Exhibit 10.1
Execution Version

 

CONTRIBUTION AGREEMENT

BY AND AMONG

SOUTHCROSS ENERGY PARTNERS, L.P.,

SOUTHCROSS ENERGY GP LLC

AND

TEXSTAR MIDSTREAM SERVICES, LP

DATED AS OF JUNE 11, 2014

 

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TABLE OF CONTENTS

 
 
Page
ARTICLE I
DEFINITIONS AND CONSTRUCTION
5
1.1
Definitions
5
1.2
Construction
5
 
 
 
ARTICLE II
CONTRIBUTION, CLOSING AND CLOSING CONDITIONS
6
2.1
Contribution of the Frio Interests
6
2.2
Consideration
6
2.3
Closing and Closing Date
6
2.4
Conditions to TexStar’s Obligation to Close
6
2.5
Conditions to SXE’s Obligation to Close
7
2.6
Conditions to each Party’s Obligation to Close
7
 
 
 
ARTICLE III
CLOSING ACTIONS
8
3.1
TexStar’s Closing Actions
8
3.2
SXE’s Closing Actions
9
 
 
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TEXSTAR REGARDING TEXSTAR
10
4.1
Organization and Good Standing
10
4.2
Power and Authority
10
4.3
No Conflict; Consents
10
4.4
Ownership Interests
11
4.5
Financial Advisors
11
4.6
No Litigation
11
4.7
Acquisition of PIK Common Units
11
 
 
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TEXSTAR REGARDING THE TEXSTAR GROUP AND THE
TEXSTAR BUSINESS
12
5.1
Organization and Qualification
12
5.2
Capitalization
12
5.3
No Conflict; Consents
13
5.4
TexStar Financial Statements
14
5.5
Liabilities; Indebtedness
14
5.6
Title to Properties and Assets; Easements
15
5.7
Contracts
15
5.8
Permits
17

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5.9
Environmental Matters
17
5.10
Taxes
18
5.11
Compliance with Law
20
5.12
Governmental Approvals
20
5.13
Proceedings
20
5.14
Absence of Changes
21
5.15
Transactions with Interested Persons
22
5.16
Financial Advisors
23
5.17
Employee Matters
23
5.18
Benefit Plans
24
5.19
Insurance Coverage
27
5.20
Intellectual Property
27
5.21
Customers and Suppliers
27
5.22
Current Business
27
5.23
Condemnation; Casualty Loss
27
5.24
Books and Records
27
5.25
Materials Provided to Conflicts Committee
28
5.26
No Representations or Warranties Implied; Independent Investigation; Forecasts
28
 
 
 
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SXE REGARDING THE SXE GROUP
29
6.1
Organization and Good Standing
29
6.2
Power and Authority
30
6.3
No Conflict
30
6.4
Capitalization
30
6.5
SXE SEC Documents
31
6.6
Absence of Changes
31
6.7
Proceedings
32
6.8
Taxes
32
6.9
Financial Capability
32
6.10
Financial Advisors
32
6.11
Acquisition of Frio Interests
32
6.12
No Representations or Warranties Implied; Independent Investigation; Forecasts
33
 
 
 
ARTICLE VII
COVENANTS OF THE PARTIES
34
7.1
Conduct of the Business
34
7.2
Access to Books and Records
35
7.3
Contact with Customers and Suppliers
35
7.4
Regulatory Filings
36

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7.5
Notification
37
7.6
Conditions
37
7.7
Preparation of Supporting Documents
37
7.8
Transaction Expenses
37
7.9
Exclusivity
37
7.10
Publicity
38
7.11
Confidentiality
38
7.12
Restructuring
38
7.13
Tax Matters
39
 
 
 
ARTICLE VIII
TERMINATION
43
8.1
Grounds for Termination
43
8.2
Effect of Termination
44
 
 
 
ARTICLE IX
INDEMNIFICATION
44
9.1
Indemnification by TexStar
44
9.2
Indemnification by SXE
45
9.3
Survival
45
9.4
Third Person Claims
46
9.5
Direct Claims
47
9.6
Basket; Indemnification Cap
47
9.7
Calculation of Losses
48
9.8
Other Limitations
48
 
 
 
ARTICLE X
MISCELLANEOUS
49
10.1
Governing Law; Venue; Waiver of Jury Trial
49
10.2
Third-Party Beneficiaries
50
10.3
No Partnership
50
10.4
Assignment
50
10.5
Entire Agreement
50
10.6
Amendment
50
10.7
Notices
51
10.8
Waiver
52
10.9
Severability
52
10.10
Conspicuousness of Provisions
52
10.11
Deliveries to a Party
53
10.12
Counterparts; Delivery
53
10.13
Representation by Counsel
53
10.14
Time of the Essence
53
10.15
Schedules
53

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Exhibits

Exhibit A – Definitions
Exhibit B – PIK Common Units

Schedules

Schedule 1.1(a)    Knowledge (TexStar)
Schedule 1.1(b)    Knowledge (SXE)
Schedule 1.1(c)    TexStar Capex Budget
Schedule 3.1(b)    Closing Consents
Schedule 4.3        No Conflicts; Consents
Schedule 4.5        Financial Advisors
Schedule 5.2        Capitalization
Schedule 5.3        No Conflicts; Consents
Schedule 5.5(a)    No Undisclosed Liabilities
Schedule 5.5(b)    Third Party Debt
Schedule 5.5(c)    Liabilities to Affiliates
Schedule 5.6        Sufficiency of Assets
Schedule 5.7(a)(i)    Current Contracts
Schedule 5.7(a)(ii)    TexStar Contracts
Schedule 5.9        Environmental Matters
Schedule 5.12        Governmental Approvals
Schedule 5.13        Proceedings
Schedule 5.14        Absence of Changes
Schedule 5.15        Transactions with Interested Persons
Schedule 5.16        Financial Advisors
Schedule 5.17        Employee Matters
Schedule 5.18(a)    Benefit Plans
Schedule 5.18(b)    Qualified Benefit Plans
Schedule 5.18(h)    Post-Employment Benefit Plans
Schedule 5.18(m)    Conflicts with Benefit Plans
Schedule 5.19        Insurance
Schedule 5.20        Intellectual Property
Schedule 5.21        Customers and Suppliers
Schedule 5.22        Current Business
Schedule 6.3        No Conflict
Schedule 6.10        Financial Advisors
Schedule 7.12        Rich Gas System

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CONTRIBUTION AGREEMENT
This Contribution Agreement (this “Agreement”) is made as of June 11, 2014, by
and among Southcross Energy Partners, L.P., a Delaware limited partnership
(“SXE”), Southcross Energy GP LLC, a Delaware limited liability company (“SXE
Energy”), TexStar Midstream Services, LP, a Texas limited partnership
(“TexStar”). SXE, SXE Energy and TexStar are referred to herein individually as
a “Party” and collectively as the “Parties.”
WHEREAS, as of the date hereof, TexStar owns (a) 100% of the outstanding limited
partnership interest (the “Frio LP Interest”) in Frio LaSalle Pipeline, LP, a
Texas limited partnership (“Frio LP”), and (b) 100% of the outstanding limited
liability company interest (the “Frio GP Interest” and, together with the Frio
LP Interest, the “Frio Interests”) in Frio LaSalle GP, LLC, a Texas limited
liability company and the sole general partner of Frio LP (“Frio GP”);
WHEREAS, on the Closing Date, among the other actions described herein, TexStar
will contribute to SXE the Frio Interests in exchange for the consideration
described herein; and
WHEREAS, the Conflicts Committee has previously (a) received an opinion of
Jefferies, the financial advisor to the Conflicts Committee, that the
consideration to be paid in connection with such contribution is fair, from a
financial point of view, to the public holders of Common Units of SXE and (b)
determined that this Agreement and such contribution are in the best interests
of SXE and are fair and reasonable to SXE and its public holders of Common Units
and recommended that the board of directors of SXE GP approve this Agreement and
the Transactions.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements, covenants, representations and warranties set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and accepted, the Parties hereby agree as follows:
ARTICLE IDEFINITIONS AND CONSTRUCTION
1.1    Definitions. Exhibit A sets forth the definitions of the capitalized
terms set forth herein.
1.2    Construction. In this Agreement, unless a clear contrary intention
appears in the applicable provision: (a) the singular includes the plural and
vice versa; (b) reference to a Person includes such Person’s successors and
assigns but, in the case of a Party, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity; (c) reference to any gender includes
each other gender; (d) references to any Exhibit, Schedule, Section, Article,
subsection and other subdivision refer to the corresponding Exhibit, Schedule,
Section, Article, subsection and other subdivision of this Agreement; (e)
references in any Section or Article or definition to any clause means such
clause of such Section, Article or definition; (f) “hereunder,” “hereof,”
“hereto” and words of similar import are references to this Agreement as a whole
and not to any particular provision of this Agreement; (g) the word “including”
(in its various forms) means “including without limitation”; (h) each

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accounting term not otherwise defined in this Agreement has the meaning commonly
applied to it in accordance with GAAP; (i) references to “days” are to calendar
days; and (j) all references to money refer to the lawful currency of the United
States. The Table of Contents and the Article and Section titles and headings in
this Agreement 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.
ARTICLE II    
CONTRIBUTION, CLOSING AND CLOSING CONDITIONS
2.1    Contribution of the Frio Interests. At the Closing and subject to the
terms and conditions set forth in this Agreement and the Assignment and
Contribution Agreement, (a) TexStar shall contribute, convey, transfer and
assign the Frio Interests to SXE and (b) SXE shall then further contribute,
convey, transfer and assign the Frio Interests to SXE Energy.
2.2    Consideration. As consideration for the contribution of the Frio
Interests to SXE, SXE shall deliver to TexStar: (a) an amount in cash equal to
One Hundred Eighty Million Dollars ($180,000,000) (the “Cash Consideration”),
payable to TexStar on the Closing Date by wire transfer of immediately available
funds to the account(s) designated by TexStar not less than two Business Days
prior to the Closing, and (b) 14,633,000 units of a new class of SXE common
units (“PIK Common Units”) with the rights and characteristics set forth on
Exhibit B hereto (the “Unit Consideration” and, together with the Cash
Consideration, the “Consideration”), to be issued (or evidenced by book entry
notation in SXE’s register) to TexStar on the Closing Date.
2.3    Closing and Closing Date. The consummation of the Transactions
(the “Closing”) shall take place at the offices of Gardere Wynne Sewell LLP,
1601 Elm Street, Suite 3000, Dallas, Texas 75201, at 10:00 a.m. (local time) on
the first Business Day following full satisfaction or due waiver of all of the
closing conditions set forth in this Article II (other than those to be
satisfied at the Closing, but subject to the satisfaction or due waiver of such
conditions) or on such other date, at such other time and/or location as
mutually agreed by the Parties (the “Closing Date”).
2.4    Conditions to TexStar’s Obligation to Close. The obligation of TexStar to
consummate the Transactions is subject to the satisfaction or waiver by TexStar
of the following conditions at or immediately before the Closing:
(a)    the (i) Fundamental Representations of SXE shall be true and correct on
and as of the Closing Date as if made on the Closing Date and
(ii) representations and warranties of SXE, other than the Fundamental
Representations of SXE, set forth in Article VI shall be true and correct on and
as of the Closing Date as if made on the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such earlier date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth in any individual representation or
warranty) does not constitute, individually or in the aggregate, a Material
Adverse Effect as to the SXE Group;
(b)    SXE shall have performed in all material respects all of the covenants
and agreements required to be performed by it under this Agreement at or before
the Closing;

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(c)    there shall not have been or occurred since the date of this Agreement
any event, change, occurrence or circumstance that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect on the SXE Group; and
(d)    SXE’s and SXE Energy’s obligations under Section 3.2 shall have been
fulfilled.
2.5    Conditions to SXE’s Obligation to Close. The obligation of SXE to
consummate the Transactions is subject to the satisfaction or waiver by SXE of
the following conditions at or immediately before the Closing:
(a)    the (i) Fundamental Representations of TexStar (other than Section 5.10)
shall be true and correct on and as of the Closing Date as if made on the
Closing Date and (ii) representations and warranties of TexStar (including
Section 5.10), other than the Fundamental Representations of TexStar, set forth
in Article IV and Article V shall be true and correct on and as of the Closing
Date as if made on the Closing Date (except to the extent expressly made as of
an earlier date, in which case as of such earlier date), except where the
failure of such representations and warranties to be so true and correct
(without giving effect to any limitation as to “materiality” or “Material
Adverse Effect” set forth in any individual representation or warranty) does not
constitute, individually or in the aggregate, a Material Adverse Effect as to
the TexStar Group;
(b)    TexStar shall have performed in all material respects all of the
covenants and agreements required to be performed by it under this Agreement at
or before the Closing;
(c)    there shall not have been or occurred since the date of this Agreement
any event, change, occurrence or circumstance that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect on the TexStar Group;
(d)    TexStar shall have completed the TexStar Rich Gas Restructuring; and
(e)    TexStar’s obligations under Section 3.1 shall have been fulfilled.
2.6    Conditions to each Party’s Obligation to Close. The obligations of each
Party to consummate the Transactions are subject to the satisfaction or waiver
by such Party of the following conditions at or immediately before the Closing:
(a)    the applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the “HSR Act”) shall have expired or been terminated,
if applicable;
(b)    no Proceeding shall, on the Closing Date, be in effect that restrains,
prohibits or makes illegal the consummation of the Transactions;
(c)    each of the conditions precedent to the transactions contemplated by the
Master Contribution Agreement (other than those conditions that will be
satisfied at the closing thereof) shall have been satisfied or waived;

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(d)    funds sufficient to pay the Cash Consideration in full shall be available
under the SXE Credit Facility;
(e)    SXE shall have amended the SXE Partnership Agreement to authorize the PIK
Common Units and establish the rights, powers and preferences related thereto;
and
(f)    this Agreement shall not have been terminated in accordance with
Section 8.1.
ARTICLE III    
CLOSING ACTIONS
3.1    TexStar’s Closing Actions. On the Closing Date, TexStar shall take the
following actions:
(a)    TexStar shall deliver to SXE a counterpart signature page to the
Assignment and Contribution Agreement, duly executed by TexStar;
(b)    TexStar shall deliver to SXE the consents and approvals set forth on
Schedule 3.1(b);
(c)    TexStar shall deliver to SXE a certificate of good standing with respect
to TexStar and each member of the TexStar Group issued by the relevant
Governmental Authority of each such Person’s jurisdiction of organization, as of
a recent date;
(d)    TexStar shall deliver to SXE a certificate signed by the Secretary of
TexStar (or by an authorized officer of its general partner) certifying as to
(i) the accuracy and full force and effect of resolutions of the general partner
of TexStar authorizing TexStar to enter into the Transactions and the Operative
Documents and to perform its obligations hereunder and thereunder and (ii) the
names and signatures of the officers of TexStar (or the officers of its general
partner) authorized to sign this Agreement and any other Operative Documents on
its behalf;
(e)    TexStar shall deliver to SXE a certificate, dated as of the Closing Date,
stating that the conditions specified in Section 2.5(a), (b) and (c) have been
satisfied;
(f)    TexStar shall deliver to SXE a certificate (in such form as may be agreed
to by SXE) conforming to the requirements of Treasury Regulations Sections
1.1445-2(b)(2); and
(g)    TexStar shall execute and deliver to SXE such other documents, agreements
or instruments as are contemplated in this Agreement or that may reasonably be
necessary or appropriate to evidence the Transactions or to effectuate the
purpose or intent of this Agreement.

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3.2    SXE’s Closing Actions. On the Closing Date, SXE and SXE Energy shall take
the following actions:
(a)    SXE shall deliver to TexStar the Consideration as provided in Section
2.2;
(b)    Each of SXE and SXE Energy shall deliver to TexStar a counterpart
signature page to the Assignment and Contribution Agreement, duly executed by
each of SXE and SXE Energy;
(c)    SXE shall deliver to TexStar a certificate of good standing with respect
to each member of the SXE Group issued by the relevant Governmental Authority of
each such Person’s jurisdiction of organization, as of a recent date;
(d)    SXE shall deliver to TexStar a certificate signed by an authorized
officer of SXE GP certifying as to (i) the accuracy and full force and effect of
resolutions of the board of directors of SXE GP authorizing SXE to enter into
the Transactions and the Operative Documents and to perform its obligations
hereunder and thereunder and (ii) the names and signatures of the officers of
SXE (or the officers of SXE GP) authorized to sign this Agreement and any other
Operative Documents on its behalf;
(e)    SXE Energy shall deliver to TexStar a certificate signed by the Secretary
of SXE Energy certifying as to (i) the accuracy and full force and effect of
resolutions of the board of directors of SXE GP authorizing SXE Energy to enter
into the Transactions and the Operative Documents and to perform its obligations
hereunder and thereunder and (ii) the names and signatures of the officers of
SXE Energy authorized to sign this Agreement and any other Operative Documents
on its behalf;
(f)    SXE shall deliver to TexStar a certificate, dated as of the Closing Date,
stating that the conditions specified in Section 2.4(a), (b) and (c) have been
satisfied;
(g)    SXE shall enter into the SXE Credit Facility; and
(h)    SXE and SXE Energy shall execute and deliver to TexStar such other
documents, agreements or instruments as are contemplated in this Agreement or
that may reasonably be necessary or appropriate to evidence the Transactions or
to effectuate the purpose or intent of this Agreement.

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ARTICLE IV    
REPRESENTATIONS AND WARRANTIES OF TEXSTAR REGARDING TEXSTAR
TexStar hereby represents and warrants to SXE as follows:
4.1    Organization and Good Standing. TexStar is duly organized, validly
existing and in good standing under the Laws of the jurisdiction in which it is
organized and has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement and any other Operative Document to
which it is a party and to consummate the Transactions.
4.2    Power and Authority. The execution and delivery by TexStar of this
Agreement and the other Operative Documents to which it is a party, and the
performance of the Transactions by TexStar, have been duly authorized by the
general partner of TexStar, and no other action on the part of TexStar or its
general partner is necessary to authorize this Agreement and the other Operative
Documents to which TexStar is a party or to consummate the Transactions. This
Agreement and each other Operative Document to which TexStar is a party has been
or will be duly and validly executed and delivered by TexStar, and constitutes
or will constitute a valid and binding obligation of TexStar, enforceable
against TexStar in accordance with its terms, except as such enforceability may
be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors generally, (b) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances and (c) public policy considerations with
respect to the enforceability of rights of indemnification.
4.3    No Conflict; Consents.
    
(a)    Except as set forth on Schedule 4.3, neither the execution and delivery
by TexStar of this Agreement and the other Operative Documents to which TexStar
is a party nor consummation or performance by TexStar of the Transactions will:
(i) conflict with or violate any Law binding upon TexStar, (ii) conflict with or
violate the Organizational Documents of TexStar, (iii) conflict with or violate
any judgment, decree or order to which TexStar is bound, (iv) conflict with or
result in a material violation of any provision of or constitute (with or
without the giving of notice or the passage of time or both) a material default
under or give rise (with or without the giving of notice or the passage of time
or both) to any right of termination, cancelation, acceleration or loss of
benefit under, or require any actions (including obtaining the consent of any
Person or providing notice to any Person) under, any material Contract to which
TexStar is a party or by which TexStar or any of its properties may be bound or
result in the imposition of an Encumbrance on any of the Frio Interests, other
than in the case of clauses (ii), (iii) and (iv), such conflicts, violations,
defaults, terminations, cancelations or accelerations that would not have a
Material Adverse Effect on TexStar’s ability to perform its obligations under
this Agreement or to consummate the Transactions.

(b)    TexStar has obtained or otherwise received all authorizations, consents,
orders, approvals, declarations and filings with respect to TexStar’s entry into
the Operative Documents.

