Exhibit 10.7

Execution Version

THIS AGREEMENT, THE INDEBTEDNESS EVIDENCED HEREBY OR ANY LIEN OR SECURITY
INTEREST OR COLLATERAL SECURING SUCH INDEBTEDNESS, IS SUBORDINATED, IN THE
MANNER AND TO THE EXTENT SET FORTH IN AN AGREEMENT DATED AS OF NOVEMBER 13, 2013
(AS SUCH AGREEMENT MAY FROM TIME TO TIME BE AMENDED, RESTATED, MODIFIED, OR
SUPPLEMENTED, THE “SUBORDINATION AGREEMENT”), BY THE OBLIGOR AND OBLIGEE OF THIS
AGREEMENT IN FAVOR OF BANK OF AMERICA, N.A. AS ADMINISTRATIVE AGENT FOR THE
“LENDERS” REFERRED TO THEREIN, TO ALL SENIOR INDEBTEDNESS (AS DEFINED THEREIN),
AND EACH HOLDER OF OBLIGATIONS UNDER THIS AGREEMENT, BY ITS ACCEPTANCE HEREOF,
SHALL BE BOUND BY THE SUBORDINATION AGREEMENT.

WORKING CAPITAL LOAN AGREEMENT

THIS WORKING CAPITAL LOAN AGREEMENT (this “Agreement”) is made as of
November 13, 2013 (the “Effective Date”), between Enbridge Energy Partners,
L.P., a Delaware limited partnership (“EEP”, collectively with any EEP
subsidiary or EEP affiliate that provides financing to Borrower on behalf of EEP
pursuant to this Agreement, or “Lender”), with principal offices at 1100
Louisiana Street, Suite 3300, Houston, Texas 77002, and Midcoast Operating,
L.P., a Texas limited partnership (“Borrower”), with principal offices at 1100
Louisiana Street, Suite 3300, Houston, Texas 77002.

Background. In contemplation of EEP’s initial public offering of Midcoast Energy
Partners, L.P., a Delaware limited partnership (“MEP”), Borrower, as the
principal operating subsidiary of MEP, has requested Lender, and Lender has
agreed, to continue Lender’s direct loan financial support to Borrower, subject
to the conditions and upon the terms of this Agreement; and for good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
Borrower and Lender agree as provided in this Agreement.

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

a. “Change of Control” means any of the following events: (i) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the General Partner’s assets to any
other Person, unless immediately following such sale, lease, exchange or other
transfer such assets are owned, directly or indirectly, by the General Partner,
EEP or an affiliate of EEP; (ii) the dissolution or liquidation of the General
Partner (other than in connection with a consolidation or merger provided for in
sub-clause (b) of the next-following clause (iii)); (iii) the consolidation or
merger of the General Partner with or into another Person pursuant to a
transaction in which the outstanding membership interests of the General Partner
are changed into or exchanged for cash, securities or other property, other than
any such transaction where (a) the outstanding membership interests of the
General Partner are changed into or exchanged for Voting Securities of the
surviving corporation or its parent and (b) Lender or any of its affiliates
continues to own, directly or indirectly, not less than a majority of the
outstanding Voting Securities of the surviving corporation or its parent
immediately after such transaction; and (iv) other than Lender and its
affiliates, a “person” or “group” (within the meaning of

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Sections 13(d) or 14(d)(2) of the Exchange Act) being or becoming the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
of more than 50% of all of the then outstanding membership interests of the
General Partner having voting power to control the General Partner, except in a
merger or consolidation which would not constitute a Change of Control under
clause (iii) above.

b. “Commitment Termination Date” means the earlier of (i) the Maturity Date or
(ii) the date EEP owns, directly or indirectly, less than an aggregate of 20% of
the outstanding limited partnership interests in Borrower (a “Reduction in
Ownership”), provided that immediately after giving effect to such Reduction in
Ownership, such Reduction in Ownership does not result in a Change of Control.

