Exhibit 10.1

 

CONTRIBUTION AND TRANSFER AGREEMENT

 

dated as of October 22, 2014

 

by and among

 

ENLINK MIDSTREAM INC.

 

and

 

ENLINK MIDSTREAM PARTNERS, LP

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

2

 

Section 1.1

Definitions

2

 

Section 1.2

Construction

7

 

 

ARTICLE II CONVEYANCE AND CLOSING

8

 

Section 2.1

Conveyance

8

 

Section 2.2

Transactions Proceeds

8

 

Section 2.3

Closing

8

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF EMI

9

 

Section 3.1

Organization

9

 

Section 3.2

Authority and Approval

9

 

Section 3.3

No Conflict; Consents

10

 

Section 3.4

Capitalization; Title to Transferred Units

11

 

Section 3.5

Financial Information; Undisclosed Liabilities

11

 

Section 3.6

Compression and Stabilization Equipment

12

 

Section 3.7

Litigation; Laws and Regulations

12

 

Section 3.8

No Adverse Changes

13

 

Section 3.9

Taxes

13

 

Section 3.10

Environmental Matters

14

 

Section 3.11

Licenses; Permits

15

 

Section 3.12

Contracts

15

 

Section 3.13

Employee Matters

17

 

Section 3.14

Transactions with Affiliates

17

 

Section 3.15

Insurance

17

 

Section 3.16

Intellectual Property Rights

17

 

Section 3.17

Brokerage Arrangements

18

 

Section 3.18

Books and Records

18

 

Section 3.19

Sufficiency of Assets

18

 

Section 3.20

Investment Intent

18

 

Section 3.21

No Other Representations or Warranties; Disclosure Schedules

18

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

19

 

Section 4.1

Organization and Existence

19

 

Section 4.2

Authority and Approval

19

 

Section 4.3

No Conflict; Consents

19

 

Section 4.4

Delivery of Opinion

20

 

Section 4.5

Periodic Reports

20

 

Section 4.6

No Material Adverse Change

21

 

Section 4.7

Common Units

21

 

Section 4.8

Brokerage Arrangements

21

 

Section 4.9

Litigation

21

 

Section 4.10

Investment Intent

22

 

Section 4.11

No Other Representations or Warranties

22

 

i

--------------------------------------------------------------------------------

 

Table of Contents
(Continued)

 

ARTICLE V TAX MATTERS

22

 

Section 5.1

Liability for Taxes

22

 

Section 5.2

Tax Returns

23

 

Section 5.3

Transfer Taxes

24

 

Section 5.4

Allocation of Consideration

24

 

Section 5.5

Tax Treatment

24

 

Section 5.6

Conflict

25

 

 

ARTICLE VI INDEMNIFICATION

25

 

Section 6.1

Indemnification of the Partnership

25

 

Section 6.2

Indemnification of EMI

25

 

Section 6.3

Tax Indemnification

26

 

Section 6.4

Survival

26

 

Section 6.5

Demands

26

 

Section 6.6

Right to Contest and Defend

27

 

Section 6.7

Cooperation

28

 

Section 6.8

Right to Participate

28

 

Section 6.9

Payment of Damages

28

 

Section 6.10

Direct Claim

28

 

Section 6.11

Limitations on Indemnification

29

 

Section 6.12

Sole Remedy

29

 

 

ARTICLE VII MISCELLANEOUS

30

 

Section 7.1

Acknowledgements

30

 

Section 7.2

Cooperation; Further Assurances

30

 

Section 7.3

Expenses

30

 

Section 7.4

Notices

30

 

Section 7.5

Governing Law

31

 

Section 7.6

Public Statements

32

 

Section 7.7

Entire Agreement; Amendments and Waivers

32

 

Section 7.8

Action by the Partnership

32

 

Section 7.9

Conflicting Provisions

32

 

Section 7.10

Binding Effect and Assignment

33

 

Section 7.11

Severability

33

 

Section 7.12

Interpretation

33

 

Section 7.13

Headings and Disclosure Schedules

33

 

Section 7.14

Multiple Counterparts

33

 

ii

--------------------------------------------------------------------------------

 

DISCLOSURE SCHEDULES

 

 

 

 

Disclosure Schedule 3.3

-

 

Consents

Disclosure Schedule 3.5(b)

-

 

Liabilities

Disclosure Schedule 3.7

-

 

Litigation

Disclosure Schedule 3.8

-

 

Adverse Changes

Disclosure Schedule 3.10

-

 

Environmental Matters

Disclosure Schedule 3.12(b)

-

 

Contracts

Disclosure Schedule 3.13

-

 

Employee Matters

Disclosure Schedule 3.14

-

 

Transactions with Affiliates

 

EXHIBITS

 

 

 

Exhibit A

-

Form of E2 Appalachian Assignment Agreement

Exhibit B

-

Form of Energy Services Assignment Agreement

Exhibit C

-

Wire Transfer Instructions

 

APPENDICES

 

 

 

Appendix A

-

The Partnership and EMI Designated Personnel

 

i

--------------------------------------------------------------------------------

 

CONTRIBUTION AND TRANSFER AGREEMENT

 

This Contribution and Transfer Agreement (this “Agreement”) is made and
effective as of October 22, 2014, by and among EnLink Midstream Inc., a Delaware
corporation (“EMI”), and EnLink Midstream Partners, LP, a Delaware limited
partnership (the “Partnership”).  Capitalized terms used herein without
definition have the respective meanings set forth in Section 1.1.

 

RECITALS

 

WHEREAS, EMI owns (i) 100,000,000 Class A Units (as defined in the E2
Appalachian LLC Agreement) and 5,350,000 Class B Units (as defined in the E2
Appalachian LLC Agreement) (together, the “E2 Appalachian Units”), which
represent 100% of the issued and outstanding Class A Units and 50% of the issued
and outstanding Class B Units, respectively, in E2 Appalachian Compression, LLC,
a Delaware limited liability company (“E2 Appalachian”), and (ii) 9,370,000
Class A Units (as defined in the Energy Services LLC Agreement) (the “Energy
Services Units” and, together with the E2 Appalachian Units, the “Transferred
Units”), which represent 93.7% of the issued and outstanding Class A Units in E2
Energy Services, LLC, a Delaware limited liability company (“Energy Services”
and, together with E2 Appalachian, the “Companies”);

 

WHEREAS, EMI desires to contribute the E2 Appalachian Units to the Partnership
(which may, in turn, contribute such units to its designee, in which case the
Partnership may direct that the assignment be made directly to such designee)
and to sell the Energy Services Units to the Partnership (or its designee), in
each case, pursuant to the terms of this Agreement and the E2 Appalachian
Assignment Agreement or the Energy Services Assignment Agreement, as applicable;

 

WHEREAS, the Partnership (or its designee) desires to accept and acquire the
Transferred Units in accordance with the terms of this Agreement and the E2
Appalachian Assignment Agreement or the Energy Services Assignment Agreement, as
applicable; and

 

WHEREAS, the Conflicts Committee has previously (i) received an opinion of
Simmons & Company International, the financial advisor to the Conflicts
Committee (the “Financial Advisor”), that the amount to be paid by the
Partnership pursuant to the Transactions is fair, from a financial point of
view, to the Partnership and to the holders of Common Units of the Partnership
(other than EMI and its Affiliates) and (ii) found the Transactions to be fair
and reasonable to the Partnership and holders of its Common Units (other than
EMI and its Affiliates) and recommended that the board of directors (the “Board
of Directors”) of EnLink Midstream GP, LLC, the general partner of the
Partnership (the “General Partner”), approve the Transactions and, subsequently,
the Board of Directors has approved the Transactions.

 

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

 

1

--------------------------------------------------------------------------------

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                   Definitions.

 

The respective terms defined in this Section 1.1 shall, when used in this
Agreement, have the respective meanings specified herein, with each such
definition equally applicable to both singular and plural forms of the terms so
defined:

 

“Affiliate,” when used with respect to a Person, means any other Person that
directly or indirectly Controls, is Controlled by or is under common Control
with such first Person; provided, however, that (i) with respect to EMI, the
term “Affiliate” shall exclude the Partnership, the General Partner and the
Partnership’s subsidiaries, (ii) with respect to the Partnership, the term
“Affiliate” shall exclude EMI and EMI’s Controlling Affiliates (other than the
Partnership and its subsidiaries), and (iii) the Companies shall be deemed to be
“Affiliates” (x) prior to the Closing, of EMI and (y) on and after the Closing,
of the Partnership.  No Person shall be deemed an Affiliate of any Person solely
by reason of the exercise or existence of rights, interests or remedies under
this Agreement.

 

“Agreement” has the meaning ascribed to such term in the preamble.

 

“Applicable Law” means any applicable law or administrative rule or regulation
or any judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree of any Governmental Authority having valid jurisdiction.

 

“Assignment Agreements” means the E2 Appalachian Assignment Agreement and the
Energy Services Assignment Agreement.

 

“Balance Sheet” has the meaning ascribed to such term in Section 3.5(a).

 

“Basis Amount” has the meaning ascribed to such term in Section 2.2(a).

 

“Board of Directors” has the meaning ascribed to such term in the recitals.

 

“Ceiling Amount” has the meaning ascribed to such term in Section 6.11(a).

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act.

 

“Closing” has the meaning ascribed to such term in Section 2.3.

 

“Closing Date” has the meaning ascribed to such term in Section 2.3.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Units” has the meaning given to such term in the Partnership Agreement.

 

2

--------------------------------------------------------------------------------

 

“Companies” has the meaning ascribed to such term in the recitals.

 

“Company Assets” means all of the assets owned on the Closing Date by the
Companies.

 

“Company Material Adverse Effect” means a material adverse effect on or material
adverse change in (i) the assets, liabilities, financial condition or results of
operations of the Companies, taken as a whole, other than any effect or change
(a) that impacts the oil and gas midstream industry generally (including any
change in the prices of crude oil, condensate, natural gas or other hydrocarbon
products, industry margins or any regulatory changes or changes in Applicable
Law or GAAP), (b) in United States or global political or economic conditions or
financial markets in general, or (c) resulting from the announcement of the
transactions contemplated by this Agreement and the Assignment Agreements and
the taking of any actions contemplated by this Agreement or the Assignment
Agreements, provided, that in the case of clauses (a) and (b), the impact on the
Companies or either of them is not materially disproportionate to the impact on
similarly situated parties in the oil and gas midstream industry, or (ii) the
ability of EMI to perform its obligations under this Agreement or to consummate
the transactions contemplated by this Agreement.