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4.4    Ownership Interests. TexStar owns and has good and valid title to the
Frio Interests, free and clear of any Encumbrances (other than restrictions on
transfer pursuant to applicable securities Laws, the Organizational Documents of
Frio LP and Frio GP and Encumbrances under the BBTS Credit Facility that will be
released in full at Closing). TexStar is not a party to any voting trust, proxy
or other agreement or understanding with respect to the voting of the Frio
Interests. Other than in connection with this Agreement, TexStar is not a party
to any Contract pursuant to which TexStar has, directly or indirectly, granted
any option, warrant or other right to any Person to acquire any Equity Interests
in any member of the TexStar Group.
4.5    Financial Advisors. Except as set forth on Schedule 4.5, no brokerage or
finder’s fees or commissions are or will be payable by TexStar or its Affiliates
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, intermediary, bank or other Person with respect to the
Transactions.
4.6    No Litigation. There is no Proceeding pending or, to the Knowledge of
TexStar, threatened against TexStar that seeks to enjoin, restrict, limit or
obtain monetary damages in respect of the execution and delivery of this
Agreement or TexStar’s performance under this Agreement or in respect of the
Transactions.
4.7    Acquisition of PIK Common Units.
(a)    TexStar has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the PIK Common Units being issued to TexStar in connection with the
Transactions (the “TexStar SXE Interest”), and is capable of bearing the
economic risk of such investment. TexStar is an “accredited investor” as that
term is defined in Rule 501 of Regulation D (without regard to Rule 501(a)(4))
promulgated under the Securities Act. TexStar is acquiring the TexStar SXE
Interest for investment for its own account and not with a view toward or for
sale in connection with any distribution thereof, or with any present intention
of distributing or selling the TexStar SXE Interest, in violation of the
Securities Act. Other than pursuant to the Master Contribution Agreement,
TexStar does not have any Contract with any Person to sell, transfer or grant
participations to such Person or to any other Person with respect to the TexStar
SXE Interest. TexStar acknowledges and understands that (i) its acquisition of
the TexStar SXE Interest has not been registered under the Securities Act in
reliance on an exemption therefrom and (ii) the TexStar SXE Interest will, upon
such acquisition, be characterized as “restricted securities” under state and
federal securities Laws. TexStar further acknowledges and understands that the
TexStar SXE Interest may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of except pursuant to an effective
registration statement under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act, and in
compliance with other applicable state and federal securities Laws.
(b)    TexStar has undertaken such investigation as it has deemed necessary to
enable it to make an informed decision with respect to the execution, delivery
and performance of this Agreement and the other Operative Documents, and the
acquisition of the TexStar SXE Interest. TexStar has had an opportunity to ask
questions and receive answers from SXE regarding the business, properties,
prospects and financial condition of the members of the SXE Group and SXE GP.

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ARTICLE V    
REPRESENTATIONS AND WARRANTIES OF TEXSTAR REGARDING THE TEXSTAR GROUP AND THE
TEXSTAR BUSINESS
TexStar hereby represents and warrants to SXE and SXE Energy as follows:
5.1    Organization and Qualification.
(a)    Each member of the TexStar Group (i) is duly organized, validly existing
and in good standing under the Laws of the jurisdiction in which it is organized
and is duly authorized and qualified to carry on its respective TexStar
Business, (ii) is duly qualified to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect on the TexStar Group, and (iii) has the requisite power and authority to
own, lease and operate its respective TexStar Assets and to carry on its
respective TexStar Business.
(b)    TexStar has made available to SXE true and complete copies of (i) the
Organizational Documents of each member of the TexStar Group and (ii) the minute
books of each member of the TexStar Group, which contain records of all meetings
held of, and other actions taken by, the partners, members, shareholders or
other holders of Equity Interests in members of the TexStar Group, the Boards of
Directors (or equivalent governing body) of each member of the TexStar Group,
and each committee thereof.
(c)    Except as has been obtained before the Closing, no action by a member of
the TexStar Group is necessary to authorize this Agreement or the other
Operative Documents or to consummate the Transactions.
5.2    Capitalization. Except as set forth on Schedule 5.2:
(a)    Frio GP is the sole general partner of Frio LP, and there has been no
other general partner of Frio LP since its formation. No member of the TexStar
Group owns, directly or indirectly, any Equity Interest in any Person (other
than with respect to Equity Interests of another member of the TexStar Group).
Schedule 5.2 sets forth, for each member of the TexStar Group, the issued and
outstanding Equity Interests (including the Frio Interests) of such Person and
the owners thereof (which (i) as to the ownership of the TexStar JV Entities by
Persons other than a member of the TexStar Group, is to the Knowledge of TexStar
and (ii) does not give effect to the TexStar Rich Gas Restructuring).
(b)    Other than as contemplated by this Agreement, there are no outstanding
options, restricted units, appreciation rights, profits interests,
subscriptions, warrants, securities or rights of any kind (whether debt or
equity) that are convertible into, exercisable or exchangeable for Equity
Interests (including the Frio Interests) of any member of the TexStar Group, or
calls, commitments, pre-emptive or anti-dilutive rights, rights of first offer
or refusal or other rights obligating a member of the TexStar Group to issue or
sell any securities or Equity Interests (including any Frio Interests), or
otherwise requiring TexStar

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or a member of the TexStar Group to give any Person the right to participate in
the equity or net income of any other member of the TexStar Group.
(c)    The respective Equity Interests set forth on Schedule 5.2 (including the
Frio Interests) constitute all of the outstanding Equity Interests in the
respective members of the TexStar Group and, other than Equity Interests in the
TexStar JV Entities held by Atlas, are owned by TexStar or another member of the
TexStar Group free and clear of any and all Encumbrances (other than
restrictions on transfer pursuant to applicable securities Laws, Encumbrances
under the BBTS Credit Facility that will be released in full at Closing and
Encumbrances existing under the Organizational Documents of the members of the
TexStar Group). All Equity Interests (including the Frio Interests) of each
member of the TexStar Group (i) were issued in compliance with all Laws and any
preemptive or anti-dilutive rights, rights of first offer or refusal and any
other statutory or contractual rights of any Person and (ii) have been duly
authorized, validly issued, fully paid and are non-assessable (except as such
nonassessability may be affected by matters expressly set forth in the Law of
the jurisdiction of organization of such Person).
(d)    Except for this Agreement and the Organizational Documents of the members
of the TexStar Group, there are no agreements, voting trusts or other agreements
or understandings between or among the members of the TexStar Group to which any
such Person is a party or by which it is bound with respect to the transfer or
voting of any Equity Interests of a member of the TexStar Group, including the
Frio Interests (which, solely as such agreements, voting trusts or other
agreements or understandings to which Atlas may have caused a TexStar JV Entity
to be a party, is to the Knowledge of TexStar). Except for this Agreement, there
are no Contracts to purchase or redeem any of the outstanding Equity Interests
of a member of the TexStar Group (which, with respect to the Equity Interests of
the TexStar JV Entities held by Atlas, is to the Knowledge of TexStar).
5.3    No Conflict; Consents.
(a)    Except as set forth on Schedule 5.3, neither the execution and delivery
by TexStar of this Agreement or by TexStar or any member of the TexStar Group of
the other Operative Documents to which they are a Party, nor consummation or
performance by TexStar or any member of the TexStar Group of the Transactions
will: (i) conflict with or violate any Law binding on a member of the TexStar
Group, (ii) conflict with or violate the Organizational Documents of a member of
the TexStar Group, (iii) conflict with or violate any judgment, decree or order
to which a member of the TexStar Group is bound or (iv) conflict with or result
in a material violation of any provision of or constitute (with or without the
giving of notice or the passage of time or both) a material default under or
give rise (with or without the giving of notice or the passage of time or both)
to any right of termination, cancelation, acceleration or loss of benefit under,
or require any actions (including obtaining the consent of any Person or
providing notice to any Person) under, any TexStar Contract or result in the
imposition of an Encumbrance on any of the TexStar Assets or on any of the
Equity Interests of a member of the TexStar Group (including the Frio
Interests), other than in the case of clauses (ii), (iii) and (iv), such
conflicts, violations, defaults, terminations,

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cancelations or accelerations that would not have a Material Adverse Effect on
the TexStar Group.
(b)    TexStar has obtained or otherwise received all authorizations, consents,
orders, approvals, declarations and filings with respect to its entry into the
Operative Documents.
5.4    TexStar Financial Statements. TexStar has made available to SXE: (a) an
audited consolidated balance sheet of the TexStar Group and the Related
Affiliates as of December 31, 2013 and December 31, 2012 and the related audited
consolidated statements of income and cash flows for the fiscal years then ended
(the “TexStar Historical Financial Statements”) and (b) the TexStar Group’s
(together with certain of its Affiliates’) consolidated unaudited balance sheet
as of March 31, 2014 and the related consolidated unaudited statement of income
and cash flows for the three-month period then ended (the “TexStar Latest
Financial Statement” and, together with the TexStar Historical TexStar Financial
Statements, the “TexStar Financial Statements”). The TexStar Financial
Statements fairly present in all material respects the financial condition,
results of operations and cash flows of the TexStar Group and the Related
Affiliates on a consolidated basis as of the respective dates thereof and for
the periods therein referred to, all in accordance with GAAP consistently
applied throughout the periods involved. The TexStar Financial Statements have
been prepared from and are in accordance with the accounting records of the
TexStar Group and the Related Affiliates (and such records are true, correct and
accurately reflect in all material respects all transactions engaged in by the
members of the TexStar Group). Since January 1, 2012, except as set forth in the
TexStar Financial Statements, there has been no material change of the
accounting (tax or otherwise) policies, practices or procedures of any member of
the TexStar Group. The representations in this Section 5.4, as applicable, are
subject, in the case of unaudited financial statements, to normal year-end audit
adjustments and accruals and the absence of notes.
5.5    Liabilities; Indebtedness.
(a)    Except for liabilities reflected or reserved against in the TexStar
Latest Financial Statement, as of the date of this Agreement, none of Frio GP or
Frio LP or, to the Knowledge of TexStar, any TexStar JV Entity has any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
that would be required to be reflected on a balance sheet prepared in accordance
with GAAP, except liabilities and obligations that (i) constitute Transaction
Expenses, (ii) have been incurred by such member of the TexStar Group in the
Ordinary Course of Business since the date of the TexStar Latest Financial
Statement, (iii) are set forth on Schedule 5.5(a), (iv) arise under any TexStar
Contract (other than liabilities arising from any breach or default under such
Contracts) or (v) are not material to the TexStar Group, taken as a whole.
(b)    Schedule 5.5(b) sets forth and describes all Third Party Debt of each
member of the TexStar Group.
(c)    Except as set forth on Schedule 5.5(c), no member of the TexStar Group
owes any liabilities or obligations, whether known or unknown, suspected or
unsuspected, absolute or contingent, direct or indirect or nominally or
beneficially possessed or claimed,

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to TexStar or its Affiliates (other than members of the TexStar Group), and
there are no claims or Proceedings with respect thereto.
5.6    Title to Properties and Assets; Easements.
(a)    Each member of the TexStar Group has title to or rights or interests in
its real property and personal property, free and clear of all Encumbrances
(except Permitted Encumbrances and Encumbrances under the BBTS Credit Facility
that will be released in full at Closing), sufficient to allow it to conduct its
TexStar Business as currently being conducted.
(b)    Each member of the TexStar Group has such Easements as are necessary to
use, own and operate such Person’s assets in the manner such assets are
currently used, owned and operated by such Person, in each case, except as would
not reasonably be expected to have a Material Adverse Effect on the TexStar
Group. No event has occurred that allows, or after the giving of notice or the
passage of time, or both, would allow, revocation or termination thereof or
would result in any impairment of the rights of the holder of any such
Easements, in each case, except as would not reasonably be expected to have a
Material Adverse Effect on the TexStar Group.
(c)    Except as set forth on Schedule 5.6 and subject to the TexStar Rich Gas
Restructuring, the TexStar Assets are and at the Closing will be, sufficient to
permit the conduct of the TexStar Business in the manner presently conducted in
all material respects and for the performance of all obligations of the TexStar
Group (or any member thereof) under any Contracts relating to the TexStar
Business.
5.7    Contracts.
(a)    (I) Schedule 5.7(a)(i) contains a list of the following contracts to
which, as of the date hereof, any member of the TexStar Group is a party or
bound and (II) Schedule 5.7(a)(ii) contains a list of the following contracts to
which, after giving effect to the TexStar Rich Gas Restructuring, any member of
the TexStar Group will be a party or bound (each such contract contemplated by
clause (II) being a “TexStar Contract”):
(i)    any Contract that constitutes a commitment relating to any outstanding
Indebtedness of any member of the TexStar Group (in either case, whether
incurred, assumed, guaranteed or secured by any asset) other than agreements
solely between or among one or more of members of the TexStar Group;
(ii)    each natural gas transportation, gathering, treating, processing or
other contract, each natural gas liquids fractionation, transportation,
purchase, sales or storage Contract and each natural gas purchase Contract that
during the 12 months ended March 31, 2014 individually involved, or is
reasonably expected in the future to involve, annual revenues received by or
payments made by any member of the TexStar Group in excess of $5,000,000 in the
aggregate;

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(iii)    each Contract for lease of personal property or real property involving
aggregate payments in excess of $1,000,000 in any calendar year;
(iv)    each Contract (other than a Benefit Plan) containing a non-compete or
similar type of provision that, following the Closing, would by its terms
materially restrict the ability of SXE or any member of the TexStar Group to
compete in any line of business or with any Person or in any geographic area
during any period of time after the Closing and any Contract that grants to any
Person any right of first refusal, right of first offer or similar right in any
material asset or property of any member of the TexStar Group;
(v)    each Contract involving the pending acquisition or sale of (or option to
purchase or sell) any assets or properties of any member of the TexStar Group,
other than an acquisition or sale in the ordinary course of business consistent
with past practice;
(vi)    each Contract for futures, swap, collar, put, call, floor, cap, option,
or other Contract that is intended to reduce or eliminate the fluctuations in
the prices of commodities, including natural gas, natural gas liquids, crude oil
and condensate that will be binding on any member of the TexStar Group after the
Closing;
(vii)    each partnership, joint venture or limited liability company agreement
to which any member of the TexStar Group is a party;
(viii)    any collective bargaining, works council or similar labor Contract (a
“Labor Agreement”) to which any member of the TexStar Group is a party or is
subject;
(ix)    any Contract for employment with any employee of the TexStar Group;
(x)    any Contract (other than Contracts of the type described in
Section 5.7(a)(ii)) for the purchase by any member of the TexStar Group of
materials, supplies, goods, services, equipment or other assets with a value in
excess of $5,000,000 that cannot be terminated by such member of the TexStar
Group on not more than 90 days’ notice without penalty; and
(xi)    each Contract under which any member of the TexStar Group has advanced
or loaned any amount of money to any of its officers, directors, employees or
consultants (other than with respect to immaterial loans or advances to
employees in the Ordinary Course of Business).
(b)    TexStar has made available to SXE true and complete copies of each
TexStar Contract. No member of the TexStar Group, nor to the Knowledge of
TexStar is any other Person, in material breach or default in the performance of
its duties or obligations under any TexStar Contract.
(c)    Except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors
generally, (ii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances and (iii)
public policy considerations with respect to the enforceability of rights of
indemnification, each TexStar Contract is in full force and effect against, and
constitutes the enforceable obligations of, the member of the TexStar Group
party to such Contract and, to the

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Knowledge of TexStar, the other parties thereto, and each of the TexStar
Contracts will continue to be in full force and effect against, and constitute
the enforceable obligations of, the member of the TexStar Group party to such
Contract and the other parties thereto on identical terms immediately after the
Closing. None of TexStar, Frio GP, Frio LP or, to the Knowledge of TexStar, any
TexStar JV Entity has received written notice of any material violation or
default under (or any condition which with the passage of time or the giving of
notice would cause such a material violation of or default under) any TexStar
Contract.
5.8    Permits. Each member of the TexStar Group has all material Permits
necessary for the conduct of the TexStar Business as currently being conducted,
and such Permits are valid and in full force and effect. None of TexStar, Frio
GP, Frio LP or, to the Knowledge of TexStar, any TexStar JV Entity has received
any written notice of Proceedings relating to the revocation, modification,
cancelation, termination or nonrenewal of any material Permit. No member of the
TexStar Group is in default under, and to the Knowledge of TexStar, no condition
exists that with or without the giving of notice or the passage of time, or
both, would constitute a default under, any material Permit. All applications
required to have been filed for the renewal of any material Permits have been
duly filed on a timely basis with the appropriate Governmental Authorities. All
notices, applications or other actions, if any, required to ensure that none of
such material Permits shall be suspended, terminated, impaired, adversely
modified or become terminable, in whole or in part, as a result of any of the
Transactions, have been or will be timely completed, and none of such material
Permits shall be suspended, terminated, impaired, adversely modified or become
terminable, in whole or in part, as a result of any of the Transactions.
5.9    Environmental Matters. Except as set forth on Schedule 5.9:
(a)    except as would not reasonably be expected to result in any member of the
TexStar Group incurring material liabilities, (i) no written claim, notice,
order, request for information, complaint, directive or penalty has been
received by TexStar, Frio GP, Frio LP or, to the Knowledge of TexStar, any
TexStar JV Entity with respect to the TexStar Assets or the TexStar Business and
(ii) there are no judicial, administrative or other Proceedings pending or, to
the Knowledge of TexStar, threatened or reasonably anticipated, and, to the
Knowledge of TexStar, there are no conditions or circumstances that would
reasonably be expected to result in the receipt of such written claim, notice,
order, request for information, directive, complaint, penalty or judicial,
administrative or other Proceedings, which, in the case of each of (i) and (ii),
allege a violation of or result in liability under any Environmental Law by or
of a member of the TexStar Group with respect to the TexStar Assets or the
TexStar Business;
(b)    the TexStar Assets and the operation of the TexStar Business are in
compliance in all material respects with applicable Environmental Laws, which
includes obtaining, maintaining and complying with all material Permits
necessary for the operation of the TexStar Business under applicable
Environmental Laws;
(c)    to the Knowledge of TexStar, there are no written environmental reports,
studies, tests, analyses or other material documents specifically addressing
unresolved environmental liabilities related to the ownership or operation of
the TexStar Assets or

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environmental conditions of the TexStar Assets (i) that are in the possession or
under the control of, or that are accessible by, TexStar or any member of the
TexStar Group or (ii) that are in the possession of any Person other than
TexStar or a member of the TexStar Group, in each case, that have not been made
available to SXE (other than, in the case of each of (i) and (ii) of this
paragraph, any privileged reports or documents that have been indicated as such
in a written privilege log made available to SXE); and
(d)    except as would not reasonably be expected to result in any member of the
TexStar Group incurring material liabilities, the operations of the TexStar
Business have not resulted in a Release of any Hazardous Substances at any real
property currently or formerly owned, operated or leased by a member of the
TexStar Group requiring any reporting, investigation, remediation or other
response action under any Environmental Laws, and, to the Knowledge of TexStar
no such Release of any Hazardous Substance has occurred at any real property
currently or formerly owned, operated or leased by a member of the TexStar
Group.
5.10    Taxes.
(a)    All Tax Returns required to be filed pursuant to applicable Law by or
with respect to TexStar and each member of the TexStar Group (in the case of the
T2 LaSalle Entities, to the Knowledge of TexStar) have been timely filed with
the appropriate Governmental Authority (taking into account any applicable
extensions), and each such Tax Return is (with respect to the T2 LaSalle
Entities, to the Knowledge of TexStar) complete and accurate in all material
respects. All material amounts of Taxes owed by TexStar and each member of the
TexStar Group (or for which TexStar or a member of the TexStar Group may be
liable) that have become due and payable under applicable Law have been (in the
case of the T2 LaSalle Entities, to the Knowledge of TexStar) timely paid in
full, whether or not shown on any Tax Return.
(b)    There are no actions pending by any Governmental Authority with respect
to TexStar or any member of the TexStar Group (in the case of the T2 LaSalle
Entities, to the Knowledge of TexStar) for any unpaid Taxes, and no Tax
assessment, deficiency or adjustment has been asserted, proposed or, to
TexStar’s Knowledge, threatened with respect to TexStar or any member of the
TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar). Neither TexStar nor any member of the TexStar Group (in the case of
the T2 LaSalle Entities, to the Knowledge of TexStar) has given or been
requested to give waivers or extensions (or is or would be subject to a waiver
or extension given by any other Person) of any statute of limitations relating
to the assessment or collection of Taxes for which TexStar or any member of the
TexStar Group may be liable, and there is not in force any extension of time
with respect to the due date for the filing of any Tax Return of or with respect
to TexStar or any member of the TexStar Group (in the case of the T2 LaSalle
Entities, to the Knowledge of TexStar). No Tax audit, examination, judicial
proceeding or other Proceeding is pending or, to TexStar’s Knowledge, threatened
with respect to any Taxes due from or with respect to TexStar or any member of
the TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar).

