Employment Agreement - Michael B. Hiney


 Exhibit 10.4 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT AGREEMENT (this “Agreement”) is made by and
between CEP Services Company, Inc., a Delaware corporation (the “Company”), Michael B. Hiney (“Executive”) and, solely for the limited purpose set out in Section 7.13 of this Agreement, Constellation
Energy Partners LLC, a Delaware limited liability company (“CEP”). 
 WHEREAS, the Company is a wholly owned subsidiary of
CEP; 
 WHEREAS, pursuant to an offer letter by and between the Company and Executive, dated December 31, 2008 (the “Offer
Letter”), Executive is employed by the Company as President, Chief Executive Officer and Chief Operating Officer and serves in those same offices for CEP, as directed by the Company; and 
 WHEREAS, the Company and Executive desire to provide the full terms and conditions of Executive’s employment by the Company; 
 WHEREAS, the Company has caused CEP to enter into each of the 2009 LTI Grant Agreement (defined below) and Inducement Award Agreement (defined below)
contemporaneously with the execution of this Agreement; 
 WHEREAS, the Company, CEP and Executive intend for the Offer Letter to be fully
superseded by the entry into each of this Agreement, the 2009 LTI Grant Agreement and the Inducement Award Agreement; 
 NOW, THEREFORE, for
and in consideration of the mutual promises, covenants and obligations contained herein, the Company and Executive agree as follows: 
 ARTICLE 1 
 DEFINITIONS AND INTERPRETATIONS 
 1.1 Definitions. 
 (a)
“2009 LTI Grant Agreement” means that certain Grant Agreement Relating to Notional Units—Executives, dated May 1, 2009, by and between CEP and Executive. 
 (b) “Affiliate” means, with respect to any natural person, firm, partnership, association, corporation, limited liability
company, company, trust, entity, public body or government (a “Person”), any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person. The term “control”
(including the terms “controlled by” and “under common control with”) as used in this definition means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies
of a Person, whether through the ownership of voting securities, by contract or otherwise. With respect to any natural person, the term “Affiliate” means (i) the spouse or children (including those by adoption) and siblings of
such Person; and any trust whose primary beneficiary is such Person, such Person’s spouse, such Person’s siblings and/or one or more of such Person’s lineal descendants, 







 
(ii) the legal representative or guardian of such Person or of any such immediate family member in the event such Person or any such immediate family member
becomes mentally incompetent and (iii) any Person controlled by or under common control with any one or more of such Person and the Persons described in clauses (i) or (ii) preceding. 
 (c) “Annual Base Salary” means, as of a specified date, Executive’s annual base salary as of such date determined
pursuant to Section 4.1. 
 (d) “Annual Compensation” means, as of particular date, an amount
equal to: 
 (i) the Target-Level Bonus for the year in which such date falls; plus 
 (ii) the greater of: 
 (A) Executive’s Annual Base Salary at the annual rate in effect on the date of his Involuntary Termination; 
 (B) Executive’s Annual Base Salary at the annual rate in effect 180 days prior to the date of his Involuntary Termination; and 
 (C) Executive’s Annual Base Salary at the annual rate in effect immediately prior to a Change of Control if Executive’s employment shall be subject to an Involuntary Termination during the Change of Control
Period. 
 (e) “Board” means the Board of Managers of CEP. 
 (f) “Cause” means Executive 
 (i) has engaged in gross negligence, gross incompetence or willful misconduct in the performance of his duties, 
 (ii) has failed to substantially perform the duties and services reasonably required by the Company; provided, that such failure continues for at least 30 days after Executive’s receipt of written notice
of such failure from the Company, 
 (iii) has willfully engaged in conduct that is materially injurious to CEP or its
subsidiaries (monetarily or otherwise), 
 (iv) has committed an act of fraud, embezzlement or willful breach of a fiduciary
duty to the Company or CEP (including the unauthorized disclosure of confidential or proprietary material information of the Company or CEP) or 
 (v) has been convicted of, pled guilty to, or pleaded no contest to, a crime involving fraud, dishonesty or moral turpitude. 
  

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 For purposes of this definition, “moral turpitude” means an act of baseness, vileness or
depravity in the private and social duties which one owes to his fellow man. 
 (g) “CEG” means Constellation
Energy Group, Inc., a Maryland corporation. 
 (h) “CEG Acquisition” means the consummation of a
reorganization, merger, consolidation, statutory equity exchange or similar form of business transaction involving CEG (a “CEG Business Combination”), unless immediately following such CEG Business Combination: (i) more than
60% of the total voting power of (x) the organization resulting from such CEG Business Combination (the “CEG Surviving Organization”), or (y) if applicable, the ultimate parent organization that directly or indirectly has
beneficial ownership of at least 95% of the voting securities eligible to elect managers or directors of the CEG Surviving Organization (the “CEG Parent Organization”), is represented by combined voting power of CEG’s then
outstanding securities eligible to vote for the election of the CEG Board (the “CEG Voting Securities”) that were outstanding immediately prior to such CEG Business Combination (or, if applicable, is represented by equity interests
into which such CEG Voting Securities were converted pursuant to such CEG Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such CEG Voting Securities among the
holders thereof immediately prior to the CEG Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the CEG Surviving Organization or the CEG Parent Organization), is or becomes
the beneficial owner, directly or indirectly, of 25% or more (the “CEG Percentage”) of the total voting power of the outstanding voting securities eligible to elect managers or directors of the CEG Parent Organization (or, if there
is no CEG Parent Organization, the CEG Surviving Organization) except where such person held the CEG Percentage of CEG Voting Securities immediately prior to the consummation of the CEG Business Combination and (iii) at least a majority of the
members of the board of managers or directors of the CEG Parent Organization (or, if there is no CEG Parent Organization, the CEG Surviving Organization) following the consummation of the CEG Business Combination were members of the CEG Board at the
time of the CEG Board’s approval of the execution of the initial agreement providing for such CEG Business Combination. 
 (i) “CEG Board” means the Board of Directors of CEG. 
 (j) “CEG Ownership Event”
means the consummation of any transaction or other event whereby CEG or any of its Affiliates becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 49% or more of CEP’s
then-outstanding Common Units. 
 (k) “Change of Control” shall be deemed to have occurred upon any one or
more of the following events: 
 (i) Board Change. 
  