 

“Compression and Stabilization Equipment” means the compression and
stabilization equipment located at each of the Companies’ stations, as of the
Closing Date, used to provide compression and stabilization services under
certain third party agreements.

 

“Conflicts Committee” means the conflicts committee of the Board of Directors.

 

“Control” and its derivatives mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

 

“Damages” means liabilities and obligations, including all losses, deficiencies,
costs, expenses, fines, interest, expenditures, claims, suits, proceedings,
judgments, damages, and reasonable attorneys’ fees and reasonable expenses of
investigating, defending and prosecuting litigation.

 

“Deductible Amount” has the meaning ascribed to such term in Section 6.11(a).

 

“Delaware LLC Act” means the Delaware Limited Liability Company Act, as amended.

 

“Direct Claim” has the meaning ascribed to such term in Section 6.10.

 

“Disclosure Schedules” has the meaning ascribed to such term in Article III.

 

“DRULPA” means the Delaware Revised Uniform Partnership Act.

 

“E2 Appalachian” has the meaning ascribed to such term in the recitals.

 

“E2 Appalachian Assignment Agreement” means that Assignment and Assumption
Agreement substantially in the form of Exhibit A attached hereto, to be executed
by EMI, the

 

3

--------------------------------------------------------------------------------

 

Partnership and a designee of the Partnership, pursuant to which the Partnership
will direct that EMI assign the E2 Appalachian Units to such designee.

 

“E2 Appalachian LLC Agreement” means that certain Second Amended and Restated
Limited Liability Company Agreement of E2 Appalachian, dated as of October 10,
2014.

 

“E2 Appalachian Units” has the meaning ascribed to such term in the recitals.

 

“EMI” has the meaning ascribed to such term in the preamble.

 

“EMI Fundamental Representations” has the meaning ascribed to such term in
Section 6.4.

 

“EMI Indemnified Parties” has the meaning ascribed to such term in Section 6.2.

 

“Energy Services” has the meaning ascribed to such term in the recitals.

 

“Energy Services Assignment Agreement” means that Assignment and Assumption
Agreement substantially in the form of Exhibit B attached hereto, to be executed
by EMI, the Partnership and, if applicable, a designee of the Partnership,
pursuant to which EMI will assign the Energy Services Units to the Partnership
or such designee.

 

“Energy Services LLC Agreement” means that certain Amended and Restated Limited
Liability Company Agreement of Energy Services, dated as of March 5, 2013.

 

“Energy Services Units” has the meaning ascribed to such term in the recitals.

 

“Enforceability Exceptions” has the meaning ascribed to such term in
Section 3.2(b).

 

“Environmental Laws” means, without limitation, the following laws, in effect as
of the Closing Date, as such law may be amended after the Closing Date: (i) the
Resource Conservation and Recovery Act; (ii) the Clean Air Act; (iii) CERCLA;
(iv) the Federal Water Pollution Control Act; (v) the Safe Drinking Water Act;
(vi) the Toxic Substances Control Act; (vii) the Emergency Planning and
Community Right-to Know Act; (viii) the National Environmental Policy Act;
(ix) the Pollution Prevention Act of 1990; (x) the Oil Pollution Act of 1990;
(xi) the Hazardous Materials Transportation Act; (xii) the Federal Insecticide,
Fungicide and Rodenticide Act; (xiii) all laws, statutes, rules, regulations,
orders, judgments, decrees promulgated or issued with respect to the foregoing
Environmental Laws by Governmental Authorities with jurisdiction in the
premises, and (xiv) any other federal, state or local statutes, laws, common
laws, ordinances, rules, regulations, orders, codes, decisions, injunctions or
decrees that regulate or otherwise pertain to the protection of the environment,
including, but not limited to, the management, control, discharge, emission,
exposure, treatment, containment, handling, removal, use, generation,
permitting, migration, storage, release, transportation, disposal, remediation,
manufacture, processing or distribution of Hazardous Materials that are or may
present a threat to human health or the environment.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

4

--------------------------------------------------------------------------------

 

“Financial Advisor” has the meaning ascribed to such term in the recitals.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“General Partner” has the meaning ascribed to such term in the recitals.

 

“Governmental Approval” means any consent, approval, license, permit, order, or
authorization of, or registration, declaration, or filing with, any Governmental
Authority.

 

“Governmental Authority” means any federal, state, municipal or other
government, governmental court, department, commission, board, bureau, agency or
instrumentality.

 

“Hazardous Materials” means any substance, whether solid, liquid or gaseous:
(i) which is listed, defined or regulated as a “hazardous material,” “hazardous
waste,” “solid waste,” “hazardous substance,” “toxic substance,” “pollutant” or
“contaminant,” or words of similar meaning or import found in any applicable
Environmental Law; or (ii) which is or contains asbestos, polychlorinated
biphenyls, radon, urea formaldehyde foam insulation, explosives, or radioactive
materials; or (iii) any petroleum, petroleum hydrocarbons, petroleum substances,
petroleum or petrochemical products, natural gas, crude oil and any components,
fractions, or derivatives thereof, any oil or gas exploration or production
waste, and any natural gas, synthetic gas and any mixtures thereof; or
(iv) radioactive material, waste and pollutants, radiation, radionuclides and
their progeny, or nuclear waste including used nuclear fuel; or (v) which causes
or poses a threat to cause contamination or nuisance on any properties, or any
adjacent property or a hazard to the environment or to the health or safety of
persons on or about any properties.

 

“Indebtedness for Borrowed Money” means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services or
any other similar obligation upon which interest charges are customarily paid
(excluding trade accounts payable incurred in the ordinary course of business),
(e) all Indebtedness for Borrowed Money of others secured by (or for which the
holder of such Indebtedness for Borrowed Money has an existing right, contingent
or otherwise, to be secured by) any encumbrance on property owned or acquired by
such Person, whether or not the Indebtedness for Borrowed Money secured thereby
has been assumed, (f) all assurances by such Person of Indebtedness for Borrowed
Money of others, (g) all capital lease obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances.

 

“Intellectual Property” means all intellectual or industrial property and rights
therein, however denominated, throughout the world, whether or not registered,
including all patent applications, patents, trademarks, service marks, trade
styles or dress, mask works, copyrights

 

5

--------------------------------------------------------------------------------

 

(including copyrights in computer programs, software, computer code,
documentation, drawings, specifications and data), works of authorship, moral
rights of authorship, rights in designs, trade secrets, technology, inventions,
invention disclosures, discoveries, improvements, know-how, proprietary rights,
formulae, processes, methods, technical and business information, and
confidential and proprietary information, and all other intellectual and
industrial property rights, whether or not subject to statutory registration or
protection and, with respect to each of the foregoing, all registrations and
applications for registration, renewals, extensions, continuations,
reexaminations, reissues, divisionals, improvements, modifications, derivative
works, goodwill, and common law rights, and causes of action relating to any of
the foregoing.

 

“Knowledge,” as used in this Agreement with respect to a party hereof, means the
actual knowledge of that party’s designated personnel, after reasonable
inquiry.  The designated personnel for EMI and the Partnership are set forth on
Appendix A.

 

“Lien” means any mortgage, deed of trust, lien, security interest, pledge,
conditional sales contract, charge or encumbrance.

 

“Material Contract” has the meaning ascribed to such term in Section 3.12(a).

 

“Minimum Claim Amount” has the meaning ascribed to such term in Section 6.11(a).

 

“Notice” has the meaning ascribed to such term in Section 7.4.

 

“Partnership” has the meaning ascribed to such term in the preamble.

 

“Partnership Agreement” means that certain Seventh Amended and Restated Limited
Partnership Agreement of the Partnership, dated as of July 7, 2014.

 

“Partnership Financial Statements” has the meaning ascribed to such term in
Section 4.5.

 

“Partnership Indemnified Parties” has the meaning ascribed to such term in
Section 6.1.

 

“Permits” has the meaning ascribed to such term in Section 3.11(a).

 

“Permitted Liens” means all: (i) mechanics’, materialmen’s, repairmen’s,
employees’ contractors’ operators’, carriers’, workmen’s or other like Liens or
charges arising by operation of law, in the ordinary course of business or
incident to the construction or improvement of any of the Company Assets, in
each case, for amounts not yet delinquent (including any amounts being withheld
as provided by law); (ii) Liens arising under original purchase price
conditional sales contracts and equipment leases with third parties entered into
in the ordinary course of business; (iii) immaterial defects and irregularities
in title, encumbrances, exceptions and other matters that, singularly or in the
aggregate, will not materially interfere with the ownership, use, value,
operation or maintenance of the Company Assets to which they pertain or EMI’s
ability to perform its obligations hereunder; (iv) Liens for Taxes that are not
yet due and payable; (v) pipeline, utility and similar easements and other
rights in respect of surface operations; (vi) Liens supporting surety bonds,
performance bonds and similar obligations issued in connection with the
Companies’ business; and (vii) all rights to consent, by required notices to,
filings with, or other actions by Governmental Authorities or third parties in
connection with the sale or

 

6

--------------------------------------------------------------------------------

 

conveyance of easements, rights of way, licenses, facilities or interests
therein if they are customarily obtained subsequent to the sale or conveyance.

 

“Person” means an individual or entity, including any partnership, corporation,
association, trust, limited liability company, joint venture, unincorporated
organization or other entity.

 

“SEC Documents” has the meaning ascribed to such term in Section 4.5.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Tax” means any and all U.S. federal, state, local or foreign net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, capital
stock, profits, license, license fee, environmental, customs duty, unclaimed
property or escheat payments, alternative fuels, mercantile, lease, service,
withholding, payroll, employment, unemployment, social security, disability,
excise, severance, registration, stamp, occupation, premium, property (real or
personal), windfall profits, fuel, value added, alternative or add on minimum,
estimated or other similar taxes, duties, levies, customs, tariffs, imposts or
assessments (including public utility commission property tax assessments)
imposed by any Governmental Authority, together with any interest, penalties or
additions thereto payable to any Governmental Authority in respect thereof or
any liability for the payment of any amounts of any of the foregoing types as a
result of being a member of an affiliated, consolidated, combined or unitary
group.

