SC 13D

0001193125-14-310316.txt : 20140814 0001193125-14-310316.hdr.sgml : 20140814 20140814165637 ACCESSION NUMBER: 0001193125-14-310316 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20140814 DATE AS OF CHANGE: 20140814 GROUP MEMBERS: CHARLESBANK CAPITAL PARTNERS, LLC GROUP MEMBERS: SOUTHCROSS HOLDINGS BORROWER GP LLC GROUP MEMBERS: SOUTHCROSS HOLDINGS BORROWER LP GROUP MEMBERS: SOUTHCROSS HOLDINGS GP LLC GROUP MEMBERS: SOUTHCROSS HOLDINGS GUARANTOR GP LLC GROUP MEMBERS: SOUTHCROSS HOLDINGS GUARANTOR LP GROUP MEMBERS: SOUTHCROSS HOLDINGS LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Southcross Energy Partners, L.P. CENTRAL INDEX KEY: 0001547638 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 455045230 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-87091 FILM NUMBER: 141043914 BUSINESS ADDRESS: STREET 1: 1700 PACIFIC AVENUE, SUITE 2900 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 214-979-3700 MAIL ADDRESS: STREET 1: 1700 PACIFIC AVENUE, SUITE 2900 CITY: DALLAS STATE: TX ZIP: 75201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Southcross Energy LLC CENTRAL INDEX KEY: 0001470527 IRS NUMBER: 270364170 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1700 PACIFIC AVE. STREET 2: SUITE 2900 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 214-979-3709 MAIL ADDRESS: STREET 1: 1700 PACIFIC AVE. STREET 2: SUITE 2900 CITY: DALLAS STATE: TX ZIP: 75201 SC 13D 1 d772644dsc13d.htm SC 13D SC 13D

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934*

SOUTHCROSS ENERGY PARTNERS, L.P.

(Name of Issuer)

Common Units Representing Limited Partner Interests

(Title of Class of Securities)

84130C100

(CUSIP Number)

David W. Biegler

1700 Pacific Avenue, Suite 2900

Dallas, Texas 75201

(214) 979-3700

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 4, 2014

(Date of Event which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 84130C100


(1)	NAME OF REPORTING PERSONS Southcross Energy LLC
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON OO - limited liability company

(1)

Southcross Holdings Borrower LP (“Borrower”) owns of record 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Southcross Holdings LP (“Holdings”), and its non-economic general partner interest is held by Southcross Holdings Guarantor GP LLC, which is owned of record 100% by Holdings. Southcross Energy LLC (“SELLC”) owns of record 29.6% of each of Holdings and Southcross Holdings GP LLC, the non-economic general partner of Holdings. Therefore, SELLC may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Based upon 23,800,943 Common Units, 14,633,000 Class B Convertible Units and 12,213,713 Subordinated Units outstanding as of August 14, 2014. For purposes of this calculation, the initial Class B Conversion Rate of 1.0 (i.e., one Common Unit for each Class B Convertible Unit) was used, although the Class B Conversion Rate may vary. See Item 1 of the Schedule 13D to which this cover page relates for a description of the securities to which this Schedule 13D relates.

Page 2 of 25


(1)	NAME OF REPORTING PERSONS Charlesbank Capital Partners, LLC
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Massachusetts
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON OO – limited liability company

(1)

Southcross Holdings Borrower LP (“Borrower”) owns of record 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Southcross Holdings LP (“Holdings”), and its non-economic general partner interest is held by Southcross Holdings Guarantor GP LLC. Southcross Energy LLC (“SELLC”) owns of record 29.6% of each of Holdings and Southcross Holdings GP LLC, the general partner of Holdings. Charlesbank Capital Partners, LLC (“Charlesbank”) is the investment adviser to and the general partner of the general partner of Charlesbank Equity Fund VI, Limited Partnership and its affiliated investment funds (collectively, the “Charlesbank Funds”), which hold of record an approximate 85.2% membership interest in SELLC. Therefore, Charlesbank may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 3 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings GP LLC
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON OO – limited liability company

(1)

Southcross Holdings Borrower LP (“Borrower”) owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Southcross Holdings LP (“Holdings”), and its non-economic general partner interest is held by Southcross Holdings Guarantor GP LLC, which is owned of record 100% by Holdings. Southcross Holdings GP LLC (“Holdings GP”) is the non-economic general partner of Holdings. Therefore, Holdings GP may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 4 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings LP
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON PN – limited partnership

(1)

Southcross Holdings Borrower LP (“Borrower”) owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Southcross Holdings LP (“Holdings”), and its non-economic general partner interest is held by Southcross Holdings Guarantor GP LLC, which is owned of record 100% by Holdings. Therefore, Holdings may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 5 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings Guarantor GP LLC
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON OO – limited liability company

(1)

Southcross Holdings Borrower LP (“Borrower”) owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Southcross Holdings LP (“Holdings”), and its non-economic general partner interest is held by Southcross Holdings Guarantor GP LLC (“Guarantor GP”). Therefore, Guarantor GP may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 6 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings Guarantor LP
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON PN – limited partnership

(1)

Southcross Holdings Borrower LP (“Borrower”) owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP (“Guarantor”), and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC, which is owned of record 100% by Guarantor. Therefore, Guarantor may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 7 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings Borrower GP LLC
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON OO – limited liability company

(1)

Southcross Holdings Borrower LP (“Borrower”) owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. Borrower is owned of record 100% by Southcross Holdings Guarantor LP and its non-economic general partner interest is held by Southcross Holdings Borrower GP LLC (“Borrower GP”). Therefore, Borrower GP may be deemed to indirectly beneficially own the Common Units, Class B Convertible Units and Subordinated Units held by Borrower. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 8 of 25


(1)	NAME OF REPORTING PERSONS Southcross Holdings Borrower LP
(2)	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
(3)	SEC USE ONLY
(4)	SOURCE OF FUNDS OO
(5)	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
(6)	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		(7)	SOLE VOTING POWER 0
		(8)	SHARED VOTING POWER 28,963,113(1)
		(9)	SOLE DISPOSITIVE POWER 0
		(10)	SHARED DISPOSITIVE POWER 28,963,113(1)
(11)	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,963,113(1)
(12)	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
(13)	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 57.2%(2)
(14)	TYPE OF REPORTING PERSON PN – limited partnership

(1)

The Reporting Person directly owns 2,116,400 common units representing limited partner interests (“Common Units”), 14,633,000 Class B convertible units representing limited partner interests (“Class B Convertible Units”) and 12,213,713 subordinated units representing limited partner interests (“Subordinated Units”) in the Issuer. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate (as defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein) on the Class B Conversion Date (as defined in the Partnership Agreement). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of the Issuer, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

(2)

Page 9 of 25

Item 1.

Security and Issuer

This Schedule 13D (“Schedule 13D”) relates to the common units representing limited partner interests (“Common Units”), Class B convertible units representing limited partner interests (“Class B Convertible Units”) and subordinated units representing limited partner interests (“Subordinated Units”) of Southcross Energy Partners, L.P. The name of the issuer is Southcross Energy Partners, L.P. (“SXE”), and the address of the principal executive offices of SXE is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

The Class B Convertible Units convert into Common Units at the Class B Conversion Rate on the Class B Conversion Date (as those terms are defined in the Issuer’s Third Amended and Restated Agreement of Limited Partnership, dated August 4, 2014 (the “Partnership Agreement”), which is incorporated by reference herein); the initial Class B Conversion Rate is 1.0 (i.e., one Common Unit for each Class B Convertible Unit). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period (as defined in the Partnership Agreement). Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of SXE, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended.

Southcross Energy LLC and Charlesbank Capital Partners, LLC previously filed on Schedule 13G on February 19, 2013, and this Schedule 13D amends and restates such Schedule 13G in its entirety.

Item 2.

Identity and Background

(a) through (c) The following describes the identities and principal businesses of the parties jointly filing this Schedule 13D:

Southcross Energy LLC (“SELLC”) is a Delaware limited liability company. The principal business of SELLC is to hold equity interests in Southcross Holdings LP and Southcross Holdings GP LLC. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Charlesbank Capital Partners, LLC (“Charlesbank”) is a Massachusetts limited liability company. The principal business of Charlesbank is to serve as investment adviser to and the general partner of the general partner of Charlesbank Equity Fund VI, Limited Partnership and its affiliated investment funds (collectively, the “Charlesbank Funds”). The address of its principal office is 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116.

Southcross Holdings GP LLC (“Holdings GP”) is a Delaware limited liability company. The principal business of Holdings GP is to serve as the general partner of Southcross Holdings LP. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Southcross Holdings LP (“Holdings”) is a Delaware limited partnership. The principal business of Holdings is to hold, directly or indirectly, equity interests in Southcross Holdings Guarantor GP LLC, Southcross Holdings Guarantor LP, Southcross Holdings Borrower GP LLC, Southcross Holdings Borrower LP, Southcross Energy Partners GP, LLC and SXE. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Southcross Holdings Guarantor GP LLC (“Guarantor GP”) is a Delaware limited liability company. The principal business of Guarantor GP is to serve as the general partner of Guarantor. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Southcross Holdings Guarantor LP (“Guarantor”) is a Delaware limited partnership. The principal business of Guarantor is to hold, directly or indirectly, equity interests in Southcross Holdings Borrower GP LLC, Southcross Holdings Borrower LP and SXE. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Southcross Holdings Borrower GP LLC (“Borrower GP”) is a Delaware limited liability company. The principal business of Borrower GP is to serve as the general partner of Borrower. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

Page 10 of 25

Southcross Holdings Borrower LP (“Borrower”) is a Delaware limited partnership. The principal business of Borrower is to hold equity interests in SXE. The address of its principal office is 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201.

SELLC, Charlesbank, Holdings GP, Holdings, Guarantor GP, Guarantor, Borrower GP and Borrower are referred to in this Schedule 13D collectively as the “Reporting Persons” and individually as a “Reporting Person.” As a result of the relationship of the Reporting Persons, the Reporting Persons constitute a “group” under Rule 13d-5(b) promulgated under the Securities Exchange Act of 1934, as amended.