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 (A) During any period of 24 consecutive months, individuals who, at the commencement of
such period, constitute all of the Class B Managers (the “Incumbent Class B Managers”) cease for any reason to constitute at least a majority of the Class B Managers; provided, however, that any person becoming a Class
B Manager subsequent to the commencement of such period, whose election or nomination for election was approved by a vote of at least two Incumbent Class B Managers then on the Board (either by a specific vote or by approval of the proxy statement
of CEP in which such person is named as a nominee for Class B Manager, without written objection to such nomination) shall be an Incumbent Class B Manager; provided further, however, that no individual initially elected or
nominated as a Class B Manager of CEP as a result of an actual or threatened election contest with respect to Managers or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall
be deemed to be an Incumbent Class B Manager; or 
 (B) Excluding the circumstances described in
Section 1.1(k)(i)(C), during any period of 24 consecutive months, individuals who, at the commencement of such period, constitute the Board (each, an “Incumbent Board Member”) cease for any reason to constitute at least
a majority of the Board; provided, however, that any person becoming a Class B Manager subsequent to the commencement of such period, whose election or nomination for election was approved by a vote of at least two Incumbent Class B
Managers then on the Board (either by a specific vote or by approval of the proxy statement of CEP in which such person is named as a nominee for Class B Manager, without written objection to such nomination) shall be an Incumbent Board Member;
provided further, however, that no individual initially elected or nominated as a Class B Manager of CEP as a result of an actual or threatened election contest with respect to Managers or as a result of any other actual or
threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Class B Manager; or 
 (C) During the period of 24 consecutive months immediately following the occurrence of a Class A Event, individuals who, at the commencement of such period, constitute the Class A Managers and at least one
Class B Manager cease for any reason to serve CEP in such capacities, whether by removal, resignation or otherwise; 
 (ii)
Unit Acquisition. Any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of CEP representing 25% or more of the combined voting power of CEP’s then outstanding securities eligible to vote for the election of the Board (the “CEP Voting
Securities”); provided, however, that none of CEG or its Affiliates shall be 

  

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deemed such a person unless CEG or any of its Affiliates shall after the date of this Agreement become the beneficial owner, directly or indirectly, of CEP
Voting Securities representing 33 1/3% or more
of the CEP Voting Securities then outstanding; and provided further, however, that, except with respect to CEG or any of its Affiliates, the event described in this paragraph (ii) shall not be deemed to be a change in control by
virtue of any of the following acquisitions (A) by CEP or any organization with respect to which CEP owns a majority of the outstanding equity interest or has the power to vote or direct the voting of sufficient securities to elect a majority
of the Managers (or equivalent) (a “Subsidiary Company”), (B) by any employee benefit plan (or related trust) sponsored or maintained by CEP or any Subsidiary Company, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii)), or (E) pursuant to any acquisition by Executive or any group of persons including Executive (or any entity controlled
by Executive or any group of persons including Executive); 
 (iii) Business Combination. Consummation of a
reorganization, merger, consolidation, statutory equity exchange or similar form of business transaction involving CEP or any Subsidiary Company (a “Business Combination”), unless immediately following such Business Combination:
(A) more than 60% of the total voting power of (x) the organization resulting from such Business Combination (the “Surviving Organization”), or (y) if applicable, the ultimate parent organization that directly or
indirectly has beneficial ownership of at least 95% of the voting securities eligible to elect managers or directors of the Surviving Organization (the “Parent Organization”), is represented by CEP Voting Securities that were
outstanding immediately prior to such Business Combination (or, if applicable, is represented by equity interests into which such CEP Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportion as the voting power of such CEP Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Organization or the Parent Organization), is or becomes the beneficial owner, directly or indirectly, of 25% or more (the “Applicable Percentage”) of the total voting power of the outstanding
voting securities eligible to elect managers or directors of the Parent Organization (or, if there is no Parent Organization, the Surviving Organization) except where such person held the Applicable Percentage of CEP Voting Securities immediately
prior to the consummation of the Business Combination and (C) at least a majority of the members of the board of managers or directors of the Parent Organization (or, if there is no Parent Organization, the Surviving Organization) following the
consummation of the Business Combination were Managers at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination that satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); 
  

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 (iv) Liquidation. The equity holders of CEP approve a plan of complete liquidation
or dissolution of CEP; or 
 (v) Asset Sale. The consummation of a sale or disposition by CEP of all or substantially
all of CEP’s assets, other than a sale or disposition where the holders of CEP Voting Securities outstanding immediately prior thereto hold securities immediately thereafter that represent more than 60% of the combined voting power of the
voting securities of the acquiror, or parent of the acquiror, of such assets. 
 Notwithstanding the foregoing, except with respect to CEG or
any of its Affiliates, a change in control of CEP shall not be deemed to occur solely because any person acquires beneficial ownership of more than 25% of CEP Voting Securities as a result of the acquisition of CEP Voting Securities by CEP that
reduces the number of CEP Voting Securities outstanding; provided, however, that if after such acquisition by CEP such person becomes the beneficial owner of additional CEP Voting Securities that increases the percentage of outstanding
CEP Voting Securities beneficially owned by such person, a change in control of CEP shall then occur. 
 (l) “Class A
Event” means the occurrence of any event through which or as a consequence of which (i) CEG shall cease to beneficially own, directly or indirectly, at least 50% of the Class A Units of CEP that are then outstanding (including
where CEG or any of its direct or indirect subsidiaries (individually, a “CEG Entity”) enters into a total return swap or any other contractual arrangement whereby a CEG Entity transfers any economic interest in at least 50% of the
Class A Units of CEP that are then outstanding); (ii) a CEG Acquisition occurs; or (iii) CEG shall cease to have the right, directly or indirectly, to direct the appointment of all Class A Managers pursuant to
Section 11.8(d) of the LLC Agreement or otherwise (including where any CEG Entity enters into any contractual arrangement whereby a CEG Entity grants any Person other than a wholly owned CEG Entity the right or option, directly or indirectly,
to direct the appointment of any number of the Class A Managers pursuant to Section 11.8(d) of the LLC Agreement or otherwise). 
 (m) “Change of Control Period” means, with respect to a Change of Control, the two-year period beginning on the date upon which such Change of Control occurs. 
 (n) “Code” means the Internal Revenue Code of 1986, as amended. 
 (o) “Compensation Committee” means the Compensation Committee of the Board. 
 (p) “Disability” means that, as a result of Executive’s incapacity due to physical or mental illness, (i) he
shall have been absent from the full-time performance of his duties for six consecutive months, (ii) the Board reasonably determines that such incapacity is expected to be suffered for a period of at least 12 consecutive months from the date
such absence first occurred and (iii) he shall not have returned to full-time 