 

“Tax Return” means any return, declaration, report, statement, election, claim
for refund or other written document, together with all attachments, amendments
and supplements thereto, filed with or provided to, or required to be filed with
or provided to, a Governmental Authority in respect of Taxes.

 

“Taxing Authority” means, with respect to any Tax, the Governmental Authority
that imposes such Tax, and the agency (if any) charged with the collection of
such Tax for such entity or subdivision, including any governmental or
quasi-governmental entity or agency that imposes, or is charged with collecting,
social security or similar charges or premiums.

 

“Third Party Indemnity Claim” has the meaning ascribed to such term in
Section 6.5(a).

 

“Transactions” means (1) the contribution and transfer of the E2 Appalachian
Units and the Common Units and the cash reimbursement payment described in
Sections 2.1(a) and 2.2(a) below and (2) the sale and transfer of the Energy
Services Units and the delivery of the cash sales proceeds described in Sections
2.1(b) and 2.2(b) below.

 

“Transfer Taxes” has the meaning ascribed to such term in Section 5.3.

 

“Transferred Units” has the meaning ascribed to such term in the recitals.

 

Section 1.2                                   Construction.

 

In constructing this Agreement: (a) the word “includes” and its derivatives
means “includes, without limitation” and corresponding derivative expressions;
(b) the currency

 

7

--------------------------------------------------------------------------------

 

amounts referred to herein, unless otherwise specified, are in United States
dollars; (c) whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless business days are specified; (d) unless
otherwise specified, all references in this Agreement to “Article,” “Section,”
“Disclosure Schedule,” “Exhibit,” “preamble” or “recitals” shall be references
to an Article, Section, Disclosure Schedule, Exhibit, preamble or recitals
hereto; and (e) whenever the context requires, the words used in this Agreement
shall include the masculine, feminine and neuter and singular and the plural.

 

ARTICLE II
CONVEYANCE AND CLOSING

 

Section 2.1                                   Conveyance.

 

Upon the terms and subject to the conditions set forth in this Agreement and in
the Assignment Agreements, on the Closing Date, EMI shall (a) contribute,
transfer, assign and convey the E2 Appalachian Units to the Partnership (which
may, in turn, contribute such units to its designee, in which case the
Partnership may direct that the assignment be made directly to such designee)
and (b) sell, transfer and assign the Energy Services Units to the Partnership
(or its designee).  Such contribution and/or sale of Transferred Units shall be
effected free and clear of all Liens (other than restrictions under applicable
federal and state securities laws).

 

Section 2.2                                   Transactions Proceeds.

 

(a)                                 As consideration for the contribution of the
E2 Appalachian Units, the Partnership shall issue its Common Units to EMI and
make a cash distribution to EMI in partial reimbursement of amounts paid and
contributed by EMI for the E2 Appalachian Units.  The reimbursement amount shall
be equal to $150,000,000 (the “Basis Amount”).  The number of Common Units that
are issued to EMI shall equal 1,016,322.

 

(b)                                 As consideration for the sale of the Energy
Services Units, the Partnership shall make a cash payment of sales proceeds to
EMI in the amount of $13,000,000.

 

(c)                                  The cash reimbursement amount specified in
subsection (a) and the cash payment of sales proceeds specified in subsection
(b) shall be made by wire transfer of immediately available funds to the account
designated on Exhibit C hereto.

 

Section 2.3                                   Closing.

 

The closing (the “Closing”) of the Transactions will be held on the date hereof
(the “Closing Date”) at the offices of the Partnership at 2501 Cedar Springs
Rd., Dallas, Texas 75201. At the Closing, (i) EMI shall deliver to the
Partnership, or cause to be delivered to the Partnership, the Assignment
Agreements duly executed by EMI and (ii) the Partnership shall deliver to EMI,
or cause to be delivered to EMI, such Common Units and cash amounts specified in
Section 2.2 and the Assignment Agreements (as applicable) duly executed by the
Partnership.

 

8

--------------------------------------------------------------------------------

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EMI

 

EMI hereby represents and warrants to the Partnership that, except as disclosed
on the disclosure schedules delivered to the Partnership on the date of this
Agreement (the “Disclosure Schedules”) (it being understood that any information
set forth on any Disclosure Schedule shall be deemed to apply to and qualify all
other representations or warranties made by EMI, whether or not such disclosure
specifically identifies or purports to respond to one or more of such other
representations and warranties, if it is reasonably apparent that such
disclosure pertains to the subject matter of such other representations and
warranties), as of the date hereof:

 

Section 3.1                                   Organization.

 

(a)                                 EMI is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own, operate and lease its
properties and assets and to carry on its business as now conducted.

 

(b)                                 Each Company is a limited liability company
duly formed, validly existing and in good standing under the laws of the State
of Delaware and has all requisite limited liability company power and authority,
as applicable, to own, operate and lease its properties and assets and to carry
on its business as currently conducted.  Each Company is duly licensed or
qualified to do business and is in good standing in the states in which the
character of the properties and assets owned or held by it or the nature of the
business conducted by it requires it to be so licensed or qualified, except
where the failure to be so qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.  EMI has made available to the Partnership true and complete copies of
the organizational documents of each Company in effect as of the date of this
Agreement.

 

Section 3.2                                   Authority and Approval.

 

(a)                                 EMI has full corporate power and authority
to execute and deliver this Agreement and the Assignment Agreements, to
consummate the transactions contemplated hereby and thereby and to perform all
of the obligations hereof and thereof to be performed by it.  The execution and
delivery by EMI of this Agreement and the Assignment Agreements, the
consummation of the transactions contemplated hereby and thereby and the
performance of all of the obligations hereof and thereof to be performed by EMI
have been duly authorized and approved by all requisite corporate action on the
part of EMI.

 

(b)                                 This Agreement has been duly executed and
delivered by EMI and constitutes the valid and legally binding obligation of
EMI, enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium,

 

9

--------------------------------------------------------------------------------

 

fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights and remedies generally and by general principles of equity
(whether applied in a proceeding at law or in equity) (the “Enforceability
Exceptions”).  When executed and delivered by each of the parties thereto, the
Assignment Agreements will constitute valid and legally binding obligations of
EMI, enforceable against EMI in accordance with their terms, except as such
enforcement may be limited by the Enforceability Exceptions.

 

Section 3.3                                   No Conflict; Consents.

 

Except as set forth on Disclosure Schedule 3.3:

 

(a)                                 the execution, delivery and performance of
this Agreement and the Assignment Agreements by EMI do not, and the fulfillment
and compliance with the terms and conditions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not,
(i) violate, conflict with, result in any breach of, or require the consent of
any Person under, any of the terms, conditions or provisions of the certificate
of incorporation or bylaws of EMI; (ii) conflict with or violate any provision
of any Applicable Law; (iii) conflict with, result in a breach of, constitute a
default under (whether with notice or the lapse of time or both), or accelerate
or permit the acceleration of the performance required by, or require any
consent, authorization or approval under, or result in the suspension,
termination or cancellation of, or in a right of suspension, termination or
cancellation of, any material indenture, mortgage, agreement, contract,
commitment, license, concession, permit, lease, joint venture or other
instrument to which EMI or either Company is a party or by which any of them or
any of the Company Assets are bound; or (iv) result in the creation of any Lien
(other than Permitted Liens) on any of the Company Assets under any such
indenture, mortgage, agreement, contract, commitment, license, concession,
permit, lease, joint venture or other instrument, except in the case of clauses
(ii), (iii) and (iv) for those items which, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect; and

 

(b)                                 no consent, approval, license, permit, order
or authorization of any Governmental Authority or other Person is required to be
obtained or made by EMI or either Company with respect to the Transferred Units
in connection with the execution, delivery and performance of this Agreement and
the Assignment Agreements or the consummation of the transactions contemplated
hereby or thereby, except (i) as have been waived or obtained or with respect to
which the time for asserting such right has expired, (ii) such consents,
approvals, licenses, permits, orders or authorizations that are not customarily
obtained prior to the Closing and are reasonably expected to be obtained in the
ordinary course of business following the Closing or (iii) those which
individually or in the aggregate would not reasonably be expected to have a
Company Material Adverse Effect.

 

10

--------------------------------------------------------------------------------

 

Section 3.4                                   Capitalization; Title to
Transferred Units.

 

(a)                                 EMI owns, beneficially and of record, the
Transferred Units and will convey good title, free and clear of all Liens (other
than restrictions under applicable federal and state securities laws), to the
Transferred Units to the Partnership.  Except as set forth in the E2 Appalachian
LLC Agreement and the Energy Services LLC Agreement, the Transferred Units are
not subject to any agreements or understandings with respect to the voting or
transfer of any of the Transferred Units (except the contribution of the
Transferred Units contemplated by this Agreement and restrictions under
applicable federal and state securities laws).  The Transferred Units have been
duly authorized and are validly issued, fully paid and nonassessable (except as
such nonassessability may be affected by Sections 18-607 and 18-804 of the
Delaware LLC Act).  There are 100,000,000 Class A Units and 10,700,000 Class B
Units of E2 Appalachian issued and outstanding.  There are 10,000,000 Class A
Units and 10,000,000 Class B Units of E2 Energy Services issued and outstanding.

 

(b)                                 Except as set forth in the E2 Appalachian
LLC Agreement and the Energy Services LLC Agreement, there are (i) no authorized
or outstanding subscriptions, warrants, options, convertible securities or other
rights (contingent or otherwise) to purchase or otherwise acquire from either
Company any equity interests of or in such Company, (ii) no commitments on the
part of either Company to issue Units (as separately defined in the E2
Appalachian LLC Agreement and the Energy Services LLC Agreement), subscriptions,
warrants, options, convertible securities or other similar rights, and (iii) no
equity securities of either Company reserved for issuance by such Company for
any such purpose.  Except as set forth in the E2 Appalachian LLC Agreement and
the Energy Services LLC Agreement, neither Company has the obligation
(contingent or other) to purchase, redeem or otherwise acquire any of its equity
securities.  Except for this Agreement, the E2 Appalachian LLC Agreement and the
Energy Services LLC Agreement, neither Company nor EMI is a party to any voting
trust or agreement, stockholders agreement, pledge agreement, buy-sell
agreement, right of first refusal, preemptive right or proxy relating to any
equity securities of either Company.

 

Section 3.5                                   Financial Information; Undisclosed
Liabilities.