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

d. “General Partner” means Midcoast OLP GP, L.L.C., a Delaware limited liability
company (including any successors and permitted assigns under the Limited
Partnership Agreement of Borrower, as it is amended and in effect from time to
time).

e. “LIBOR” means on any date of determination, the offered rate (rounded up to
the next highest one one-thousandth of one percent (0.001%)) for deposits in
U.S. dollars for a one-month period which appears on the Bloomberg BTMM Page at
approximately 11:00 A.M., London time, on such date, or if such date is not a
date on which dealings in U.S. dollars are transacted in the London interbank
market, then on the next preceding day on which such dealings were transacted in
such market; provided that if such rate is not available on Bloomberg, or
Bloomberg is not available, then such other comparable rate as determined by the
Lender.

f. “Loan” means a Revolving Loan or a Term Loan.

g. “Maturity Date” means November 13, 2017 or, if earlier, upon maturity (by
acceleration, termination of this Agreement, or otherwise as provided herein).

h. “Person” means a corporation, partnership (limited, general or otherwise),
joint venture, trust, limited liability company, unincorporated organization or
any other entity.

i. “Voting Securities” means securities of any class of Person entitling the
holders thereof to vote in the election of members of the board of directors or
other similar governing body of the Person, or in the case of a limited
partnership, a majority of the general partner interests in such limited
partnership.

 

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Further, as used in this Agreement, terms otherwise defined herein shall have
the meanings so assigned.

2. Loan. Subject to the conditions and upon the terms hereof, Lender shall make
revolving loans (“Revolving Loans”) to Borrower prior to the Commitment
Termination Date in an aggregate amount outstanding of up to, but not exceeding,
$250,000,000.00 at any time, and Borrower may borrow, prepay, and reborrow under
this Section 2.

3. Conversion of Revolving Loans to the Term Loan. If on the Commitment
Termination Date, such date is not the Maturity Date, the aggregate of all then
outstanding Revolving Loans shall automatically convert to a term loan (the
“Term Loan”) on the Commitment Termination Date in the aggregate principal
amount outstanding of all such Revolving Loans.

4. Procedure for Borrowing. On a business day, Borrower may borrow a Revolving
Loan in amounts of not less than $5,000.00, and integral multiples of $1,000.00
in excess thereof, by giving written notice to Lender. Each Revolving Loan
request shall be received by 10:00 a.m. Houston, Texas time on the business day
prior to the date of the proposed borrowing.

5. Interest; Fee.

a. The initial per annum interest rate on each outstanding Loan will be LIBOR
determined the date of the borrowing (or for Term Loan, on the date the
Revolving Loans are converted to the Term Loan) plus 2.5%. If any Loan is not
repaid within one month, then on the date of the expiration of the initial
one-month interest period, and thereafter for so long as such borrowing is
outstanding on the date of the expiration of each successive one-month interest
period (or portion thereof), the per annum interest rate will be adjusted to the
then current LIBOR, determined as of the expiration of such one-month interest
period, plus 2.5%. Loans may be repaid prior to the end of any one-month
interest period without breakage or similar costs.

b. Interest accrued on the Loans shall be due and payable in arrears monthly on
the 15th day of each month, beginning on the 15th day of the month next
following the Effective Date, until the Maturity Date, upon which day all
accrued interest then unpaid shall be due and payable. Interest shall be
computed on the basis of a 360-day year and actual days elapsed. Interest shall
be calculated based on the outstanding principal amount of the Loans.

c. At all times that any subordination agreement, as contemplated by Section 29
herein, shall be in effect, accrued and unpaid interest on Loans, when due and
payable (except on the maturity hereof, howsoever such maturity occurs), may, if
cash payments in respect of such interest are not permitted under such
subordination agreements and upon at least five (5) business days’ advance
notice from Borrower, be paid in the form of additional indebtedness issued by
Borrower to Lender, which additional indebtedness shall be in the principal
amount of such due and payable accrued interest and otherwise of like tenor and
terms of this Agreement, it being acknowledged and agreed by Lender that payment
of such interest amounts by the issuance of such additional indebtedness shall
constitute full and timely payment of such interest amounts when they are due.

 

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d. Borrower agrees to pay to Lender a commitment fee on the unused commitment
which shall accrue thereon at the per annum rate of 0.4250% and be payable, in
arrears, on the last day of each fiscal quarter of Borrower.

6. Payment. Borrower hereby promises to pay to Lender interest when due
hereunder and all outstanding principal, accrued unpaid interest and all other
amounts owing under this Agreement in full on the Maturity Date. All payments of
principal and interest shall be payable in lawful currency of the United States
of America at the office of Lender as provided above or such other address as
Lender shall have designated to Borrower, in immediately available funds.
Borrower may prepay all or part of the amounts outstanding hereunder at any time
without premium or penalty. Any partial prepayment, however, shall be applied
first to any fees or expenses payable to Lender hereunder, second to accrued
unpaid interest, and third to the outstanding principal amount of any Loan.