  

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performance of his duties within 30 days after written notice of disability is given to Executive or his representative by the Company (a “Disability
Notice”); provided, however, that such Disability Notice may not be given prior to 30 days before the expiration of such six-month period. 
 (q) “Effective Date” means May 1, 2009. 
 (r) “Enhanced Severance Amount” means an amount equal to two times Executive’s Annual Compensation. 
 (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (t) “Event of Good Reason” means: 
 (i) The occurrence, prior to a Change of Control or after the expiration of a Change of Control Period, of any one or more of the
following: 
 (A) a material reduction in the nature or scope of Executive’s authority or duties from those previously
applicable to him; provided, however, that, if Executive holds more than one office, the removal from any offices other than the most senior shall not constitute an Event of Good Reason; 
 (B) a reduction in Executive’s Annual Base Salary, except with Executive’s prior written consent; 
 (C) a diminution in Executive’s eligibility to participate in bonus, stock option, incentive award and other compensation plans that
provide opportunities to receive compensation that are substantially similar to the opportunities provided by CEP or the Company to executives with comparable duties (subject, in each case to CEP and Executive performance, as applicable);

 (D) a change in the location of Executive’s principal place of employment by the Company by more than 60 miles from
the location where he was principally employed; provided, however, that such change in the location of Executive’s principal place of employment shall not constitute an Event of Good Reason if Executive consents to such decision
to relocate prior to such change in location. 
 (ii) The occurrence, within a Change of Control Period, of any one or more of
the following (except with Executive’s prior written consent): 
 (A) a material reduction in the nature or scope of
Executive’s authority or duties from those applicable to him immediately prior to the date on which a Change of Control occurs; 
  

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 (B) a reduction in Executive’s Annual Base Salary from that provided to him
immediately prior to the date on which a Change of Control occurs; 
 (C) a diminution in Executive’s eligibility to
participate in bonus, stock option, incentive award and other compensation plans that provide opportunities to receive compensation that are the greater of (A) the opportunities provided by CEP or the Company and any of its subsidiaries for
executives with comparable duties or (B) the opportunities under any such plans under which he was participating immediately prior to the date on which a Change of Control occurs; 
 (D) a material diminution in employee benefits (including medical, dental, life insurance and long-term disability plans) and perquisites
applicable to Executive from the greater of (A) the employee benefits and perquisites provided by CEP or the Company and any of its subsidiaries to executives with comparable duties or (B) the employee benefits and perquisites to which
Executive was entitled immediately prior to the date on which a Change of Control occurs; or 
 (E) a change in the location
of Executive’s principal place of employment by the Company by more than 60 miles from the location where he was principally employed immediately prior to the date on which a Change of Control occurs; provided, however, that such
change in the location of Executive’s principal place of employment shall not constitute an Event of Good Reason if Executive consents to the decision to relocate prior to such change in location. 
 (u) “Inducement Award Agreement” means that certain Inducement Award Agreement, dated May 1, 2009, by and between
CEP and Executive. 
 (v) “Involuntary Termination” means any termination of Executive’s employment with
the Company that: 
 (i) does not result from a resignation by Executive (other than a resignation pursuant to clause
(ii) of this Section 1.1(v)); 
 (ii) results from the Company’s delivery of a notice pursuant to
Section 3.1 that no automatic extension shall occur upon the Initial Expiration Date; or 
 (iii) results from a
resignation by Executive on or before the date that is 60 days after the occurrence of an Event of Good Reason; 
 provided,
however, that the term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of death or Disability. 
  


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 (w) “LLC Agreement” means the Second Amended and Restated Operating
Agreement of Constellation Energy Partners LLC, dated as of November 20, 2006, as amended, and as may be further amended from time to time. 
 (x) “Manager” means a member of the Board. 
 (y) “Omnibus Incentive
Plan” means (i) Constellation Energy Partners LLC Long-Term Incentive Plan, (ii) the Constellation Energy Partners LLC 2009 Omnibus Incentive Plan and (iii) any successor plan adopted by CEP or any of its Affiliates for the
benefit of the employees of CEP or any of its Affiliates. 
 (z) “Performance Award” has the meaning given
such term in the Omnibus Incentive Plan. 
 (aa) “Severance Amount” means an amount equal to one and one-half
times Executive’s Annual Compensation; provided, however, that, at any time after December 31, 2009, such amount shall include a Target-Level Bonus only if a bonus was paid to or earned by Executive for the most recently
completed fiscal year of CEP. 
 (bb) “Severance Period” means the period commencing on the date of
Involuntary Termination and continuing for 12 months thereafter. 
 (cc) “Special Termination Option” means
Executive’s right to terminate his employment hereunder within one year of the first occurrence of a CEG Ownership Event. 
 (dd) “Target-Based Grant” means an award under the Omnibus Incentive Plan for which eligibility or pay-out is determined by reference to the achievement of a Performance Goal, as such term is defined in the Omnibus
Incentive Plan. 
 (ee) “Target-Level Bonus” means that bonus required or indicated under a Performance Award
or other Target-Based Grant under the Omnibus Incentive Plan or other bonus arrangement of CEP or the Company, in each case as if all target performance goals were achieved. 
 1.2 Interpretations. 
 (a) General. In this Agreement, unless a clear contrary intention appears, (a) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision, (b) reference to any Article or Section means such Article or Section hereof, (c) the words “including” (and with correlative meaning “include”) means
including, without limiting the generality of any description preceding such term and (d) where any provision of this Agreement refers to action to be taken by either party, or that such party is prohibited from taking an action, such provision
shall be applicable whether such action is taken directly or indirectly by such party. 
  