 

(a)                                 EMI has provided to the Partnership a true
and complete copy of the unaudited balance sheet as of June 30, 2014 for each
Company (the “Balance Sheets”).  The Balance Sheets present fairly in all
material respects the financial position of each Company as of the date
thereof.  There are no off-balance sheet arrangements that have or are
reasonably likely to have a Company Material Adverse Effect.  The Balance Sheets
have been prepared in accordance with GAAP consistently applied throughout the
periods presented, except that the Balance Sheets do not include any notes. 
Except as

 

11

--------------------------------------------------------------------------------

 

required by GAAP, there were no changes in the method of application of the
Companies’ accounting policies or changes in the method of applying the
Companies’ use of estimates in the preparation of the Balance Sheets as compared
with past practice.

 

(b)                                 Except as disclosed on Disclosure Schedule
3.5(b), there are no liabilities or obligations of either Company of any nature
(whether known or unknown and whether accrued, absolute, contingent or
otherwise) and there are no facts or circumstances that would reasonably be
expected to result in any such liabilities or obligations, whether arising in
the context of federal, state or local judicial, regulatory, administrative or
permitting agency proceedings, other than (i) liabilities or obligations
reflected or reserved against in the Balance Sheets, (ii) current liabilities
incurred in the ordinary course of business since June 30, 2014, and
(iii) liabilities or obligations (whether known or unknown and whether accrued,
absolute, contingent or otherwise) that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 3.6                                   Compression and Stabilization
Equipment.

 

(a)                                 Each Company has good and valid title to the
Compression and Stabilization Equipment owned by it, free and clear of all Liens
except Permitted Liens, as well as free and clear of all preferential purchase
rights, options or other rights to purchase.

 

(b)                                 The Compression and Stabilization Equipment
is, in the aggregate, in good operating condition and repair (normal wear and
tear excepted) and has been maintained in accordance with applicable laws and
regulations, as well as generally accepted industry practice, and is adequate
for the purposes for which it is currently being used or held for use.

 

(c)                                  Neither of the Companies own or otherwise
hold any interest in real property other than rights granted to the Companies in
customer contracts for activities related to the installation, operation and
maintenance of the Compression and Stabilization Equipment and the office lease
related to the Dallas headquarters of each Company.

 

Section 3.7                                   Litigation; Laws and Regulations.

 

(a)                                 Except as set forth in Disclosure Schedule
3.7, there are no (i) civil, criminal or administrative actions, suits, claims,
hearings, arbitrations or proceedings pending or, to EMI’s Knowledge, threatened
against either Company, (ii) judgments, orders, decrees or injunctions of any
Governmental Authority, whether at law or in equity, against either Company or
(iii) pending or, to EMI’s Knowledge, threatened investigations by any
Governmental Authority against either Company.

 

12

--------------------------------------------------------------------------------

 

(b)                                 There are no civil, criminal or
administrative actions, suits, claims, hearings, arbitrations, investigations or
proceedings pending or, to EMI’s Knowledge, threatened that (i) question or
involve the validity or enforceability of any of EMI’s obligations under this
Agreement or the Assignment Agreements or (ii) seek (or reasonably might be
expected to seek) (A) to prevent or delay the consummation by EMI of the
transactions contemplated by this Agreement or the Assignment Agreements or
(B) damages in connection with any such consummation.

 

(c)                                  Neither EMI nor either Company is in
violation of or in default under any Applicable Law, except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.

 

Section 3.8                                   No Adverse Changes.

 

Except as set forth on Disclosure Schedule 3.8, since June 30, 2014:

 

(a)                                 there has not been a Company Material
Adverse Effect;

 

(b)                                 there has not been any damage, destruction
or loss to any material portion of the Company Assets, whether or not covered by
insurance, in excess of $100,000;

 

(c)                                  there has been no delay in, or postponement
of, the payment of any liabilities related to either Company, the Company Assets
or the Companies’ business, individually or in the aggregate, in excess of
$100,000; and

 

(d)                                 there is no contract, commitment or
agreement to do any of the foregoing.

 

Section 3.9                                   Taxes.

 

(a)                                 To the Knowledge of EMI, except as would not
reasonably be expected to have a Company Material Adverse Effect, (i) all Tax
Returns required to be filed by or with respect to either Company, the Company
Assets or the operations of either Company have been filed on a timely basis
(taking into account all extensions of due dates); (ii) all Taxes owed by either
Company, the Company Assets or the operations of such Company which are or have
become due, have been timely paid in full, other than Taxes the amount or
validity of which is being contested in good faith by appropriate proceedings
for which an adequate reserve has been established therefor; (iii) there are no
Liens on any of the Company Assets that arose in connection with any failure (or
alleged failure) to pay any Tax on either Company or its assets, other than
Liens for Taxes not yet due and payable or the amount or validity of which is
being contested in good faith by appropriate proceedings for which an adequate
reserve has been established therefor; and (iv) there is no pending action,
proceeding or investigation for assessment or collection of Taxes and no Tax
assessment, deficiency or adjustment has been asserted or proposed

 

13

--------------------------------------------------------------------------------

 

with respect to either Company, the Company Assets or the operations of either
Company.

 

(b)                                 Each Company has, since its formation, been
treated either as a partnership or disregarded as an entity separate from its
owner for federal income tax purposes pursuant to Treasury Regulation
Section 301.7701-2(c).

 

(c)                                  During the twelve (12) month period ended
December 31, 2013 and throughout the period in 2014 ending on the Closing Date,
more than ninety percent (90%) of the gross income (as determined for federal
income tax purposes) of the business operations conducted with the assets owned
directly by each Company was qualifying income, within the meaning of
Section 7704(d) of the Code.

 

Section 3.10                            Environmental Matters.

 

Except as identified on Disclosure Schedule 3.10:

 

(a)                                 and except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect, each Company, the Company Assets, and operations and business of each
Company have at all times been and currently are in compliance with applicable
Environmental Laws;

 

(b)                                 and except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect, no circumstances exist with respect to either Company or its assets,
operations and business that give rise to an obligation by such Company to
investigate or remediate the presence, on-site or offsite, of Hazardous
Materials under any applicable Environmental Laws;

 

(c)                                  neither Company has received any written
communication from a Governmental Authority alleging that such Company may be in
violation of any Environmental Law or any Permit issued pursuant to
Environmental Law;

 

(d)                                 neither Company, nor the Company Assets, nor
the operations and business of either Company are subject to any pending or, to
the Knowledge of EMI, threatened, claim, action, suit, investigation, inquiry or
proceeding under any Environmental Law (including designation as a potentially
responsible party under CERCLA or any similar local or state law);

 

(e)                                  and except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect, all notices, permits, permit exemptions, licenses or similar
authorizations, if any, required to be obtained or filed by either Company under
any Environmental Law in connection with its assets, operations and business
have been duly obtained

 

14

--------------------------------------------------------------------------------

 

or filed, are valid and currently in effect, and each Company and the Company
Assets are in compliance with such authorizations; and

 

(f)                                   and except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect, there has been no release of any Hazardous Material into the environment
by either Company, the Company Assets, or the operations and business of either
Company, or to the Knowledge of EMI, by a third party in connection with the
business or operations of either Company except in compliance with applicable
Environmental Law.

 

Section 3.11                            Licenses; Permits.

 

(a)                                 As of the date of this Agreement, each
Company validly holds all material licenses, permits and authorizations issued
or granted or waived by Governmental Authorities that are necessary for the
conduct of its business as now being conducted (collectively, “Permits”).

 

(b)                                 All Permits are in full force and effect,
except as would not reasonably be expected to have a Company Material Adverse
Effect.

 

(c)                                  Each Company has complied with all terms
and conditions of the Permits, except as would not reasonably be expected to
have a Company Material Adverse Effect.

 

(d)                                 There is no outstanding written notice, nor
to EMI’s Knowledge, any other notice of revocation, cancellation or termination
of any material Permit.

 

(e)                                  No proceeding is pending or, to EMI’s
Knowledge, threatened with respect to any alleged failure by either Company to
have any material Permit necessary for the operation of any of the Company
Assets or the conduct of such Company’s business or to be in compliance
therewith.

 

Section 3.12                            Contracts.

 

(a)                                 EMI has made available to the Partnership a
correct and complete copy of the following contracts and other agreements to
which either Company is, or immediately after the Closing will be, a party (each
such contract or agreement being referred to herein as a “Material Contract”):

 

(i)                                     contracts, agreements and instruments
representing Indebtedness for Borrowed Money and all guarantees thereof;

 

(ii)                                  contracts containing covenants limiting
the freedom of either Company to engage in any line of business or compete with
any Person or operate at any location;

 

(iii)                               price swaps, hedges, futures or similar
instruments;

 

15

--------------------------------------------------------------------------------

 

(iv)                              contracts to which either Company, on the one
hand, and an Affiliate of EMI, on the other hand, is a party or is otherwise
bound;

 

(v)                                 contracts containing any preferential rights
to purchase or similar rights relating to any Company Assets;

 

(vi)                              joint venture or partnership agreements,
including any agreement or commitment to make any loan or capital contribution
to any joint venture or partnership;

 

(vii)                           contracts relating to the acquisition or
disposition by either Company of any business (whether by acquisition or
disposition of equity interests or assets) pursuant to which such Company has or
will have any remaining material obligation or liability or benefit;

 

(viii)                        contracts or agreements which, individually,
require or entitle either Company to make or receive payments of at least
$250,000 annually, provided that the calculation of the aggregate payments for
any such agreement or contract shall not include payments attributable to any
renewal periods or extensions for which such Company may exercise a renewal or
extension option in its sole discretion; and

 

(ix)                              licenses relating to Intellectual Property
(whether as licensee or licensor) other than licenses with respect to software
used or accessed by either Company under a “shrink wrap,” “click wrap,” or “off
the shelf” software license that is generally commercially available on standard
terms.

 

(b)                                 Except as would not reasonably be expected
to result in a Company Material Adverse Effect or as disclosed in Disclosure
Schedule 3.12(b), with respect to each Company: (i) each Material Contract is
legal, valid and binding on and enforceable against such Company and in full
force and effect; (ii) each Material Contract will continue to be legal, valid
and binding on and enforceable against such Company, and in full force and
effect on identical terms immediately following the consummation of the
transactions contemplated by this Agreement; (iii) such Company is not in breach
or default, and no event has occurred which with notice or lapse of time would
constitute a breach or default by such Company, or permit termination,
modification or acceleration, under any Material Contract; and (iv) to EMI’s
Knowledge, no other party to any Material Contract is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default by such other party, or permit termination, modification or
acceleration, under any Material Contract other than in accordance with its
terms, nor has any other party repudiated any provision of any Material
Contract.