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(c)    To the extent relevant to TexStar or a member of the TexStar Group (in
the case of the T2 LaSalle Entities, to the Knowledge of TexStar), all Tax
withholding and deposit requirements imposed on or with respect to TexStar
and/or each member of the TexStar Group have been satisfied in full in all
material respects and, to the extent required, any withheld Taxes have been
timely paid to the proper Governmental Authority.
(d)    Neither TexStar nor any member of the TexStar Group (in the case of the
T2 LaSalle Entities, to the Knowledge of TexStar) has been a party to a “listed
transaction,” as such term is defined in Treasury Regulation § 1.6011-4(b)(2).
(e)    There are no Encumbrances with respect to Taxes on the Frio Interests,
except for Encumbrances for Taxes that are not yet due and payable.
(f)    Since its inception, TexStar and each member of the TexStar Group (in the
case of the T2 LaSalle Entities, to the Knowledge of TexStar) has at all times
been properly classified as a partnership or a disregarded entity for U.S.
federal income tax and any applicable state and local Tax purposes (other than
for Texas franchise tax purposes).
(g)    There are no outstanding appeals, requests for rulings, claims for refund
or credit, or subpoenas relating to Taxes of TexStar or any member of the
TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar).
(h)    None of TexStar (as related to the TexStar Group) or any member of the
TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar) has received any claim in writing from any Governmental Authority in a
jurisdiction in which such Person does not file Tax Returns that it may be
subject to taxation by (or liable for Tax in) that jurisdiction.
(i)    None of TexStar (as related to the TexStar Group) or any member of the
TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar) is a party to (or currently negotiating or pursuing) any rulings,
closing agreements or similar agreements between TexStar or any member of the
TexStar Group, on the one hand, and any tax authority, on the other hand, that
could reasonably be expected to increase materially the Taxes imposed on a
member of the TexStar Group for any period ending after the Closing Date.
(j)    There is no Tax sharing, allocation or indemnification agreement or any
similar contract or arrangement with respect to Taxes of a member of the TexStar
Group (in the case of the T2 LaSalle Entities, to the Knowledge of TexStar) that
will not be terminated as of the Closing Date, other than customary provisions
of commercial agreements and arrangements not primarily related to Taxes such as
leases, credit facilities, customer agreements and loan agreements.
(k)    Neither TexStar nor any member of the TexStar Group (in the case of the
T2 LaSalle Entities, to the Knowledge of TexStar) (i) has been a member of any
Consolidated Group (other than a combined group of BlackBrush Oil & Gas, L.P.
for Texas franchise tax

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purposes) or (ii) has any liability for the Taxes of any Person under Treasury
Regulations § 1.1502-6 (or any corresponding provisions of state, local or
foreign Law), or as a transferee, successor, by Contract or otherwise, except
for joint and several liability for Texas franchise Taxes of the combined group
of which TexStar or the member of the TexStar Group is a member.
(l)    No power of attorney that is currently in force has been granted with
respect to any matter relating to Taxes that could affect a member of the
TexStar Group (in the case of the T2 LaSalle Entities, to the Knowledge of
TexStar).
(m)    To the Knowledge of TexStar, all of the assets of each member of the
TexStar Group have been properly listed and described on the property tax rolls
for the Tax units in which such assets are located and no portion of such assets
constitutes omitted property for property tax purposes.
5.11    Compliance with Law. Except for Environmental Laws, Laws requiring the
obtaining or maintenance of a Permit and Tax matters, that are the subject of
Section 5.8, Section 5.9 and Section 5.10, respectively, (a) to the Knowledge of
TexStar, each member of the TexStar Group is in compliance in all material
respects with all applicable Laws and (b) none of Frio GP, Frio LP or, to the
Knowledge of TexStar, any TexStar JV Entity has received written notice of any
material violation of any applicable Law.
5.12    Governmental Approvals. Except for the applicable requirements of the
HSR Act (if applicable) or as set forth on Schedule 5.12, no material consent,
approval, order, or authorization of, or declaration, filing, notice to or
registration with, any Governmental Authority is required to be obtained or made
by a member of the TexStar Group in connection with the execution, delivery or
performance by TexStar of this Agreement or by TexStar or any other member of
the TexStar Group of any other Operative Document or in respect of the TexStar
Rich Gas Restructuring.
5.13    Proceedings. Other than as set forth on Schedule 5.13, there are no
material Proceedings pending or, to the Knowledge of TexStar, threatened
against, any member of the TexStar Group or its business or the TexStar Assets.
There is no unsatisfied judgment, court order, arbitral award or administrative
decision against a member of the TexStar Group, its business or the TexStar
Assets, and no order has been made or petition presented or resolution passed or
other steps taken for the winding up or dissolution of any member of the TexStar
Group. There has been no appointment, and no such appointment is planned by a
member of the TexStar Group, of an administrator, receiver, liquidator or
liquidation committee or like body or officer of a member of the TexStar Group
or the TexStar Assets. To the Knowledge of TexStar, there is no basis for any
Proceeding which, if adversely determined against a member of the TexStar Group
or its Representatives (in the capacity in which such Representative is
affiliated with such Person), would reasonably be expected to result in a loss
to the TexStar Group in excess of $500,000.

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5.14    Absence of Changes. Except as set forth on Schedule 5.14:
(a)    Since the date of the TexStar Latest Financial Statement, there has not
been any event or occurrence which has had or which would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
TexStar Group.
(b)    Since the date of the TexStar Latest Financial Statement, except for this
Agreement, the Transactions and the TexStar Rich Gas Restructuring, each member
of the TexStar Group has carried on and operated its respective businesses in
all material respects in the Ordinary Course of Business and from such date
through the date hereof, no member of the TexStar Group has:
(i)    amended its Organizational Documents;
(ii)    transferred, issued, sold or disposed of any of its Equity Interests
(including any options, warrants, or other securities convertible into or
exercisable or exchangeable for such Equity Interests, or other rights of any
kind with respect to such Equity Interests) other than transfers, issuances,
sales or dispositions to another member of the TexStar Group;
(iii)    adopted a plan of complete or partial liquidation, dissolution,
recapitalization or other reorganization;
(iv)    made any material change in such Person’s accounting methods, policies
or procedures, other than as required by GAAP or a change in applicable Law;
(v)    made any acquisitions (by merger, consolidation, acquisition of equity
interests or otherwise) of assets, properties, equity interests or business of
any other Person;
(vi)    other than in the Ordinary Course of Business, sold, transferred,
assigned, disposed of, leased, pledged or encumbered any assets;
(vii)    commenced or settled any litigation;
(viii)    made any loan, advance or capital contribution to, or other investment
in, any Person that is not a member of the TexStar Group;
(ix)    paid, or agreed to pay upon the satisfaction of any condition, any
increase in the compensation of any employee of the TexStar Group other than in
the Ordinary Course of Business, or agreed to pay upon the satisfaction of any
condition any severance or termination pay to any such Persons, except as
specifically agreed to in writing between TexStar and SXE as part of the
Transactions;
(x)    adopted, established, entered into, amended, modified or agreed to amend
or modify (or announced an intention to establish, amend or modify) or

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terminated any Benefit Plan or became liable with respect to any Benefit Plan
with respect to which such member of the TexStar Group was not liable
immediately before the TexStar Latest Financial Statement;
(xi)    made any material amendment to any Tax Return, or made, changed or
rescinded any Tax election, in each case, which would reasonably be expected to
materially increase the Tax liability of the TexStar Group (in the case of the
T2 LaSalle Entities, to the Knowledge of TexStar) or the direct or indirect
owners of the TexStar Group (in the case of the T2 LaSalle Entities, to the
Knowledge of TexStar) for any taxable period beginning after the Closing Date;
(xii)    other than in the Ordinary Course of Business, incurred any
Indebtedness or incurred, assumed, guaranteed or otherwise become liable or
responsible (whether directly, contingently or otherwise) for any Indebtedness
or other obligations of any Person (other than a member of the TexStar Group)
that will not be extinguished at Closing;
(xiii)    committed to any capital expenditures outside of the Ordinary Course
of Business after March 31, 2014, to the extent not included in the TexStar
Capex Budget and in excess of $2,000,000 individually or $10,000,000 in the
aggregate;
(xiv)    suffered any material damage, destruction or loss affecting any assets
of any member of the TexStar Group, but in each case only to the extent not
covered by payments or approved claims under the TexStar Group’s insurance
policies;
(xv)    accelerated, terminated, materially amended, modified or canceled any
TexStar Contract, except for any such accelerations, terminations, amendments,
modifications or cancelations in the Ordinary Course of Business and that
individually would not reasonably be expected to have an adverse impact on the
TexStar Group in excess of $2,000,000 in any fiscal year; or
(xvi)    agreed or committed to do any of the foregoing.
5.15    Transactions with Interested Persons. Except as set forth on Schedule
5.15, none of TexStar, an employee or officer of Frio GP or Frio LP (or spouse
or any child thereof or other related person (by blood or marriage)) or any
Affiliate of TexStar owns, directly or indirectly, on an individual or joint
basis, (a) any material interest in, or serves as an officer, director or
employee of, any customer or supplier of or any Person that has a Contract with
a member of the TexStar Group or (b) any material interest in any asset,
tangible or intangible, that is used (or contemplated to be used) in the TexStar
Business, nor has any such Person engaged in any material transaction,
arrangement or understanding with a member of the TexStar Group other than as
contemplated by this Agreement.

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5.16    Financial Advisors. Except as set forth on Schedule 5.16, no brokerage
or finder’s fees or commissions are or will be payable by a member of the
TexStar Group to any broker, financial advisor or consultant, finder, placement
agent, investment banker, intermediary, bank or other Person in connection with
the Transactions.
5.17    Employee Matters.
(a)    Except as disclosed on Schedule 5.17 or rights that are extinguished
prior to or at Closing, neither the execution and delivery of this Agreement nor
the consummation of the Transactions will result in the acceleration or creation
of any rights of any current or former employee of a member of the TexStar Group
to payments or benefits or increases in or funding of any payments or benefits
or any loan forgiveness.
(b)    Except as would not reasonably be expected to result in a Material
Adverse Effect on a member of the TexStar Group, (i) to the Knowledge of
TexStar, each member of the TexStar Group is in compliance with all applicable
labor and employment Laws including all Laws, rules, regulations, orders,
rulings, decrees, judgments and awards relating to employment discrimination,
payment of wages, overtime compensation, immigration, occupational health and
safety, wrongful discharge, collective bargaining, discrimination, civil rights,
workers’ compensation, the Fair Labor Standards Act and the Worker Adjustment
and Retraining Notification Act or any similar state or local mass-layoff or
plant-closing law (collectively, the “WARN Act”), (ii) no action, suit,
complaint, charge, arbitration, inquiry, proceeding or investigation by or
before any Governmental Authority, brought by or on behalf of any employee,
prospective or former employee, individual independent contractor or labor
organization or other representative of the employees or of any prospective or
former employees of any member of the TexStar Group is pending or, to the
Knowledge of TexStar, threatened against any member of the TexStar Group and
(iii) no member of the TexStar Group is subject to any employment-related audit,
investigation, lawsuit or other challenge or otherwise bound by any material
consent decree, order or agreement with any current or former employee or
individual independent contractor or any Governmental Authority relating to
current or former employees or individual independent contractors of any member
of the TexStar Group.
(c)    No employee of the TexStar Group is covered by, and no member of the
TexStar Group is party to, any Labor Agreement. No collective labor organizing
activity is ongoing or threatened with respect to any employee of the TexStar
Group, and no such activity has occurred or been threatened within the past five
years. No pickets, strikes, slowdowns, work stoppages, other job actions,
lockouts, arbitrations, grievances or other labor disputes involving any of the
employees of the TexStar Group is pending or threatened, and no such activity
has occurred or been threatened within the past five years.
(d)    There has been no “mass layoff” or “plant closing,” as defined under the
WARN Act, with respect to any employee of the TexStar Group within the six-month
period immediately preceding the Closing.

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5.18    Benefit Plans.
(a)    Schedule 5.18(a) sets forth a true and complete list of all material
Benefit Plans that are or are required to be sponsored, maintained or
contributed to by each member of the TexStar Group or any other corporation or
trade or business under common control with any of them or treated as a single
employer with any of them as determined under Sections 414(b), (c), (m) or (o)
of the Code (an “TexStar ERISA Affiliate”), or under which any of them or any
TexStar ERISA Affiliate has any current or future obligation or liability,
contingent or otherwise with respect to a present or former officer, employee,
agent or consultant of any member of the TexStar Group or under which any
present or former officer, employee, agent or consultant of any member of the
TexStar Group, or such present or former officer’s, employee’s, agent’s or
consultant’s dependents or beneficiaries, have any current or future right to
benefits. For purposes of this Section 5.18, the term “Benefit Plans” refers to
the Benefit Plans applicable to the TexStar Group, and shall not refer to the
Benefit Plans of any member of the SXE Group. For purposes of this Section 5.18,
the term “SXE Group” shall include SXE GP.
(b)    Schedule 5.18(b) identifies as such all Benefit Plans, if any, which are
(i) qualified under Section 401(a) of the Code, (ii) severance, continuation
pay, termination pay or deferred compensation arrangements (including any such
arrangements contained in an employment, advisory or consulting agreement),
(iii) welfare benefit plans within the meaning of Section 3(1) of ERISA and (iv)
plans that provide benefits of any kind after termination of employment.
(c)    With respect to each Benefit Plan, TexStar has made available to SXE true
and complete copies of all current written documents setting forth the terms and
conditions of such Benefit Plan (or a written summary of such terms in the case
of an unwritten Plan) and, in the case of each Benefit Plan subject to ERISA,
copies of the plan document, the most current summary plan description and any
modifications thereto, and if applicable, the most recently filed IRS Form 5500
(including attachments), the most recent trust agreement, insurance or annuity
contract or other funding vehicle, the most recent actuarial valuation and
report or financial report, as applicable, the most recent IRS determination or
opinion letter and other material related documents applicable to such Benefit
Plan.
(d)    No member of the TexStar Group or any TexStar ERISA Affiliate has within
the past six years maintained, had an obligation to contribute to or has had any
other liability, contingent or otherwise, with respect to a “defined benefit
plan” as defined in Section 3(35) of ERISA, a pension plan subject to the
minimum funding standards of Section 302 of ERISA or Section 412 of the Code, or
a “multiemployer plan” as defined in Section 3(37) of ERISA. No other trade or
business (other than a member of the TexStar Group or a TexStar ERISA Affiliate)
is, or, at any time within the past six years, has been treated, together with
any member of the TexStar Group or any TexStar ERISA Affiliate, as a single
employer under Section 414 of the Code or Section 4001 of ERISA.
(e)    There does not exist any condition, there has not occurred any event, and
there has not been any omission, with respect to the sponsorship, funding or
administration

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of any Benefit Plan, which has or could result in a material Encumbrance upon or
material claim with respect to any of the TexStar Assets, or any member of the
SXE Group being liable for any contribution, withdrawal liability, benefit,
claim, settlement, Tax, penalty, payment or liability of any material nature.
All contributions required to be made under the terms of any Benefit Plan
(including all employer contributions and employee salary reduction
contributions) have been timely made in accordance with applicable Law,
including 29 C.F.R. § 2510.3-102.
(f)    Each group health plan that provides health coverage to any present or
former employee of a member of the TexStar Group has operated in compliance,
except for any immaterial error, with all requirements of Sections 601 through
608 of ERISA and Section 4980B of the Code and the regulations promulgated
thereunder (and any applicable similar state Law), relating to the continuation
of coverage under certain circumstances in which coverage would otherwise cease.
(g)    Each Benefit Plan has at all times been maintained, administered, and
operated in all material respects in accordance with its terms, all applicable
provisions of ERISA (including the “fiduciary responsibility” and “prohibited
transaction” rules thereof), the Code and other applicable Laws, and each
Benefit Plan intended to be a qualified plan under Section 401(a) of the Code
and each trust forming a part thereof is the subject of a favorable
determination or opinion letter from the Internal Revenue Service as to the
qualification under the Code of such Benefit Plan and the tax-exempt status of
such related trust, and nothing has occurred since the date of such
determination letter that could reasonably be expected to adversely affect the
qualification of such Benefit Plan or the tax-exempt status of such related
trust. There are no active suits, governmental investigations or proceedings
pending or, to the Knowledge of TexStar, threatened against or concerning any
Benefit Plan or against any fiduciary thereof respecting the fiduciary’s duties
to the Benefit Plan or any trust under the Benefit Plan. There is no action or
claim (other than routine claims for benefits made in the ordinary course of
Plan administration) pending or, to the Knowledge of TexStar, threatened against
or with respect to any Benefit Plan and, to the Knowledge of TexStar, no facts
exist which could give rise to any such action or claim.
(h)    No member of the TexStar Group or any TexStar ERISA Affiliate has ever
maintained or contributed to a trust that is subject to Section 501(c)(9) of the
Code and none of the Benefit Plans that are welfare benefit plans within the
meaning of Section 3(1) of ERISA provide for health or life insurance or other
welfare-type benefits for current or future retired or terminated directors,
officers or employees of a member of the TexStar Group or any TexStar ERISA
Affiliate or their beneficiaries, except to the extent required under ERISA
Section 601 et seq., or by Section 4980B of the Code and the regulations
promulgated thereunder or other similar state Law, and, except as disclosed on
Schedule 5.18(h), at the sole expense of the participant.
(i)    All insurance premiums due or payable with respect to the periods from
the end of the most recent Benefit Plan or contract year to and including the
Closing Date have

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been paid or fully accrued in the TexStar Financial Statements. No such premium
is overdue or in a grace period for late payments.
(j)    All contributions, expenses and unfunded liabilities for prior plan years
which are not yet due and with respect to the current Benefit Plan year for the
period ending on the Closing Date relating to all of the Benefit Plans have been
made or accrued in accordance with GAAP in the TexStar Financial Statements,
and, to the extent required, in the TexStar Financial Statements of the
applicable Benefit Plan.
(k)    Any fidelity bond required to be obtained under ERISA with respect to any
Benefit Plan has been obtained and is in full force and effect.
(l)    The consummation of the Transactions will not (either alone or in
connection with the occurrence of any additional or subsequent events) result in
a nondeductible expense pursuant to Section 280G of the Code or an excise tax to
any “disqualified individual” pursuant to Section 4999 of the Code.
(m)    Except as disclosed on Schedule 5.18(m), neither the execution of this
Agreement nor other Operative Documents by the members of the TexStar Group and
the performance by each of them hereunder or thereunder, nor the consummation of
the Transactions will (i) entitle any employees, former employees or other
service providers of any member of the TexStar Group or any TexStar ERISA
Affiliate to severance pay or severance benefits, (ii) accelerate the time of
payment or vesting, trigger any payment of compensation or benefits or
forgiveness of indebtedness under, increase the amount payable under or trigger
any other obligation pursuant to, any of the Benefit Plans, (iii) obligate any
member of the SXE Group to continue any of the Benefit Plans or (iv) result in
any breach or violation of, or a default under, any of the Benefit Plans.
(n)    No provision of any Benefit Plan would prevent the amendment or
termination of any such Benefit Plan assumed or continued by any member of the
SXE Group pursuant to the Transactions without material liability, other than
the (i) the obligation for ordinary benefits accrued before the termination of
such Benefit Plan and (ii) payment of any insurance premiums and plan
administration fees for the remaining term of the applicable contract. No action
or omission of any member of the TexStar Group or any TexStar ERISA Affiliate,
or any manager, officer, or agent thereof in any way restricts, impairs or
prohibits any of the members of the TexStar Group or any TexStar ERISA
Affiliate, or any successor, from amending, merging or terminating any of the
Benefit Plans in accordance with the express terms of any such plan and
applicable Law.
(o)    No Person that was engaged by Frio GP or Frio LP or, to the Knowledge of
TexStar, any TexStar JV Entity as an independent contractor or in any other
non-employee capacity can or will be characterized or deemed to be an employee
of a member of the TexStar Group or any TexStar ERISA Affiliate under applicable
laws, statutes, rules, regulations and administrative proceedings for any
purpose whatsoever including for purposes of federal, state and local income
taxation, workers’ compensation and