Set forth on Appendix 1 (constituting a part of this Schedule 13D) are the names, business addresses and positions of the respective executive officers and directors, as applicable, of the Reporting Persons and other persons controlling the Reporting Persons (collectively, the “Controlling Persons”).

(d) During the past five years, no Reporting Person and no Controlling Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the past five years, no Reporting Person and no Controlling Person has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) All of the Controlling Persons who are natural persons are United States citizens.

The Reporting Persons have entered into a Joint Filing Agreement, dated the date hereof, a copy of which is filed with this Schedule 13D as Exhibit 7 (which is hereby incorporated by reference), pursuant to which the Reporting Persons have agreed to file this Schedule 13D jointly in accordance with the provision of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended. Information with respect to each Reporting Person is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of the information furnished by another Reporting Person.

SELLC holds of record 29.6% of each of Holdings and Holdings GP. BBTS Borrower LP (“BBTS-B”) holds of record the other 70.4% of each of Holdings and Holdings GP not held by SELLC. Each of (i) the BBTS Parties (as defined in Item 5), (ii) the Tailwater Parties (as defined in Item 5), and (iii) the EIG Parties (as defined in Item 5), are separately filing Schedule 13Ds with respect to the securities to which this Schedule 13D relates.

As a result of the relationship of the Reporting Persons, the BBTS Parties, the Tailwater Parties and the EIG Parties among themselves with respect to the transactions described in Items 3 through 6 of this Schedule 13D, each of such parties may have been or continue to be members of a “group” under Rule 13d-5(b) promulgated under the Securities Exchange Act of 1934, as amended, with respect to the Common Units, the Class B Convertible Units and the Subordinated Units reported as beneficially owned by the Reporting Persons in this Schedule 13D, although the Reporting Persons do not affirm that, notwithstanding that such a group may have initially existed as of the closing of such transactions giving rise to the acquisition of beneficial ownership of such Common Units, Class B Convertible Units and Subordinated Units, such group is deemed to continue from and after such closing.

Item 3.

Source and Amount of Funds or Other Consideration.

On August 4, 2014, SXE closed its previously reported transactions pursuant to that certain Contribution Agreement, dated June 11, 2014 (the “Drop-Down Contribution Agreement”), among SXE, Southcross Energy GP LLC, a subsidiary of SXE, and TexStar Midstream Services, LP (“TexStar”), a wholly-owned subsidiary of BBTS-B, pursuant to which SXE acquired TexStar’s rich gas system (the “Rich Gas System”) through TexStar’s contribution to subsidiaries of SXE of TexStar’s equity interest in the entities that own the Rich Gas System (the “Drop-Down Contribution”). Pursuant to the Drop-Down Contribution Agreement, in exchange for the Drop-Down Contribution, SXE (a) paid TexStar cash and (b) issued to TexStar 14,633,000 Class B Convertible Units. The Drop-Down Contribution and actions occurring in connection therewith are described in the Current Report on 8-K of SXE dated August 4, 2014, as filed with the Securities and Exchange Commission.

Page 11 of 25

Immediately following the Drop-Down Contribution, on August 4, 2014, SELLC, which held 100% of Southcross Energy Partners GP, LLC, the general partner of SXE (“SXE GP”), and 1,863,713 Common Units, 12,213,713 Subordinated Units and 229,716 Series A preferred units of SXE, closed its previously announced transaction to combine with TexStar pursuant to that certain Contribution Agreement, dated June 11, 2014 (the “Primary Contribution Agreement”), among BBTS-B, SELLC and Holdings. Prior to the consummation of such transactions, SELLC elected to convert all of its Series A preferred units into 252,687 Common Units. Pursuant to the Primary Contribution Agreement, (i) BBTS-B contributed (through Holdings) to Borrower, an indirect wholly owned subsidiary of Holdings, (a) 100% of the outstanding limited partnership interest in TexStar and (b) 100% of the outstanding limited liability company interest in TexStar Midstream GP, LLC, the sole general partner of TexStar, and (ii) SELLC contributed (through Holdings) to Borrower (a) 2,116,400 Common Units, (b) 12,213,713 Subordinated Units and (c) 100% of the interest in SXE GP (the “Combination Transaction”). TexStar then distributed to Borrower the Class B Convertible Units acquired by it in the Drop-Down Contribution. In connection with, and as a part of, the Combination Transaction, SELLC and BBTS-B each received equity interests in Holdings and its general partner, Holdings GP, each of which is now owned 29.6% by SELLC and 70.4% by BBTS-B.

Item 4.

Purpose of Transaction.

The information set forth or incorporated in Item 3 is incorporated by reference in this Item 4.

The Reporting Persons acquired the Common Units, Class B Convertible Units and Subordinated Units as part of the consideration for SXE to acquire TexStar’s Rich Gas System through the Drop-Down Contribution and to establish a structure for common ownership and control of the Common Units, Class B Convertible Units and Subordinated Units through Holdings, as a new holding company of SXE, and its general partner Holdings GP, both of which are owned by SELLC and BBTS-B. As a result of the relationships described in Item 2 and Item 5 of this Schedule 13D, each of the Reporting Persons may be deemed to have shared power to vote, or direct the disposition of, and to dispose, or direct the disposition of, the Common Units, Class B Convertible Units and Subordinated Units held of record by Borrower.

(a) Beginning with the fiscal quarter of SXE ending on September 30, 2014 until the Class B Conversion Date, SXE will make quarterly distributions to Borrower payable in Class B PIK Units (as defined in the Partnership Agreement) pursuant to calculations in the Partnership Agreement. On the Class B Conversion Date, all Class B Convertible Units and Class B PIK Units will automatically convert into Common Units at the Class B Conversion Rate and participate in cash distributions pari passu with all other Common Units.

Each of the Reporting Persons and each of the Controlling Persons may make additional purchases of Common Units, either in the open market or in private transactions, although there are no current plans or proposals of the acquisition of additional Common Units (other than upon conversion of Class B Convertible Units or Subordinated Units as described in Item 1 and as may occur as a result of the exchange or distribution of equity securities of SXE for or on account of interests in Holdings as described in Item 6). In connection with the Combination Transaction, Holdings and its subsidiaries waived their right to receive distributions on the Subordinated Units that would cause the distributable cash flow ratio of SXE (defined as Distributable Cash Flow (as defined on the Partnership Agreement) as of a given date divided by total cash distributed by SXE on such date) to be less than 1.0, such waiver to terminate and be of no further force or effect when SXE can make a distribution on all outstanding Subordinated Units and maintain a distributable cash flow ratio of at least 1.0. As described in the second paragraph of Item 6, holders of Common Units have certain registration rights with respect to the resale of Common Units.

(b) There are no current plans or proposals which relate to or would result in any future extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries, other than the transactions described herein.

(c) There are no current plans or proposals to have any future sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries.

(d) In connection with the Drop-Down Contribution and the Combination Transaction, Samuel P. Bartlett and Kim G. Davis resigned from the SXE GP Board, effective August 4, 2014. The resignations did not result from a disagreement with SXE GP. Jason H. Downie and Wallace C. Henderson were appointed to the Board, effective August 4, 2014. Jon M. Biotti, Jerry W. Pinkerton, Bruce A. Williamson, Ronald G. Steinhart and David W. Biegler continued on the Board. Phillip M. Mezey was appointed as Executive Vice President of SXE GP, David Ash was appointed Vice President of SXE GP, Robb Lidell was appointed Vice President of SXE GP and Gaylon Gray was appointed Vice President of SXE GP all on August 4, 2014.

Page 12 of 25

(e) The information set forth or incorporated in Item 4(a) is incorporated by reference in this Item 4(e). The Reporting Persons or the Controlling Persons do not have any current plans or proposals to change the capitalization or dividend policy of the Issuer.

(f) There are no current plans or proposals for any future material changes in the Issuer’s business or corporate structure other than as described in Item 3 and other parts of Item 4, which are incorporated by reference in this Item 4(f).

(g) In connection with the Drop-Down Contribution, the Second Amended and Restated Agreement of Limited Partnership of SXE, dated April 12, 2013, was amended and restated as the Third Amended and Restated Agreement of Limited Partnership of SXE, dated August 4, 2014, to authorize the Class B Convertible Units and establish the rights, powers and preferences of the Class B Convertible Units, and the Amended and Restated Limited Liability Company Agreement of SXE GP, dated November 7, 2012, was amended and restated as the Second Amended and Restated Limited Liability Company Agreement of SXE, dated August 4, 2014 (the “SXE GP Agreement”).

In connection with the Combination Transaction, SELLC and BBTS-B entered into that certain Amended and Restated Limited Liability Company Agreement of Holdings GP dated August 4, 2014 (the “Holdings GP Agreement”) and, with Holdings GP, that certain Amended and Restated Limited Partnership Agreement of Holdings dated August 4, 2014 (the “Holdings LP Agreement”). The Partnership Agreement, the SXE GP Agreement, the Holdings GP Agreement and the Holdings LP Agreement govern the voting and disposition of the Common Units held by Borrower.

(h) There are no current plans or proposals to cause in the future a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association.

(i) There are no current plans or proposals to cause in the future a class of equity securities of the Issuer to be eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended.

(j) There are no current plans or proposals similar to other actions required to be disclosed other than as described in Item 3 and other parts of Item 4, which are incorporated by reference in this Item 4(j).

Item 5.

Interest in Securities of the Issuer.