7. Conditions of Loans. The obligation of Lender to make each Loan described
herein is subject to the satisfaction of the following conditions:

a. the representations and warranties of Borrower set forth in this Agreement
shall be true and correct on and as of the date of such Loan; and.

b. at the time of and immediately after giving effect to such Loan, no event or
circumstance exists which constitutes, or, with the giving of notice or passage
of time, if applicable, would constitute, a Default.

Each Loan shall be deemed to constitute a representation and warranty by
Borrower on the date thereof as to the matters specified in this Section 7.

8. Representations and Warranties. Borrower hereby represents and warrants to
Lender that:

a. Borrower is a limited partnership duly organized and existing in good
standing under the laws of the State of Delaware and is duly qualified as a
foreign limited partnership and is in good standing in all states or other
jurisdictions where the nature and extent of the business transacted by it or
the ownership of its properties or assets makes such qualification necessary,
except for those jurisdictions in which the failure to so qualify would not have
a material adverse effect;

b. on the date hereof, the correct legal name of Borrower and Borrower’s
principal place of business, are as specified in the opening paragraph of this
Agreement;

c. the execution, delivery and performance of this Agreement and the
transactions contemplated hereunder are all within the limited partnership power
and authority of Borrower, have been duly authorized and are not in violation of
law or the terms of Borrower’s organizational documentation, or in breach of, or
default under, any indenture, agreement or undertaking to which Borrower is a
party or by which Borrower or its property are bound;

 

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d. this Agreement constitute a legal, valid and binding obligation of Borrower
enforceable against Borrower in accordance with its terms; except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and general principles of equity;

e. no consent, approval or other action of, or filing with, or notice to any
governmental authority is required to be made or obtained by Borrower in
connection with its execution, delivery and performance of this Agreement,
except for those consents or approvals already obtained by Borrower; and

f. the proceeds of the Loans have been and shall be used only for working
capital and other general corporate purposes. No part of the proceeds of any
Loan shall be used, whether directly or indirectly, for the purpose of
purchasing or carrying margin stock (as defined by the Board of Governors of the
Federal Reserve Bank) or for any purpose that entails a violation of any of the
Regulations of the Board of Governors of the Federal Reserve Bank, including
Regulations U and X.

9. Default. Any of the following shall constitute a default (“Default”):

a. Borrower defaults in the payment or performance of the terms and conditions
of this Agreement and such default continues for 30 days after notice thereof
from Lender; or

b. any representation, warranty or certification made by Borrower herein shall
have been untrue in a material respect on the date when made; or

c. Borrower or MEP (i) becomes insolvent or admits in writing its inability to
pay its debts as they mature or (ii) applies for, consents to, or acquiesces in
the appointment of a trustee or receiver for any of its property; in the absence
of an application, consent, or acquiescence a trustee or receiver is appointed
for Borrower or MEP or a substantial part of its property and is not discharged
within 60 days; Borrower or MEP otherwise commits an act of bankruptcy; or any
bankruptcy, reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
instituted by or against Borrower or MEP and if instituted is consented to or
acquiesced in by it or remains for 60 days undismissed;

d. any Change of Control of Borrower shall have occurred or Borrower shall
dissolve or terminate its existence;

e. any court shall find or rule, or Borrower shall assert or claim, that this
Agreement does not or shall not constitute the legal, valid, binding and
enforceable obligation of Borrower;

f. Borrower or MEP, as applicable, shall (i) fail to pay when due any principal
of, or interest on, any indebtedness (other than amounts owed hereunder), the
aggregate outstanding amount of which is in excess of $25,000,000, and such
failure extends beyond the period of grace, if any, provided for in the
instrument or agreement governing such indebtedness or

 

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under which such indebtedness was created, or (B) default in the observance or
performance of any other agreement or condition (1) under the credit agreement
governing the MEP Revolving Credit Facility (as herein defined) or (2) relating
to any indebtedness (other than amounts owed hereunder), the aggregate
outstanding amount of which is in excess of $25,000,000, or contained in any
instrument or agreement evidencing, securing or relating to such indebtedness,
or any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or holders of
such indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, with the giving of notice and/or lapse of time, if required, any such
indebtedness to become due prior to its stated maturity (any applicable grace
period having expired); or

g. any government, board, agency, department, or commission takes possession or
control of a substantial part of Borrower’s property and such possession or
control continues for 30 days.