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unemployment insurance and eligibility for the Benefit Plans or for purposes of
applying any fee, Tax or penalty under applicable Law.
5.19    Insurance Coverage. Schedule 5.19 sets forth a list of all insurance
policies, formal self-insurance programs and bonds currently maintained by each
member of the TexStar Group. All such insurance policies and bonds have been
made available to SXE. All such insurance policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
Closing have been paid and no notice of cancelation or termination has been
received with respect to any such insurance policy.
5.20    Intellectual Property. None of Frio GP or Frio LP or, to the Knowledge
of TexStar, any TexStar JV Entity has received any written notice asserting that
the conduct of the TexStar Business infringes upon or violates any Intellectual
Property of any Person. Schedule 5.20 lists all material software licenses,
patents and other registered Intellectual Property used in the conduct of the
TexStar Business, other than programs existing on any personal computers owned
by members of the TexStar Group, back-office accounting software or otherwise
generally available off the shelf software. Each member of the TexStar Group
owns or has valid rights to use all the Intellectual Property of such Person
without conflict with the rights of others.
5.21    Customers and Suppliers. Schedule 5.21 sets forth a true and complete
list of the top ten customers and top ten suppliers to Frio LP, as measured by
the dollar amount of purchases therefrom or thereby for the fiscal year ended
December 31, 2013. None of such customers or suppliers has provided TexStar or
Frio LP, or their Affiliates, any written notice which canceled, materially
modified or otherwise terminated its relationship with such Person or materially
decreased its services, supplies or materials to such Person or its usage or
purchase of the services or products of such Person.
5.22    Current Business. Except as set forth on Schedule 5.22, no member of the
TexStar Group has engaged in any material business activity other than the
TexStar Business.
5.23    Condemnation; Casualty Loss. Since the date of the TexStar Latest
Financial Statement, there has been no condemnation, seizure, damage,
destruction or other casualty loss (whether or not covered by insurance)
affecting any of the TexStar Assets in any material respect which has not
subsequently been repaired, replaced or restored. None of TexStar, Frio GP, Frio
LP or, to the Knowledge of TexStar, any TexStar JV Entity has received written
notice of and there is not any pending or, to the Knowledge of TexStar,
threatened or contemplated condemnation Proceeding affecting any of the TexStar
Assets (or any portion thereof), or of any sale or other disposition of any of
the TexStar Assets (or any portion thereof) in lieu of condemnation.
5.24    Books and Records. The books and records of each member of the TexStar
Group that are necessary for the ownership and operation of the TexStar Assets
have been maintained in accordance with prudent industry practice and such books
and records have been made available to SXE.

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5.25    Materials Provided to Conflicts Committee. The projections and budgets
provided to the Conflicts Committee (including those provided to Jefferies, the
financial advisor to the Conflicts Committee) as part of the Conflicts
Committee’s review in connection with this Agreement and the Transactions were
prepared by the management of the TexStar Group and, in the opinion of the
management of the TexStar Group, have a reasonable basis and are consistent with
the current expectations of the management of the TexStar Group and its
Affiliates. The other historical financial and operational information and
materials provided to Jefferies as part of its review for the Conflicts
Committee in connection with this Agreement and the Transactions is derived from
and is consistent with the TexStar Group’s books and records.  Copies of the
TexStar Financial Statements have been provided to the Conflicts Committee.
5.26    No Representations or Warranties Implied; Independent Investigation;
Forecasts.
(a)    EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV AND THIS ARTICLE V OR
ELSEWHERE IN THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, NEITHER TEXSTAR NOR
ANY OTHER PERSON HAS MADE, DOES NOT MAKE AND TEXSTAR SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO (i) THE VALUE, NATURE, QUALITY, ADEQUACY OR
CONDITION OF THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS, (ii) THE INCOME TO BE
DERIVED FROM THE FRIO INTERESTS, THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS,
(iii) THE SUITABILITY OF THE TEXSTAR ASSETS FOR ANY ACTIVITIES OR USES WHICH THE
SXE GROUP (DIRECTLY OR INDIRECTLY) MAY CONDUCT THEREON OR (iv) THE
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE OF THE FRIO INTERESTS, THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE IV, THIS ARTICLE V OR
ELSEWHERE IN THIS AGREEMENT OR ANY OPERATIVE DOCUMENT, SXE FURTHER ACKNOWLEDGES
AND AGREES THAT SXE (i) IS ACQUIRING THE TEXSTAR INTERESTS AND ACCEPTING THE
TEXSTAR ASSETS ON AN AS IS, WHERE IS CONDITION AND BASIS WITH ALL FAULTS AND
(ii) WITHOUT LIMITING ITS RIGHTS IN THE CASE OF KNOWING AND INTENTIONAL FRAUD OR
WILLFUL MISCONDUCT, WILL NOT ASSERT ANY CLAIMS OR TAKE ANY POSITION IN ANY LEGAL
PROCEEDING THAT IS INCONSISTENT WITH THIS SECTION 5.26.
(b)    TEXSTAR HAS CONDUCTED ITS OWN INDEPENDENT INVESTIGATION, REVIEW AND
ANALYSIS OF THE BUSINESS, RESULTS OF OPERATIONS, PROSPECTS, CONDITION (FINANCIAL
OR OTHERWISE) OR ASSETS OF THE SXE GROUP, AND ACKNOWLEDGES THAT IT HAS BEEN
PROVIDED ADEQUATE ACCESS TO THE PERSONNEL, PROPERTIES,

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ASSETS, PREMISES, BOOKS AND RECORDS, AND OTHER DOCUMENTS AND DATA OF THE SXE
GROUP FOR SUCH PURPOSE. TEXSTAR ACKNOWLEDGES AND AGREES THAT, IN MAKING ITS
DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS,
TEXSTAR HAS RELIED SOLELY UPON ITS OWN INVESTIGATION AND THE EXPRESS
REPRESENTATIONS AND WARRANTIES OF SXE SET FORTH IN ARTICLE VI AND ARTICLE VII
(INCLUDING THE RELATED PORTIONS OF THE SCHEDULES) AND IS NOT RELYING ON THE
ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION, MATERIALS, REPRESENTATIONS OR
WARRANTIES PROVIDED BY OR ON BEHALF OF THE SXE GROUP.
(c)    WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TEXSTAR ACKNOWLEDGES
AND EXPRESSLY CONFIRMS THAT TEXSTAR HAS RECEIVED FROM THE SXE GROUP CERTAIN
PROJECTIONS, INCLUDING PROJECTED BALANCE SHEETS AND STATEMENTS OF OPERATING
REVENUES AND INCOME AND CERTAIN BUSINESS PLAN INFORMATION RELATED TO THE SXE
GROUP. TEXSTAR ACKNOWLEDGES THAT (i) THERE ARE UNCERTAINTIES INHERENT IN
ATTEMPTING TO MAKE SUCH ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS,
(ii) TEXSTAR IS FAMILIAR WITH SUCH UNCERTAINTIES, (iii) TEXSTAR IS TAKING FULL
RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL
ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE
REASONABLENESS OF THE ASSUMPTIONS, UNDERLYING ESTIMATES, PROJECTIONS AND
FORECASTS FURNISHED TO IT) AND (iv) TEXSTAR SHALL HAVE NO CLAIM AGAINST ANY
MEMBER OF THE SXE GROUP WITH RESPECT THERETO.
ARTICLE VI    
REPRESENTATIONS AND WARRANTIES OF SXE REGARDING THE SXE GROUP
Except as to matters disclosed in the SXE SEC Documents filed with the SEC on or
after December 31, 2013, and prior to the date of this Agreement (but excluding
any disclosure included therein to the extent that it is cautionary, predictive
or forward-looking in nature) (provided the foregoing shall not be applicable to
the representations and warranties set forth in Section 6.4 or Section 6.5), SXE
and SXE Energy hereby represent and warrant to TexStar as follows:
6.1    Organization and Good Standing. Each of SXE and SXE Energy (a) is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is organized and is duly authorized and qualified to
carry on its respective SXE Business, (b) is duly qualified to do business and
is in good standing in each jurisdiction where the conduct of its business
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect on the SXE Group, and (c) has the requisite
power and authority to own, lease and operate its respective SXE Assets and to
carry on its respective SXE Business. SXE has made

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available to TexStar true and complete copies of the Organizational Documents of
SXE and SXE Energy.
6.2    Power and Authority. The execution and delivery by each of SXE and SXE
Energy of this Agreement and the other Operative Documents to which it is a
party, and the performance of the Transactions by each of SXE and SXE Energy,
have been duly authorized by the board of directors of SXE GP and no other
action on the part of SXE or SXE Energy or their respective governing bodies or
any other holders of any Equity Interest in SXE is necessary to authorize this
Agreement and the other Operative Documents to which SXE or SXE Energy is a
party or to consummate the Transactions. Each of SXE and SXE Energy has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement and any other Operative Document to which it is a party and
to consummate the Transactions. This Agreement and each other Operative Document
to which SXE and SXE Energy is a party has been or will be duly and validly
executed and delivered by SXE and SXE Energy and constitutes or will constitute
a valid and binding obligation of SXE and SXE Energy, respectively, enforceable
against such Party in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors generally, (b) equitable
principles which may limit the availability of certain equitable remedies (such
as specific performance) in certain instances and (c) public policy
considerations with respect to the enforceability of rights of indemnification.
6.3    No Conflict.
(a)    Except as set forth on Schedule 6.3, neither the execution and delivery
by SXE and SXE Energy of this Agreement and the other Operative Documents to
which SXE or SXE Energy are a party nor consummation or performance by SXE or
SXE Energy of the Transactions will: (i) conflict with or violate any Law
binding upon SXE or SXE Energy, (ii) conflict with or violate the Organizational
Documents of SXE or SXE Energy, (iii) conflict with or violate any judgment,
decree or order to which SXE or SXE Energy is bound, (iv) conflict with or
result in a material violation of any provision of or constitute (with or
without the giving of notice or the passage of time or both) a material default
under or give rise (with or without the giving of notice or the passage of time
or both) to any right of termination, cancelation, acceleration or loss of
benefit under, or require any actions (including obtaining the consent of any
Person or providing notice to any Person) under, any material Contract to which
SXE or SXE Energy is a party or by which SXE or SXE Energy or any of their
respective properties may be bound, other than in the case of clauses (ii),
(iii) and (iv), such conflicts, violations, defaults, terminations, cancelations
or accelerations that would not have a Material Adverse Effect on the SXE Group.
(b)    SXE and SXE Energy have obtained or otherwise received all
authorizations, consents, orders, approvals, declarations and filings with
respect to SXE’s and SXE Energy’s entry into the Operative Documents.
6.4    Capitalization. The authorized Equity Interest of SXE is as set forth in
the SXE Partnership Agreement. At the close of business on June 1, 2014: (a)
21,465,046 Common Units were issued and outstanding, (b) 12,213,713 Subordinated
Units were issued and outstanding, (c) 1,832,399 Series A Convertible Preferred
Units were issued and outstanding, (d) SXE GP held 2%

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of the total partnership interest in SXE; (e) 477,651 Common Units were subject
to issuance under outstanding options or awards under the SXE Long-Term
Incentive Plan, (f) no Voting Debt was issued and outstanding, and (g) all
Incentive Distribution Rights were held by SXE GP. Except as set forth in this
Section 6.4, there are no outstanding (i) Equity Interests or Voting Debt or
other voting securities of SXE; (ii) securities of SXE or any member of the SXE
Group convertible into or exchangeable for Equity Interests, Voting Debt or
other voting securities of SXE or any member of the SXE Group; and (iii) no
options, warrants, calls, rights (including preemptive rights), commitments or
agreements to which SXE or any member of the SXE Group is a party or by which it
is bound in any case obligating SXE or any member of the SXE Group to issue,
deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered,
sold, purchased, redeemed or acquired, additional Equity Interests, Voting Debt
or other voting securities of SXE or any member of the SXE Group or obligating
SXE or any member of the SXE Group to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. All Equity Interests of
each member of the SXE Group (i) were issued in compliance with all Laws and any
preemptive or anti-dilutive rights, rights of first offer or refusal and any
other statutory or contractual rights of any Person and (ii) have been duly
authorized, validly issued, fully paid and are non-assessable (except as such
nonassessability may be affected by matters expressly set forth in the Law of
the jurisdiction of organization of such Person).
6.5    SXE SEC Documents. SXE has filed all reports, schedules, forms,
certifications, prospectuses, and registration, proxy and other statements
required to be filed by it with the SEC since January 1, 2013 (collectively, and
together with any other reports on Form 8-K filed on a voluntary basis, and in
each case including all other exhibits and schedules thereto and documents
incorporated by reference therein, the “SXE SEC Documents”). As of their
respective dates, the SXE SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such SXE SEC
Documents, and none of the SXE SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of SXE included
in the SXE SEC Documents were prepared from the books and records of SXE and its
Subsidiaries, complied in all material respects with the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects and
in accordance with applicable requirements of GAAP (subject, in the case of the
unaudited statements, to normal, recurring adjustments, none of which is
material) the consolidated financial position of SXE and its Subsidiaries as of
their respective dates and the consolidated results of operations and the
consolidated cash flows of SXE and its Subsidiaries for the periods presented
therein. Notwithstanding the foregoing statements, SXE and SXE Energy shall have
no liability with respect to any information in or any exhibit to any Form 8-K
of SXE that is deemed not to be “filed” and is not specifically identified in
any filing under the Securities Act or the Exchange Act as being incorporated
therein by reference.
6.6    Absence of Changes. Except as disclosed in, or reflected in the financial
statements included in, the SXE SEC Documents, since December 31, 2013, SXE has
conducted its business

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in the Ordinary Course of Business, and there has not been (a) any material
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets owned by SXE or its Subsidiaries, or (b) any
other transaction, commitment, dispute or other event or condition (financial or
otherwise) of any character (whether or not in the Ordinary Course of Business),
in each case, which has had or which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the SXE Group.
6.7    Proceedings. There is no Proceeding pending or, to the Knowledge of SXE,
threatened against SXE or SXE Energy that seeks to enjoin, restrict, limit or
obtain monetary damages in respect of the execution and delivery of this
Agreement or SXE’s or SXE Energy’s performance under this Agreement or in
respect of the Transactions. There is no unsatisfied judgment, court order,
arbitral award or administrative decision against a member of the SXE Group, its
business or the SXE Assets, and no order has been made or petition presented or
resolution passed or other steps taken for the winding up or dissolution of any
member of the SXE Group. There has been no appointment, and no such appointment
is planned by a member of the SXE Group, of an administrator, receiver,
liquidator or liquidation committee or like body or officer of a member of the
SXE Group or the SXE Assets. To the Knowledge of SXE, there is no basis for any
Proceeding which, if adversely determined against a member of the SXE Group or
its Representatives (in the capacity in which such Representative is affiliated
with such Person) that would reasonably be expected to result in a loss to the
SXE Group, individually or in the aggregate, in excess of $500,000.
6.8    Taxes. From and at all times since its formation, SXE has qualified as a
partnership for U.S. federal income tax purposes under Section 7704(c) of the
Code, and all Tax Returns of SXE have been prepared consistently therewith.
6.9    Financial Capability. SXE has, and at the Closing will have, sufficient
funds available to pay the Cash Consideration and any fees and expenses incurred
by the SXE Group in connection with the Transactions.
6.10    Financial Advisors. Except as set forth on Schedule 6.10, no brokerage
or finder’s fees or commissions are or will be payable by SXE or its Affiliates
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, intermediary, bank or other Person with respect to the
Transactions.
6.11    Acquisition of Frio Interests.
(a)    SXE has such knowledge and experience in financial and business matters
so as to be capable of evaluating the merits and risks of its investment in the
Frio Interests, and is capable of bearing the economic risk of such investment.
SXE is an “accredited investor” as that term is defined in Rule 501 of
Regulation D (without regard to Rule 501(a)(4)) promulgated under the Securities
Act. SXE is acquiring the Frio Interests for investment for its own account and
not with a view toward or for sale in connection with any distribution thereof,
or with any present intention of distributing or selling the Frio Interests
(except with respect to the distribution of the Frio Interests to SXE Energy).
SXE acknowledges and understands that (i) its acquisition of the Frio Interests
has not been registered under the Securities Act in reliance on an exemption
therefrom and (ii) the Frio

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Interests may not be sold, transferred, offered for sale, pledged, hypothecated
or otherwise disposed of except pursuant to an effective registration statement
under the Securities Act or pursuant to an available exemption from the
registration requirements of the Securities Act, and in compliance with other
applicable state and federal securities Laws.
(b)    SXE has undertaken such investigation as it has deemed necessary to
enable it to make an informed decision with respect to the execution, delivery
and performance of this Agreement and the other Operative Documents, and the
acquisition of the Frio Interests. SXE has had an opportunity to ask questions
and receive answers from TexStar regarding the business, properties, prospects
and financial condition of the members of the TexStar Group.
6.12    No Representations or Warranties Implied; Independent Investigation;
Forecasts.
(a)    EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE VI OR ELSEWHERE IN THIS
AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, NEITHER SXE NOR ANY OTHER PERSON HAS
MADE, DOES NOT MAKE AND SXE SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
(i) THE VALUE, NATURE, QUALITY, ADEQUACY OR CONDITION OF THE SXE BUSINESS OR THE
SXE ASSETS, (ii) THE INCOME TO BE DERIVED FROM THE PIK COMMON UNITS OR (iii) THE
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE OF THE SXE UNITS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
ARTICLE VI OR ELSEWHERE IN THIS AGREEMENT OR ANY OPERATIVE DOCUMENT, TEXSTAR
FURTHER ACKNOWLEDGES AND AGREES THAT TEXSTAR (i) IS ACQUIRING THE PIK COMMON
UNITS AND ACCEPTING THE SXE ASSETS ON AN AS IS, WHERE IS CONDITION AND BASIS
WITH ALL FAULTS AND (ii) WITHOUT LIMITING ITS RIGHTS IN THE CASE OF KNOWING AND
INTENTIONAL FRAUD OR WILLFUL MISCONDUCT, WILL NOT ASSERT ANY CLAIMS OR TAKE ANY
POSITION IN ANY LEGAL PROCEEDING THAT IS INCONSISTENT WITH THIS SECTION 6.12.
(b)    SXE HAS CONDUCTED ITS OWN INDEPENDENT INVESTIGATION, REVIEW AND ANALYSIS
OF THE BUSINESS, RESULTS OF OPERATIONS, PROSPECTS, CONDITION (FINANCIAL OR
OTHERWISE) OR ASSETS OF THE TEXSTAR GROUP, AND ACKNOWLEDGES THAT IT HAS BEEN
PROVIDED ADEQUATE ACCESS TO THE PERSONNEL, PROPERTIES, ASSETS, PREMISES, BOOKS
AND RECORDS, AND OTHER DOCUMENTS AND DATA OF THE TEXSTAR GROUP FOR SUCH PURPOSE.
SXE ACKNOWLEDGES AND AGREES THAT, IN MAKING ITS DECISION TO ENTER INTO THIS
AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS, SXE