(a and b) As of August 14, 2014, 23,800,943 Common Units, 14,633,000 Class B Convertible Units and 12,213,713 Subordinated Units are outstanding. The Class B Convertible Units convert into Common Units at the Class B Conversion Rate on the Class B Conversion Date; the initial Class B Conversion Rate is 1.0 (i.e., one Common Unit for each Class B Convertible Unit). The Subordinated Units convert into Common Units on a one-for-one basis on the expiration of the Subordination Period. Because such Class B Convertible Units and Subordinated Units were acquired in connection with transactions having the purpose or effect of changing or influencing the control of SXE, such Class B Convertible Units and Subordinated Units are considered converted for purposes of the calculations of the amounts noted under Rule 13d-3(d)(1)(i) of the Securities Exchange Act of 1934, as amended. As a result of the relationship of the Reporting Persons, each of the Reporting Persons is deemed to be the beneficial owner, with shared power to vote or direct the vote and shared power to dispose or direct the disposition, of 28,963,113 Common Units, which constitutes approximately 57.2% of the outstanding Common Units (giving effect to the conversion of all outstanding Class B Convertible Units and Subordinated Units).

Page 13 of 25

Southcross Energy LLC

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Charlesbank Capital Partners, LLC

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Southcross Holdings GP LLC

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Southcross Holdings LP

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Southcross Holdings Guarantor GP LLC

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Southcross Holdings Guarantor LP

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Page 14 of 25

Southcross Holdings Borrower GP LLC

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

Southcross Holdings Borrower LP

Amount Beneficially Owned: 28,963,113(1)

Percentage: 57.2%(2)

Sole power to vote or to direct the vote: 0

Shared power to vote or to direct the vote: 28,963,113(1)

Sole power to dispose or to direct the disposition of: 0

Shared power to dispose or to direct the disposition of: 28,963,113(1)

(1)

Borrower directly owns of record all of the 2,116,400 Common Units representing limited partner interests, 14,633,000 Class B Convertible Units representing limited partner interests and 12,213,713 Subordinated Units representing limited partner interests in SXE of which each Reporting Person has beneficial ownership. Borrower is owned of record 100% by Guarantor and its non-economic general partner interest is held by Borrower GP, which is owned of record 100% by Guarantor. Guarantor is owned of record 100% by Holdings and its non-economic general partner interest is held by Guarantor GP, which is owned of record 100% by Holdings. SELLC owns of record 29.6% of each of Holdings and Holdings GP. Charlesbank Capital Partners, LLC is the investment adviser to and the general partner of the general partner of Charlesbank Equity Fund VI, Limited Partnership and its affiliated investment funds (collectively, the “Charlesbank Funds”), which hold of record an approximate 85.2% membership interest in SELLC.

(2)

BBTS-B owns 70.4% of each of Holdings and Holdings GP. The Reporting Persons understand that: (i) BBTS-B is owned 100% by BBTS Guarantor LP (“BBTS-G”), and its non-economic general partner interest is held by BBTS Borrower GP LLC (“BBTS-B GP”), which is owned 100% by BBTS-G; (ii) BBTS-G is owned 100% by BlackBrush TexStar LP (“BBTS–LP”), and its non-economic general partner interest is held by BBTS Guarantor GP LLC (“BBTS-G GP”), which is owned 100% by BBTS-LP; and (iii) Blackbrush TexStar GP LLC (“BBTS-GP”) is the general partner of BBTS-LP. BBTS-B, BBTS-B GP, BBTS-G, BBTS-G GP, BBTS-LP and BBTS-GP are referred to collectively in this Schedule 13D as the “BBTS Parties.”

The Reporting Persons understand that: (i) EIG Blackbrush Holdings LLC (“EIG”) owns 51.14% of the limited partnership interest in BBTS-LP and 51.14% of BBTS-GP and has the right to elect members to the board of managers of BBTS-GP; and (ii) EIG also is a party to a letter agreement with BBTS-B and TW BBTS Aggregator LP (“Aggregator”), which holds the 48.86% limited partnership interest in BBTS-LP not held by Aggregator. EIG, together with EIG Management Company, LLC, EIG Asset Management, LLC, EIG Global Energy Partners, LLC, The R. Blair Thomas 2010 Irrevocable Trust and R. Blair Thomas, are referred to collectively in this Schedule 13D as the “EIG Parties.”

The Reporting Persons understand that: (i) Aggregator owns 48.86% of the limited partnership interest in BBTS-LP; (ii) BB-II Holdco LP owns 48.86% of BBTS-GP and has the right to elect members to the board of managers of BBTS-GP; and (iii) Aggregator also is a party to a letter agreement with BBTS-B and EIG, which holds the 51.14% limited partnership interest in BBTS-LP not held by Aggregator and the 51.14% of BBTS-GP not held by BB-II Holdco LP, which provides certain rights to Aggregator. Aggregator, together with BB-II Holdco LP, TW/LM GP Sub, LLC, Tailwater Energy Fund I, LP, TW GP EF-I, LP, TW GP EF-I GP, LLC, Tailwater Capital LLC, Jason H. Downie and Edward Herring, are referred to collectively in this Schedule 13D as the “Tailwater Parties.”

Page 15 of 25

(c) There have been no reportable transactions in the Common Units, Class B Convertible Units or Subordinated Units that were effected in the last 60 days by the Reporting Persons or Controlling Persons, except as described in Items 3 and 4, which are incorporated by reference in this Item 5(c).

(d) To the knowledge of the Reporting Persons, no other person, other than the Reporting Persons, the BBTS Parties, the EIG Parties and the Tailwater Parties, has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Units, Class B Convertible Units or Subordinated Units.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

The information set forth or incorporated in Items 3 and 4 is incorporated by reference in this Item 6.

Under the Partnership Agreement, the Class B Convertible Units and Class B PIK Units will vote together with the Common Units as a single class and will vote as a separate class on any change to the Partnership Agreement that would adversely affect the Class B Convertible Units or Class B PIK Units. As promptly as reasonably practicable following receipt of a request from any Holder (as defined in the Partnership Agreement), SXE shall file a registration statement providing for the resale of the Registrable Securities (as defined and provided for in the Partnership Agreement). The Partnership Agreement also contains various provisions regarding the Common Units, Class B Convertible Units and Subordinated Units regarding voting, distributions, transfers, the allocation of profits and losses and various other matters.

Holdings, through its indirect ownership of Borrower, controls the activities of Borrower. Holdings GP, as the general partner of Holdings, controls the activities of Holdings. Pursuant to the Holdings GP Agreement, Holdings GP is managed by a board of directors (the “Holdings GP Board”). Pursuant to the Holdings GP Agreement, so long as (i) BBTS-B is a Designating Party (as defined in the Holdings GP Agreement), BBTS-B has the right to designate four directors to the Holdings GP Board (two of which will be designated as Tailwater Capital LLC directors and two of which will be designated as EIG Blackbrush Holdings, LP directors), (ii) SELLC is a Designating Party, SELLC has the right to designate two directors to the Holdings GP Board, (iii) Philip M. Mezey is affiliated with Holdings GP or any Designating Party, Mr. Mezey will have the right to designate one director to the Holdings GP Board, and (iv) David W. Biegler is affiliated with Holdings GP or any Designating Party, Mr. Biegler will have the right to designate one director to the Holdings GP Board; and each such Person shall have the sole right to remove (with or without cause), and to fill vacancies with respect to, the director(s) designated by such entity or individual. Each director designated by Messrs. Mezey and Biegler does not have voting rights. Certain actions of Holdings GP requires approval of a majority of all directors of Holdings GP entitled to vote and the approval of at least one director designated by each Designating Party that has a Veto Interest (which, as defined in the Holdings GP Agreement, generally means an interest equal to 50% of the interest originally allocated to such party). In addition, certain other actions of Holdings GP requires the approval of a majority of all directors of Holdings GP entitled to vote.

The Holdings GP Agreement provides that Board of Directors of SXE GP (the “SXE GP Board”) shall be seven directors, initially consisting of Jon M. Biotti, Jason H. Downie, Wallace C. Henderson, Jerry W. Pinkerton, Bruce A. Williamson, Ronald G. Steinhart and Mr. Biegler (who will also serve as Chairman). So long as (i) BBTS-B is a Designating Party, BBTS-B has the right to designate four directors to serve on the SXE GP Board (two of whom must be an Independent Director (as defined in the Holdings GP Agreement)) and (ii) SELLC is a Designating Party, SELLC shall have the right to designate two directors to serve on the SXE GP Board (one of whom must be an Independent Director); provided, however, an Independent Director designated by a Designating Party may be removed upon the vote or consent of a majority of the SXE GP Board (including the approval of the chairman of the SXE GP Board); provided, further, however, that that the Designating Party that designated such removed Independent Director shall have the right to designate an Independent Director to replace the removed Independent Director. The seventh member of the SXE GP Board and the chairman of the SXE GP Board shall be determined by a vote or consent of a majority of the other directors of the SXE GP Board. However, the initial chairman of the SXE GP Board shall be Mr. Biegler until August 4, 2016 (or until his earlier death or resignation). The Holdings GP Agreement provides there shall always be three Independent Directors on the SXE GP Board.

Page 16 of 25

Pursuant to the Holdings LP Agreement, Holdings GP will manage, direct and control Holdings. As provided in the Holdings LP Agreement, certain actions of Holdings requires approval of Holdings GP requiring the approval of a majority of all directors entitled to vote and the approval of at least one director designated by each Designating Party that has a Veto Interest. In addition, certain other actions of Holdings requires approval of Holdings GP requiring the approval of a majority of all directors entitled to vote.

Also under the Holdings LP Agreement, upon the earlier of (i) the approval by Holdings GP or (ii) the request by a Designating Party at any time after February 3, 2020, Holdings will institute a process pursuant to which all (and not less than all) of the interest of such requesting Designating Party in Holdings and Holdings GP may be exchanged for equity securities of SXE and receive customary registration rights with respect to such equity securities of SXE so issued in exchange for such interest in Holdings and Holdings GP. Such right of a Designating Party to exchange its interests in Holdings and Holdings GP is subject to a right of each other Designating Party to purchase such exchanging parties’ interests in Holdings and Holdings GP at fair market value.

The Holdings LP Agreement also provides that, upon the earlier of (i) the approval by Holdings GP or (ii) the request by a Designating Party at any time after August 4, 2016, Holdings will use good faith efforts to distribute to the common equity owners of Holdings all equity securities of SXE held by Holdings and each person receiving such SXE securities will receive customary registration rights with respect to such equity securities of SXE so distributed.