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 (b) Comparable Positions. For purposes of this Agreement, the offices of chief
financial officer or general counsel shall be deemed to have comparable duties to those of Executive. 
 ARTICLE 2 
 EMPLOYMENT AND DUTIES 
 2.1
Employment. Effective as of the Effective Date and continuing for the period of time set forth in Section 3.1 of this Agreement (the “Term”), Executive’s employment by the Company shall be subject to the
terms and conditions of this Agreement. 
 2.2 Positions. From and after the Effective Date during the Term, the Company shall employ
Executive in the position of President, Chief Executive Officer and Chief Operating Officer of CEP and President, Chief Executive Officer and Chief Operating Officer of the Company. 
 2.3 Duties and Services. Executive agrees to serve in the position(s) referred to in Section 2.2 and to perform diligently the duties
and services appertaining to such offices, as well as such additional duties and services appropriate to such offices that CEP or the Company may reasonably designate from time to time. Executive’s employment shall also be subject to the
policies maintained and established by CEP or the Company that are of general applicability to CEP’s or the Company’s employees, as such policies may be amended from time to time. 
 2.4 Other Interests. Executive agrees, during the period of such employment by the Company, to devote substantially all of Executive’s
business time, energy and efforts to the business and affairs of CEP and the Company. 
 2.5 Duty of Loyalty. Executive acknowledges
and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of CEP and the Company. In keeping with such duty, Executive shall make full disclosure to CEP and the Company of all business opportunities
pertaining to CEP’s or the Company’s businesses and shall not appropriate for Executive’s own benefit business opportunities concerning CEP’s or the Company’s businesses. 
 2.6 Disclosure Representation. Executive represents to the Company that no event of the type referred to in Section 1.1(f)(v) has
occurred with respect to Executive other than as has been disclosed to the Board. 
 ARTICLE 3 
 TERM AND TERMINATION OF EMPLOYMENT 
 3.1 Term. Unless Executive’s employment hereunder is sooner terminated pursuant to other provisions hereof, the Company agrees to employ Executive for the period beginning on the Effective Date and ending on the third
anniversary of the Effective Date (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if
Executive’s employment hereunder has not been terminated pursuant to Section 3.2 or Section 3.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date
that is 180 days prior to the Initial Expiration Date or any anniversary thereof either party shall give written notice to the other that no such automatic extension shall occur. 
  

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 3.2 The Company’s Right To Terminate. Notwithstanding the provisions of
Section 3.1, the Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons: 
 (a) upon Executive’s death; 
 (b) upon Executive’s Disability; 
 (c) for Cause; or 
 (d) for any other reason whatsoever, in the sole discretion of the Board. 
 3.3 Executive’s Right To Terminate. Notwithstanding the provisions of Section 3.1, Executive shall have the right to terminate
his employment under this Agreement for any of the following reasons: 
 (a) as a result of an Event of Good Reason;
provided, however, that prior to Executive’s termination as a result of an Event of Good Reason, Executive must give written notice to the Company of the specific occurrence that resulted in the Event of Good Reason and such
occurrence must remain uncorrected for 30 calendar days following such written notice; or 
 (b) at any time for any other
reason whatsoever, in the sole discretion of Executive. 
 3.4 Notice of Termination. If the Company desires to terminate
Executive’s employment hereunder at any time prior to expiration of the Term, it shall do so by giving written notice to Executive that it has elected to terminate Executive’s employment hereunder and stating the effective date and reason
for such termination; provided, however, that no such action shall alter or amend any other provisions of this Agreement or rights arising under this Agreement. If Executive desires to terminate his employment hereunder at any time
prior to expiration of the Term, he shall do so by giving a 60-day written notice to the Company that he has elected to terminate his employment hereunder and stating the effective date and reason for such termination; provided,
however, that no such action shall alter or amend any other provisions of this Agreement or rights arising under this Agreement. 
 3.5 Deemed Resignations. Any termination of Executive’s employment shall constitute an automatic resignation of Executive as an officer and manager or director, as applicable, (if applicable) of CEP, the Company and each of its
Affiliates, unless Executive owns at least 10% of the issued and outstanding CEP Voting Securities, in which case such resignation shall not be deemed an automatic resignation of Executive from the Board, and from the board of directors or
similar governing body of any corporation, limited liability company or other entity in which CEP holds an equity interest and with respect to which board or similar governing body Executive serves as CEP’s designee or other representative.

  

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 ARTICLE 4 
 COMPENSATION AND BENEFITS 
 4.1 Base Salary. During the Term, Executive shall receive an
initial Annual Base Salary of $175,000. Executive’s Annual Base Salary shall be reviewed by the Compensation Committee on an annual basis, and, in the sole discretion of the Compensation Committee, such Annual Base Salary may be increased,
effective as of any date determined by the Compensation Committee. Executive’s Annual Base Salary shall be paid in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no
less frequently than monthly. 
 4.2 Bonuses. 
 (a) General. During the Term, the Company shall cause CEP to make yearly grants to Executive of a Performance Award under the
Omnibus Incentive Plan; provided, however, that all determinations relating to Executive’s participation, including those relating to the performance goals applicable to Executive and Executive’s level of participation and
payout opportunity, shall be made by the Compensation Committee in its sole discretion. 
 (b) 2009 Award. The Company
shall cause CEP to grant Executive a Performance Award for 2009 with such Performance Metrics (as such term is defined in the Omnibus Incentive Plan) determined by the Committee in its good faith discretion (the “2009 Award”). The
2009 Award shall pay in cash 40% of Executive’s initial Annual Base Salary for the achievement of Target-Level Performance and up to 80% of Executive’s initial Annual Base Salary for superior performance, in each case as such performance
is determined by the Committee in its good faith discretion; provided, however, that, if the Constellation Energy Partners LLC 2009 Omnibus Incentive Compensation Plan has not been approved by the common unitholders of the Company
prior to December 31, 2009, the Company shall pay Executive an amount in cash that is equivalent to the amount that would have been payable in respect of the 2009 Award, which payment shall be made contemporaneously with the payment by the
Company of bonuses to its other employees, but in no event later than March 31, 2010. 
 (c) Inducement Bonus. The
Company shall pay Executive an aggregate cash bonus of $262,500 (the “Inducement Cash Bonus”), $131,250 of which is payable on January 1, 2010 and $131,250 of which is payable on January 1, 2011. 
 4.3 Long-Term Incentive. During the Term, the Company shall cause CEP to make yearly long-term incentive grants to Executive under the Omnibus
Incentive Plan; provided, however, that all determinations relating to Executive’s participation, including those relating to the performance goals applicable to Executive and Executive’s level of participation and payout
opportunity, shall be made by the Compensation Committee in its sole discretion. 
 4.4 Life Insurance. To the extent such insurance
is available to the Company on commercially reasonable terms, the Company shall obtain, and thereafter maintain at all times prior to the termination of Executive’s employment hereunder pursuant to Article 3, a term life 