 

16

--------------------------------------------------------------------------------

 

Section 3.13                            Employee Matters.

 

Energy Services is the only Company that has employees.  Neither of the
Companies nor EMI is a party to or is bound by any collective bargaining
agreement with respect to any employees who perform services in connection with
the business and operations of either Company.  Except for the employee benefit
and/or welfare plans listed on Disclosure Schedule 3.13, neither Company
maintains or contributes to or is subject to any employee benefit or welfare
plan of any nature, including but not limited to, plans subject to the Employee
Retirement Income Security Act of 1974, as amended.

 

Section 3.14                            Transactions with Affiliates.

 

Except as otherwise contemplated in this Agreement or as disclosed on Disclosure
Schedule 3.14, neither Company is, nor will it be immediately after Closing, a
party to any agreement, contract or arrangement with any of its Affiliates prior
to the Closing.

 

Section 3.15                            Insurance.

 

EMI has made available to the Partnership a correct and complete copy of all
material insurance policies that either Company holds or of which either Company
is the beneficiary.  Such policies are in full force and effect, and neither
Company has received written notice of any pending or threatened termination of
such policies.

 

Section 3.16                            Intellectual Property Rights.

 

Each Company owns or has the right to use all Intellectual Property necessary
for or used in the conduct of such Company’s business as currently conducted by
it, and, to EMI’s Knowledge, neither Company’s products and services infringe
upon, misappropriate or otherwise violate any Intellectual Property of any third
party.  All Intellectual Property owned by either Company, if any, is free and
clear of any Liens (other than Permitted Liens).  Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will, with or without notice or lapse of time, result in, or
give any other Person the right or option to cause or declare, a breach or
termination of, or cancellation or reduction in, rights of either Company under
any contract providing for the license of any Intellectual Property to such
Company, except for any such terminations, cancellations or reductions that,
individually or in the aggregate, would not have a Company Material Adverse
Effect.  There is no Intellectual Property-related action, suit, proceeding,
hearing, investigation, notice or complaint pending or, to EMI’s Knowledge,
threatened by any third party before any court or tribunal (including, without
limitation, the United States Patent and Trademark Office or equivalent
authority anywhere in the world) relating to either Company or its operations,
nor has any claim or demand been made by any third party that alleges any
infringement, misappropriation or violation of any Intellectual Property of any
third party, or unfair competition or trade practices by either Company.  Except
as would not result in a Company Material Adverse Effect, each Company has taken
reasonable measures to protect the confidentiality of all material trade
secrets.

 

17

--------------------------------------------------------------------------------

 

Section 3.17                            Brokerage Arrangements.

 

EMI has not entered (directly or indirectly) into any agreement with any Person
that would obligate EMI, the Partnership or any of their respective Affiliates
to pay any commission, brokerage or “finder’s fee” or other similar fee in
connection with this Agreement, the Assignment Agreements or the transactions
contemplated hereby or thereby.

 

Section 3.18                            Books and Records.

 

Accurate copies of the respective books of account, minute books and stock or
other equity record books of the Company have been made available for inspection
to the Partnership.

 

Section 3.19                            Sufficiency of Assets.

 

The Company Assets constitute all of the assts necessary to conduct the business
and operations of the Companies in the materially the same manner as currently
conducted.

 

Section 3.20                            Investment Intent.

 

EMI is accepting the Common Units for its own account with the present intention
of holding the Common Units for investment purposes and not with a view to, or
for offer or sale in connection with, any distribution thereof in violation of
the Securities Act or state securities laws.  EMI does not presently have any
contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to such Person or to any third Person, with
respect to such Common Units.  EMI has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risk of an investment in such Common Units.  EMI acknowledges that such Common
Units are not currently registered under the Securities Act or any applicable
state securities law and may not be registered in the future, and that such
Common Units may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or pursuant to an applicable exemption
therefrom and pursuant to state securities laws and regulations as applicable.

 

Section 3.21                            No Other Representations or Warranties;
Disclosure Schedules.

 

Except for the representations and warranties contained in this Article III (as
modified by the Disclosure Schedules hereto), neither EMI nor any other Person
makes any other express or implied representation or warranty with respect to
EMI, the Companies or the Transactions, and EMI disclaims any other
representations or warranties, whether made by EMI, the Companies or any of
their respective Affiliates, officers, directors, employees, agents or
representatives.  Except for the representations and warranties contained in
Article III hereof (as modified by the Disclosure Schedules hereto), EMI hereby
disclaims all liability and responsibility for any representation, warranty,
projection, forecast, statement, or information made, communicated, or furnished
(orally or in writing) to the Partnership or its Affiliates or representatives
(including any opinion, information, projection, or advice that may have been or
may be provided to the Partnership by any director, officer, employee, agent,
consultant, or representative of EMI or either Company or any of their
respective Affiliates).  The disclosure of any matter or item in any Disclosure
Schedule hereto shall not be deemed to constitute an acknowledgment that any
such matter is required to be disclosed.

 

18

--------------------------------------------------------------------------------

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

 

The Partnership hereby represents and warrants to EMI as follows:

 

Section 4.1                                   Organization and Existence.

 

The Partnership is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
limited partnership power and authority to own, operate and lease its properties
and assets and to carry on its business as now conducted.

 

Section 4.2                                   Authority and Approval.

 

(a)                                 The Partnership has full limited partnership
power and authority to execute and deliver this Agreement and the Assignment
Agreements, as applicable, to consummate the transactions contemplated hereby
and thereby and to perform all of the obligations hereof and thereof to be
performed by it.  The execution and delivery of this Agreement and the
Assignment Agreements, as applicable, the consummation of the transactions
contemplated hereby and thereby and the performance of all of the obligations
hereof and thereof to be performed by the Partnership have been duly authorized
and approved by all requisite limited partnership action of the Partnership.

 

(b)                                 This Agreement has been duly executed and
delivered by or on behalf of the Partnership and constitutes the valid and
legally binding obligation of the Partnership, enforceable against the
Partnership in accordance with its terms, except as such enforcement may be
limited by the Enforceability Exceptions.  When executed and delivered by each
of the parties thereto, the Assignment Agreements, as applicable will constitute
valid and legally binding obligations of the Partnership (or its designee),
enforceable against the Partnership (or its designee) in accordance with their
terms, except as such enforcement may be limited by the Enforceability
Exceptions.

 

Section 4.3                                   No Conflict; Consents.

 

(a)                                 The execution, delivery and performance of
this Agreement and the Assignment Agreements, as applicable, by the Partnership
do not and the fulfillment and compliance with the terms and conditions hereof
and the consummation of the transactions contemplated hereby and thereby will
not, (i) violate, conflict with, result in any breach of, or require the consent
of any Person under, any of the terms, conditions or provisions of the
certificate of limited partnership or limited partnership agreement of the
Partnership; (ii) conflict with or violate any provision of any Applicable Law;
or (iii) conflict with, result in a breach of, constitute a default under
(whether with notice or the lapse of time or both), or accelerate or permit the
acceleration of the performance required by, or require any consent,
authorization or approval under, any indenture, mortgage, agreement, contract,
commitment, license,

 

19

--------------------------------------------------------------------------------

 

concession, permit, lease, joint venture or other instrument to which the
Partnership is a party or by which it is bound or to which any of its property
is subject; and

 

(b)                                 No consent, approval, license, permit, order
or authorization of any Governmental Authority or other Person is required to be
obtained or made by or with respect to the Partnership in connection with the
execution, delivery, and performance of this Agreement or the Assignment
Agreements, as applicable, or the consummation of the transactions contemplated
hereby and thereby, except as have been waived or obtained or with respect to
which the time for asserting such right has expired.

 

Section 4.4                                   Delivery of Opinion.

 

The Financial Advisor has delivered an opinion to the Conflicts Committee that
the aggregate consideration to be paid by the Partnership as consideration for
the Transferred Units pursuant to this Agreement is fair to the common
unitholders of the Partnership (other than EMI and its Affiliates) from a
financial point of view.

 

Section 4.5                                   Periodic Reports.

 

The Partnership’s forms, registration statements, reports, schedules and
statements required to be filed by it under the Exchange Act or the Securities
Act (all such documents filed prior to the date hereof, collectively the “SEC
Documents”) have been filed with the Commission on a timely basis.  The SEC
Documents, including, without limitation, any audited or unaudited financial
statements and any notes thereto or schedules included therein (the “Partnership
Financial Statements”), at the time filed (or in the case of registration
statements, solely on the dates of effectiveness) (except to the extent
corrected by a subsequent SEC Document) (a) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, (b) complied in all
material respects with the applicable requirements of the Exchange Act and the
Securities Act, as the case may be, (c) complied as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, (d) in the case of
the Partnership Financial Statements, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the Commission), and (e) in the case of the
Partnership Financial Statements, fairly present (subject in the case of
unaudited statements to normal and recurring audit adjustments) in all material
respects the consolidated financial position of the Partnership and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of its operations and cash flows for the periods then ended.  KPMG LLP is an
independent registered public accounting firm with respect to the Partnership
and has not resigned or been dismissed as independent registered public
accountants of the Partnership as a result of or in connection with any
disagreement with the Partnership on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedures.

 

20

--------------------------------------------------------------------------------

 

Section 4.6                                   No Material Adverse Change.

 

Except as set forth in or contemplated by the SEC Documents and as contemplated
by this Agreement, since June 30, 2014, and except for matters relating to the
Transactions, the business of the Partnership and its subsidiaries, as
applicable, has been conducted only in the ordinary course of business and there
has not been any (a) material adverse effect on the Partnership, (b) acquisition
or disposition of any material asset by the Partnership or any of its
subsidiaries or any contract or arrangement therefore, other than in the
ordinary course of business, (c) material change in any of the Partnership’s
accounting principles, practices or methods except to the extent required in
accordance with GAAP, (d) incurrence of material indebtedness other than in the
ordinary course of business, (e) amendment, or approval of any amendment, to the
charter documents of the Partnership, (f) material legal, regulatory or other
similar proceedings for which the Partnership has been served or (g) material
disputes, claims, audits or investigations, whether administrative, judicial or
otherwise, instituted or, to the Partnership’s Knowledge, threatened by or
against or affecting the Partnership.