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HAS RELIED SOLELY UPON ITS OWN INVESTIGATION AND THE EXPRESS REPRESENTATIONS AND
WARRANTIES OF TEXSTAR SET FORTH IN ARTICLE IV AND ARTICLE V (INCLUDING THE
RELATED PORTIONS OF THE SCHEDULES) AND IS NOT RELYING ON THE ACCURACY OR
COMPLETENESS OF ANY OTHER INFORMATION, MATERIALS, REPRESENTATIONS OR WARRANTIES
PROVIDED BY OR ON BEHALF OF TEXSTAR OR THE TEXSTAR GROUP.
(c)    WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SXE ACKNOWLEDGES AND
EXPRESSLY CONFIRMS THAT IT HAS RECEIVED FROM TEXSTAR AND THE TEXSTAR GROUP
CERTAIN PROJECTIONS, INCLUDING PROJECTED BALANCE SHEETS AND STATEMENTS OF
OPERATING REVENUES AND INCOME AND CERTAIN BUSINESS PLAN INFORMATION RELATED TO
THE TEXSTAR GROUP. SXE ACKNOWLEDGES THAT (i) THERE ARE UNCERTAINTIES INHERENT IN
ATTEMPTING TO MAKE SUCH ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS,
(ii) SXE IS FAMILIAR WITH SUCH UNCERTAINTIES, (iii) SXE IS TAKING FULL
RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL
ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE
REASONABLENESS OF THE ASSUMPTIONS, UNDERLYING ESTIMATES, PROJECTIONS AND
FORECASTS FURNISHED TO IT) AND (iv) SXE SHALL HAVE NO CLAIM AGAINST TEXSTAR OR
ANY MEMBER OF THE TEXSTAR GROUP WITH RESPECT THERETO.
ARTICLE VII    
COVENANTS OF THE PARTIES
7.1    Conduct of the Business.
(a)    From the date hereof until the Closing or the termination of this
Agreement in accordance with Article VIII, other than as provided for in, or
contemplated by, this Agreement (including the TexStar Rich Gas Restructuring),
(i) TexStar shall not transfer, assign or convey any of the Frio Interest, or
commit to or enter into any Contract to effect the foregoing, or permit any
Encumbrance to be placed on any of the Frio Interest, and (ii) TexStar shall,
and shall cause each member of the TexStar Group to, conduct its business and
operations in the Ordinary Course of Business, and use commercially reasonable
efforts to maintain the value of the TexStar Business as a going concern
consistent with past practice, including by preserving intact its business
organization, keeping available the services of its current managers, partners,
officers and employees, preserving its relationships with customers, creditors
and suppliers consistent with past practice, maintaining its books and records
and complying in all material respects with applicable Law.
(b)    From the date hereof until the Closing or the termination of this
Agreement in accordance with Article VIII, SXE shall, and shall cause each
member of the SXE Group to, conduct its business and operations in the Ordinary
Course of Business, and use

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commercially reasonable efforts to maintain the value of the SXE Business as a
going concern consistent with past practice, including by preserving intact its
business organization, keeping available the services of its current managers,
partners, officers and employees, preserving its relationships with customers,
creditors and suppliers consistent with past practice, maintaining its books and
records and complying in all material respects with applicable Law.
7.2    Access to Books and Records. From the date hereof until the Closing Date
or the earlier termination of this Agreement:
(a)    TexStar shall provide to SXE and its authorized Representatives
(the “Southcross Representatives”) (a) access at all reasonable times and upon
at least two Business Days’ advance notice to the offices, properties, books and
records of the members of the TexStar Group in order for the Southcross
Representatives to have the opportunity to make such investigation as SXE shall
reasonably desire to make of the affairs of the TexStar Group and (b) such
additional financial and operating data and other information regarding the
assets, properties and business of members of the TexStar Group as SXE may from
time to time reasonably request; provided that such access and provision of
information does not unreasonably interfere with the normal operations of the
members of the TexStar Group or contravene any Law or require substantial time
to compile or provide.
(b)    SXE shall provide to TexStar and its authorized Representatives
(the “TexStar Representatives”) (a) access at all reasonable times and upon at
least two Business Days’ advance notice to the offices, properties, books and
records of the members of the SXE Group in order for the TexStar Representatives
to have the opportunity to make such investigation as TexStar shall reasonably
desire to make of the affairs of the SXE Group and (b) such additional financial
and operating data and other information regarding the assets, properties and
business of members of the SXE Group as TexStar may from time to time reasonably
request; provided that such access and provision of information does not
unreasonably interfere with the normal operations of the members of the SXE
Group or contravene any Law or require substantial time to compile or provide.
Notwithstanding anything herein to the contrary, no such access or examination
shall be permitted to the extent that (i) it would require any member of the
TexStar Group or the SXE Group to disclose information subject to
attorney-client privilege or (ii) legal counsel for TexStar or SXE, as
applicable, reasonably concludes that it may give rise to antitrust or
competition law issues or violates a protective order or otherwise may not be
disclosed pursuant to applicable Law. Further, TexStar and SXE shall not be
permitted to perform invasive or subsurface investigations of the properties or
facilities of the SXE Group or the TexStar Group, respectively.
7.3    Contact with Customers and Suppliers.
(a)    TexStar acknowledges and agrees that it is not authorized to and shall
not (and shall not permit any of its Representatives or Affiliates to) contact
any customer, supplier or other material business relation of a member of the
SXE Group (except any current or

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prospective customers, suppliers or other such Persons of the TexStar Group, if
the same) before the Closing without the prior written consent of SXE.
(b)    SXE acknowledges and agrees that it is not authorized to and shall not
(and shall not permit any of its Representatives or Affiliates to) contact any
customer, supplier or other material business relation of a member of the
TexStar Group (except any current or prospective customers, suppliers or other
such Persons of the SXE Group, if the same) before the Closing without the prior
written consent of TexStar.
7.4    Regulatory Filings.
(a)    Subject to the terms and conditions herein, each Party shall use
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done as promptly as practicable, all things necessary,
proper and advisable under applicable Laws to consummate and make effective as
promptly as practicable the Transactions. Subject to appropriate confidentiality
protections, each Party shall furnish to the other Parties such necessary
information and reasonable assistance as such other Parties may reasonably
request in connection with the foregoing.
(b)    Each of the Parties shall cooperate with one another and use commercially
reasonable efforts to prepare all necessary documentation (including furnishing
all information required under the HSR Act or other Competition Laws) to effect
promptly all necessary filings and to obtain all consents, waivers and approvals
necessary to consummate the Transactions. Each Party shall provide to the other
Parties copies of all correspondence between it (or its Representatives) and any
Governmental Authority relating to the Transaction or any of the matters
described in this Section 7.4. Each such Party shall promptly inform the other
Parties of any oral communication with, and provide copies of written
communications with, any Governmental Authority regarding any such
communication. No Party shall independently participate in any formal meeting
with any Governmental Authority in respect of any such filings, investigation,
or other inquiry without giving the other Parties prior notice of the meeting
and, to the extent permitted by such Governmental Authority, the opportunity to
attend and/or participate. Subject to applicable Law, the Parties shall consult
and cooperate with one another in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of any Party relating to proceedings under the HSR Act
or other Competition Laws.
(c)    Without limiting the generality of the undertakings pursuant to this
Section 7.4, the Parties shall provide or cause to be provided as promptly as
practicable to any Governmental Authority information and documents requested by
any Governmental Authority or necessary, proper or advisable to permit
consummation of the Transaction, including filing any notification and report
form and related material required under the HSR Act as promptly as practicable,
but in no event later than five Business Days after the date hereof for filings
required under the HSR Act and thereafter to respond promptly to any request for
additional information or documentary material that may be made and use
commercially reasonable efforts to obtain early termination of the waiting
period under the

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HSR Act. Each Party shall pay one-half of any filing fees for filings made
pursuant to the HSR Act.
(d)    Nothing in this Agreement shall require any Party or its Affiliates to
(i) sell or otherwise dispose of specific assets or categories of assets or
businesses of such Persons or any other assets or businesses now owned or
hereafter acquired by such Persons or (ii) terminate any existing relationships
and contractual rights or obligations.
7.5    Notification. From the date hereof until the Closing Date, promptly
following discovery thereof, each Party shall provide prompt written notice to
the other Party of (a) in the case of TexStar, the occurrence, or failure to
occur, of any event of which to the Knowledge of TexStar causes or would be
reasonably likely to cause the condition in Section 2.5(a) to fail to be
satisfied or the failure of TexStar to comply with or satisfy in any material
respect any covenant or agreement to be complied with by it hereunder prior to
Closing and (b) in the case of SXE, the occurrence, or failure to occur, of any
event of which to the Knowledge of SXE causes or would be reasonably likely to
cause the condition in Section 2.4(a) to fail to be satisfied or the failure of
SXE or SXE Energy to comply with or satisfy in any material respect any covenant
or agreement to be complied with by it hereunder prior to Closing. The delivery
of any notice pursuant to this Section 7.5 shall be for informational purposes
only, and shall not in any way be deemed to cure any inaccuracy or breach of any
provision of this Agreement or in any way limit or affect any rights or remedies
under this Agreement (including rights to indemnification).
7.6    Conditions. Each Party shall use commercially reasonable efforts to cause
the conditions to closing applicable to such Party in Article II to be satisfied
and to consummate the Transactions as soon reasonably possible after the
satisfaction of the conditions set forth in Article II (other than those to be
satisfied at the Closing).
7.7    Preparation of Supporting Documents. The Parties shall take such actions,
shall furnish such information and shall prepare, or cooperate in preparing, and
execute and deliver, such certificates, agreements and other instruments as the
other such Party or Parties may reasonably request from time to time, before, at
or after the Closing, with respect to the Transactions and the performance of
the obligations under this Agreement and each other Operative Document to which
it is a party or, with respect to TexStar, to which a member of the TexStar
Group is a party, and with respect to SXE, to which a member of the SXE Group is
a party.
7.8    Transaction Expenses. Each Party shall bear and be responsible for all
fees and expenses incurred by such Party (whether incurred before, at or after
the date of this Agreement) in connection with the Transactions, including the
fees and expenses of legal counsel, accountants and all other third party
consultants and advisors engaged by such Party to assist it in the structuring,
negotiation, documentation and implementation of the Transactions (“Transaction
Expenses”).
7.9    Exclusivity. From the date hereof until the consummation of the
Transactions or the earlier termination of this Agreement, except with respect
to the TexStar Rich Gas Restructuring, TexStar shall not, and shall cause each
member of the TexStar Group, and the Representatives of the foregoing, not to,
directly or indirectly (a) solicit or initiate, or encourage the submission of,
proposals or offers relating to, (b) respond to any submissions, proposals or
offers relating to (other

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than to inform any person of such Party’s obligations under this paragraph), (c)
engage in any negotiations or discussions with any Person relating to or (d)
enter into any Contract or otherwise cooperate in any way with any other Person
in connection with, in each case, any transaction similar to the transactions
contemplated hereunder or otherwise with respect to the TexStar Assets without
first obtaining the written approval of the other Parties.
7.10    Publicity. The initial press release with respect to the execution of
this Agreement shall be reasonably agreed upon by TexStar and SXE. Thereafter,
the Parties shall promptly advise and cooperate with each other before issuing,
or permitting any of its Representatives to issue, any press release or other
form of public announcement with respect to any Operative Documents or the
Transactions. The Parties agree that all such press releases or other forms of
public announcement with respect to the Operative Documents or the Transactions
are subject to the prior approval of the other Parties, which approval shall not
be unreasonably withheld; provided, however, that the Parties shall be entitled
to issue a press release or make a public announcement with respect to the
Operative Documents or the Transactions if such Party, as the issuer of such
press release or other form of public announcement, has received advice from its
counsel to the effect that such press release is required by Law or listing
agreement with a national security exchange or the rules of such exchange,
including the NYSE or the SEC. If a Party is required by Law or listing
agreement with a national security exchange or the rules of such exchange to
make any release concerning any Operative Document or the Transactions, then
such party agrees to use its commercially reasonable efforts to: (a) provide
advance notice of at least two Business Days to the other Parties of such
release, which such notice shall include the content of such release, and (b)
incorporate the reasonable comments proposed by the non-issuing Party.
7.11    Confidentiality. Except for disclosures permitted by the terms of the
Confidentiality Agreement, the terms of which shall remain in full force in
accordance with this Section 7.11, the Parties shall hold any information
received in connection with the Transactions in confidence in accordance with
the terms of the Confidentiality Agreement. In the event of the termination of
this Agreement in accordance with its terms, nothing in this Agreement shall be
deemed to limit the restrictions set forth in the Confidentiality Agreement. If
the Closing occurs, the Confidentiality Agreement shall terminate (which
termination shall be effective as of the Closing).
7.12    Restructuring. Prior to the Closing, TexStar shall take, or cause to be
taken, the following actions (collectively, the “TexStar Rich Gas
Restructuring”):
(a)    Frio LP shall effect a divisive merger (the “Merger”), in form and
substance reasonably acceptable to SXE, in accordance with Chapter 10 of the
Texas Business Organizations Code and pursuant to which, among other things:
(i)    Frio LP shall be a surviving entity in the Merger and shall change its
name in connection with the Merger;
(ii)    a new Texas limited partnership shall be created by the Merger (“New
Frio LP”), whose sole general partner shall be a newly-formed Texas limited
liability company of which TexStar will be the sole member; and

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(iii)    all of the assets of Frio LP, other than assets related to the TexStar
rich gas system (including those assets set forth on Schedule 7.12), shall be
vested in New Frio LP.
(b)    TexStar shall contribute to Frio LP all of the Equity Interests in the
TexStar JV Entities held by TexStar and TexStar and Frio LP shall take such
other actions as may be reasonably necessary to further evidence such transfer,
including delivering notice of such transfer to Atlas and executing a joinder
agreement to the Organizational Documents of T2 EFC Holdings, T2 EF Gathering
and T2 LaSalle Gathering.
7.13    Tax Matters.
(a)    Closing of the Books. SXE shall, to the extent permitted under Law and
each such entity’s Organizational Documents, cause each Contributed Entity (or,
in the case of the T2 LaSalle Entities, use commercially reasonable efforts to
cause) to allocate all items of income, gain, loss, deduction or credit
attributable to the taxable period of the Contributed Entity in which the
Closing occurs based on an interim closing of the books of such Contributed
Entity as of the end of the Closing Date consistent with Section 7.13(d) (to the
extent the Contributed Entity’s Tax period does not otherwise end on the Closing
Date).
(b)    Return Preparation. SXE GP shall, at its sole cost and expense, timely
prepare or cause to be timely prepared all Tax Returns of the Contributed
Entities due after the Closing Date that relate to a Pre-Closing Tax Period,
including a Straddle Period (the “Post-Closing Returns”), other than Tax Returns
of, or that include, TexStar or any of its Affiliates (other than members of the
TexStar Group) or the T2 LaSalle Entities (the “Excluded Returns”). The
Post-Closing Returns shall, to the extent permitted by applicable Law, be
prepared on a basis consistent with existing procedures and practices and
accounting methods of the applicable Contributed Entity, except for
inconsistencies required by changes in Law or facts. At least 20 days prior to
the due date of any Post-Closing Return (other than any Excluded Return) that is
an income or franchise Tax Return (including, for the avoidance of doubt, any
Texas franchise tax return), or a reasonable period of time with respect to a
Post-Closing Return that is a non-income or non-franchise Tax Return, SXE GP
shall submit a draft of such Post-Closing Returns for review and approval (with
such approval shall not be unreasonably withheld, conditioned or delayed) to
TexStar and the Southcross Director with respect to Post-Closing Returns of any
member of the TexStar Group. SXE GP shall consider in good faith any comments
made by TexStar and the Southcross Director, and shall attempt in good faith to
resolve any disagreements regarding such Post-Closing Returns prior to the due
date for filing. In the event that SXE GP, the Southcross Director and TexStar
are unable to resolve any dispute with respect to any such Post-Closing Return
at least ten days prior to the due date for filing, such dispute shall be
resolved pursuant to Section 7.13(h), which resolution shall be binding on the
Parties. SXE GP shall timely file or cause to be timely filed all Post-Closing
Returns (other than Excluded Returns) and timely pay, or cause the Contributed
Entities to timely pay, all Taxes shown as due on such Post-Closing Returns, as
finalized pursuant to this Section 7.13(b). With respect to any such
Post-Closing Return, the amount of undisputed Tax due with respect to such
Pre-Closing Tax Period (as

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determined under Section 7.13(d) with respect to Straddle Periods) shall be paid
to SXE by TexStar at least five Business Days prior to the filing of such
Post-Closing Return. In the event of a dispute with respect to any such
Post-Closing Return, the disputed amounts shall become payable by TexStar to SXE
promptly when such items in dispute are resolved pursuant Section 7.13(h).
(c)    Excluded Returns. TexStar shall use commercially reasonable efforts to
submit to SXE GP and the Southcross Director for review and approval (with such
approval shall not be unreasonably withheld, conditioned or delayed) drafts of
Excluded Returns of the TexStar JV Entities (other than the T2 LaSalle Entities)
that are federal income tax returns (“Excluded 1065 Returns”), no later than
February 15, 2015. TexStar shall consider in good faith any written comments
made by SXE GP and the Southcross Director, and shall attempt in good faith to
resolve any disagreements regarding such Excluded 1065 Returns and finalize such
returns no later than March 1, 2015. In the event that SXE GP, TexStar and the
Southcross Director are unable to resolve any dispute with respect to any such
Excluded 1065 Returns by March 1, 2015, such dispute shall be resolved pursuant
to Section 7.13(h), which resolution shall be binding on the Parties. TexStar
shall prepare or cause to be prepared, and file or cause to be filed, the
Excluded Returns (other than those of the T2 LaSalle Entities) at its cost and
expense and shall remit (or, in the case of the TexStar JV Entities, cause the
relevant TexStar JV Entity to remit) the Tax shown to be due thereon to the
appropriate Tax authority.   With respect to any Excluded Return that is for a
Straddle Period, SXE shall pay to TexStar at least five Business Days prior to
the filing of such Excluded Return, the amount of undisputed Tax due with
respect such Excluded Return that is attributable to a Post-Closing Tax Period
(as determined under Section 7.13(d)). At least 20 days prior to the due date of
any Excluded Return (other than any Excluded 1065 Returns or any Tax Returns of
the T2 LaSalle Entities) that is an non-federal income or franchise Tax Return
(including, for the avoidance of doubt, any Texas franchise tax return), or a
reasonable period of time with respect to a Excluded Return that is a non-income
or non-franchise Tax Return (other than a Tax Return of either of the T2 LaSalle
Entities), TexStar shall submit a draft of such Excluded Returns for review and
approval (with such approval shall not be unreasonably withheld, conditioned or
delayed) to SXE GP and the Southcross Director. TexStar shall consider in good
faith any comments made by SXE GP and the Southcross Director, and shall attempt
in good faith to resolve any disagreements regarding such Excluded Returns prior
to the due date for filing. In the event that TexStar, SXE GP and the Southcross
Director are unable to resolve any dispute with respect to any such Post-Closing
Return at least ten days prior to the due date for filing, such dispute shall be
resolved pursuant to Section 7.13(h), which resolution shall be binding on the
Parties. In the event of a dispute with respect to any such Excluded Return, the
disputed amounts shall become payable by SXE to TexStar promptly when such items
in dispute are resolved pursuant Section 7.13(h).
(d)    Straddle Period Tax Returns. To the extent permissible under applicable
Laws, SXE shall elect to have each taxable period of the Contributed Entities
(other than the TexStar JV Entities) during which the Closing Date occurs end at
the end of the Closing Date (and shall use commercially reasonable efforts to
cause the TexStar JV Entities to do