The descriptions of the Drop-Down Contribution Agreement, the Primary Contribution Agreement, the Partnership Agreement, the SXE GP Agreement, the Holdings GP Agreement and the Holdings LP Agreement (collectively, the “Transaction Agreements”) do not purport to be complete descriptions of all of the terms and conditions of each agreement. The foregoing descriptions are qualified in their entirety by reference to the full text of the Transaction Agreements, copies of which are Exhibits 1 through 6 hereto and incorporated by reference herein.

The Transaction Agreements are filed as exhibits to this Schedule 13D only to provide investors with information regarding the terms and conditions of the Transaction Agreements, and not to provide investors with any other factual information regarding SXE or its subsidiaries or their business or operations. SXE’s investors should not rely on the representations and warranties in the Transaction Agreements or any descriptions thereof as characterizations of the actual state of facts or condition of SXE or any of its subsidiaries. Information concerning the subject matter of the representations and warranties in the Transaction Agreements may change after the date of the Transaction Agreements, and such subsequent information may or may not be fully reflected in SXE’s public disclosures or periodic reports filed with the Securities and Commission (the “SEC”). The Transaction Agreements should not be read alone, but should instead be read in relation with the other information regarding SXE and its subsidiaries, and their businesses and operations, that is or will be contained in, or incorporated by reference into, SXE’s Forms 10-K, Forms 10-Q and other documents that SXE files with or furnishes to the SEC.

Item 7.

Materials to be Filed as Exhibits.

Exhibit 1.

Contribution Agreement among TexStar Midstream Services, LP, Southcross Energy Partners, L.P. and Southcross Energy GP LLC dated June 11, 2014 (incorporated herein by reference to Exhibit 10.1 to the Issuer’s Current Report on Form 8-K dated June 12, 2014).

Exhibit 2.

Contribution Agreement among BBTS Borrower LP, Southcross Energy LLC and Southcross Holdings LP dated June 11, 2014.

Exhibit 3.

Amended and Restated Limited Liability Company Agreement of Southcross Holdings GP LLC dated August 4, 2014.

Exhibit 4.

Amended and Restated Agreement of Limited Partnership of Southcross Holdings LP dated August 4, 2014.

Exhibit 5.

Third Amended and Restated Agreement of Limited Partnership of Southcross Energy Partners, L.P. dated August 4, 2014 (incorporated herein by reference to Exhibit 3.1 to the Issuer’s Current Report on Form 8-K dated August 4, 2014).

Page 17 of 25

Exhibit 6.

Second Amended and Restated Limited Liability Company Agreement of Southcross Energy Partners GP, LLC, dated August 4, 2014 (incorporated herein by reference to Exhibit 3.2 to the Issuer’s Current Report on Form 8-K dated August 4, 2014).

Exhibit 7.

Joint Filing Agreement.

Page 18 of 25

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: August 14, 2014


SOUTHCROSS ENERGY LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

CHARLESBANK CAPITAL PARTNERS, LLC, a Massachusetts limited liability company

By:		/s/ Tami Nason
		Tami Nason
		General Counsel and Chief Compliance Officer

SOUTHCROSS HOLDINGS GP LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS LP, a Delaware limited partnership

BY: SOUTHCROSS HOLDINGS GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS GUARANTOR GP LLC,
a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

Page 19 of 25


SOUTHCROSS HOLDINGS GUARANTOR LP, a Delaware limited partnership

BY: SOUTHCROSS HOLDINGS GUARANTOR GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS BORROWER GP LLC,
a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS BORROWER LP,
a Delaware limited partnership

BY:		SOUTHCROSS HOLDINGS BORROWER GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

Page 20 of 25

APPENDIX 1

The name, principal address and position of the executive officers and directors, as applicable, of the following entities are as follows:

Southcross Energy LLC


Samuel P. Bartlett	Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

David W. Biegler	Chairman, Chief Executive Officer and President	Chairman and Chief Executive Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Jon M. Biotti	Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Kim G. Davis	Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Michael T. Hunter	Director, Vice Chairman	Vice Chairman of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

J. Michael Anderson	Senior Vice President, Chief Financial Officer and Secretary	Senior Vice President, Chief Financial Officer and Secretary of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

David M. Mueller	Senior Vice President	Senior Vice President, Treasurer, and Commercial Planning of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Page 21 of 25

Charlesbank Capital Partners, LLC


Sam Bartlett	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Jon Biotti	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

J. Ryan Carroll	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Michael Choe	Managing Director and President	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Kim Davis	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Michael Eisenson	Managing Director and Chief Executive Officer	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Andrew Janower	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Joshua Klevens	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Rim Palmer	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Mark Rosen	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Michael Thonis	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

John Vander Vort	Managing Director and Chief Operating Officer	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Brandon White	Managing Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Kevin M. Brown	Chief Financial Officer	Chief Financial Officer, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Tami E. Nason	General Counsel and Chief Compliance Officer	General Counsel and Chief Compliance Officer, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Page 22 of 25

Southcross Holdings GP LLC


Jon M. Biotti	Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Kim G. Davis	Director	Managing Director, Charlesbank Capital Partners, LLC 200 Clarendon Street, 54^th Floor, Boston, Massachusetts 02116

Clayton R. Taylor	Director	Senior Vice President, EIG Global Energy Partners 333 Clay Street, Suite 3500 Houston, Texas 77002

Wallace C. Henderson	Director	Managing Director, EIG Global Energy Partners 333 Clay Street, Suite 3500 Houston, Texas 77002

Jason Downie	Director	Managing Partner, Tailwater Capital LLC 300 Crescent Court, Suite 200 Dallas, Texas 75201

Edward Herring	Director	Managing Partner, Tailwater Capital LLC 300 Crescent Court, Suite 200 Dallas, Texas 75201

David W. Biegler	Director, Chairman and Chief Executive Officer	Chairman and Chief Executive Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Philip M. Mezey	Director and Executive Vice President	Executive Vice President of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Michael T. Hunter	Vice Chairman	Vice Chairman of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

John E. Bonn	President and Chief Operating Officer	President and Chief Operating Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

J. Michael Anderson	Senior Vice President, Chief Financial Officer and Secretary	Senior Vice President, Chief Financial Officer and Secretary of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

David M. Mueller	Senior Vice President, Treasurer, and Commercial Planning	Senior Vice President, Treasurer, and Commercial Planning of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Southcross Holdings LP

The sole general partner of Southcross Holdings LP is Southcross Holdings GP LLC.

Page 23 of 25

Southcross Holdings Guarantor GP LLC


David W. Biegler	Chairman and Chief Executive Officer	Chairman and Chief Executive Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Michael T. Hunter	Vice Chairman	Vice Chairman of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

John E. Bonn	President and Chief Operating Officer	President and Chief Operating Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Philip M. Mezey	Executive Vice President	Executive Vice President of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

J. Michael Anderson	Senior Vice President, Chief Financial Officer and Secretary	Senior Vice President, Chief Financial Officer and Secretary of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

David M. Mueller	Senior Vice President, Treasurer, and Commercial Planning	Senior Vice President, Treasurer, and Commercial Planning of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Page 24 of 25

Southcross Holdings Guarantor LP

The sole general partner of Southcross Holdings Guarantor LP is Southcross Holdings Guarantor GP LLC.

Southcross Holdings Borrower GP LLC


David W. Biegler	Chairman and Chief Executive Officer	Chairman and Chief Executive Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Michael T. Hunter	Vice Chairman	Vice Chairman of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

John E. Bonn	President and Chief Operating Officer	President and Chief Operating Officer of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201

Philip M. Mezey	Executive Vice President	Executive Vice President of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201
J. Michael Anderson	Senior Vice President, Chief Financial Officer and Secretary	Senior Vice President, Chief Financial Officer and Secretary of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

David M. Mueller	Senior Vice President, Treasurer, and Commercial Planning	Senior Vice President, Treasurer, and Commercial Planning of Southcross Energy Partners GP, LLC 1700 Pacific Avenue, Suite 2900 Dallas, Texas 75201

Southcross Holdings Borrower LP

The sole general partner of Southcross Holdings Borrower LP is Southcross Holdings Borrower GP LLC.

Page 25 of 25

EX-99.2 2 d772644dex992.htm EX-2 EX-2

Exhibit 2

Execution Version

CONTRIBUTION AGREEMENT

BY AND AMONG

BBTS BORROWER LP,

SOUTHCROSS ENERGY LLC

AND

SOUTHCROSS HOLDINGS LP

DATED AS OF JUNE 11, 2014

TABLE OF CONTENTS


		Page

ARTICLE I	DEFINITIONS AND CONSTRUCTION		1
1.1	Definitions		1
1.2	Construction		1

ARTICLE II	CLOSING, CLOSING CONDITIONS AND ADJUSTMENTS		2
2.1	Closing and Closing Date		2
2.2	Conditions to BBTS’s Obligation to Close		2
2.3	Conditions to Southcross’ Obligation to Close		3
2.4	Conditions to each Party’s Obligation to Close		3
2.5	Closing Transactions		4
2.6	Closing Adjustment Amount		5
2.7	Post-Closing Adjustments to the Adjustment Amount		5

ARTICLE III	CLOSING ACTIONS		7
3.1	BBTS’s Closing Actions		7
3.2	Southcross’ Closing Actions		8

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF BBTS REGARDING BBTS, THE COMPANY AND HOLDINGS GP		9
4.1	Organization and Good Standing		9
4.2	Power and Authority		9
4.3	No Conflict; Consents		10
4.4	Ownership Interests		10
4.5	Financial Advisors		10
4.6	No Litigation		10
4.7	Company Operations		10
4.8	Investigation		11