 

Section 4.7                                   Common Units.

 

(a)                                 The Partnership has taken all limited
partnership action necessary to authorize the issuance and delivery to EMI of
the Common Units as contemplated by this Agreement.

 

(b)                                 When issued in accordance with the
provisions of this Agreement, the Common Units will be validly issued in
accordance with the Partnership Agreement and the DRULPA, fully paid (to the
extent required by the Partnership Agreement), nonassessable (except as such
non-assessability may be affected by Sections 17-303, 17-607 and 17-804 of the
DRULPA) and free and clear of all Liens (except for restrictions on transfer
imposed under the Partnership Agreement or this Agreement or by applicable
federal or state securities laws).

 

Section 4.8                                   Brokerage Arrangements.

 

The Partnership has not entered (directly or indirectly) into any agreement with
any Person that would obligate EMI, the Partnership or any of their respective
Affiliates to pay any commission, brokerage or “finder’s fee” or other similar
fee in connection with this Agreement, the Assignment Agreements or the
transactions contemplated hereby or thereby.

 

Section 4.9                                   Litigation.

 

There are no civil, criminal or administrative actions, suits, claims, hearings,
arbitrations, investigations or proceedings pending or, to the Partnership’s
Knowledge, threatened that (a) question or involve the validity or
enforceability of any of the Partnership’s obligations under this Agreement or
the Assignment Agreements, as applicable, or (b) seek (or reasonably might be
expected to seek) (i) to prevent or delay the consummation by the Partnership of
the transactions contemplated by this Agreement or the Assignment Agreements, as
applicable, or (ii) damages in connection with any such consummation.

 

21

--------------------------------------------------------------------------------

 

Section 4.10                            Investment Intent.

 

The Partnership is accepting the Transferred Units for its own account with the
present intention of holding the Transferred Units for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution
thereof in violation of the Securities Act or state securities laws.  The
Partnership acknowledges that the Transferred Units will not be registered under
the Securities Act or any applicable state securities law, and that such
Transferred Units may not be transferred or sold except pursuant to the
registration provisions of the Securities Act or pursuant to an applicable
exemption therefrom and pursuant to state securities laws and regulations as
applicable.

 

Section 4.11                            No Other Representations or Warranties.

 

Except for the representations and warranties contained in this Article IV,
neither the Partnership nor any other Person makes any other express or implied
representation or warranty with respect to the Partnership or the Transactions,
and the Partnership disclaims any other representations or warranties, whether
made by the Partnership or any of its Affiliates, officers, directors,
employees, agents or representatives.  Except for the representations and
warranties contained in this Article IV, the Partnership hereby disclaims all
liability and responsibility for any representation, warranty, projection,
forecast, statement, or information made, communicated, or furnished (orally or
in writing) to EMI or its Affiliates or representatives (including any opinion,
information, projection, or advice that may have been or may be provided to EMI
by any director, officer, employee, agent, consultant, or representative of the
Partnership or any of its Affiliates).

 

ARTICLE V
TAX MATTERS

 

Section 5.1                                   Liability for Taxes.

 

(a)                                 EMI shall be liable for, and shall
indemnify, defend and hold harmless the Partnership from any unpaid Taxes
imposed on or incurred by or with respect to the Companies or either of them or
the Company Assets with respect to any taxable period or portion thereof ending
on or prior to the Closing Date to the extent such unpaid Taxes exceed any
reserves therefor.

 

(b)                                 The Partnership shall be liable for any
Taxes imposed on or incurred by or with respect to the Companies or either of
them or the Company Assets with respect to any taxable period or portion thereof
beginning after the Closing Date.

 

(c)                                  Whenever it is necessary for purposes of
this Article V to determine the amount of any Taxes imposed on or incurred by or
with respect to the Companies or either of them or the Company Assets for a
taxable period beginning before and ending after the Closing Date which is
allocable to the period ending on or prior to the Closing Date, the
determination shall be made, in the case of property or ad valorem taxes or
franchise taxes (which are measured by, or based solely upon capital, debt or a
combination of

 

22

--------------------------------------------------------------------------------

 

capital and debt), by pro rating such Taxes ratably on a per diem basis and, in
the case of other Taxes, by assuming that such taxable period ending on or prior
to the Closing Date constitutes a separate taxable period applicable to the
Companies and by taking into account the actual taxable events occurring during
such period (except that exemptions, allowances and deductions for a taxable
period beginning before and ending after the Closing Date that are calculated on
an annual or periodic basis, such as the deduction for depreciation, shall be
apportioned to the period prior to and including the Closing Date ratably on a
per diem basis).  Notwithstanding anything to the contrary herein, any franchise
tax paid or payable with respect to the Companies or either of them or the
Company Assets shall be allocated to the taxable period during which the income,
operations, assets or capital comprising the base of such tax is measured,
regardless of whether the right to do business for another taxable period is
obtained by the payment of such franchise tax.

 

(d)                                 If either Company or the Partnership
receives a refund of any Taxes that EMI is responsible for hereunder, or if EMI
or its Affiliates receive a refund of any Taxes that the Partnership is
responsible for hereunder, the party receiving such refund shall, within ninety
(90) days after receipt of such refund, remit it to the party who has
responsibility for such Taxes hereunder.  The parties shall cooperate in order
to take all necessary and reasonable steps to claim any such refund.

 

Section 5.2                                   Tax Returns.

 

(a)                                 With respect to any Tax Return attributable
to a taxable period ending on or before the Closing Date that is required to be
filed either before or after the Closing Date with respect to the Companies or
either of them or the Company Assets, EMI shall cause such Tax Return to be
prepared, cause to be included in such Tax Return all items of income, gain,
loss, deduction and credit required to be included therein, cause such Tax
Return to be filed timely with the appropriate Taxing Authority, and be
responsible for the timely payment (and entitled to any refund) of all Taxes due
with respect to the period covered by such Tax Return.

 

(b)                                 With respect to any Tax Return attributable
to a taxable period beginning on or before the Closing Date and ending after the
Closing Date that is required to be filed after the Closing Date with respect to
the Companies or either of them or the Company Assets, the Partnership and the
Companies shall cause such Tax Return to be prepared, cause to be included in
such Tax Return all items of income, gain, loss, deduction and credit required
to be included therein, furnish a copy of such Tax Return to EMI, cause such Tax
Return to be filed timely with the appropriate Taxing Authority, and the
Partnership shall be responsible for the timely payment of all Taxes due with
respect to the period covered by such Tax Return (but shall have a right to
recover from

 

23

--------------------------------------------------------------------------------

 

EMI the amount of Taxes attributable to the portion of the taxable period ending
on or prior to the Closing Date pursuant to Section 5.1(a)).

 

(c)                                  With regard to any Tax Return not yet filed
for any taxable period that begins before the Closing Date with respect to the
Companies or either of them or the Company Assets, the parties shall cause each
such Tax Return to be prepared in accordance with past Tax accounting practices
used with respect to the Tax Returns in question (unless such past practices are
no longer permissible under the Applicable Law), and to the extent any items are
not covered by past practices, in accordance with reasonable tax accounting
practices selected by the filing party with respect to such Tax Return under
this Agreement with the consent (not to be unreasonably withheld or delayed) of
the non-filing party.

 

Section 5.3                                   Transfer Taxes.

 

All transfer, documentary, sales, use, stamp, registration and other similar
Taxes and fees arising out of or in connection with the transactions effected
pursuant to this Agreement (the “Transfer Taxes”) shall be borne equally by the
Companies.  Each Company shall file all necessary Tax Returns and other
documentation with respect to such Transfer Taxes.  If required by Applicable
Law, EMI and the Partnership shall, and shall cause their Affiliates, as
applicable, to join in the execution of any such Tax Returns and other
documentation.

 

Section 5.4                                   Allocation of Consideration.

 

The parties will use commercially reasonable efforts to agree upon (i) an
allocation of the consideration paid for Energy Services (as determined for U.S.
federal income tax purposes) among the assets of Energy Services that are
treated as sold for U.S. federal income tax purposes in compliance with the
principles of Section 1060 of the Code, and the Treasury Regulations thereunder
and (ii) if applicable, an allocation of the consideration paid for E2
Appalachian (as determined for U.S. federal income tax purposes) among the
assets of E2 Appalachian for purposes of determining the allocation (if any)
under Section 755 of the Code of any tax basis adjustments under Section 743 of
the Code.  If and to the extent the parties agree to any such allocation, such
parties agree (a) that such agreed allocation shall be used by such parties as
the basis for reporting asset values and other items for purposes of all
federal, state, and local Tax Returns, including without limitation Internal
Revenue Service Form 8594, and (b) that neither such parties nor any of their
respective Affiliates will take a position on any Tax Return, or before any
Governmental Authority in connection with the examination of a Tax Return or in
any Tax Proceeding that is in any manner inconsistent with such agreed
allocation, except as required by Applicable Law or with the written consent of
the other party.

 

Section 5.5                                   Tax Treatment.

 

(a)                                 Except as otherwise provided in this
Section 5.5, the parties acknowledge that the contribution of the E2 Appalachian
Units for Common Units and the cash reimbursement amount described in this
Agreement is properly characterized as transactions described in Sections
721(a) and 731 of the Code and agree to

 

24

--------------------------------------------------------------------------------

 

file all Tax Returns in a manner consistent with such treatment.  The parties
further acknowledge and agree that the sale of the Energy Services Units
described in this Agreement is properly treated as a sale of the assets of
Energy Services for U.S. federal income tax purposes.

 

(b)                                 The cash reimbursement amount specified in
Section 2.2(a) shall be treated (i) as a distribution in reimbursement of EMI’s
capital expenditures with respect to the E2 Appalachian Units within the meaning
of (and to the maximum extent permissible under) Treasury Regulation
Section 1.707-4(d) and (ii) as the proceeds of a sale by EMI of E2 Appalachian
Units to the Partnership to the extent clause (i) or any other exception to the
“disguised sale” rules under Section 707 of the Code and the Treasury
Regulations thereunder, are inapplicable.  Except with the prior written consent
of EMI, the Partnership agrees to act at all times in a manner consistent with
this intended treatment of the cash reimbursement amount, including, if
required, disclosing the distribution of the cash reimbursement amount in
accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

 

Section 5.6                                   Conflict.

 

In the event of a conflict between the provisions of this Article V and any
other provisions of this Agreement, the provisions of this Article V shall
control.