  

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insurance policy with a responsible and reputable insurance company on the life of Executive, in the face amount equal to Executive’s then-current
Annual Base Salary, which policy shall name any party designated by Executive as the beneficiary thereunder. 
 4.5 Other Perquisites.
During Executive’s employment hereunder, Executive shall be afforded the following benefits as incidences of his employment: 
 (a) Business and Entertainment Expenses. Subject to the Company’s standard policies and procedures with respect to expense reimbursement as applied to its employees generally, the Company shall no less frequently than monthly
reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive for business related purposes, including dues and fees to industry and professional organizations and costs of entertainment and
business development. 
 (b) Vacation. During his employment hereunder, Executive shall be entitled each calendar year
to such number of days of paid vacation and to all holidays, in each case as provided to employees of the Company generally. 
 (c) Other Company Benefits. Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications
of the same, that are now, or may hereafter be, available to other executives or employees of the Company. Such benefits, plans and programs shall include any profit sharing plan, thrift plan, health insurance or health care plan, life insurance,
disability insurance, pension plan, supplemental retirement plan, vacation and sick leave plan, and the like that may be maintained by the Company. The Company shall not, however, by reason of this paragraph be obligated to institute, maintain or
refrain from changing, amending or discontinuing any such benefit plan or program, as long as such changes are similarly applicable to employees generally. 
 ARTICLE 5 
 EFFECT OF TERMINATION ON 
 COMPENSATION; ADDITIONAL PAYMENTS 
 5.1 Termination Other Than an Involuntary
Termination. 
 (a) Except as provided in Section 5.1(b), if Executive’s employment hereunder shall
terminate upon expiration of the Term because either party has provided the notice contemplated in Section 3.1 or for any other reason except those described in Section 5.2 and Section 5.3, then all compensation
and all benefits to Executive under this Agreement shall continue to be provided until the date of such termination of employment, and such compensation and benefits shall terminate contemporaneously with such termination of employment. 

(b) If Executive shall die or the Company shall have delivered a Disability Notice, then all compensation and all benefits to Executive
under this Agreement shall continue to be provided until the date of such death or the date on which the Disability Notice is delivered; provided, however, that (i) the award of Restricted Units made 

  

 13 







 
pursuant to the Inducement Award Agreement and all awards under the Omnibus Incentive Plan (including the award made pursuant to the 2009 LTI Grant
Agreement) shall immediately accelerate, if then unvested, and vest in Executive or the legal representative of his estate and the Company shall pay to Executive of the legal representative of his estate any part of the Inducement Cash Bonus not
already paid to Executive; and (ii) for the year in which Executive’s death or the Company’s delivery of a Disability Notice, as applicable, occurs, the Company shall pay to Executive or the legal representative of his estate the
applicable Target-Level Bonus, pro rated for the number of days elapsed in such year at the time of such death or delivery, as applicable. 
 5.2 Involuntary Termination Other Than During a Change of Control Period. If Executive’s employment hereunder shall be subject to an Involuntary Termination that occurs prior to a Change of Control or after the expiration of a
Change of Control Period, then the Company shall, subject to Section 5.7, pay to Executive, as additional compensation for services rendered to the Company (including CEP and its subsidiaries), the following amounts and take the
following actions after the last day of Executive’s employment with the Company: 
 (a) Pay Executive a lump-sum cash
payment in an amount equal to the Severance Amount plus any part of the Inducement Cash Bonus not already paid to Executive, which lump-sum cash payment shall be made on the first day the timing of which would not cause any part of the Severance
Amount or such part of the Inducement Cash Bonus to be subject to additional taxes or interest under Section 409A of the Code. 
 (b) Cause (i) the Restricted Units and related Distribution Credits granted pursuant to the Inducement Award Agreement and (ii) any and all outstanding options and other non-vested service-based awards under the Omnibus Incentive
Plan (including the Notional Units and related Distribution Credits granted pursuant to the 2009 LTI Grant Agreement), that are held by Executive, to become immediately vested, earned and exercisable in full and cause Executive’s accrued
benefits under any and all nonqualified deferred compensation plans sponsored by CEP or the Company to become immediately nonforfeitable. 
 (c) Cause Executive and those of his dependents (including Executive’s spouse) who were covered under the Company’s medical and dental benefit plans on the day prior to Executive’s Involuntary
Termination to continue to be covered under such plans (or to receive equivalent benefits) throughout the Severance Period at no greater cost to Executive than that applicable to a similarly situated Company employee who has not terminated
employment; provided, however, that 
 (i) such coverage shall terminate if and to the extent Executive becomes
eligible to receive medical and dental coverage from a subsequent employer (and any such eligibility shall be promptly reported to the Company by Executive), 
 (ii) if Executive (and/or Executive’s spouse) would have been entitled to retiree medical and/or dental coverage under the
Company’s plans had Executive voluntarily retired on the date of such Involuntary Termination, then such coverages shall be continued as provided under such plans, and 
  