ARTICLE V	REPRESENTATIONS AND WARRANTIES OF BBTS REGARDING THE TEXSTAR GROUP AND THE TEXSTAR BUSINESS		11
5.1	Organization and Qualification		11
5.2	Capitalization		12
5.3	No Conflict; Consents		13
5.4	TexStar Financial Statements		13
5.5	Liabilities; Indebtedness		14
5.6	Title to Properties and Assets; Easements		14
5.7	Contracts		15
5.8	Permits		16
5.9	Environmental Matters		17
5.10	Taxes:		18
5.11	Compliance with Law		19
5.12	Governmental Approvals		19
5.13	Proceedings		19
5.14	Absence of Changes		20
5.15	Transactions with Interested Persons		21
5.16	Financial Advisors		22


5.17	Employee Matters	22
5.18	Benefit Plans	23
5.19	Insurance Coverage	26
5.20	Intellectual Property	26
5.21	Customers and Suppliers	26
5.22	Current Business	26
5.23	Condemnation; Casualty Loss	26
5.24	Books and Records	26
5.25	No Representations or Warranties Implied; Independent Investigation; Forecasts	27

ARTICLE VI	REPRESENTATIONS AND WARRANTIES OF SOUTHCROSS REGARDING SOUTHCROSS	28
6.1	Organization and Good Standing	28
6.2	Power and Authority	28
6.3	No Conflict; Consents	28
6.4	SXE Interests	29
6.5	Financial Advisors	29
6.6	No Litigation	29
6.7	Acquisition of Membership Interests	29

ARTICLE VII	REPRESENTATIONS AND WARRANTIES OF SOUTHCROSS REGARDING THE SXE GROUP AND THE SXE BUSINESS	30
7.1	Organization and Qualification	30
7.2	Capitalization	31
7.3	No Conflict; Consents	32
7.4	Southcross Financial Statements	32
7.5	Liabilities; Indebtedness	33
7.6	Title to Properties and Assets; Easements	33
7.7	Contracts	34
7.8	Permits	35
7.9	Environmental Matters	36
7.10	Taxes	36
7.11	Compliance with Law	38
7.12	Governmental Approvals	38
7.13	Proceedings	38
7.14	Absence of Changes	39
7.15	Transactions with Interested Persons	40
7.16	Financial Advisors	40
7.17	Employee Matters	41
7.18	Benefit Plans	41
7.19	Insurance Coverage	44
7.20	Intellectual Property	45
7.21	Customers and Suppliers	45
7.22	Current Business	45
7.23	Condemnation; Casualty Loss	45
7.24	Books and Records	45
7.25	No Representations or Warranties Implied; Independent Investigation; Forecasts	45

ARTICLE VIII	COVENANTS OF THE PARTIES	47
8.1	Conduct of the Business	47
8.2	Access to Books and Records	47


8.3	Contact with Customers and Suppliers	48
8.4	Closing Efforts	48
8.5	Notification	49
8.6	Conditions	49
8.7	Preparation of Supporting Documents	49
8.8	Transaction Expenses	49
8.9	Exclusivity	49
8.10	Publicity	50
8.11	Confidentiality	50
8.12	Right of First Offer for Excluded TexStar Assets	50
8.13	Tax Matters	51
8.14	Series A Change of Control Offer	57
8.15	Mutual Releases	57
8.16	Restructuring	58
8.17	Financing	58

ARTICLE IX	TERMINATION	59
9.1	Grounds for Termination	59
9.2	Effect of Termination	59

ARTICLE X	INDEMNIFICATION	60
10.1	Indemnification by BBTS	60
10.2	Indemnification by Southcross	60
10.3	Survival	61
10.4	Third Person Claims	62
10.5	Direct Claims	63
10.6	Basket; Indemnification Cap	63
10.7	Calculation of Losses	64
10.8	Other Limitations	64
10.9	Payment of Indemnification by a Party	65

ARTICLE XI	MISCELLANEOUS	66
11.1	Governing Law; Venue; Waiver of Jury Trial	66
11.2	Third-Party Beneficiaries	67
11.3	No Partnership	67
11.4	Assignment	67
11.5	Entire Agreement	68
11.6	Amendment	68
11.7	Notices	68
11.8	Waiver	70
11.9	Severability	71
11.10	Conspicuousness of Provisions	71
11.11	Deliveries to a Party	71
11.12	Counterparts; Delivery	71
11.13	Representation by Counsel	71
11.14	Time of the Essence	71
11.15	Schedules	72

iii

Exhibits

Exhibit A – Definitions

Exhibit B – Drop-Down Agreement

Exhibit C – LLC Agreement

Exhibit D – LP Agreement

Exhibit E – Sample Balance Sheet

Schedules


Schedule 1.1(a)		Excluded TexStar Assets
Schedule 1.1(b)		Knowledge (BBTS)
Schedule 1.1(c)		Knowledge (Southcross)
Schedule 1.1(d)		TexStar Capex Budget
Schedule 3.1(b)		Closing Consents (BBTS)
Schedule 3.2(b)		Closing Consents (Southcross)
Schedule 4.3		No Conflicts; Consents
Schedule 4.5		Financial Advisors
Schedule 5.2		Capitalization
Schedule 5.3		No Conflicts; Consents
Schedule 5.5(a)		No Undisclosed Liabilities
Schedule 5.5(b)		Third Party Debt
Schedule 5.5(c)		Liabilities to Affiliates
Schedule 5.6		Sufficiency of Assets
Schedule 5.7(a)(i)		Current Contracts
Schedule 5.7(a)(ii)		TexStar Contracts
Schedule 5.9		Environmental Matters
Schedule 5.10		Taxes
Schedule 5.12		Governmental Approvals
Schedule 5.13		Proceedings
Schedule 5.14		Absence of Changes
Schedule 5.15		Transactions with Interested Persons
Schedule 5.16		Financial Advisors
Schedule 5.17		Employee Matters
Schedule 5.18(a)		Benefit Plans
Schedule 5.18(b)		Qualified Benefit Plans
Schedule 5.18(h)		Post-Employment Benefit Plans
Schedule 5.18(m)		Conflicts with Benefit Plans
Schedule 5.19		Insurance
Schedule 5.20		Intellectual Property
Schedule 5.21		Customers and Suppliers
Schedule 5.22		Current Business
Schedule 6.3		No Conflict; Consents
Schedule 6.5		Financial Advisors
Schedule 7.2		Capitalization


Schedule 7.3		No Conflicts; Consents
Schedule 7.5(a)		No Undisclosed Liabilities
Schedule 7.5(b)		Third Party Debt
Schedule 7.5(c)		Liabilities to Affiliates
Schedule 7.6		Sufficiency of Assets
Schedule 7.7		SXE Contracts
Schedule 7.9		Environmental Matters
Schedule 7.12		Government Approvals
Schedule 7.13		Proceedings
Schedule 7.14		Absence of Changes
Schedule 7.15		Transactions with Interested Persons
Schedule 7.16		Financial Advisors
Schedule 7.17		Employee Matters
Schedule 7.18(a)		Benefit Plans
Schedule 7.18(b)		Qualified Benefit Plans
Schedule 7.18(h)		Post-Employment Benefit Plans
Schedule 7.18(m)		Conflicts with Benefit Plans
Schedule 7.19		Insurance
Schedule 7.20		Intellectual Property
Schedule 7.21		Customers and Suppliers
Schedule 7.22		Current Business
Schedule 8.1(a)		Conduct of Business
Schedule 8.16		Rich Gas System

CONTRIBUTION AGREEMENT

This Contribution Agreement (this “Agreement”) is made as of June 11, 2014, by and among BBTS Borrower LP, a Delaware limited partnership (“BBTS”), Southcross Energy LLC, a Delaware limited liability company (“Southcross”), and Southcross Holdings LP, a Delaware limited partnership (the “Company”). BBTS, Southcross and the Company are referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS, as of the date hereof, BBTS owns (a) 100% of the outstanding limited partnership interest (the “Company LP Interest”) in the Company and (b) 100% of the outstanding limited liability company interest (the “Company GP Interest” and, together with the Company LP Interest, the “Company Interests”)) in Southcross Holdings GP LLC, a Delaware limited liability company and the sole general partner of the Company (“Holdings GP”);

WHEREAS, as of the date hereof, BBTS owns (a) 100% of the outstanding limited partnership interest (the “TexStar LP Interest”) in TexStar Midstream Services, LP, a Texas limited partnership (“TexStar LP”), and (b) 100% of the outstanding limited liability company interest (the “TexStar GP Interest” and, together with the TexStar LP Interest, the “TexStar Interests”) in TexStar Midstream GP, LLC, a Texas limited liability company and the sole general partner of TexStar LP (“TexStar GP”);

WHEREAS, as of the date hereof, Southcross owns (a) 1,863,713 common units, 12,213,713 subordinated units and 229,716 Series A preferred units (collectively, the “SXE LP Interest”) of Southcross Energy Partners, L.P., a Delaware limited partnership (“SXE”), and (b) 100% of the outstanding limited liability company interest (the “SXE GP Interest” and, together with the SXE LP Interest, the “SXE Interests”) in Southcross Energy Partners GP, LLC, a Delaware limited liability company and the sole general partner of SXE (“SXE GP”); and

WHEREAS, on the Closing Date, among the other actions described herein, BBTS will contribute to the Company the TexStar Interests, and Southcross will contribute to the Company the SXE Interests, in each case, in exchange for the consideration described herein.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements, covenants, representations and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

1.1 Definitions. Exhibit A sets forth the definitions of the capitalized terms set forth herein.

1.2 Construction. In this Agreement, unless a clear contrary intention appears in the applicable provision: (a) the singular includes the plural and vice versa; (b) reference to a Person includes such Person’s successors and assigns but, in the case of a Party, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity

excludes such Person in any other capacity; (c) reference to any gender includes each other gender; (d) references to any Exhibit, Schedule, Section, Article, subsection and other subdivision refer to the corresponding Exhibit, Schedule, Section, Article, subsection and other subdivision of this Agreement; (e) references in any Section or Article or definition to any clause means such clause of such Section, Article or definition; (f) “hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement; (g) the word “including” (in its various forms) means “including without limitation”; (h) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in accordance with GAAP; (i) references to “days” are to calendar days; and (j) all references to money refer to the lawful currency of the United States. The Table of Contents and the Article and Section titles and headings in this Agreement are inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement.