10. Acceleration; Termination of Commitment. If a Default set forth in
Section 9.c occurs, (i) the unpaid principal amount of the Loans and all
accrued, unpaid interest thereon and other amounts hereunder shall be deemed to
have matured and shall become and be immediately due and payable without demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of intent to accelerate maturity, notice of acceleration of maturity or
any other notice of any kind to Borrower, all of which are expressly waived by
Borrower, anything contained herein to the contrary notwithstanding and (ii) all
obligations of Lender to make Loans hereunder shall terminate. If any other
Default occurs and continues, Lender (y) may declare the amounts outstanding
under this Agreement immediately due and payable, at which time all unpaid
principal amount of the Loans and all accrued, unpaid interest thereon shall
immediately become due and payable and (z) may terminate all of its obligations
to make Loans hereunder. In addition, during the existence of a Default, Lender
may exercise any and all rights and remedies available at law or in equity.

11. Termination. Borrower may terminate this Agreement by giving Lender 30 days
prior written notice, and upon such termination date, the Maturity Date shall be
deemed to have occurred and all outstanding and accrued, unpaid amounts
hereunder shall be due and payable. Notwithstanding anything contained in this
Agreement to the contrary, in the event of a Change of Control of the General
Partner, the Maturity Date shall be deemed to have immediately occurred as of
the date of such Change of Control.

12. Lender’s Records. Lender shall maintain a loan account in the name of
Borrower in which shall be recorded the date and amount of each Loan made by
Lender to Borrower and the date and amount of each payment in respect thereof;
provided, however, the failure by Lender to record the date and amount of any
Loan shall not adversely affect Lender’s rights or Borrower’s obligations. The
records of Lender with respect to the loan account shall be conclusive evidence
of the amounts of Loans and other charges thereto and of payments applicable
thereto. Lender shall, upon request of Borrower, provide copies of that portion
of its records evidencing loans made by Lender to Borrower and repayments by
Borrower to Lender.

 

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13. Binding Effect. This Agreement shall be binding on the respective successors
and permitted assigns of Lender and Borrower and shall inure to the benefit of
Lender’s successors and assigns. The Borrower may not assign any of its rights
or obligations hereunder without the prior written consent of Lender, and any
attempted assignment hereof, or any part hereof or interest herein without such
consent of the Lender shall be void and without force and effect.

14. Loan Expenses. Except as expressly set forth herein, Borrower shall not be
required to pay any fees or other expenses of Lender in connection with this
Agreement or the Loans made hereunder.

15. Non-Waiver. No delay or failure by Lender to exercise any right under this
Agreement, and no partial or single exercise of a right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein.

16. Governing Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of New York applicable to agreements made and
to be performed entirely within such State.

17. Interpretation. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions. The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms. The words “herein” and “hereunder” and words of similar import
shall refer to this Agreement as a whole and not to any particular provision
thereof. The term “including” is by way of example and not limitation and the
word “or” is not exclusive.

18. Counterparts. This Agreement may be executed in two or more counterparts,
and by each party hereto on separate counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.

19. Time of Essence. Time is expressly declared to be the essence of this
Agreement.

20. Entire Agreement; Modification. This instrument and any other loan documents
executed in connection herewith constitute the entire Agreement between Lender
and Borrower and may not be contradicted by evidence of prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. This Agreement may not be modified except in a
writing signed by both parties.

21. Notices. All notices under this Agreement shall be in writing and delivered
to the respective parties at their principal offices stated at the beginning
hereof or such other address as a party shall have designated to the other
party.

22. No Third Party Beneficiaries. The agreement of Lender to make the loan to
Borrower for the account of Borrower on the terms and conditions set forth in
this Agreement, is solely for the benefit of Borrower and no other Person has
any rights hereunder against Lender or with respect to the extension of credit
contemplated hereby.

 

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23. Special Exculpation. No claim may be made by Borrower or any other Person
against Lender or its partners, or equity interest holders or any of its or
their respective directors, officers, employees, attorneys or agents of any of
them for any special, indirect, consequential or punitive damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or relating to this Agreement or any other financing document or the
transactions contemplated hereby or thereby, or any act, omission or event
occurring in connection therewith and Borrower hereby waives, releases and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.