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 (iii) such coverage to Executive (or the receipt of equivalent benefits) shall be
provided under one or more insurance policies so that reimbursement or payment of benefits to Executive thereunder shall not result in taxable income to Executive (or, if any such reimbursement or payment of benefits is taxable to Executive, then
the Company shall pay to Executive an amount (the “tax gross-up payment”) equal to an amount as is required to hold Executive harmless from any additional tax liability (including liability under Section 409A of the Code)
relating to such reimbursement or payment). Any such tax gross-up payment shall be made as soon as practicable after Executive remits the taxes, but in all events within 30 days of such remittance. 
 The Company shall pay any premiums arising from such coverage on a monthly basis. 
 5.3 Involuntary Termination During a Change of Control Period; Special Termination Option. If (X) Executive’s employment hereunder shall
be subject to an Involuntary Termination (i) following a Change of Control and (ii) during a Change of Control Period or (Y) Executive shall have delivered notice to the Company of his exercise of the Special Termination Option within
one year following the first occurrence of a CEG Ownership Event, then the Company shall, subject to Section 5.7, pay to Executive, as additional compensation for services rendered to the Company (including CEP and its subsidiaries), the
following amounts and take the following actions after the last day of Executive’s employment with the Company: 
 (a)
Pay Executive a lump-sum cash payment in an amount equal to the Enhanced Severance Amount plus any part of the Inducement Cash Bonus not already paid to Executive, which lump-sum cash payment shall be made on the first day the timing of which would
not cause any part of the Enhanced Severance Amount or such part of the Inducement Cash Bonus to be subject to additional taxes or interest under Section 409A of the Code. 
 (b) Pay Executive a lump-sum cash payment in respect of the Performance Award under the Omnibus Incentive Plan for the then-current year,
which amount (the “Current-Year PA Payment”) shall be paid out as if Target-Level Performance will have been achieved for such year; provided, however, that the Current-Year PA Payment shall be prorated based on the
number of whole or partial months that have occurred as of the date of such Involuntary Termination. The Current-Year PA Payment shall be made on the first day the timing of which would not cause any part of such payment to be subject to additional
taxes or interest under Section 409A of the Code. 
 (c) Pay Executive a lump-sum cash payment under the Omnibus
Incentive Plan for any Target-Based Grants for the then-current year (not including any Performance Awards), which amount (the “Other TBG Payment”) shall be paid out as if Target-Level Performance will be achieved for such year;
provided, however, that the Other TBG Payment shall be prorated based on the number of whole or partial months that have occurred as of the date of such Involuntary Termination. The Other TBG 

  

 15 







 
Payment shall be made on the first day the timing of which would not cause any part of such payment to be subject to additional taxes or interest under
Section 409A of the Code. 
 (d) Cause (i) the Restricted Units and related Distribution Credits granted pursuant to
the Inducement Award Agreement and (ii) any and all outstanding options and other non-vested service-based awards under the Omnibus Incentive Plan (including the Notional Units and related Distribution Credits granted pursuant to the 2009 LTI
Grant Agreement), that are held by Executive, to become immediately vested, earned and exercisable in full and cause Executive’s accrued benefits under any and all nonqualified deferred compensation plans sponsored by CEP or the Company to
become immediately nonforfeitable. 
 (e) Cause Executive and those of his dependents (including Executive’s spouse) who
were covered under the Company’s medical and dental benefit plans on the day prior to Executive’s Involuntary Termination to continue to be covered under such plans (or to receive equivalent benefits) throughout the Severance Period at no
greater cost to Executive than that applicable to a similarly situated Company employee who has not terminated employment; provided, however, that 
 (i) such coverage shall terminate if and to the extent Executive becomes eligible to receive medical and dental coverage from a subsequent
employer (and any such eligibility shall be promptly reported to the Company by Executive), 
 (ii) if Executive (and/or
Executive’s spouse) would have been entitled to retiree medical and/or dental coverage under the Company’s plans had Executive voluntarily retired on the date of such Involuntary Termination, then such coverages shall be continued as
provided under such plans, and 
 (iii) such coverage to Executive (or the receipt of equivalent benefits) shall be provided
under one or more insurance policies so that reimbursement or payment of benefits to Executive thereunder shall not result in taxable income to Executive. 
 The Company shall pay any premiums arising from such coverage on a monthly basis. 
 (f)
Should any amount paid or benefit delivered pursuant to this Section 5.3 result in an excise tax payable by Executive, the Company shall pay to Executive an amount (the “tax gross-up payment”) as is required to hold
Executive harmless from such excise tax and any additional tax liability arising as a result of any part of the tax gross-up payment. Any such tax gross-up payment shall be made as soon as practicable after Executive remits the taxes, but in all
events within 30 days of such remittance. 
 5.4 Interest on Late Payments. If any payment provided for in Section 5.1,
Section 5.2 or Section 5.3 hereof is not made when due, then the Company shall pay to Executive interest on the amount payable from the date that such payment should have been made under such Section until such payment is
made, which interest shall be calculated, on a 

  

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per-annum basis, at 2% plus the prime or base rate of interest as reported from time to time in the Wall Street Journal, and shall further hold
Executive harmless from any liability under Section 409A of the Code. 
 5.5 Liquidated Damages. In light of the difficulties in
estimating the damages for an early termination of Executive’s employment under this Agreement, the Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 5 shall be
received by Executive as liquidated damages. 
 5.6 Other Benefits. This Agreement governs the rights and obligations of Executive and
the Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to unit
options, restricted units, incentive and deferred compensation, life insurance policies insuring the life of Executive and other benefits under the plans and programs maintained by the Company shall be governed by the separate agreements, plans and
other documents and instruments governing such matters. 
 5.7 Release. As a condition to the Company’s obligations arising under
Section 5.2 and Section 5.3, Executive shall first execute and deliver to the Company a release, in the form reasonably established by the Compensation Committee, releasing the Company, CEP and their respective Affiliates,
officers, managers, directors, employees and agents, from any and all claims and from any and all causes of action of any kind or character, including all claims and causes of action arising out of Executive’s employment hereunder or the
termination of such employment. The performance of the Company’s obligations under Section 5.2 and Section 5.3 and the receipt of the severance benefits provided thereunder by Executive shall constitute full settlement
of all such claims and causes of action. Executive shall not be under any duty or obligation to seek or accept other employment following a termination of employment pursuant to which severance benefits under Section 5.2 and
Section 5.3 are owing and any amounts due Executive pursuant to Section 5.2 and Section 5.3 shall not be reduced or suspended if Executive accepts subsequent employment or earns any amounts as a self-employed
individual. Executive’s rights under Section 5.2 and Section 5.3 are Executive’s sole and exclusive rights against the Company and any of its Affiliates and the Company’s and its Affiliates’ sole and
exclusive liability to Executive under, by reason of or related to this Agreement, whether in contract, tort or otherwise, for the termination of his employment by the Company. Nothing contained in this Section 5.7 shall be construed to
be a waiver by Executive of any benefits accrued for or due Executive under any employee benefit plan (as such term is defined in the Employees’ Retirement Income Security Act of 1974, as amended) maintained by the Company, CEP or any of their
respective subsidiaries except that Executive shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company, CEP or any of their respective subsidiaries. 
  