ARTICLE II

CLOSING, CLOSING CONDITIONS AND ADJUSTMENTS

2.1 Closing and Closing Date. The consummation of the Transactions (the “Closing”) shall take place at the offices of Gardere Wynne Sewell LLP, 1601 Elm Street, Suite 3000, Dallas, Texas 75201, at 10:00 a.m. (local time) on the first Business Day following full satisfaction or due waiver of all of the closing conditions set forth in this Article II (other than those to be satisfied at the Closing, but subject to the satisfaction or due waiver of such conditions) (such first Business Day, the “Target Closing Date”) or on such other date, at such other time and/or location as mutually agreed by the Parties; provided, however, that, if the Marketing Period has not ended prior to the Target Closing Date, then the Company, at its option, may postpone the date of the Closing until the third Business Day following the final day of the Marketing Period (but in any event no later than one Business Day prior to the Outside Date) (the day on which the Closing takes place being the “Closing Date”). In furtherance of the foregoing, the transactions set forth in Section 2.5 shall be deemed to have commenced at 10:00 a.m. (local time) on the Closing Date in the sequence described in such Section and to have been consummated in their entirety on the Closing Date.

2.2 Conditions to BBTS’s Obligation to Close. The obligation of BBTS to consummate the Transactions is subject to the satisfaction or waiver by BBTS of the following conditions at or immediately before the Closing:

(a) the (i) Fundamental Representations of Southcross (other than Section 7.10) shall be true and correct on and as of the Closing Date as if made on the Closing Date and (ii) representations and warranties of Southcross (including Section 7.10), other than the Fundamental Representations of Southcross, set forth in Article VI and Article VII shall be true and correct on and as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth in any individual representation or warranty) does not constitute, individually or in the aggregate, a Material Adverse Effect as to the SXE Group;

(b) Southcross shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or before the Closing;

(c) there shall not have been or occurred since the date of this Agreement any event, change, occurrence or circumstance that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect on the SXE Group;

(d) Southcross shall have caused SXE to issue Conversion Units (as defined in the SXE Partnership Agreement) to each holder of Series A preferred units of SXE in respect of the Series A preferred units of SXE properly designated for conversion by such holders in connection with the Series A Change of Control Offer; and

(e) Southcross’ obligations under Section 3.2 shall have been fulfilled.

2.3 Conditions to Southcross’ Obligation to Close. The obligation of Southcross to consummate the Transactions is subject to the satisfaction or waiver by Southcross of the following conditions at or immediately before the Closing:

(a) the (i) Fundamental Representations of BBTS (other than Section 5.10) shall be true and correct on and as of the Closing Date as if made on the Closing Date and (ii) representations and warranties of BBTS (including Section 5.10), other than the Fundamental Representations of BBTS, set forth in Article IV and Article V shall be true and correct on and as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth in any individual representation or warranty) does not constitute, individually or in the aggregate, a Material Adverse Effect as to the TexStar Group;

(b) BBTS shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or before the Closing;

(d) BBTS’s obligations under Section 3.1 shall have been fulfilled; and

(e) BBTS shall have completed the TexStar Rich Gas Restructuring.

2.4 Conditions to each Party’s Obligation to Close. The obligations of each Party to consummate the Transactions are subject to the satisfaction or waiver by such Party of the following conditions at or immediately before the Closing:

(a) all conditions precedent to the transactions contemplated by Section 2.5 shall have been satisfied or waived, and the closing of such transactions shall have occurred;

(b) no Proceeding shall, on the Closing Date, be in effect that restrains, prohibits or makes illegal the consummation of the Transactions;

(c) SXE GP, TexStar Midstream Logistics, LP and TexStar Midstream Products, LP shall have entered into a Management Services Agreement in form and substance mutually acceptable to the Parties; and

(d) this Agreement shall not have been terminated in accordance with Section 9.1.

2.5 Closing Transactions. At the Closing:

(a) Southcross shall contribute, transfer and assign to the Company the SXE Interests, as a capital contribution to the Company, by executing and delivering to the Company an Assignment with respect to each of the SXE GP Interest and the SXE LP Interest, each in form and substance mutually satisfactory to the Parties (the “Southcross Contribution”);

(b) in exchange for the Southcross Contribution, (i) the Company shall issue to Southcross the partnership interest in the Company identified as being owned by Southcross in the LP Agreement, upon which Southcross shall become a member of the Company, and (ii) BBTS shall cause Holdings GP to issue to Southcross the membership interest in Holdings GP identified as being owned by Southcross in the LLC Agreement, upon which Southcross shall become a member of Holdings GP;

(d) SXE shall enter into the SXE Credit Facility;

(e) BBTS shall cause the cash proceeds received by TexStar LP in connection with the consummation of the transactions contemplated by the Drop-Down Agreement to be delivered to BBTS Lender in partial satisfaction of BBTS’ obligations under the BBTS Credit Facility;

(f) BBTS shall contribute, transfer and assign to the Company the TexStar Interests, as a capital contribution to the Company, by executing and delivering to the Company an Assignment with respect to each of the TexStar GP Interest and the TexStar LP Interest, each in form and substance mutually satisfactory to the Parties (the “BBTS Contribution”);

(g) in exchange for the BBTS Contribution, (i) (A) the Company shall issue to BBTS (I) the partnership interest in the Company (other than Preferred Equity) identified as being owned by BBTS in the LP Agreement and (II) Preferred Equity with a value

equal to the Estimated Adjustment Amount, subject to adjustment in accordance with Section 2.7(f), (B) the Company (or one of its wholly-owed Subsidiaries) shall assume $337,162,162 of the debt obligations of BBTS under the BBTS Credit Facility (the “Assumed Debt Amount”), and (ii) BBTS shall cause Holdings GP to issue to BBTS the membership interest in Holdings GP identified as being owned by BBTS in the LLC Agreement; and

(h) the Company (or one of its wholly-owned Subsidiaries) shall enter into the Credit Facility and, using the proceeds received in connection therewith, immediately (i) pay to Southcross, $100,000,000, (ii) pay to BBTS, $237,837,837, and (iii) pay to BBTS Lender the Assumed Debt Amount, in each case, by wire transfer of immediately available funds.

2.6 Closing Adjustment Amount.

(a) At least three, but no more than five, Business Days prior to the expected Closing Date, BBTS shall deliver to Southcross a written statement (the “Adjustment Statement”) setting forth BBTS’ preliminary, good faith determination of the Adjustment Amount (“BBTS’ Proposed Adjustment Amount”). The Adjustment Statement shall be prepared in accordance with this Agreement and shall be based upon actual information available to BBTS at the time of preparation and upon BBTS’ good faith estimates and assumptions as to amounts not known by BBTS at such time.

(b) If Southcross has any questions or disagreements regarding the Adjustment Statement, then, upon request by Southcross prior to the Closing Date, BBTS and Southcross shall in good faith attempt to resolve any disagreements promptly, and BBTS shall afford Southcross the opportunity to examine the Adjustment Statement and such supporting schedules, analyses and workpapers on which the Adjustment Statement is based or from which the Adjustment Statement is derived as are reasonably requested by Southcross. If Southcross and BBTS agree on changes to BBTS’ Proposed Adjustment Amount based on such discussions, then the amount of Preferred Equity to be issued at Closing shall be based on such changes. If Southcross and BBTS do not agree on changes to BBTS’ Proposed Adjustment Amount, then the amount of Preferred Equity to be issued at Closing shall be based on the amounts set forth in the Adjustment Statement. In either such case, appropriate adjustments to the amount of Preferred Equity issued at Closing shall be made after the Closing pursuant to Section 2.7. BBTS’ Proposed Adjustment Amount, as modified to reflect changes (if any) agreed to pursuant to this Section 2.6(b), is referred to herein as the “Estimated Adjustment Amount.”

2.7 Post-Closing Adjustments to the Adjustment Amount.

(a) As promptly as practicable, but in no event later than 60 days after the Closing Date, Southcross shall deliver to BBTS a statement of Southcross’ calculation of the actual Adjustment Amount and such supporting documentation as is reasonably necessary to support the Adjustment Amount shown therein (the “Final Adjustment Statement”). To the extent reasonably necessary to Southcross, the Company shall give personnel, accountants and representatives of Southcross reasonable access to the books,

records and properties of the Company and its Subsidiaries for purposes of preparing the Final Adjustment Statement and will cause appropriate personnel of the Company to assist Southcross and Southcross’ personnel, accountants and representatives, with no charge to Southcross for such assistance, in the preparation of the Final Adjustment Statement.

(b) The Final Adjustment Statement shall become final and binding on the Parties as to the Adjustment Amount 30 days following the date the Final Adjustment Statement is received by BBTS, except to the extent that prior to the expiration of such 30-day period BBTS shall deliver to Southcross written notice (“Dispute Notice”), as hereinafter described, of its disagreement with the contents of the Final Adjustment Statement. Such Dispute Notice shall be in writing and set forth all of BBTS’ disagreements with respect to any portion of the Final Adjustment Statement, together with BBTS’ proposed changes thereto, and shall include an explanation in reasonable detail of, and such supporting documentation as is reasonably necessary to support, such changes. Any disagreements with or changes to the Final Adjustment Statement not included in such Dispute Notice shall be waived by BBTS.

(c) If BBTS has timely delivered a Dispute Notice to Southcross in the manner required above, then, upon written agreement between BBTS and Southcross resolving all disagreements with the contents of the Final Adjustment Statement set forth in the Dispute Notice, the Final Adjustment Statement (including any revisions thereto as are so agreed) will become final and binding on the Parties as to the Adjustment Amount.