24. Waiver of Jury Trial. EACH OF BORROWER AND LENDER HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT NOT PROHIBITED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

25. Indemnification. Borrower agrees to pay on demand all reasonable costs and
expenses incurred by Lender in connection with enforcement of this Agreement.
Borrower agrees to the fullest extent permitted by law, to indemnify and hold
harmless Lender and each of its affiliates, or any of its or their partners,
members, equity interest holders, directors, officers, employees and agents
(each an “Indemnified Party”) from and against any and all claims, damages,
liabilities and expenses (including without limitation fees and disbursements of
counsel) arising out of or in connection with any investigation, litigation or
proceeding (whether or not any Indemnified Party is a party) arising out of,
related to or in connection with this Agreement, the Loans made hereunder or any
transaction in which any proceeds of all or any part of the Loans made hereunder
are applied.

26. Severability. If any term or provision of this Agreement shall be determined
to be illegal or unenforceable, all other terms and provisions of this Agreement
shall nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.

27. Further Assurances. The parties agree (i) to furnish upon request to each
other such further information, (ii) to execute and deliver to each other such
other documents, and (iii) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement.

28. Interest Rate Limitation. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any amounts outstanding
hereunder, together with all fees, charges and other amounts which are treated
as interest on such amounts under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with applicable law, the rate of interest payable in respect of such amounts
outstanding hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such amounts outstanding but
were not payable as a result of the operation of this Section 28 shall be
cumulated and the interest and Charges payable to Lender in respect of other
amounts outstanding hereunder or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender. “Federal Funds Effective Rate” as used herein
means, for any day, the

 

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weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding business day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a business day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by Lender from three Federal funds
brokers of recognized standing selected by it.

29. Subordination. Lender agrees that at the request of the administrative agent
(the “Administrative Agent”) under MEP’s principal commercial bank revolving
credit facility (the “MEP Revolving Credit Facility”), it will execute and
deliver to the Administrative Agent an agreement in form and substance as agreed
between Lender and the Administrative Agent, which expressly subordinates
Lender’s right to payment on Loans on the terms expressly provided therein;
provided, Borrower acknowledges and agrees that:

a. the provisions of any such subordination agreement, as amended and in effect,
define the relative rights of Lender and the Administrative Agent, and nothing
contained therein is intended to or shall impair the obligations of Borrower
hereunder, which are unconditional and absolute, to pay the amounts owed and
owing under this Agreement as and when the same shall become due and payable in
accordance with its terms, or to affect the relative rights of creditors of
Borrower other than the relative rights of Lender and the Administrative Agent,
as therein expressly provided,

b. Borrower’s failure to make any payment (principal, interest, fees, costs,
expenses or otherwise) in respect of any Loans when due because such payment is
prohibited by any such subordination agreement, as amended and in effect, shall
not prevent such failure from constituting a default under this Agreement, and

c. until all amounts owed by Borrower to Lender hereunder have been paid in
full, the Borrower may not, and shall not permit any of its affiliates to, grant
or permit any liens on any asset or property to secure the MEP Revolving Credit
Facility, unless it and each of them has granted or concurrently grants a Lien
to Lender on such asset or property to secure its obligations hereunder, on a
second-priority basis, and Borrower hereby expressly agrees, for itself and its
subsidiaries, to grant, create, perfect and maintain, and to cause to be
granted, created, perfected and maintained, liens on its and their assets and
properties in favor of Lender, to secure all amounts from time to time owing
hereunder, in scope, nature, type of, but second priority to, the liens at any
time, and from time to time, granted, created, perfected and maintained to
secure the MEP Revolving Credit Facility.

Without limiting the generality of the foregoing, Borrower specifically
acknowledges and agrees that the provisions of any such subordination agreement,
as amended and in effect, are not for the benefit of, and may not be enforced
by, Borrower or any other obligors of the MEP Revolving Credit Facility or the
Loans.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their proper officers on the day and year first above written.

 

ENBRIDGE ENERGY PARTNERS, L.P. By:  

Enbridge Energy Management, L.L.C.,

as delegate of Enbridge Energy Company, Inc.,

as general partner

By:  

/s/ Chris Kaitson

Name:   Chris Kaitson Title:   Vice President—Law and Assistant Secretary
MIDCOAST OPERATING, L.P. By:   Midcoast Holdings, L.L.C, as general partner of
Midcoast Energy Partners, L.P., as sole member of Midcoast OLP GP, L.L.C., as
general partner By:  

/s/ Chris Kaitson

Name:   Chris Kaitson Title:   Vice President—Law and Assistant Secretary

[Signature Page to Working Capital Loan Agreement]