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 ARTICLE 6 
 OTHER AGREEMENTS 
 6.1 Protection of Confidential Information. 
 (a) Disclosure to and Property of CEP or the Company. All information, designs, ideas, concepts, improvements, product
developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by Executive, individually or in conjunction with others, during the period of Executive’s employment by the Company (whether
during business hours or otherwise and whether on the Company’s premises or otherwise) that relate to CEP’s or the Company’s business, trade secrets, products or services (including all such information relating to corporate
opportunities, product specification, compositions, manufacturing and distribution methods and processes, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or
their requirements, the identity of key contacts within a customer’s organizations or within the organization of acquisition prospects, marketing and merchandising techniques, business plans, computer software or programs, computer software and
database technologies, prospective names and marks) (collectively, the “Confidential Information”) shall be disclosed to CEP or the Company and are and shall be the sole and exclusive property of the Company. Moreover, all
documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, drawings, architectural
renditions, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression (collectively, “Work Product”) are
and shall be the sole and exclusive property of the Company. Upon Executive’s termination of employment hereunder, for any reason, Executive shall promptly deliver such Confidential Information and Work Product, and all copies thereof, to the
Company. 
 (b) Disclosure to Executive. The Company has and will disclose to Executive, or place Executive in a
position to have access to or develop, Confidential Information and Work Product of CEP or the Company; and/or has and will entrust Executive with business opportunities of CEP or the Company; and/or has and will place Executive in a position to
develop business goodwill on behalf of CEP or the Company. Executive agrees to preserve and protect the confidentiality of all Confidential Information or Work Product. 
 (c) No Unauthorized Use or Disclosure. Executive agrees that he will not, at any time during or after Executive’s employment
hereunder, make any unauthorized disclosure of, and will prevent the removal from CEP’s or the Company’s premises of, Confidential Information or Work Product, or make any use thereof, except in the carrying out of Executive’s
responsibilities during the course of Executive’s employment hereunder. Executive shall use commercially reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by him under this Agreement to
observe the terms and conditions set forth herein as though each such 

  

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person or entity was bound hereby. Executive shall have no obligation under this Agreement to keep confidential any Confidential Information if and to the
extent that disclosure thereof is specifically required by law; provided, however, that in the event disclosure is required by applicable law, Executive shall provide the Company with prompt notice of such requirement prior to making
any such disclosure so that the Company may seek an appropriate protective order. At the request of the Company at any time, Executive agrees to deliver to the Company all Confidential Information that he may possess or control. Executive agrees
that all Confidential Information (whether now or hereafter existing) conceived, discovered or made by him during the period of Executive’s employment hereunder exclusively belongs to the Company (and not to Executive), and Executive will
promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. Affiliates of the Company, shall be third-party beneficiaries of
Executive’s obligations under this Section 6.1. As a result of Executive’s employment hereunder, Executive may also from time to time have access to, or knowledge of, confidential information or work product of third parties,
such as customers, suppliers, partners, joint venturers and the like, of CEP or the Company. Executive also agrees to preserve and protect the confidentiality of such third-party confidential information and work product to the same extent, and on
the same basis, as the Confidential Information and Work Product. 
 (d) Ownership by the Company. If, during
Executive’s employment hereunder, Executive creates any work of authorship fixed in any tangible medium of expression that is the subject matter of copyright (such as videotapes, written presentations, computer programs, e-mail, voice mail,
electronic databases, drawings, maps, architectural renditions, models, manuals, brochures or the like) relating to CEP’s or the Company’s business, products or services, whether such work is created solely by Executive or jointly with
others (whether during business hours or otherwise and whether on CEP’s or the Company’s premises or otherwise), including any Work Product, the Company shall be deemed the author of such work if the work is prepared by Executive in the
scope of Executive’s employment; or, if the work is not prepared by Executive within the scope of Executive’s employment but is specially ordered by the Company as a contribution to a collective work, as a part of an audiovisual work, as a
translation, as a supplementary work, as a compilation or as an instructional text, then the work shall be considered to be work made-for-hire, and the Company shall be the author of the work. If such work is neither prepared by Executive within the
scope of Executive’s employment nor a work specially ordered that is deemed to be a work made-for-hire, then Executive hereby agrees to assign, and by these presents does assign, to the Company all of Executive’s worldwide right, title and
interest in and to such work and all rights of copyright therein. 
 (e) Assistance By Executive. During the period of
Executive’s employment hereunder and thereafter, Executive shall reasonably assist the Company and its nominee, at any time, in (a) the protection of the Company’s worldwide right, title and interest in and to Work Product,
(b) the execution of all formal assignment documents requested by the Company or its nominee and (c) the execution of all lawful oaths and applications for patents and registration of copyright in the United States and foreign countries.

  

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 (f) Remedies. Executive acknowledges that money damages would not be a sufficient
remedy for any breach of this Section 6.1 by Executive, and the Company shall be entitled to enforce the provisions of this Section 6.1 by terminating payments then owing to Executive under this Agreement or otherwise and to
specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed to be the exclusive remedies for a breach of this Section 6.1 but shall be in addition to all remedies
available at law or in equity, including the recovery of damages from Executive and his agents. 
 6.2 Non-Disparagement. Except as
required by law, for a period of one year immediately following any termination of Executive’s employment hereunder (a) Executive agrees to refrain from making any statement disparaging CEP or the Company, any officer, manager, employee or
other service provider for CEP or the Company, or any product or service offered by CEP, the Company or any of their respective Affiliates; and (b) the Company agrees to refrain from making any statement disparaging Executive. 
 6.3 Non-Solicitation. For a period of one year immediately following any termination of Executive’s employment hereunder, Executive shall not
directly or indirectly solicit, induce, recruit, encourage or otherwise endeavor to cause or attempt to cause any employee or consultant of CEP or the Company to terminate their relationship with CEP or the Company, as the case may be;
provided, however, that nothing in this Section 6.3 shall prohibit the use of a general solicitation in a publication or by other means. 
 6.4 Claw-back. 
 (a) Post-Termination Payments. Executive agrees to promptly
repay to the Company all payments made pursuant to any of Section 5.2, Section 5.3, Section 5.4 or Section 5.5 if there has been a final and non-appealable judgment entered by a court of competent
jurisdiction that found willful misconduct by Executive in the performance of his duties prior to the termination of his employment hereunder. 
 (b) Pre-Termination Bonuses. Executive agrees to promptly repay to the Company any Overpayment in the event of any restatement of CEP’s financial statements that are filed with the Securities and Exchange
Commission. For purposes of this Section 6.4(b), “Overpayment” means the excess, if any, of (i) the amounts actually paid by the Company pursuant to Section 4.2 for the two years immediately prior to
such restatement over (ii) the amounts that should have been paid pursuant to Section 4.2 for those two years based on the financial results reflected in such restated financial statements. 
 ARTICLE 7 
 MISCELLANEOUS