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likewise) and, if such election is not permitted or required in a jurisdiction
such that any of the Contributed Entities is required to file a Tax Return for a
Straddle Period, SXE shall use the following conventions for determining the
amount of Taxes attributable to the Pre-Closing Tax Period: (i) in the case of
property Taxes and other similar Taxes imposed on a periodic basis, the amount
attributable to the Pre-Closing Tax Period shall be determined by multiplying
the Taxes for the entire Straddle Period by a fraction, the numerator of which
is the number of days in the portion of the Straddle Period ending on the
Closing Date and the denominator of which is the number of days in the entire
Straddle Period; and (ii) in the case of all other Taxes (including income
Taxes, sales Taxes, employment Taxes, withholding Taxes and other transaction
based Taxes), the amount attributable to the Pre-Closing Tax Period shall be
determined using a “closing of the books methodology.” For purposes of clause
(ii), any item determined on an annual or periodic basis (including amortization
and depreciation deductions) shall be allocated to the Pre-Closing Tax Period by
multiplying the amount of such item for the entire Straddle Period by a
fraction, the numerator of which is the number of days in the portion of the
Straddle Period ending on the Closing Date and the denominator of which is the
number of days in the entire Straddle Period, with such reasonable adjustments
as may be necessary to appropriately take the items into account (e.g., to
appropriately reflect the period during which depreciable property was in
service).
(e)    Tax Contests. If SXE or any Contributed Entity receives notice of any
deficiency, proposed adjustment, assessment, audit, examination, inquiry, suit,
dispute or other claim with respect to any Pre-Closing Taxes (a “Tax Claim”),
SXE will cause such entity (or, in the case of any TexStar JV Entity, use
commercially reasonable efforts to cause such entity) to notify TexStar in
writing within ten days of receipt of any Tax Claim attributable to a member of
the TexStar Group, but the failure to so notify TexStar will not relieve TexStar
of any liability it may have under Section 8.1(c), except to the extent TexStar
has suffered actual and material prejudice thereby. With respect to any Tax
Claim, the provisions of this Section 7.13(e) and not Section 9.4 or Section 9.5
shall apply.
With respect to any Tax Claim attributable to a member of the TexStar Group,
TexStar (the “Controlling Person”) shall assume and control all claims, actions,
administrative appeals, proceedings, hearings and conferences, investigations or
inquiries, suits with any applicable Governmental Authorities with respect
thereto (the “Tax Proceedings”). With respect to any Tax Claim, the Controlling
Person may either pay the Tax claimed and sue for a refund where applicable Law
permits such refund suits or contest the Tax Claim in any permissible manner;
provided, however, that (i) SXE (the “Non-Controlling Person”) will be permitted
to participate fully in all such Tax Proceedings at such Person’s sole cost and
the Controlling Person will consult with the Non-Controlling Person in the
negotiation and settlement of any Tax Claim, and (ii) the Controlling Person
will not, without the written consent of the Non-Controlling Person, which
consent shall not be unreasonably withheld, settle or compromise any Tax Claim
in any manner; provided, that to the extent that a Tax Claim relates to a
Straddle Period, TexStar and SXE will jointly have the right to control all Tax
Proceedings taken in connection with any such Tax Claim and such Straddle Period
Tax Claim and will not settle or compromise such Straddle Period Tax Claim
without the

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written consent of the other Party, which consent shall not be unreasonably
withheld, conditioned or delayed.
(f)    Cooperation on Tax Matters. SXE and TexStar shall (and SXE shall cause
the Contributed Entities to or, use commercially reasonable efforts to cause the
TexStar JV Entities to) (i) assist in the preparation and timely filing of all
Tax Returns of the Contributed Entities; (ii) assist in any audit or other
proceeding with respect to the Tax Returns or Taxes of the Contributed Entities
(whether or not involving a Tax contest); (iii) make available any information,
records or other documents relating to any Taxes or Tax Returns of the
Contributed Entities (including copies of Tax Returns and related work papers)
with respect to a Pre-Closing Tax Period; and (iv) provide certificates or
forms, and timely execute any Tax Returns, that are necessary or appropriate to
establish an exemption for (or reduction in) any Tax. SXE shall not, nor shall
it allow the Contributed Entities to, amend any Tax Return of any of the
Contributed Entities for a Pre-Closing Tax Period or (or will use commercially
reasonable efforts to preclude the TexStar JV Entities to) otherwise initiate
any other Post-Closing Tax Event without the prior written consent of TexStar.
Without limiting the foregoing, the Parties shall work together in good faith to
procure, no later than January 15, 2015, with respect to each of the Contributed
Entities the following information as of the Closing Date (i) the tax basis of
all assets and the amount of liabilities of the Contributed Entities; (ii) the
amount of tax items under Section 704(c) of the Code with respect to assets of
the Contributed Entities; (iii) any amounts to be charged to SXE (for example
costs, expenses, compensation awards, and similar items); (iv) Schedule K-1
information for each Contributed Entity, along with copies of the federal income
tax return and reports filed by each Contributed Entity for the previous year;
and (v) to the extent reasonably available, such other information as SXE may
reasonably request in writing for purposes of complying with its applicable tax
reporting requirements.
(g)    Refunds. Any refund of Taxes of the Contributed Entities, including any
interest with respect thereto, attributable to any Tax period occurring on or
before the Closing Date (or attributable to the portion of any Straddle Period
ending on the Closing Date determined in a manner specified in Section 7.13(d))
shall be for the account of TexStar. If the amount of any such Tax refund is
received by SXE or any of the Contributed Entities, such refund shall be paid
promptly to the appropriate Party consistent with this Section 7.13(g).
(h)    Disputes. Any dispute as to any matter covered by this Section 7.13 shall
be resolved by the Independent Auditor, although with respect to any Excluded
1065 Returns, the parties agree to use commercially reasonable efforts to
finalize any disputes with respect to such returns no later than March 1, 2015.
The fees and expenses of the Independent Auditor shall be borne equally by SXE
and TexStar. If any dispute with respect to a Tax Return is not resolved prior
to due date for filing, such Tax Return shall be filed in the manner which the
Party responsible for filing such Tax Return deems correct pending such
resolution (whereupon, to the extent required, such filed Tax Return shall be
amended).

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(i)    Treatment of Cash Consideration. The Parties agree to treat the Cash
Consideration as reimbursement of pre-formation expenses of TexStar (in
accordance with a schedule of such expenses provided by TexStar within five days
prior to the Closing) for all applicable income tax purposes to the extent
permitted by applicable Law.
(j)    Termination of Tax Sharing Agreements.  The parties shall ensure (and, as
to the TexStar JV Entities, shall undertake commercially reasonable efforts to
ensure) that any tax sharing or similar agreements to which any Contributed
Entity was or is a party prior to the Closing (other than those solely between a
Contributed Entity and another Contributed Entity) shall be terminated as of the
Closing as to such Contributed Entity, and no Contributed Entity or any
successor thereto shall have any further rights or obligations under any such
agreement, including for prior periods covered by any such agreements.
(k)    Tax Indemnity.  SXE shall indemnify, defend and hold harmless TexStar (or
any of its Affiliates, other than SXE or its Subsidiaries) from and against (i)
any and all taxes (including any interest, penalties or additions to tax and any
tax sharing payment otherwise due under any tax sharing agreements, except to
the extent that such tax sharing agreement is described in Section 7.13(j)) of
SXE, any of its Subsidiaries or any Contributed Entity for any Post-Closing Tax
Period, including, for the avoidance of doubt, any taxes imposed on TexStar (or
any of its Affiliates, other than SXE or its Subsidiaries) for Post-Closing Tax
Period taxes attributable to the income, assets or operations of SXE, any of its
Subsidiaries or any Contributed Entity on account of TexStar (or any of its
Affiliates, other than SXE or its Subsidiaries) being deemed to be a member of a
consolidated, combined or unitary group with SXE and/or its Subsidiaries or any
Contributed Entity; and (ii) any reasonable out of pocket expenses (e.g.,
reasonable attorneys’ and accountants fees and expenses) relating to matters
covered by the foregoing.
ARTICLE VIII    
TERMINATION
8.1    Grounds for Termination. Subject to Section 8.2, this Agreement may be
terminated at any time before the Closing upon the occurrence of any one or more
of the following:
(a)    by the mutual written agreement of the Parties;
(b)    by either Party (by giving written notice to the other Party), if the
consummation of the Transactions would violate any final judgment, decree or
order of any Governmental Authority having appropriate jurisdiction enjoining
the consummation of the Transactions;
(c)    by either Party (by giving written notice to the other Party), if the
other Party has breached this Agreement in any material respect and such breach
causes any of the conditions to Closing for the other Party not to be satisfied
(or, if before the Closing, is of such a magnitude that it will not be possible
for such condition to be satisfied); provided, however, that in the case of a
breach that is capable of being cured, the breaching Party shall have until the
earlier of (i) the

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Outside Date and (ii) 30 days following receipt of such notice to attempt to
cure the breach and the termination under this Section 8.1(c) shall not become
effective until the end of such period;
(d)    by either Party (by giving written notice to the other Party), if the
Closing has not occurred by September 30, 2014 (the “Outside Date”), through no
breach (including a willful failure to perform an obligation under this
Agreement) of this Agreement by the terminating Party or its Affiliates;
provided, however, that if Section 2.6(a) is the only condition to Closing that
remains unsatisfied or unwaived on the Outside Date (other than those conditions
to be satisfied at Closing), then TexStar and SXE shall each have the right, in
its sole discretion, to extend such date by up to 30 days in one or more
extensions by delivering written notice of such extension(s) to the other
Parties;
(e)    by TexStar (by giving written notice to SXE) if there shall have occurred
a Material Adverse Effect on the SXE Group; and
(f)    by SXE (by giving written notice to TexStar) if there shall have occurred
a Material Adverse Effect on the TexStar Group.
8.2    Effect of Termination. A Party shall not have the right to terminate this
Agreement under Section 8.1 if it is then in material breach of this Agreement.
If this Agreement is terminated in accordance with Section 8.1, such termination
shall be without liability to any Party, except with respect to any Party that
has intentionally and willfully breached this Agreement and except that
performance of the obligations contained in Section 7.11, this Section 8.2,
Article IX and Article X, and such defined terms in Exhibit A as may be required
to give meaning to such Sections, shall survive termination of this Agreement.
No termination of this Agreement under this Article VIII shall relieve any Party
of liability for breach of this Agreement arising before such termination.
ARTICLE IX    
INDEMNIFICATION
9.1    Indemnification by TexStar. Subject to the limitations set forth in this
Article IX, from and after the Closing, TexStar shall indemnify and hold SXE,
its Subsidiaries, SXE GP, and such Persons’ members, officers, employees, agents
and assignees (collectively, the “Southcross Indemnitees”), harmless from and
against any and all Losses actually incurred by any such Southcross Indemnitee
either directly or indirectly as a result of, arising from or related to:
(a)    any failure of the representations and warranties of TexStar set forth in
Article IV and Article V to be true and correct as of the Closing Date (or, if
such representations and warranties relate to an earlier date, as of such
earlier date);
(b)    any breach or non-fulfillment of any covenant or agreement on the part of
TexStar under this Agreement;
(c)    any Indemnified Taxes of any member of the TexStar Group; and
(d)    any Special Litigation Matters.

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9.2    Indemnification by SXE. Subject to the limitations set forth in this
Article IX, from and after the Closing, SXE shall indemnify and hold TexStar and
its partners, officers, employees, agents, Affiliates and assignees
(collectively, the “TexStar Indemnitees”) harmless from and against any and all
Losses actually incurred by any such TexStar Indemnitee either directly or
indirectly as a result of, arising from or related to:
(a)    any failure of the representations and warranties of SXE set forth in
Article VI to be true and correct as of the Closing Date (or, if such
representations and warranties relate to an earlier date, as of such earlier
date); and
(b)    any breach or non-fulfillment of any covenant or agreement on the part of
SXE or SXE Energy under this Agreement.
9.3    Survival. Regardless of any investigation at any time made by or on
behalf of any Party, each of the representations and warranties contained in
this Agreement shall survive the Closing for the applicable period of time set
forth in this Section 9.3 and any and all claims and causes of action for
indemnification under this Article IX arising out of the inaccuracy or breach of
any representation or warranty of a Party must be made before the termination of
the applicable survival period.
(a)    All of the representations, warranties, covenants and agreements of the
Parties contained in this Agreement and any and all claims and causes of action
for indemnification under this Article IX shall survive as follows (with the
date on which the relevant representation, warranty, covenant or agreement
expires pursuant to this Section 9.3 being the “Expiration Date”):
(i)    the representations and warranties set forth in (A) Sections 4.1, 4.2,
4.4, 4.5, 4.7, 5.1, 5.2, 5.16, 6.1, 6.2, 6.4, 6.9 and 6.10 shall survive
indefinitely and (B) Sections 5.10 and 5.18 shall survive for a period ending 60
days after the expiration of the statute of limitations applicable to any
matters or other liabilities that are the subject thereof (together, the
representations and warranties set forth in clauses (A) and (B), except for
those set forth in Section 5.18, the “Fundamental Representations”), and any
covenants or agreements in this Agreement that by their terms are to be
performed after the Closing shall survive until fully discharged; and
(ii)    except for the Fundamental Representations and the representations and
warranties set forth in Section 5.18, all representations and warranties set
forth in Article IV, Article V and Article VI shall survive until the date that
is 12 months after the Closing Date (collectively, the “Non-Fundamental
Representations”).
(b)    No action for a breach of any representation, warranty, covenant or
agreement contained herein (other than Fundamental Representations, which
survive in accordance with Section 9.3(a)(i)) shall be brought after the
applicable Expiration Date, except for claims of which a Party has received a
Claim Notice before the applicable Expiration Date.

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9.4    Third Person Claims.
(a)    If any Southcross Indemnitee or TexStar Indemnitee (any such Person, an
“Indemnified Party”) has received notice or otherwise has knowledge of any claim
by any Person who is not a Party or the commencement of any Proceeding by such
Person who the Indemnified Party believes in good faith has an indemnifiable
claim under this Agreement (a “Third Person Claim”), the Indemnified Party shall
deliver a Claim Notice with respect thereto to the Party obligated to provide
indemnification pursuant to Section 9.1 or Section 9.2 (the “Indemnifying
Party”); provided, however, that the failure or delay to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from liability for
such Third Person Claim except to the extent that such failure or delay results
in the loss or forfeiture by the Indemnifying Party of material rights and
defenses otherwise available to the Indemnifying Party with respect to such
Third Person Claim or increased indemnification expenses incurred as a direct
result of such failure or delay to so notify. The Claim Notice shall state the
nature and the basis of such Third Person Claim. The Indemnifying Party shall
have the right to defend and settle any such Third Person Claim, at its own
expense and by its own counsel (reasonably acceptable to the Indemnified Party)
if the Indemnifying Party provides written notice to the Indemnified Party
(within five Business Days of its receipt of the Claim Notice) declaring its
intention to defend or settle such Third Person Claim.
(b)    If the Indemnifying Party notifies the Indemnified Party of its intention
to undertake the defense or settlement of such Third Person Claim pursuant to
Section 9.4(a), the Indemnified Party shall cooperate with the Indemnifying
Party and its counsel, at the Indemnifying Party’s sole cost and expense, in all
commercially reasonable respects in the defense thereof and in any settlement
thereof. Such cooperation shall include furnishing the Indemnifying Party with
any books, records and other information reasonably requested by the
Indemnifying Party and in the Indemnified Party’s possession or control. After
the Indemnifying Party has notified the Indemnified Party of its intention to
undertake the defense or settlement of such Third Person Claim pursuant to
Section 9.4(a), the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such Third Person Claim; provided, however, that the
Indemnified Party shall be entitled, at its expense, to participate in the
defense of such Third Person Claim and the negotiations of the settlement
thereof.
(c)    The Indemnifying Party shall not settle any Third Person Claim without
the consent of the Indemnified Party unless the sole relief provided is monetary
damages that are paid in full by the Indemnifying Party, and the settlement
thereof imposes no liability or obligation on, and includes a complete release
from liability of, the Indemnified Party and further involves no injunction or
equitable relief upon the Indemnified Party and no limitation on the future
operation of the business, assets or property of the Indemnified Party and its
Affiliates.

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(d)    If, upon receiving a Claim Notice with respect to a Third Person Claim,
the Indemnifying Party does not timely undertake to defend such Third Person
Claim, or fails to pursue such defense diligently or is otherwise not entitled
to assume the defense of such Third Person Claim or the Indemnified Party is
otherwise entitled to assume such defense, the Indemnified Party may undertake
such defense through counsel of its choice, at the cost and expense of the
Indemnifying Party, and the Indemnified Party may settle such Third Person
Claim, in its discretion, and the Indemnifying Party shall reimburse the
Indemnified Party for the amount paid in such settlement and any other Losses
incurred by the Indemnified Party in connection therewith.
9.5    Direct Claims.
(a)    If the Indemnified Party asserts the existence of a claim giving rise to
Losses that is not a Third Person Claim (a “Direct Claim”), the Indemnified
Party shall deliver a Claim Notice with respect thereto to the Indemnifying
Party.
(b)    A Claim Notice delivered in connection with a Direct Claim shall state
that it is being given pursuant to this Section 9.5 and shall specify the nature
and, if known, the amount of the Losses associated therewith. If the
Indemnifying Party, within 30 days after the receipt of such Claim Notice from
the Indemnified Party, shall not give written notice to the Indemnified Party
stating the Indemnifying Party’s intent to contest such Direct Claim, the
Indemnified Party’s assertion shall be deemed accepted and the amount of such
Direct Claim shall be deemed a valid Direct Claim.
(c)    If, however, the Indemnifying Party contests such Direct Claim by giving
written notice, setting forth in reasonable detail the basis for contesting the
Direct Claim, to the Indemnified Party within such 30-day period, then the
Indemnifying Party and the Indemnified Party shall negotiate in good faith to
reach agreement regarding such Direct Claim. If the Indemnifying Party and the
Indemnified Party cannot reach an agreement regarding such Direct Claim within
30 days after the notice contesting such Direct Claim provided by the
Indemnifying Party has been received by the Indemnified Party, the Indemnifying
Party shall be deemed to have rejected such Direct Claim, in which case the
Indemnified Party shall be free to pursue such remedies as may be available to
the Indemnified Party on the terms and subject to the provisions of this
Agreement.
9.6    Basket; Indemnification Cap.