 

ARTICLE VI
INDEMNIFICATION

 

Section 6.1                                   Indemnification of the
Partnership.

 

Subject to the limitations set forth in this Agreement, EMI, from and after the
Closing Date, shall indemnify, defend and hold the Partnership and its
Affiliates (other than any of the EMI Indemnified Parties) and their respective
securityholders, directors, officers, and employees, but otherwise excluding the
Companies (the “Partnership Indemnified Parties”) harmless from and against any
and all Damages suffered or incurred by any Partnership Indemnified Party as a
result of or arising out of (i) any breach or inaccuracy of a representation or
warranty of EMI in this Agreement or the Assignment Agreements or (ii) any
breach of any agreement or covenant on the part of EMI made under this Agreement
or the Assignment Agreements or in connection with the transactions contemplated
hereby or thereby, including the tax indemnification obligations set forth in
Section 5.1(a).

 

Section 6.2                                   Indemnification of EMI.

 

Subject to the limitations set forth in this Agreement, the Partnership, from
and after the Closing Date, shall indemnify, defend and hold EMI, its Affiliates
(other than any of the Partnership Indemnified Parties) and their respective
securityholders, directors, officers, and employees (the “EMI Indemnified
Parties”) harmless from and against any and all Damages suffered or incurred by
the EMI Indemnified Parties as a result of or arising out of (i) any breach or
inaccuracy of a representation or warranty of the Partnership in this Agreement
or the Assignment Agreements, as applicable, or (ii) any breach of any agreement
or covenant on the

 

25

--------------------------------------------------------------------------------

 

part of the Partnership made under this Agreement or the Assignment Agreements,
as applicable, or in connection with the transactions contemplated hereby or
thereby, including the tax indemnification obligations set forth in
Section 5.1(b).

 

Section 6.3                                   Tax Indemnification.

 

With the exception of a breach or inaccuracy of the representations and
warranties of EMI contained in Section 3.9, nothing in this Article VI
(including, but not limited to, the Minimum Claim Amount, the Deductible Amount
and the Ceiling Amount), other than Sections 6.6 through 6.8, shall apply to
liability with respect to Taxes, the liability with respect to which shall be as
set forth in Article V.

 

Section 6.4                                   Survival.

 

All the provisions of this Agreement shall survive the Closing, notwithstanding
any investigation at any time made by or on behalf of any party hereto, provided
that the representations and warranties set forth in Article III and Article IV
shall terminate and expire on the date that is 12 months following the Closing
Date, except (a) the representations and warranties of EMI set forth in
Section 3.9 (Taxes) shall survive until the date that is thirty (30) days after
the expiration of the applicable statutes of limitations (including all periods
of extension and tolling), (b) the representations and warranties of EMI set
forth in Section 3.1 (Organization),  Section 3.2 (Authority and Approval),
Section 3.4(a) (Ownership) and Section 3.17 (Brokerage Arrangements) (the “EMI
Fundamental Representations”) shall survive indefinitely and (c) the
representations and warranties of the Partnership set forth in Section 4.1
(Organization and Existence), Section 4.2 (Authority and Approval) and
Section 4.8 (Brokerage Arrangements) shall survive indefinitely.  After a
representation and warranty has terminated and expired, no indemnification shall
or may be sought pursuant to this Article VI on the basis of that representation
and warranty by any Person who would have been entitled pursuant to this
Article VI to indemnification on the basis of that representation and warranty
prior to its termination and expiration, provided that in the case of each
representation and warranty that shall terminate and expire as provided in this
Section 6.4, no claim presented in writing for indemnification pursuant to this
Article VI on the basis of that representation and warranty prior to its
termination and expiration shall be affected in any way by that termination and
expiration.  The indemnification obligations under this Article VI or elsewhere
in this Agreement shall apply regardless of whether any suit or action results
solely or in part from the active, passive or concurrent negligence or strict
liability of the indemnified party.  The covenants and agreements entered into
pursuant to this Agreement to be performed after the Closing shall survive the
Closing.

 

Section 6.5                                   Demands.

 

(a)                                 Each indemnified party hereunder agrees that
promptly upon its discovery of facts giving rise to a claim for indemnity under
the provisions of this Agreement, including receipt by it of notice of any
demand, assertion, claim, action or proceeding, judicial or otherwise, by any
third party (such claims for indemnity involving third-party claims being
collectively referred to herein as the “Third Party Indemnity Claims”), with
respect to any matter as to which it claims to be entitled to indemnity under
the provisions of this

 

26

--------------------------------------------------------------------------------

 

Agreement, it will give prompt notice thereof in writing to the indemnifying
party, together with a statement of such information respecting any of the
foregoing as it shall have.  Such notice shall include a formal demand for
indemnification under this Agreement.

 

(b)                                 Notwithstanding the foregoing, if the
indemnified party fails to notify the indemnifying party thereof in accordance
with the provisions of this Agreement in sufficient time to permit the
indemnifying party or its counsel to defend against a Third Party Indemnity
Claim and to make a timely response thereto, the indemnifying party’s indemnity
obligation relating to such Third Party Indemnity Claim shall not be relieved
except in the event and only to the extent that the indemnifying party is
prejudiced or damaged by such failure.

 

Section 6.6                                   Right to Contest and Defend.

 

(a)                                 The indemnifying party shall be entitled, at
its sole cost and expense, to contest and defend by all appropriate legal
proceedings any Third Party Indemnity Claim for which it is called upon to
indemnify the indemnified party under the provisions of this Agreement;
provided, that notice of the intention to so contest shall be delivered by the
indemnifying party to the indemnified party within thirty (30) days from the
date of receipt by the indemnifying party of notice by the indemnified party of
the assertion of the Third Party Indemnity Claim.  Any such contest may be
conducted in the name and on behalf of the indemnifying party or the indemnified
party as may be appropriate.  Such contest shall be conducted by reputable
counsel employed by the indemnifying party and not reasonably objected to by the
indemnified party, but the indemnified party shall have the right but not the
obligation to participate in such proceedings and to be represented by counsel
of its own choosing at its sole cost and expense.

 

(b)                                 The indemnifying party shall have full
authority to determine all action to be taken with respect thereto; provided,
however, that the indemnifying party will not have the authority to subject the
indemnified party to any obligation whatsoever, other than the performance of
purely ministerial tasks or obligations not involving material expense or
injunctive relief.  If the indemnifying party does not elect to contest any such
Third Party Indemnity Claim, the indemnifying party shall be bound by the result
obtained with respect thereto by the indemnified party.  If the indemnifying
party assumes the defense of a Third Party Indemnity Claim, the indemnified
party shall agree to any settlement, compromise or discharge of a Third Party
Indemnity Claim that the indemnifying party may recommend and that by its terms
obligates the indemnifying party to pay the full amount of the liability in
connection with such Third Party Indemnity Claim, which releases the indemnified
party completely in connection with such Third Party Indemnity Claim and which
would not otherwise adversely affect the indemnified party as determined by the
indemnified party in its sole discretion.

 

27

--------------------------------------------------------------------------------

 

(c)                                  Notwithstanding the foregoing, the
indemnifying party shall not be entitled to assume the defense of any Third
Party Indemnity Claim (and shall be liable for the reasonable fees and expenses
of counsel incurred by the indemnified party in defending such Third Party
Indemnity Claim) if the Third Party Indemnity Claim seeks an order, injunction
or other equitable relief or relief for other than money damages against the
indemnified party which the indemnified party reasonably determines, after
conferring with its outside counsel, cannot be separated from any related claim
for money damages.  If such equitable relief or other relief portion of the
Third Party Indemnity Claim can be so separated from that for money damages, the
indemnifying party shall be entitled to assume the defense of the portion
relating to money damages.

 

Section 6.7                                   Cooperation.

 

If requested by the indemnifying party, the indemnified party agrees to
cooperate with the indemnifying party and its counsel in contesting any Third
Party Indemnity Claim that the indemnifying party elects to contest or, if
appropriate, in making any counterclaim against the person asserting the Third
Party Indemnity Claim, or any cross-complaint against any person, and the
indemnifying party will reimburse the indemnified party for any expenses
incurred by it in so cooperating.  At no cost or expense to the indemnified
party, the indemnifying party shall cooperate with the indemnified party and its
counsel in contesting any Third Party Indemnity Claim.

 

Section 6.8                                   Right to Participate.

 

The indemnified party agrees to afford the indemnifying party and its counsel
the opportunity to be present at, and to participate in, conferences with all
Persons, including Governmental Authorities, asserting any Third Party Indemnity
Claim against the indemnified party or conferences with representatives of or
counsel for such Persons.

 

Section 6.9                                   Payment of Damages.

 

The indemnification required hereunder shall be made by periodic payments of the
amount of Damages in connection therewith within ten (10) days as and when
reasonably specific bills are received by, or Damages are incurred and
reasonable evidence thereof is delivered to, the indemnifying party.  In
calculating any amount to be paid by an indemnifying party by reason of the
provisions of this Agreement, the amount shall be reduced by all insurance
proceeds and any indemnification reimbursement proceeds received from third
parties credited to or received by the indemnified party related to the Damages.

 

Section 6.10                            Direct Claim.

 

Any claim by an indemnified party with respect to any Damages which do not
result from a Third Party Indemnity Claim (a “Direct Claim”) will be asserted by
giving the indemnifying party reasonably prompt written notice thereof, stating
the nature of such claim in reasonable detail and indicating the estimated
amount, if practicable.  The indemnifying party will have a period of forty-five
(45) days from receipt of such Direct Claim within which to respond to such

 

28

--------------------------------------------------------------------------------

 

Direct Claim.  If the indemnifying party does not respond within such forty-five
(45) day period, the indemnifying party will be deemed to have accepted such
Direct Claim.  If the indemnifying party rejects such Direct Claim, the
indemnified party will be free to seek enforcement of its rights to
indemnification under this Agreement.

 

Section 6.11                            Limitations on Indemnification.