(d) If the Final Adjustment Statement has not become final and binding 60 days following the date the Final Adjustment Statement is delivered to BBTS, then BBTS and Southcross shall submit any unresolved disagreements of BBTS set forth in the Dispute Notice to the Audit Firm for a final and binding determination and BBTS and Southcross shall execute such engagement, indemnity and other agreements as such Audit Firm may reasonably require in connection with or as a condition to such engagement. BBTS and Southcross shall cooperate diligently with any reasonable request of the Audit Firm and furnish to the Audit Firm such workpapers and other documents and information relating to such objections as the Audit Firm may reasonably request and are available to such Party or its Affiliates (or its independent public accountants) and will be afforded the opportunity to present to the Audit Firm any material relating to the determination of the matters in dispute and to discuss such determination with the Audit Firm prior to any written notice of determination hereunder being delivered by the Audit Firm. The Audit Firm’s engagement shall be limited to the resolution of designated items set forth in the Final Adjustment Statement that were identified in such Dispute Notice delivered by BBTS to Southcross in accordance with Section 2.7(b) and that remain in dispute upon the engagement of the Audit Firm, which resolution shall be in accordance with this Agreement. To the extent that a value has been assigned to any objection that remains in dispute, the Audit Firm shall not assign a value to such objection that is greater than the greatest value for such objection claimed by a Party or less than the smallest value for such objection claimed by a Party. The decision of the Audit Firm shall be set forth in a written statement delivered to Southcross and BBTS and shall be final and binding on the Parties, absent fraud or manifest error. Judgment may be entered on the decision of the Audit Firm in any court of competent jurisdiction.

(e) The proposed Final Adjustment Statement, in the form agreed to by the Parties as final, in the form deemed final in accordance with Section 2.7(b) or as revised, if necessary, to reflect the final determination by the Audit Firm, as applicable, shall be deemed the “Final Adjustment Statement,” and the Adjustment Amount as determined in accordance therewith is referred to herein as the “Final Adjustment Amount.”

(f) If (i) the Final Adjustment Amount exceeds the Estimated Adjustment Amount, then the Company shall issue to BBTS, effective as of the Closing Date, additional Preferred Equity valued at the amount of such excess or (ii) the Estimated Adjustment Amount exceeds the Final Adjustment Amount, then the Preferred Equity issued to BBTS at Closing shall be reduced (by redemption or otherwise) to reflect the Final Adjustment Amount.

(g) Any actions required by Section 2.7(f) with respect to the Preferred Equity shall be taken within three Business Days after the final determination of the Final Adjustment Statement pursuant to this Section 2.7.

(h) If the Parties submit any disputed amounts to the Audit Firm for resolution as provided in Section 2.7(d) above, the fees and expenses of the Audit Firm (the “Audit Fees”) will be paid by and apportioned between BBTS and Southcross based on the aggregate dollar amount of the dollar value difference in the aggregate between BBTS’ and Southcross’ proposed Adjustment Amounts on the Final Adjustment Statement and inversely related to the relative recovery of Southcross and BBTS, respectively, as determined by the Audit Firm. For example, if the aggregate dollar amount of the amount in dispute is $1,000,000 and the relative recovery of Southcross and BBTS as determined by the Audit Firm is $900,000 and $100,000, respectively, then BBTS will be apportioned 90% of the Audit Fees and Southcross will be apportioned 10% of the Audit Fees. Southcross and BBTS shall promptly, and in any event within five Business Days after the final determination of the Final Adjustment Statement, pay to the Audit Firm the amount of Audit Fees payable respectively by Southcross and BBTS pursuant to this Section 2.7(h).

ARTICLE III

CLOSING ACTIONS

3.1 BBTS’s Closing Actions. On the Closing Date, BBTS shall take the following actions:

(a) BBTS shall deliver to Southcross a counterpart signature page to (i) the LLC Agreement, duly executed by BBTS in its capacity as a member of Holdings GP, and (ii) the LP Agreement, duly executed by BBTS in its capacity as a limited partner of the Company and by Holdings GP in its capacity as the general partner of the Company;

(b) BBTS shall deliver to Southcross the consents and approvals set forth on Schedule 3.1(b);

(c) BBTS shall deliver to Southcross a certificate of good standing with respect to BBTS and each member of the TexStar Group issued by the relevant Governmental Authority of each such Person’s jurisdiction of organization, as of a recent date;

(d) BBTS shall deliver to Southcross a certificate signed by the Secretary of BBTS (or by an authorized officer of its general partner) certifying as to (i) the accuracy and full force and effect of resolutions of (A) the general partner of BBTS authorizing BBTS to enter into the Transactions and the Operative Documents, including the LP Agreement and LLC Agreement, and to perform its obligations thereunder and (B) Holdings GP, in its capacity as the general partner of the Company, authorizing the Company to enter into this Agreement and to perform its obligations hereunder (all of which resolutions shall be attached as one or more exhibits to such certificate) and (ii) the names and signatures of the officers of BBTS (or the officers of its general partner) and the Company (or the officers of Holdings GP in its capacity as general partner of the Company) authorized to sign this Agreement and any other Operative Documents on its behalf;

(e) BBTS shall deliver to Southcross a certificate, dated as of the Closing Date, stating that the conditions specified in Section 2.3(a), (b) and (c) have been satisfied;

(f) BBTS shall deliver to Southcross a certificate (in such form as may be agreed to by Southcross) conforming to the requirements of Treasury Regulations Sections 1.1445-2(b)(2); and

(g) BBTS shall execute and deliver to the Company and Southcross such other documents, agreements or instruments as are contemplated in this Agreement or that may reasonably be necessary or appropriate to evidence the Transactions or to effectuate the purpose or intent of this Agreement.

3.2 Southcross’ Closing Actions. On the Closing Date, Southcross shall take the following actions:

(a) Southcross shall deliver to BBTS a counterpart signature page to (i) the LLC Agreement, duly executed by Southcross in its capacity as a member of Holdings GP, and (ii) the LP Agreement, duly executed by Southcross in its capacity as a limited partner of the Company;

(b) Southcross shall deliver to BBTS the consents and approvals set forth on Schedule 3.2(b);

(c) Southcross shall deliver to BBTS a certificate of good standing with respect to Southcross and each member of the SXE Group issued by the relevant Governmental Authority of each such Person’s jurisdiction of organization, as of a recent date;

(d) Southcross shall deliver to BBTS a certificate signed by the Secretary of Southcross certifying as to (i) the accuracy and full force and effect of resolutions of the board of managers of Southcross authorizing Southcross to enter into the Transactions and the Operative Documents, including the LLC Agreement, and to perform its obligations thereunder and (ii) the names and signatures of the officers of Southcross authorized to sign this Agreement and the other Operative Documents on its behalf;

(e) Southcross shall deliver to BBTS a certificate, dated as of the Closing Date, stating that the conditions specified in Section 2.2(a), (b) and (c) have been satisfied;

(f) Southcross shall deliver to BBTS a certificate (in such form as may be agreed to by BBTS) conforming to the requirements of Treasury Regulations Sections 1.1445-2(b)(2); and

(g) Southcross shall execute and deliver to the Company and BBTS such other documents, agreements or instruments as are contemplated in this Agreement or that may reasonably be necessary or appropriate to evidence the Transactions or to effectuate the purpose or intent of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BBTS REGARDING BBTS, THE COMPANY AND HOLDINGS GP

BBTS hereby represents and warrants to Southcross and the Company as follows:

4.1 Organization and Good Standing. Each of BBTS and the Company (each, a “Specified Person”) and Holdings GP is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized. Each Specified Person has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and any other Operative Document to which it is a party and to consummate the Transactions.

4.2 Power and Authority. The execution and delivery by each Specified Person of this Agreement and the other Operative Documents to which such Specified Person is a party, and the performance of the Transactions by such Specified Person, have been duly authorized by the general partner of each Specified Person, and no other action on the part of such Specified Person or its general partner is necessary to authorize this Agreement and the other Operative Documents to which such Specified Person is a party or to consummate the Transactions. This Agreement and each other Operative Document to which a Specified Person is a party has been or will be duly and validly executed and delivered by the applicable Specified Person and constitutes or will constitute a valid and binding obligation of such Specified Person, enforceable against such Specified Person in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally, (b) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (c) public policy considerations with respect to the enforceability of rights of indemnification.

4.3 No Conflict; Consents.

(a) Except as set forth on Schedule 4.3, neither the execution and delivery by a Specified Person of this Agreement and the other Operative Documents to which such Specified Person is a party nor consummation or performance by a Specified Person of the Transactions will: (i) conflict with or violate any Law binding upon a Specified Person, (ii) conflict with or violate the Organizational Documents of a Specified Person, (iii) conflict with or violate any judgment, decree or order to which a Specified Person is bound, (iv) conflict with or result in a material violation of any provision of or constitute (with or without the giving of notice or the passage of time or both) a material default under or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancelation, acceleration or loss of benefit under, or require any actions (including obtaining the consent of any Person or providing notice to any Person) under, any material Contract to which a Specified Person is a party or by which a Specified Person or any of its properties may be bound or result in the imposition of an Encumbrance on any of the TexStar Interests, other than in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults, terminations, cancelations or accelerations that would not have a Material Adverse Effect on a Specified Person’s ability to perform its obligations under this Agreement or to consummate the Transactions.

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

4.4 Ownership Interests. BBTS owns and has good and valid title to (i) the TexStar Interests and (ii) the Company Interests, in each case, free and clear of any Encumbrances (other than restrictions on transfer pursuant to applicable securities Laws, TexStar LP’s Organizational Documents and Encumbrances under the BBTS Credit Facility that will be released in full at Closing). None of BBTS, the Company or Holdings GP is a party to any voting trusts, proxy or other agreement or understanding with respect to the voting of the TexStar Interests or the Company Interests. Except pursuant to this Agreement, none of BBTS, the Company or Holdings GP is a party to any Contract pursuant to which such Person has, directly or indirectly, granted any option, warrant or other right to any Person to acquire any Equity Interests in TexStar GP, TexStar LP, Holdings GP or the Company.

4.5 Financial Advisors. Except as set forth on Schedule 4.5, no brokerage or finder’s fees or commissions are or will be payable by a Specified Person or its Affiliates (including Holdings GP) to any broker, financial advisor or consultant, finder, placement agent, investment banker, intermediary, bank or other Person with respect to the Transactions.