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(a)    An Indemnifying Party shall not have any obligation to provide
indemnification for Losses arising out of breaches of the Non-Fundamental
Representations (“Covered Losses”) except to the extent that the aggregate
amount of all Covered Losses exceeds $2,150,000 (the “Basket”) in which case the
Indemnifying Party shall be liable under this Article IX only for Covered Losses
that exceed the Basket. The Basket shall not be applicable to Losses arising out
of breaches of the Fundamental Representations, Section 5.5(b) or Section 5.26.
(b)    The maximum amount for which a Party may be liable, other than in cases
of knowing and intentional fraud or willful misconduct, in respect of breaches
of any of the Non-Fundamental Representations, shall be limited to an amount
equal to $32,250,000, and in respect of any breaches of the Fundamental
Representations, Section 5.26 or any other covenant or agreement under this
Agreement, shall be limited to an amount equal to $430,000,000. Notwithstanding
the foregoing, there shall be no maximum amount for which TexStar may be liable
in connection with such Party’s breach of Section 5.5(b).
9.7    Calculation of Losses. In calculating amounts payable to any Indemnified
Party for a claim for indemnification hereunder, the amount of any indemnified
Losses shall be determined without duplication of any other Loss for which an
indemnification claim has been made or could be made under any other
representation, warranty, agreement or covenant and shall be computed net of
payments actually recovered by the Indemnified Party (or its Affiliates) under
any insurance policy with respect to such Losses.
9.8    Other Limitations.
(a)    Waiver of Certain Damages. Notwithstanding any other provision of this
Agreement, no Party shall be liable for punitive, special, indirect, exemplary,
consequential, remote or speculative damages of any kind or nature or any
damages calculated using diminution of value or any multiple of value or loss of
business reputation or opportunity, regardless of the form of action through
which such damages are sought, except (i) for any such damages recovered by any
Person who is not a Party against an Indemnified Party in respect of which such
Indemnified Party would otherwise be entitled to indemnification pursuant to the
terms hereof and (ii) in the case of consequential damages to an Indemnified
Party arising from knowing and intentional fraud or willful misconduct.
(b)    Sole and Exclusive Remedy. Anything contained in this Agreement to the
contrary notwithstanding, other than the indemnity contained in Section 7.13 and
in the event of knowing and intentional fraud, the indemnification rights set
forth in this Article IX, all of which are subject to the terms, limitations and
restrictions of this Article IX, shall be the sole and exclusive legal remedy of
the Parties from and after Closing for any and all claims arising out of or
related to this Agreement or the Transactions, including claims based on any
breach of a representation, warranty, covenant, or agreement under this
Agreement, and no Person will have any other entitlement, remedy or recourse,
whether in contract, tort or otherwise, it being agreed that all of such other
remedies, entitlements and recourse are expressly waived and released by the
Parties to the fullest extent permitted by Law. This Article IX shall not govern
the remedies available under any other Operative Document to which a Party is
party and nothing contained in this Agreement shall limit the ability of any
Party (or any of its Affiliates party thereto) to pursue any remedy under the
Operative

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Documents (excluding this Agreement). Subject to the rights of the parties to
the SXE Commitment Letter under the terms thereof, none of the Parties, nor or
any of their respective affiliates, shall have any rights or claims against the
Debt Financing Sources in connection with the SXE Credit Facility described in
the SXE Commitment Letter, whether at law or equity, in contract, in tort or
otherwise.
(c)    For purposes of determining whether a representation or warranty has been
breached for purposes of this Article IX and determining the amount of Losses
suffered by any TexStar Indemnitee or Southcross Indemnitee, as the case may be,
each representation and warranty set forth in this Agreement, and any
qualification with respect to any representation or warranty set forth in the
Schedules, shall be read without regard or giving effect to any “material,”
“materiality” or “Material Adverse Effect” qualifications that may be contained
in any such representation or warranty.
ARTICLE X    
MISCELLANEOUS
10.1    Governing Law; Venue; Waiver of Jury Trial.
(a)    This Agreement shall be governed by and construed and interpreted in
accordance with the Laws of the State of Texas, without giving effect to any
conflicts of law provision or rule (whether of the State of Texas or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of Texas.
(b)    The Parties hereby irrevocably submit to the jurisdiction of the courts
of the State of Texas and the federal courts of the United States of America
located in Dallas, Texas, and appropriate appellate courts therefrom, over any
dispute arising out of or relating to this Agreement or any of the Transactions,
and each Party hereby irrevocably agrees that all claims in respect of such
dispute or Proceeding may be heard and determined in such courts. The Parties
hereby irrevocably waive, to the fullest extent permitted by Law, any objection
which they may now or hereafter have to the laying of venue of any dispute
arising out of or relating to this Agreement or any of the Transactions brought
in such court or any defense of inconvenient forum for the maintenance of such
dispute. Each Party agrees that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Law. This consent to jurisdiction is being given solely for purposes of this
Agreement and is not intended to, and shall not, confer consent to jurisdiction
with respect to any other dispute in which a Party to this Agreement may become
involved. Each Party consents to process being served by any other Party to this
Agreement in any Proceeding of the nature specified in this Section 10.1(b) by
the mailing of a copy thereof in the manner specified by the provisions of
Section 10.7.
(c)    EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH
CASE, INCLUDING ANY DISPUTE ARISING OUT OF OR RELATED TO THE SXE COMMITMENT
LETTER OR THE PERFORMANCE THEREOF.

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(d)    Notwithstanding anything in this Section 10.1 to the contrary, each of
the Parties agrees that it will not bring or support any action or proceeding
(whether at law, in equity, in contract, in tort or otherwise) against any
Commitment Party (as defined in the SXE Commitment Letter), any Lender (as
defined in the SXE Commitment Letter), any affiliate of a Commitment Party or a
Lender or any other Person that has committed to provide or otherwise entered
into agreements in connection with the SXE Commitment Letter or the financings
related thereto in connection with the transactions contemplated hereby (each
such Person, a “Debt Financing Source”, and, collectively, the “Debt Financing
Sources”) in any way relating to this Agreement or any of the transactions
contemplated by this Agreement, including any dispute arising out of or relating
in any way to the SXE Commitment Letter or the performance thereof, in any forum
other than the Supreme Court of the State of New York, County of New York, or,
if under applicable law exclusive jurisdiction is vested in the Federal courts,
the United States District Court for the Southern District of New York (and
appellate courts thereof). The provisions of the foregoing sentence in this
Section 10.1(d) shall be enforceable by each Debt Financing Source, its
affiliates and their respective successors and permitted assigns.
10.2    Third-Party Beneficiaries. Nothing in this Agreement shall provide any
benefit to any third Person or entitle any third Person to any claim, cause of
action, remedy or right of any kind, it being the intent of the Parties that
this Agreement shall not be construed as a third-party beneficiary contract;
provided, however, that the indemnification provisions of Article IX shall inure
to the benefit of the Southcross Indemnitees and the TexStar Indemnitees as
provided therein; provided that each of the Debt Financing Sources are
third-party beneficiaries of this Agreement with respect to the provisions in
this Section 10.2 and provisions in Sections 9.8, 10.1 and 10.6 of this
Contribution Agreement regarding venue, jury waiver, recourse and amendment of
this Contribution Agreement to the extent related to the Debt Financing Sources.
10.3    No Partnership. Nothing in this Agreement shall constitute a joint
venture or partnership between or among the Parties or constitute any Party as
agent or attorney of any other Party for any purpose whatever, and, except as
expressly provided for in this Agreement, no Party shall have authority or power
to bind any other Party or to contract in the name of or create liability
against any other Party in any way or for any purpose, except as expressly
authorized in writing by one Party in favor of another Party from time to time.
10.4    Assignment. No Party may assign its rights and obligations under this
Agreement without the prior written consent of the other Parties. This Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns.
10.5    Entire Agreement. This Agreement, the other Operative Documents and the
Confidentiality Agreement collectively constitute the sole understanding of the
Parties with respect to the subject matter hereof; provided, however, that this
provision is not intended to abrogate any other written agreement between or
among the Parties executed before or with this Agreement that relates to any
subject matter other than the Transactions.
10.6    Amendment. This Agreement may only be amended, modified or supplemented
by an instrument in writing signed by the Parties. Further, the Parties shall
not amend the provisions

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in this Section 10.6 or in Sections 9.8, 10.1 or 10.2 of this Agreement in a
manner that is adverse to the Debt Financing Sources without the Debt Financing
Sources’ prior written consent.
10.7    Notices. All notices, demands or communications required or permitted
under this Agreement shall be in writing and delivered personally, by reputable
overnight delivery service or other courier with charges prepaid, by certified
mail, postage prepaid and return receipt requested, or by facsimile transmission
or Email that is confirmed by another writing, sent to the Parties as follows:
If to TexStar:
TexStar Midstream Services, LP
18615 Tuscany Stone, Suite 300
San Antonio, Texas 78258
Attn: Phil Mezey
Facsimile: (210) 495-0075
Email: phil.mezey@texstarms.com
With a copy (which shall not constitute notice) to:
Tailwater Capital LLC
300 Crescent Court, Suite 200
Dallas, Texas 75201
Attn: Jason H. Downie
Facsimile: (214) 292-8562
Email: jdownie@tailwatercapital.com

and

EIG Global Energy Partners
Three Allen Center
333 Clay Street, Suite 4150
Houston, Texas 77002
Attn: Clayton R. Taylor
Email: clay.taylor@eigpartners.com

and

Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300
Dallas, Texas 75201
Attn: Rodney L. Moore
Facsimile: (214) 746-7700
Email: rodney.moore@weil.com

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If to SXE or SXE Energy:
Southcross Energy Partners, L.P.
1700 Pacific Avenue, Suite 2900
Dallas, Texas 75201
Attn: David W. Biegler
Facsimile: (214) 979-3710
Email: biegler@southcrossenergy.com

With a copy (which shall not constitute notice) to:

Gardere Wynne Sewell LLP
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Attn: Robert Sarfatis
Facsimile: (214) 999-3245
Email: rsarfatis@gardere.com

All such notices shall be deemed to have been duly given, (a) as of the date of
delivery, if delivered personally or by overnight delivery service or other
courier, (b) on the date receipt is acknowledged, if delivered by certified
mail, and (c) upon the date on which the transmission is separately confirmed in
writing, if delivered by facsimile or Email. A Party may change its address for
notice by notice to the other Parties in the manner set forth above.
10.8    Waiver.
(d)    Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall be in writing and shall not be deemed a waiver of any
subsequent breach or default and shall in no way affect the other terms of this
Agreement.
(e)    No failure to exercise and no relaxation, forbearance, indulgence or
delay on the part of any Party in exercising any right, remedy, power or
privilege of that Party under this Agreement and no course of dealing among the
Parties shall be construed or operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
10.9    Severability. If any provision of this Agreement or the application of
any such provision to any Person or circumstance, shall be declared judicially
to be invalid, unenforceable or void, such decision shall not have the effect of
invalidating or voiding the remainder of this Agreement, it being the intent and
agreement of the Parties that this Agreement shall be deemed amended to modify
such provision to the extent necessary to render it valid, legal and enforceable
while preserving its intent or, if such modification is not possible, by
substituting therefor another provision that is valid, legal and enforceable and
that achieves the same objective.
10.10    Conspicuousness of Provisions. The Parties acknowledge and agree that
the provisions contained in this Agreement that are set out in “bold” and “all
capital letters” satisfy the

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requirement of the “express negligence rule” and any other requirement at Law or
in equity that provisions contained in a contract be conspicuously marked or
highlighted.
10.11    Deliveries to a Party. Any document or item will be deemed “delivered,”
“provided” or “made available” by a Person for all purposes within the meaning
of this Agreement if such document or item (a) is included in the electronic
data site hosted by Merrill Corporation at the Parties’ request for “Project
Landry,” (b) is actually delivered or provided to the subject Person or its
Representatives or (c) is made available upon request, including at such
Person’s or any of its Affiliates’ offices.
10.12    Counterparts; Delivery. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which taken together shall constitute one and the same instrument. A Party’s
delivery of an executed counterpart signature page by facsimile or Email
transmission is as effective as executing and delivering this Agreement in the
presence of the other Parties. No Party shall be bound until such time as all of
the Parties have executed this Agreement (or counterparts hereof).
10.13    Representation by Counsel. Each Party acknowledges that it has been
represented by independent counsel of its choice during the negotiation and
execution of this Agreement and the documents referred to herein, and that it
has executed the same upon the advice of such independent counsel. Each Party
and its counsel cooperated in the drafting and preparation of this Agreement and
the documents referred to herein, and any and all drafts relating thereto shall
be deemed the work product of the Parties and may not be construed against any
Party by reason of its preparation. Therefore, the Parties waive the application
of any Law providing that ambiguities in an agreement or other document will be
construed against the Party drafting such agreement or document.
10.14    Time of the Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
10.15    Schedules. The information in any Schedule constitutes (a) exceptions
to particular representations, warranties, covenants and obligations of the
Parties, as applicable, as set forth in this Agreement or (b) descriptions or
lists and other items referred to in this Agreement. Capitalized terms used but
not defined in the Schedules have the meanings given them in this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first above written.

 
TEXSTAR:

TEXSTAR MIDSTREAM SERVICES, LP

By: TEXSTAR MIDSTREAM GP, LLC,
       its General Partner

By:                      
Name: P. Scott Martin
Title: Manager 

 
 
 
 
 
 
 
 

[Signature Page to Contribution Agreement]

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[Signature Page to Contribution Agreement]

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SXE:

SOUTHCROSS ENERGY PARTNERS, L.P.

By: SOUTHCROSS ENERGY PARTNERS GP, LLC,
       its General Partner

By:                      
   David W. Biegler, Chairman

 

[Signature Page to Contribution Agreement]

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SXE ENERGY:

SOUTHCROSS ENERGY GP LLC

By:                             
David W. Biegler, Chairman

[Signature Page to Contribution Agreement]

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The undersigned is executing this Agreement for the limited purposes of agreeing
to be bound by Section 7.13:

SOUTHCROSS ENERGY PARTNERS GP LLC

By:                             
David W. Biegler, Chairman                    

[Signature Page to Contribution Agreement]

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Exhibit A
Definitions
“Affiliate” means any Person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with the
Person specified; provided, however, that notwithstanding the foregoing, neither
Atlas nor any of its Affiliates (other than the TexStar JV Entities) shall be
considered an “Affiliate” of TexStar or any member of the TexStar Group. For the
purpose of the immediately preceding sentence, the terms “control” or
“controlled” mean the possession, directly or indirectly, of the power, directly
or indirectly, to direct or cause the direction of the management or policies of
the controlled Person, whether through the ownership of equity interests in or
voting rights attributable to the equity interests in such Person, by contract
or agency, by the general partner of a Person that is a partnership, or
otherwise.
“Agreement” has the meaning set forth in the Preamble.
“Assignment and Contribution Agreement” means a membership interest and limited
partnership interest assignment, or similar document or instrument of
conveyance, that irrevocably assigns, transfers and conveys the Frio Interests
as contemplated herein, in form and substance mutually acceptable to the
Parties.
“Atlas” means APL SouthTex Processing Company LP, a Texas limited partnership.
“Basket” has the meaning set forth in Section 9.6(a).
“BBTS Borrower” means BBTS Borrower LP, a Delaware limited partnership
“BBTS Credit Facility” means that certain Credit Agreement, dated as of June 4,
2013, as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, among BBTS Borrower, BBTS Borrower GP LLC, a
Delaware limited liability company, BBTS Guarantor LP, a Delaware limited
partnership, the subsidiaries of BBTS Borrower party thereto as guarantors, the
lenders party thereto from time to time, UBS AG, Stamford Branch, as
administrative agent and collateral agent, and the other parties thereto.
“Benefit Plan” means (a) each “employee benefit plan,” as such term is defined
in Section 3(3) of ERISA, (b) each plan that would be an “employee benefit
plan,” as such term is defined in Section 3(3) of ERISA, if it were subject to
ERISA, such as foreign plans and plans for directors, (c) each equity bonus,
equity ownership, equity option, equity purchase, equity appreciation rights,
phantom equity or other equity-based plan and (d) each bonus, commission,
incentive, deferred compensation plan, severance, employment, consulting,
retention, transaction, change-of-control, “stay,” “sale,” group insurance,
retirement, health, welfare, fringe or other compensation plan, agreement,
contract, arrangement or practice.
“Business Day” means any day other than (a) Saturday or Sunday or (b) any day on
which the Federal Reserve Bank of Dallas, Texas is closed.
“Cash Consideration” has the meaning set forth in Section 2.2.

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“Claim Notice” means written notice from an Indemnified Party to an Indemnifying
Party with respect to a Loss.
“Closing” has the meaning set forth in Section 2.3.
“Closing Date” has the meaning set forth in Section 2.3.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor law, and the Treasury Regulations.
“Common Units” means units representing limited partner interests of SXE
designated as Common Units and having the rights, obligations and such other
terms as set forth in the SXE Partnership Agreement.
“Competition Laws” means the HSR Act, the Sherman Act, as amended, the Clayton
Act, as amended, the Federal Trade Commission Act, as amended, and any other
federal, state, or local statutes, rules, regulations, orders, decrees,
administrative or judicial doctrines or other Laws that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization, lessening of competition or restraint of trade.
“Confidentiality Agreement” means that certain Confidentiality and Nondisclosure
Agreement, dated as of December 5, 2013, by and between SXE and TexStar.
“Conflicts Committee” has the meaning assigned to such term in the SXE
Partnership Agreement.
“Consideration” has the meaning set forth in Section 2.2.
“Consolidated Group” means any affiliated, combined, consolidated, unitary or
similar group with respect to any Taxes, including any affiliated group within
the meaning of Section 1504 of the Code electing to file consolidated federal
income Tax Returns and any similar group under foreign, state or local law.
“Contract” means, with respect to any Person, any agreement, arrangement,
commitment, obligation, contract, or instrument of any type whatsoever, whether
oral or written, express or implied, including any concessions, conditional
sales agreements, deeds of trust, guaranties, leases, license agreements,
mortgages, non-competition agreements, notes, pledge agreements, purchase and
sales orders, security agreements or warranties, to which a Person is a party or
by which any of its properties or assets may be bound.
“Contributed Entities” means the members of the TexStar Group.
“Controlling Person” has the meaning set forth in Section 7.13(e).
“Covered Losses” has the meaning set forth in Section 9.6(a).
“Debt Financing Sources” has the meaning set forth in Section 10.1(d).

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“Direct Claim” has the meaning set forth in Section 9.5(a).
“Easements” means the rights-of-way, easements, leases and servitudes that are
used by the TexStar Group in the location, operation, maintenance, repair,
replacement, use or ownership of the TexStar Assets.
“Email” means electronic mail.
“Encumbrances” means any claim, lien, mortgage, deed of trust, security
interest, pledge, charge, setoff, option, attachment, right of first refusal,
covenant, encroachment, encumbrance, restriction or any other adverse claim of
any kind, and additionally with respect to Equity Interests includes preemptive
rights, rights of first offer, purchase options or other restrictions or
limitations affecting transferability.
“Environmental Laws” means any federal, tribal, state, local or foreign Law
(including common law), consent decree, settlement agreement, judgment, order,
or other legal requirement issued by or entered into with a Governmental
Authority pertaining or relating to: (a) pollution or pollution control,
including storm water; or (b) protection of human health from exposure to
Hazardous Substances or protection, preservation or remediation of the
environment. “Environmental Laws” includes the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
§ 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et
seq., the Toxic Substances Control Act of 1976, 15 U.S.C. § 2601 et seq., the
Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act
of 1977, 33 U.S.C. § 1251 et seq., the Federal Safe Drinking Water Act, 42
U.S.C. §§ 300f et seq., the Rivers and Harbors Act, as amended 33 U.S.C. 401 et
seq., the Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Federal Air Pollution
Control Act, 42 U.S.C. § 7401 et seq., the National Environmental Policy Act, as
amended 42 U.S.C. 4321 et seq., the Endangered Species Act, 16 U.S.C. § 1531 et
seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §§ 11001
et seq., the Pollution Prevention Act of 1990, 42 U.S.C. §§ 13101 et seq., each
as amended, and any regulations, orders and requirements thereunder, each as
amended, or any equivalent or analogous state or local Laws, any regulation,
order or requirements thereunder and any amendments thereto.
“Equity Interest” means, with respect to any Person, (a) any capital stock,
partnership or membership interest (including a profits interest), unit of
participation or other similar interest (however designated) in such Person and
(b) any option, restricted share, restricted stock unit, stock appreciation
right, profits interest, warrant, purchase right, conversion right, exchange
right or other Contract which would entitle any other Person to acquire any such
interest in such Person or otherwise entitle any other Person to share in the
equity, profits, earnings, losses or gains of such Person (including stock
appreciation, phantom equity, profit participation or other similar rights).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.

