
	 

	 	By: /
	 	s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	455 Spring Ranch Dr.

Golden, Colorado 80401	 	 
	 
	 	 	 	 	 	 
	 	 	Stewart Hershenfield	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	308 Melrose Avenue

Toronto, Ontario M5M 1Z3	 	 
	 
	 	 	 	 	 	 
	 	 	The Albert I. & Eleanor W. Edelman &

Thomas J. Edelman Irrevocable Trust fbo

Cornelia S. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 

S-4 

 

	 	 	 	 	 	 	 
	 	 	The Albert I. & Eleanor W. Edelman &

Thomas J. Edelman Irrevocable Trust fbo

Gwen A. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 
	 
	 	 	 	 	 	 
	 	 	The Albert I. & Eleanor W. Edelman &

Thomas J. Edelman Irrevocable Trust fbo

Jennifer Edelman Lemler	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 
	 
	 	 	 	 	 	 
	 	 	The Thomas J. Edelman Irrevocable Trust fbo

Eleanor A. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 

S-5 

 

	 	 	 	 	 	 	 
	 	 	The Thomas J. Edelman Irrevocable Trust fbo

Elizabeth G. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Clark	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert J. Clark, Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 
	 
	 	 	 	 	 	 
	 	 	Thomas J. Edelman	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Edelman	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Thomas J. Edelman	 	 
	 
	 	 	 	 	 	 
	 	 	667 Madison Avenue, 4th Floor

New York, New York 10021	 	 

S-6 

 

Exhibit A

Plan of Distribution

     The Holders may use any one or more of the following methods when selling Common Units:

	 	•	 	on any national securities exchange or quotation service on which the securities
may be listed or quoted at the time of sale;
	 
	 	•	 	in the over-the-counter market;
	 
	 	•	 	in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
	 
	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
	 
	 	•	 	block trades in which the broker dealer will attempt to sell the units as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	through the settlement of short sales;
	 
	 	•	 	broker-dealers may agree with the selling unitholders to sell a specified number
of such units at a stipulated price per unit; and
	 
	 	•	 	a combination of any such methods of sale.

     The Holders may also sell units under Rule 144 under the Securities Act, if available, rather
than under the prospectus forming a part of the Registration Statement.

     The selling unitholders may not effect sales of Common Units pursuant to any underwritten
offering under the prospectus.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]