 

(a)                                 To the extent that the Partnership
Indemnified Parties would otherwise be entitled to indemnification for Damages
pursuant to Section 6.1(i), EMI shall be liable only if (i) the Damages with
respect to any individual claim exceed $50,000 (the “Minimum Claim Amount”) and
(ii) the Damages for all claims that exceed the Minimum Claim Amount exceed, in
the aggregate, $1,800,000 (the “Deductible Amount”), and then EMI shall be
liable only for Damages to the extent of any excess over the Deductible Amount. 
In no event shall EMI’s aggregate liability to the Partnership Indemnified
Parties under Section 6.1(i) exceed $36,000,000 (the “Ceiling Amount”).
Notwithstanding the foregoing, the Deductible Amount and the Ceiling Amount
shall not apply to breaches or inaccuracies of representations and warranties
contained in the EMI Fundamental Representations.

 

(b)                                 To the extent that the EMI Indemnified
Parties would otherwise be entitled to indemnification for Damages pursuant to
Section 6.2(i), the Partnership shall be liable only if (i) the Damages with
respect to any individual claim exceed the Minimum Claim Amount and (ii) the
Damages for all claims that exceed the Minimum Claim Amount exceed, in the
aggregate, the Deductible Amount, and then the Partnership shall be liable only
for Damages to the extent of any excess over the Deductible Amount.  In no event
shall the Partnership’s aggregate liability to the EMI Indemnified Parties under
Section 6.2 exceed the Ceiling Amount.

 

(c)                                  Additionally, neither the Partnership, on
the one hand, nor EMI, on the other hand, will be liable as an indemnitor, and
each of EMI and the Partnership hereby waives claims against the other party,
under this Agreement for any consequential, incidental, special, indirect,
exemplary or punitive damages based on any theory of liability (including lost
profits)  suffered or incurred by the indemnified party or parties except to the
extent resulting pursuant to Third Party Indemnity Claims.

 

Section 6.12                            Sole Remedy.

 

No party shall have liability under this Agreement, the Assignment Agreements or
the transactions contemplated hereby or thereby except as is provided in
Article V or this Article VI (other than claims or causes of action arising from
fraud).

 

29

--------------------------------------------------------------------------------

 

ARTICLE VII
MISCELLANEOUS

 

Section 7.1                                   Acknowledgements.

 

Each party acknowledges that it has relied on the representations and warranties
of the other party expressly and specifically set forth in this Agreement,
including, in the case of the Partnership, the Schedules attached hereto.  Such
representations and warranties constitute the sole and exclusive representations
and warranties of the parties hereto in connection with the transactions
contemplated hereby, and the parties hereto understand, acknowledge and agree
that all other representations and warranties of any kind or nature, whether
expressed, implied or statutory, oral or written, past or present, are
specifically disclaimed.

 

Section 7.2                                   Cooperation; Further Assurances.

 

EMI, each Company and the Partnership shall use their respective commercially
reasonable efforts to obtain all approvals and consents required by or necessary
for the transactions contemplated by this Agreement and the Assignment
Agreements.  Each of the parties acknowledges that certain actions may be
necessary with respect to the matters and actions contemplated by this Agreement
and the Assignment Agreements such as making notifications and obtaining
consents or approvals or other clearances that are material to the consummation
of the transactions contemplated hereby, and each agrees to take all appropriate
action and to do all things necessary, proper or advisable under Applicable Laws
and regulations to make effective the transactions contemplated by this
Agreement and the Assignment Agreements; provided, however, that nothing in this
Agreement will require any party hereto to hold separate or make any divestiture
not expressly contemplated herein of any asset or otherwise agree to any
restriction on its operations or other burdensome condition which would in any
such case be material to its assets, liabilities or business in order to obtain
any consent or approval or other clearance required by this Agreement or the
Assignment Agreements.

 

Section 7.3                                   Expenses.

 

Except as otherwise provided herein and regardless of whether the transactions
contemplated hereby are consummated, each party shall pay its own expenses
incident to this Agreement and all action taken in preparation for carrying this
Agreement into effect.

 

Section 7.4                                   Notices.

 

Any notice, request, instruction, correspondence or other document to be given
hereunder by any party hereto to another party hereto (herein collectively
called “Notice”) shall be in writing and delivered in person, by courier service
requiring acknowledgment of receipt of delivery or by fax, as follows:

 

If to EMI, addressed to:

 

EnLink Midstream, Inc.

2501 Cedar Springs Rd.

 

30

--------------------------------------------------------------------------------

 

Dallas, TX  75201

Attention: General Counsel

Tel: (214) 953-9500

Fax: (214) 953-9501

 

with copies (which shall not constitute notice) to:

 

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, TX  75201

Attention: Douglass M. Rayburn

Tel: (214) 953-6634

Fax: (214) 661-4634

 

If to the Partnership or either Company, addressed to:

 

EnLink Midstream Partners, LP

2501 Cedar Springs Rd.

Dallas, TX  75201

Attention: General Counsel

Tel: (214) 953-9500

Fax: (214) 953-9501

 

with copies (which shall not constitute notice) to:

 

Morris, Nichols, Arsht & Tunnell LLP

1201 North Market Street, 16th Floor

P.O. Box 1347

Attention: Louis G. Hering

                                                Frederick H. Alexander

Tel: (302) 658-9200

Fax: (302) 658-3989

 

Notice given by personal delivery or courier service shall be effective upon
actual receipt.  Notice given by fax shall be confirmed by appropriate answer
back and shall be effective upon actual receipt if received during the
recipient’s normal business hours, or at the beginning of the recipient’s next
business day after receipt if not received during the recipient’s normal
business hours.  Any party may change any address to which Notice is to be given
to it by giving Notice as provided above of such change of address.

 

Section 7.5                                   Governing Law.

 

(a)                                 This Agreement shall be subject to and
governed by the laws of the State of Delaware.  Each Party hereby submits to the
exclusive jurisdiction of the state and federal courts in the State of Texas and
to venue in the state courts in Dallas County, Texas and the Federal District
Court for the Northern

 

31

--------------------------------------------------------------------------------

 

District of Texas located in Dallas County, Texas, without regard to its
principles of conflicts of law.

 

(b)                                 Each of the parties to this Agreement
irrevocably waives any and all right to trial by jury in any legal proceeding
between the parties arising out of or relating to this Agreement or the
transactions contemplated by this Agreement.

 

Section 7.6                                   Public Statements.

 

The parties hereto shall consult with each other and no party shall issue any
public announcement or statement with respect to this Agreement or the
transactions contemplated hereby without the consent of the other party, unless
the party desiring to make such announcement or statement, after seeking such
consent from the other parties, obtains advice from legal counsel that a public
announcement or statement is required by Applicable Law or stock exchange
regulations.

 

Section 7.7                                   Entire Agreement; Amendments and
Waivers.

 

(a)                                 This Agreement and the Assignment Agreements
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof. 
Each party to this Agreement agrees that no other party to this Agreement
(including its agents and representatives) has made any representation,
warranty, covenant or agreement to or with such party relating to this Agreement
or the transactions contemplated hereby, other than those expressly set forth
herein and in the Assignment Agreements, as applicable.

 

(b)                                 No supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by each party to be
bound thereby.  No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.

 

Section 7.8                                   Action by the Partnership.

 

With respect to any action, notice, consent, approval or waiver that is required
to be taken or given or that may be taken or given by the Partnership with
respect to the transactions contemplated hereby, such action, notice, consent,
approval or waiver shall be taken or given by the Conflicts Committee on behalf
of the Partnership.

 

Section 7.9                                   Conflicting Provisions.

 

This Agreement and the Assignment Agreements, read as a whole, set forth the
parties’ rights, responsibilities and liabilities with respect to the
transactions contemplated by this Agreement.  In this Agreement and the
Assignment Agreements, and as between them, specific

 

32

--------------------------------------------------------------------------------

 

provisions prevail over general provisions.  In the event of a conflict between
this Agreement and either Assignment Agreement, this Agreement shall control.

 

Section 7.10                            Binding Effect and Assignment.

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns, but neither this
Agreement nor any of the rights, benefits or obligations hereunder shall be
assigned or transferred, by operation of law or otherwise, by any party hereto
without the prior written consent of each other party; provided, however, that
the Partnership may assign any of its rights, interests, obligations or benefits
under this Agreement (including its right to acquire some or all of the
Transferred Units at the Closing) to any direct or indirect subsidiary or other
Affiliate of the Partnership.  Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their respective permitted successors and assigns, any rights, benefits or
obligations hereunder, except for express language with respect to the
Partnership Indemnified Parties and the EMI Indemnified Parties contained in the
indemnification provisions of Article VI.

 

Section 7.11                            Severability.

 

If any provision of the Agreement is rendered or declared illegal or
unenforceable by reason of any existing or subsequently enacted legislation or
by decree of a court of last resort, the Partnership and EMI shall promptly meet
and negotiate substitute provisions for those rendered or declared illegal or
unenforceable, but all of the remaining provisions of this Agreement shall
remain in full force and effect.

 

Section 7.12                            Interpretation.

 

It is expressly agreed by the parties that neither this Agreement nor either
Assignment Agreement shall be construed against any party hereto or thereto, and
no consideration shall be given or presumption made, on the basis of who drafted
this Agreement, the applicable Assignment Agreement or any provision hereof or
thereof or who supplied the form of this Agreement or such Assignment
Agreement.  Each party agrees that this Agreement has been purposefully drawn
and correctly reflects its understanding of the transactions contemplated by
this Agreement and, therefore, waives the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.

 

Section 7.13                            Headings and Disclosure Schedules.

 

The headings of the several Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.  The Disclosure Schedules and
the Exhibits referred to herein are attached hereto and incorporated herein by
this reference, and unless the context expressly requires otherwise, the
Disclosure Schedules and such Exhibits are incorporated in the definition of
“Agreement.”

 

Section 7.14                            Multiple Counterparts.

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

 

*    *    *    *     *

 

33

--------------------------------------------------------------------------------

 

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

 

 

 

EMI:

 

 

 

ENLINK MIDSTREAM, INC.

 

 

 

 

 

 

 

By:

/s/ Michael J. Garberding

 

 

Name:

Michael J. Garberding

 

 

Title:

Executive Vice President and

 

 

 

Chief Financial Officer

 

 

 

 

 

 

THE PARTNERSHIP:

 

 

 

ENLINK MIDSTREAM PARTNERS, LP

 

 

 

 

By:

EnLink Midstream GP, LLC,

 

 

its general partner

 

 

 

 

 

 

By:

/s/ Michael J. Garberding

 

 

Name:

Michael J. Garberding

 

 

Title:

Executive Vice President and

 

 

 

Chief Financial Officer

 

Signature Page to Contribution and Transfer Agreement

 

--------------------------------------------------------------------------------