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“Excluded Returns” has the meaning set forth in Section 7.13(b).
“Excluded 1065 Returns” has the meaning set forth in Section 7.13(c).
“Expiration Date” has the meaning set forth in Section 9.3(a).
“Frio GP” has the meaning set forth in the Recitals.
“Frio GP Interest” has the meaning set forth in the Recitals.
“Frio Interests” has the meaning set forth in the Recitals.
“Frio LP” has the meaning set forth in the Recitals.
“Frio LP Interest” has the meaning set forth in the Recitals.
“Fundamental Representations” has the meaning set forth in Section 9.3(a)(i).
“GAAP” means U.S. generally accepted accounting principles consistently applied.
“Governmental Authority” means any federal, state, local, or foreign government,
political subdivision, or governmental or regulatory authority, agency, board,
bureau, commission, instrumentality, or court, arbitral tribunal or
quasi-governmental authority.
“Hazardous Substances” means any hazardous waste, hazardous substance, extremely
hazardous substance, hazardous material, pollutant, contaminant, toxic
substance, toxic chemical, asbestos or asbestos-containing materials, petroleum,
petroleum constituents, petroleum byproducts, Hydrocarbons, naturally occurring
radioactive material, each as defined in, listed or designated, or which
otherwise is the subject of any rule, regulation or other requirement, pursuant
to any Environmental Law.
“HSR Act” has the meaning set forth in Section 2.6(a).
“Hydrocarbons” means oil, gas, condensate and other gaseous and liquid
hydrocarbons or any combination thereof.
“Incentive Distribution Rights” means units representing limited partner
interests of SXE and designated as Incentive Distribution Rights and having the
rights, obligations and such other terms as set forth in the SXE Partnership
Agreement.
“Indebtedness” means, with respect to any Person, funded indebtedness for
borrowed money owed to any other Person (whether in respect of principal,
interest, prepayment penalties, reimbursement of costs and expenses, interest
swap breakage fees, or otherwise) and includes: (a) obligations related to drawn
letters of credit or similar instruments; (b) obligations evidenced by bonds,
debentures, notes, and similar instruments; (c) obligations to pay the deferred
purchase price of property or services; (d) obligations under leases that are
required by GAAP to be classified as capital leases; (e) obligations under any
currency or interest rate swap, hedge, or similar protection device; and (f)
Indebtedness of third parties that is either guaranteed by such Person or
secured by

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an Encumbrance on such Person’s assets. For the avoidance of doubt,
“Indebtedness” does not include trade payables or accrued expenses.
“Indemnified Party” has the meaning set forth in Section 9.4(a).
“Indemnified Taxes” means (i) any Tax of the Contributed Entities for a
Pre-Closing Tax Period (as determined under Section 7.13(d) with respect to
Straddle Periods); (ii) Taxes that a Contributed Entity assumes or otherwise
becomes liable for by Contract, pursuant to applicable Law as a successor or
transferee, or otherwise for any Pre-Closing Tax Period; (iii) Taxes that a
Contributed Entity is liable for (including under Treasury Regulation section
1.1502-6 or any similar provision of state, local, or non-U.S. applicable Laws)
as a result of being a member of (or leaving) a consolidated, combined, or
unitary Tax group on or before the Closing Date; and (iv) Taxes that a
Contributed Entity is liable for as a result of the transactions contemplated by
this Agreement.
“Indemnifying Party” has the meaning set forth in Section 9.4(a).
“Intellectual Property” means patents, patent applications, trademarks,
trademark registrations or applications therefor, trade names, service marks,
service mark rights, logos, domain names, corporate names and associated
goodwill, copyrights (including software), copyright registrations or
applications therefor, trade secrets, know-how, processes, confidential business
information, engineering data, maps, interpretations, and other confidential and
proprietary information.
“Independent Auditor” means a nationally recognized independent accounting firm
jointly selected by SXE and TexStar.
“Jefferies” means Jefferies LLC.
“Knowledge” or any similar term means (a) with respect to TexStar, the actual
knowledge of any of the Persons set forth on Schedule 1.1(a) and (b) with
respect to SXE, the actual knowledge of any of the Persons set forth on Schedule
1.1(b).
“Labor Agreement” has the meaning set forth in Section 5.7(a)(viii).
“Law” or “Laws” means any and all laws, statutes, ordinances, proclamations,
codes, regulations, Permits, orders, decrees and rules of any Governmental
Authority.
“Loss” or “Losses” means all liabilities, losses, claims, damages, Proceedings,
demands, assessments, adjustments, fees, fines, penalties, Taxes, judgments,
orders, costs and expenses (including reasonable attorneys’ fees, expert witness
fees and costs and expenses of investigation, defense and prosecution).
“Master Contribution Agreement” means that certain Contribution Agreement, dated
as of the date hereof, by and among BBTS Borrower, Southcross Energy LLC and
Southcross Holdings LP.

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“Material Adverse Effect” means, with respect to any Person or Persons, any
change, event or development that is materially adverse to the business,
financial condition or operations of such Person or Persons, taken as a whole;
provided, however, that a “Material Adverse Effect” shall not be deemed to have
occurred as a result of any of the following changes, events, circumstances,
developments or occurrences (either alone or in combination): (a) changes, after
the date hereof, in GAAP or regulatory accounting requirements applicable
generally to companies in the industries in which such Person or Persons
operate; (b) changes, after the date hereof, in Laws or the interpretation of
Laws by Governmental Authorities of general applicability to companies in the
industries in which such Person or Persons operate; (c) actions or omissions
taken with the prior written consent of the Party not at issue or as expressly
required by this Agreement; (d) changes in global, national or regional
political conditions (including acts of terrorism or war) or general business,
economic or market conditions, in each case generally affecting the industries
in which such Person or Persons operate; or (e) changes resulting from the
execution of this Agreement or the public disclosure of this Agreement or the
Transactions, except, with respect to clauses (a), (b) and (d) of this
paragraph, to the extent that the effects of such change are disproportionately
adverse to the financial condition, results of operations or business of such
Person or Persons, taken as a whole, as compared to other companies in the
industry in which such Person or Persons operate.
“Merger” has the meaning set forth in Section 7.12(a).
“New Frio LP” has the meaning set forth in Section 7.12(a)(ii).
“Non-Controlling Person” has the meaning set forth in Section 7.13(e).
“Non-Fundamental Representations” has the meaning set forth in Section
9.3(a)(ii).
“NYSE” means the New York Stock Exchange.
“Operative Documents” means this Agreement and the other documents, instruments
and certificates contemplated hereby.
“Ordinary Course of Business” means the ordinary course of business of such
Person consistent with past custom and practice.
“Organizational Documents” means, with respect to any Person (other than an
individual), (a) the certificate or articles of incorporation, formation or
organization and any joint venture, limited liability company, operating or
partnership agreement and other similar documents adopted or filed in connection
with the creation, formation or organization of such Person and (b) all bylaws,
voting agreements and similar documents, instruments or agreements relating to
the organization or governance of such Person, in each case, as amended or
supplemented.
“Outside Date” has the meaning set forth in Section 8.1(d).
“Party” or “Parties” has the meaning set forth in the Preamble.
“Permits” means, with respect to any Person, any license, franchise, permit,
consent, approval, right, privilege, certificate or other similar authorization
issued by, or otherwise granted

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by, any Governmental Authority to which or by which such Person is subject or
bound or to which or by which any property, business, operation or right of such
Person is subject or bound.
“Permitted Encumbrances” means:
(a)    Encumbrances for Taxes that are not yet due and payable or the validity
of which is being contested in good faith by appropriate proceedings, provided
in each case that adequate reserves (in accordance with GAAP) have been made in
respect thereof;
(b)    mechanic’s, materialman’s, carrier’s, repairer’s and other similar
Encumbrances arising or incurred in the Ordinary Course of Business that are not
yet due and payable;
(c)    rights of use, easements, rights-of-way, permits, licenses, servitudes,
surface leases, sub-surface leases, grazing rights, and logging rights on, over
or through the applicable asset and other minor defects or irregularities in
title, or encumbrances on, the applicable asset that do not materially affect or
impair the use or operation or the cost of operation of the asset to which they
relate or the ability of the specified Person to conduct its business;
(d)    zoning, municipal planning, building codes or other applicable Laws
regulating the use, development or occupancy of real property, including
building and use restrictions and covenants;
(e)    the terms and conditions of the instruments creating the asset, provided
that no current violations exist with respect to same;
(f)    the terms of any Contract in existence as of the date hereof to which
such Person is party;
(g)    Encumbrances that will be fully released at or prior to Closing; and
(h)    defects that SXE waives in writing pursuant to a separate agreement.
“Person” means an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any other
entity.
“PIK Common Units” has the meaning set forth in Section 2.2.
“Post-Closing Returns” has the meaning set forth in Section 7.13(b).
“Post-Closing Tax Event” means: (a) amending a Tax Return of any of the
Contributed Entities for a Pre-Closing Tax Period; (b) extending or waiving the
applicable statute of limitations with respect to a Tax of any of the
Contributed Entities for a Pre-Closing Tax Period; (c) filing any ruling request
with any Governmental Authority that relates to Taxes or Tax Returns of any of
the Contributed Entities for a Pre-Closing Tax Period; (d) filing Tax Returns or
paying Taxes for a Pre-

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Closing Tax Period in jurisdictions that any Contributed Entity did not
previously file a Tax Return (or pay Taxes) for such periods; (e) making,
changing or rescinding any Tax election, adopting or changing any Tax accounting
method; and (f) surrendering any right to claim a refund of Taxes, or taking any
action or entering into any other transaction that would have the effect of
increasing the Tax liability or reducing any Tax asset (including a refund of
any Tax), in each case with respect to any Pre-Closing Tax Period.
“Post-Closing Tax Period” means any taxable period other than a Pre-Closing Tax
Period, including the portion of a Straddle Period beginning on the date
following the Closing Date as determined in Section 7.13(d).
“Pre-Closing Tax Period” means any taxable period that ends on or before the
Closing Date, including the portion of a Straddle Period ending on the Closing
Date as determined in Section 8.13(c).
“Proceeding” means any claim, action, suit, investigation or inquiry before or
by any Governmental Authority or arbitrator.
“Related Affiliates” means (a) TexStar, (b) TexStar Midstream GP, LLC, a Texas
limited liability company, (c) TexStar Midstream T/U GP, LLC, a Texas limited
liability company, (d) TexStar Midstream Utility, LP, a Texas limited
partnership, (e) TexStar Transmission, LP, a Texas limited partnership, (f)
TexStar Midstream Products GP, LLC, a Texas limited liability company, (g)
TexStar Midstream Products, LP, a Texas limited partnership, (h) TexStar
Midstream Operating, LLC, a Texas limited liability company, and (i) TexStar
Midstream II GP, LLC, a Texas limited liability company (successor to TexStar
Crude Oil Services, LP, TexStar Midstream Transport, LP, and TexStar COP, LP).
“Release” means any depositing, spilling, leaking, pumping, pouring, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping,
leaching, dumping or disposing.
“Representatives” means (a) partners, employees, officers, directors, members,
equity owners and counsel of a Party or any of its Affiliates or any prospective
purchaser of a Party or an interest in a Party, (b) any consultant or agent
retained by a Party or the parties listed in subsection (a) above and (c) any
bank, other financial institution or entity funding, or proposing to fund, a
Party or its Affiliates.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Series A Convertible Preferred Units” means units representing limited partner
interests of SXE designated as Series A Convertible Preferred Units and having
the rights, obligations and such other terms as set forth in the SXE Partnership
Agreement.
“Southcross Director” means a director designated by the directors of Southcross
Holdings GP, LLC appointed by Southcross Energy LLC.

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“Southcross Indemnitees” has the meaning set forth in Section 9.1.
“Southcross Representatives” has the meaning set forth in Section 7.2(a).

“Special Litigation Matters” has the meaning set forth on Schedule 5.13.
“Straddle Period” means any taxable period that includes, but does not end on,
the Closing Date.
“Straddle Return” means a Tax Returns of a Contributed Entity for a Straddle
Period.
“Subordinated Units” means units representing limited partner interests of SXE
designated as Subordinated Units and having the rights, obligations and such
other terms as set forth in the SXE Partnership Agreement.
“Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person or a combination thereof, directly or indirectly, at
the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
“SXE” has the meaning set forth in the Preamble.
“SXE Assets” means all of the assets owned or used by the SXE Group.
“SXE Business” means the business of natural gas gathering, processing,
treating, compression and transportation services, crude oil transportation
services and NGL fractionation and transportation services conducted by the SXE
Group as of the date hereof.
“SXE Commitment Letter” means a commitment letter from the lender parties to SXE
dated June 11, 2014.
“SXE Credit Facility” means the credit arrangements applicable to SXE on
substantially the same terms as set forth in the SXE Commitment Letter.
“SXE Energy” has the meaning set forth in the Preamble.

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“SXE GP” means Southcross Energy Partners GP LLC, a Delaware limited liability
company.
“SXE Group” means SXE and each of its Subsidiaries (including SXE Energy).
“SXE Long-Term Incentive Plan” means the Southcross Energy Partners, L.P. 2012
Long-Term Incentive Plan, as amended from time to time.
“SXE Partnership Agreement” means that certain Second Amended and Restated
Agreement of Limited Partnership of SXE, dated as of April 12, 2013, as amended
from time to time.
“SXE SEC Documents” has the meaning set forth in Section 6.5.
“T2 EF Gathering” means T2 Eagle Ford Gathering Company LLC, a Delaware limited
liability company.
“T2 EFC” means T2 EF Cogeneration LLC, a Texas limited liability company and
wholly-owned Subsidiary of T2 EFC Holdings.
“T2 EFC Holdings” means T2 EF Cogeneration Holdings LLC, a Delaware limited
liability company.
“T2 LaSalle” means T2 LaSalle Gas Utility LLC, a Texas limited liability company
and wholly-owned subsidiary of T2 LaSalle Gathering.
“T2 LaSalle Gathering” means T2 LaSalle Gathering Company LLC, a Delaware
limited liability company.
“T2 LaSalle Entities” means T2 LaSalle and T2 LaSalle Gathering.
“T2GU” means T2 Gas Utility LLC, a Texas limited liability company and
wholly-owned Subsidiary of T2 EF Gathering.
“Tax Claim” has the meaning set forth in Section 7.13(e).
“Tax Proceeding” has the meaning set forth in Section 7.13(e).
“Tax Return” means any return, declaration, report, claim for refund,
information return, or statement relating to Taxes, including any attachment
thereto and any amendment thereof.
“Taxes” means (a) all federal, state, local and foreign income, gross income,
profits, ad valorem, severance, production, gain, gross receipts, excise,
property, sales, withholding, social security, unemployment, occupation, use,
goods and services, license, payroll, franchise, real property, personal
property, fuel, severance, transfer, and recording taxes or other assessments,
fees, and charges, imposed by any Government Authority, including any interest,
penalty or addition thereto, whether disputed or not; (b) any liability for the
payment of any amounts of the type described in clause (a) as a result of being
a member of a consolidated or combined group for any period; and

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(c) any liability for the payment of any amounts of the type described in
clauses (a) or (b) as a result of the operation of Law or any express or implied
obligation to indemnify any other Person.
“TexStar” has the meaning set forth in the Preamble.
“TexStar Assets” means all of the assets owned or used by the TexStar Group, and
specifically excluding any assets transferred to New Frio LP in connection with
the TexStar Rich Gas Restructuring.
“TexStar Business” means the business of natural gas gathering, processing,
treating, compression and transportation services, crude oil transportation
services and electricity generation services conducted by the TexStar Group in
substantially the manner conducted as of the date hereof (and, for clarity,
determined after giving effect to the TexStar Rich Gas Restructuring).
“TexStar Capex Budget” means the capital expenditure plan set forth on Schedule
1.1(c).
“TexStar Contracts” has the meaning set forth in Section 5.7(a).
“TexStar ERISA Affiliate” has the meaning set forth in Section 5.18(a).
“TexStar Financial Statements” has the meaning set forth in Section 5.4.
“TexStar Group” means Frio GP, Frio LP and the TexStar JV Entities.
“TexStar Historical Financial Statements” has the meaning set forth in Section
5.4.
“TexStar Indemnitees” has the meaning set forth in Section 9.2.
“TexStar JV Entities” means T2 EFC Holdings, T2 EF Gathering, T2 LaSalle
Gathering, T2 EFC, T2 LaSalle and T2GU.
“TexStar Latest Financial Statement” has the meaning set forth in Section 5.4.
“TexStar Representatives” has the meaning set forth in Section 7.2(b).
“TexStar Rich Gas Restructuring” has the meaning set forth in Section 7.12.
“TexStar SXE Interest” has the meaning set forth in Section 4.7(a).
“Third Party Debt” means all (a) outstanding indebtedness for borrowed money
owed to any Person (other than any other member of the TexStar Group) and
(b) outstanding indebtedness of any third Person that is guaranteed by, or
secured by a lien on any assets or Equity Interests of, any member of the
TexStar Group.
“Third Person Claim” has the meaning set forth in Section 9.4(a).
“Transaction Expenses” has the meaning set forth in Section 7.8.

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“Transactions” means the transactions contemplated by this Agreement and the
other Operative Documents.
“Treasury Regulations” means the regulations (including temporary regulations)
promulgated by the United States Department of the Treasury pursuant to and in
respect of provisions of the Code. All references herein to sections of the
Treasury Regulations shall include any corresponding provision or provisions of
succeeding, similar or substitute, temporary or final Treasury Regulations.
“Unit Consideration” has the meaning set forth in Section 2.2.
“Voting Debt” means bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into securities having the right to vote) on any
matters on which holders of the Common Units may vote.
“WARN Act” has the meaning set forth in Section 5.17(b).

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Exhibit B
PIK Common Units
Summary of Indicative Terms and Conditions
SXE LP Unit Purchase (the “Offering”)
Issuer:
Southcross Energy Partners, L.P. (“SXE”).
Purpose:
Proceeds of the SXE Offering, together with $180 million of cash raised from a
new debt issuance, will be used, directly or indirectly, to purchase the Rich
Gas System from New Holdco.
SXE Offering:
14.633 million units of a new class of Common Units (“Class B Common Units”)
issued in a private placement.
Purchaser:
New HoldCo
Purchase Price:
The volume weighted average trading price (“VWAP”) of SXE Common Units for the
10 trading day period ending the business day prior to signing of the
transaction.
Quarterly Distribution:
For the period lasting until SXE has met certain requirements including payment
of a quarterly distribution to common unit holders of at least $0.44
and maintaining a coverage ratio of at least 1.00x for two trailing quarters
and forecasting a coverage ratio of at least 1.00x for two forward quarters
(such period, the “PIK Distribution Period”), SXE will make quarterly
distributions to the holders of the Class B Common Units payable in PIK Class B
Common Units. For purposes of the PIK distributions, the number of PIK Class B
Common Units to be issued in respect of each distribution will be equal to 7.0%
of the Purchase Price. At the end of the PIK Distribution Period, all Class B
Common Units and PIK Class B Common Units will automatically convert into SXE
Common Units on a one-for-one basis and participate in cash distributions pari
passu with all other SXE Common Units.
Transfer Restrictions:
The Purchaser will not be permitted to sell or otherwise transfer any of the
Class B Common Units or PIK Class B Common Units (i) at any time during the
period ending 60 days after closing or (ii) thereafter unless such sale or
transfer complies with applicable securities laws.
Registration Rights:
As soon as practicable following receipt of a request from the Purchaser, SXE
shall use its reasonable best efforts to (i) file a registration statement
registering the sales of Common Units to be issued upon conversion (ii) have the
registration statement declared effective within 180 days after filing with the
Securities and Exchange Commission (the “SEC”) and (iii) maintain the
effectiveness of the registration statement for a period of two years; provided,
however, that the Purchaser may request SXE file no more than two registration
statements during the seven years following the closing to register the sales of
Common Units issuable upon conversion, subject to certain thresholds, delay
rights and other customary provisions. The Purchaser shall have customary
piggyback rights in any underwritten offering of SXE’s equity securities.
Voting:
Class B Common Units and PIK Class B Common Units will vote together with SXE
Common Units as a single class, and will vote as a separate class on any changes
to the existing SXE Partnership Agreement that would adversely affect the Class
B Common Units or PIK Class B Common Units.
Conditions Precedent:
Customary conditions precedent including all conditions to closing of the
Acquisition.