 7.1 Indemnification. If Executive shall obtain any money judgment or otherwise prevail with respect to any litigation brought
by Executive or the Company to enforce or interpret any provision contained herein, the Company, to the fullest extent permitted by 

  

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applicable law, hereby indemnifies Executive for his reasonable attorneys’ fees, other reasonable professional fees and disbursements incurred in such
litigation and hereby agrees (i) to reimburse Executive in full all such fees and disbursements and (ii) to pay prejudgment interest on any money judgment obtained by Executive from the earliest date that payment to him should have been
made under this Agreement until such judgment shall have been paid in full, which interest shall be calculated, on a per-annum basis, at 2% plus the prime or base rate of interest as reported from time to time in the Wall Street Journal. All
reimbursement obligations arising pursuant to this Section 7.1 shall remain in effect throughout the applicable statute of limitations applicable to any contractual claim under this Agreement. Any expenses eligible for reimbursement
hereunder shall not affect the expenses eligible for reimbursement in any other calendar year. The right to reimbursement hereunder is not subject to liquidation or exchange for another benefit. 
 7.2 Payment Obligations Absolute. Except as specifically provided in Section 6.1(f), the Company’s obligation to pay Executive
the amounts and to make the arrangements provided in this Agreement shall be absolute and unconditional and shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense or other right that CEP, the Company or
any of their respective subsidiaries may have against him or anyone else. All amounts payable by the Company (including its subsidiaries) shall be paid without notice or demand. Executive shall not be obligated to seek other employment in mitigation
of the amounts payable or arrangements made under any provision of this Agreement, and, except as provided in Section 5.2(c) or Section 5.3(e) hereof, the obtaining of any such other employment shall in no event effect any
reduction of the Company’s obligations to make (or cause to be made) the payments and arrangements required to be made under this Agreement. 
 7.3 Notices. For purposes of this Agreement, notices and all other communications provided in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid, or when sent by recognized overnight delivery service, addressed as follows: 
 If to the Company: 
 Constellation Energy Partners LLC 
 One Allen Center 
 500 Dallas Street, Suite 3200 
 Houston, TX 77002 
 Attention: Legal Department 
 If to Executive: 
 Michael B. Hiney 
 One Allen Center 
 500 Dallas Street, Suite 3200 
 Houston, TX 77002 
  

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 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices
or changes of address shall be effective only upon receipt. 
 7.4 Applicable Law. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas, without reference to its choice of law provisions. 
 7.5 No Waiver. No
failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. 
 7.6 Severability. Any provision in this Agreement that is prohibited or unenforceable
in any jurisdiction by reason of applicable law shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 7.7
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement. 
 7.8 Withholding of Taxes and Other Employee Deductions. The Company may withhold from any benefits and payments made pursuant to this Agreement
all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to the Company’s employees generally. 
 7.9 Headings. The Article, Section and paragraph headings have been inserted herein for purposes of convenience and shall not be used for
interpretive purposes. 
 7.10 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or
neuter, and the singular number includes the plural and conversely. 
 7.11 Assignment. This Agreement shall be binding upon and inure
to the benefit of the Company and any successor of the Company, by merger or otherwise. This Agreement shall also be binding upon and inure to the benefit of Executive and his estate. If Executive shall die prior to full payment of amounts due
pursuant to this Agreement, such amounts shall be payable pursuant to the terms of this Agreement to his estate. Executive shall not have any right to pledge, hypothecate, anticipate or assign this Agreement or the rights hereunder, except by will
or the laws of descent and distribution. 
 7.12 Entire Agreement. This Agreement constitutes the entire agreement of the parties with
regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to such subject matter. Without limiting the scope of the preceding sentence, all
understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (including the Offer Letter) are hereby null and void and of no further force and effect, including all prior employment and
severance agreements, if any, by and between the Company and Executive. Any modification of this Agreement will be effective only if it is in writing and signed by both parties. 
  

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 7.13 CEP Agreements. 
 (a) Offer Letter Termination. CEP and Executive agree that the Offer Letter is hereby terminated and of no further force or effect.

 (b) CEP Guaranty. CEP hereby unconditionally and irrevocably guarantees to Executive the prompt and full discharge
by the Company of all of the Company’s covenants, agreements, obligations and liabilities under this Agreement (the “Company Obligations”) in accordance with the terms hereof. CEP hereby guarantees to Executive full and
complete performance by the Company of each and all of the Obligations, including the due and punctual payment of all amounts that may become due and payable to Executive hereunder. CEP acknowledges and agrees that, with respect to all Company
Obligations that are obligations to pay money, such guaranty shall be a guaranty of payment and not of collection. If the Company shall default in the due and punctual performance of any of the Company Obligations, including the full and timely
payment of any amounts owed pursuant to the Company Obligations, CEP will forthwith perform or cause to be performed such Company Obligations and will forthwith make full payment of any amount due with respect thereto at its sole cost and expense
and without notice or demand by Executive or the necessity of exhausting Executive’s remedies against the Company in respect of such Company Obligations. Without limiting the generality of the remaining terms and conditions of this Agreement,
the parties to this Agreement agree and acknowledge that nothing in this Section 7.13(b) shall hinder the Company in the full exercise of its right to terminate the employment of Executive pursuant to Section 3.2. 

(c) CEP Not Employer. The Company, CEP and Executive each acknowledge and agree that CEP is a party to this Agreement solely for
the limited purpose making the agreements set out in this Section 7.13 and nothing in this Agreement is intended to make CEP the employer of Executive for any purpose. 
 [SIGNATURE PAGE FOLLOWS] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the Effective
Date. 
  

			
	THE COMPANY:
	
	CEP SERVICES COMPANY, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	EXECUTIVE
	
	 /s/ Michael B. Hiney

	Michael B. Hiney
	
	CEP:
	
	 CONSTELLATION ENERGY PARTNERS LLC
 (solely
for purposes of agreeing to Section 7.13 of this Agreement)

		
	By:	 	  

	Name:	 	
	Title:	 	


  

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