4.6 No Litigation. There is no Proceeding pending or, to the Knowledge of BBTS, threatened against a Specified Person that seeks to enjoin, restrict, limit or obtain monetary damages in respect of the execution and delivery of this Agreement or the Specified Person’s performance under this Agreement or in respect of the Transactions.

4.7 Company Operations. Each of the Company and Holdings GP was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, and

neither the Company nor Holding GP has (a) engaged (or committed to engage) in any business activities or conducted (or committed to conduct) any operations other than in connection with such transactions or (b) incurred (or committed to incur) any liabilities other than in connection with such transactions.

4.8 Investigation. BBTS has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of entering into the Transactions, and is capable of bearing the economic risk of an investment in the Company and Holdings GP. Except in respect of the Transactions and as contemplated by the Operative Documents, BBTS’s investment in the Company Interests is for its own account and not with a view toward or for sale in connection with any distribution thereof, or with any present intention of distributing or selling the Company Interests, in each case in violation of the Securities Act. BBTS has undertaken such investigation as it has deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the LP Agreement, the LLC Agreement and the other Operative Documents. In respect of the Related Transactions and the composition of the assets of the Company and its Subsidiaries upon consummation of the Transactions, BBTS, in addition to the representations and warranties of Southcross set forth in Article VII upon which it is relying, has had an opportunity to ask questions and receive answers from Southcross regarding the business, properties, prospects and financial condition of the members of the SXE Group.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BBTS REGARDING THE TEXSTAR GROUP AND THE TEXSTAR BUSINESS

BBTS hereby represents and warrants to Southcross and the Company as follows:

5.1 Organization and Qualification.

(a) Each member of the TexStar Group (i) is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized and is duly authorized and qualified to carry on its respective TexStar Business, (ii) is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect on the TexStar Group, and (iii) has the requisite power and authority to own, lease and operate its respective TexStar Assets and to carry on its respective TexStar Business.

(b) BBTS has made available to Southcross true and complete copies of (i) the Organizational Documents of each member of the TexStar Group and (ii) the minute books of each member of the TexStar Group, which contain records of all meetings held of, and other actions taken by, the partners, members, shareholders or other holders of Equity Interests in members of the TexStar Group, the Boards of Directors (or equivalent governing body) of each member of the TexStar Group, and each committee thereof.

(c) Except as has been obtained before the Closing, no action by a member of the TexStar Group is necessary to authorize this Agreement or the other Operative Documents or to consummate the Transactions.

5.2 Capitalization. Except as set forth on Schedule 5.2:

(a) TexStar GP is the sole general partner of TexStar LP, and there has been no other general partner of TexStar LP since its formation. No member of the TexStar Group owns, directly or indirectly, any Equity Interest in any Person (other than with respect to Equity Interests of another member of the TexStar Group). Schedule 5.2 sets forth, for each member of the TexStar Group, the issued and outstanding Equity Interests (including the TexStar Interests) of such Person and the owners thereof.

(b) There are no outstanding options, restricted units, appreciation rights, profits interests, subscriptions, warrants, securities or rights of any kind (whether debt or equity) that are convertible into, exercisable or exchangeable for Equity Interests (including the TexStar Interests) of any member of the TexStar Group, or calls, commitments, pre-emptive or anti-dilutive rights, rights of first offer or refusal or other rights obligating a member of the TexStar Group to issue or sell any securities or Equity Interests (including any TexStar Interests), or otherwise requiring BBTS or a member of the TexStar Group to give any Person the right to participate in the equity or net income of any other member of the TexStar Group.

(c) The respective Equity Interests set forth on Schedule 5.2 (including the TexStar Interests) constitute all of the outstanding Equity Interests in the respective members of the TexStar Group and such Equity Interests are owned by TexStar LP or another member of the TexStar Group free and clear of any and all Encumbrances (other than restrictions on transfer pursuant to applicable securities Laws, Encumbrances under the BBTS Credit Facility that will be released in full at Closing and Encumbrances existing under the Organizational Documents of the members of the TexStar Group). All Equity Interests (including the TexStar Interests) of each member of the TexStar Group (i) were issued in compliance with all Laws and any preemptive or anti-dilutive rights, rights of first offer or refusal and any other statutory or contractual rights of any Person and (ii) have been duly authorized, validly issued, fully paid and are non-assessable (except as such nonassessability may be affected by matters expressly set forth in the Law of the jurisdiction of organization of such Person).

(d) Except for this Agreement and the Organizational Documents of the members of the TexStar Group, there are no agreements, voting trusts or other agreements or understandings between or among BBTS or any member of the TexStar Group to which any such Person is a party or by which it is bound with respect to the transfer or voting of any Equity Interests of a member of the TexStar Group, including the TexStar Interests. Other than this Agreement, there are no Contracts to purchase or redeem any of the outstanding Equity Interests of any member of the TexStar Group.

5.3 No Conflict; Consents.

(a) Except as set forth on Schedule 5.3, neither the execution and delivery by BBTS of this Agreement or by BBTS or any member of the TexStar Group of the other Operative Documents to which they are a Party, nor consummation or performance by BBTS or any member of the TexStar Group of the Transactions will: (i) conflict with or violate any Law binding on a member of the TexStar Group, (ii) conflict with or violate the Organizational Documents of a member of the TexStar Group, (iii) conflict with or violate any judgment, decree or order to which a member of the TexStar Group is bound or (iv) conflict with or result in a material violation of any provision of or constitute (with or without the giving of notice or the passage of time or both) a material default under or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancelation, acceleration or loss of benefit under, or require any actions (including obtaining the consent of any Person or providing notice to any Person) under, any TexStar Contract or result in the imposition of an Encumbrance on any of the TexStar Assets or on any of the Equity Interests of a member of the TexStar Group (including the TexStar Interests), other than in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults, terminations, cancelations or accelerations that would not have a Material Adverse Effect on the TexStar Group, taken as a whole.

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

5.4 TexStar Financial Statements. BBTS has made available to Southcross: (a) an audited consolidated balance sheet of the TexStar Group as of December 31, 2013 and December 31, 2012 and the related audited consolidated statements of income and cash flows for the fiscal years then ended (the “TexStar Historical Financial Statements”) and (b) the TexStar Group’s consolidated unaudited balance sheet as of March 31, 2014 and the related consolidated unaudited statement of income and cash flows for the three-month period then ended (the “TexStar Latest Financial Statement” and, together with the TexStar Historical TexStar Financial Statements, the “TexStar Financial Statements”); provided that the TexStar Historical Financial Statements also include the operations and cash flows of the Related Affiliates and include the proportional consolidation of the TexStar JV Entities. The TexStar Financial Statements fairly present in all material respects the financial condition, results of operations and cash flows of the TexStar Group and the Related Affiliates on a consolidated basis as of the respective dates thereof and for the periods therein referred to, all in accordance with GAAP consistently applied throughout the periods involved. The TexStar Financial Statements have been prepared from and are in accordance with the accounting records of the TexStar Group (and such records are true, correct and accurately reflect in all material respects all transactions engaged in by the members of the TexStar Group). Since January 1, 2012, except as set forth in the TexStar Financial Statements, there has been no material change of the accounting (tax or otherwise) policies, practices or procedures of any member of the TexStar Group. The representations in this Section 5.4, as applicable, are subject, in the case of unaudited financial statements, to normal year-end audit adjustments and accruals and the absence of notes.

5.5 Liabilities; Indebtedness.

(a) Except for liabilities reflected or reserved against in the TexStar Latest Financial Statement, as of the date of this Agreement, no member of the TexStar Group has any liabilities or obligations (whether absolute, accrued, contingent or otherwise) that would be required to be reflected on a balance sheet prepared in accordance with GAAP, except liabilities and obligations that (i) constitute Transaction Expenses, (ii) have been incurred by such member of the TexStar Group in the Ordinary Course of Business since the date of the TexStar Latest Financial Statement, (iii) are set forth on Schedule 5.5(a), (iv) arise under any TexStar Contract (other than liabilities arising from any breach or default under such Contracts) or (v) are not material to the TexStar Group, taken as a whole.

(b) Schedule 5.5(b) sets forth and describes all Third Party Debt of each member of the TexStar Group.

(c) Except as set forth on Schedule 5.5(c), no member of the TexStar Group owes any liabilities or obligations, whether known or unknown, suspected or unsuspected, absolute or contingent, direct or indirect or nominally or beneficially possessed or claimed, to BBTS or its Affiliates, and there are no claims or Proceedings with respect thereto.

5.6 Title to Properties and Assets; Easements.

(a) Each member of the TexStar Group has title to or rights or interests in its real property and personal property, free and clear of all Encumbrances (except Permitted Encumbrances and Encumbrances under the BBTS Credit Facility that will be released in full at Closing), sufficient to allow it to conduct its TexStar Business as currently being conducted in all material respects.

(b) Each member of the TexStar Group has such Easements as are necessary to use, own and operate such Person’s assets in the manner such assets are currently used, owned and operated by such Person, in each case, except as would not reasonably be expected to have a Material Adverse Effect on the TexStar Group. No event has occurred that allows, or after the giving of notice or the passage of time, or both, would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Easements, in each case, except as would not reasonably be expected to have a Material Adverse Effect on the TexStar Group.

(c) Except as set forth on Schedule 5.6, the TexStar Assets constitute all of the assets held by BBTS and its Affiliates for use in the TexStar Business and the TexStar Assets are and at the Closing will be, sufficient to permit the conduct of the TexStar Business in the manner presently conducted in all material respects and for the performance of all obligations of the TexStar Group (or any member thereof) under any Contracts relating to the TexStar Business.

5.7 Contracts.

(a) (I) Schedule 5.7(a)(i) contains a list of the following contracts to which, as of the date hereof, any member of the TexStar Group is a party or bound and (II) Schedule 5.7(a)(ii) contains a list of the following contracts to which, after giving effect to the TexStar Rich Gas Restructuring, any member of the TexStar Group will be a party or bound (each such contract contemplated by clause (II) being a “TexStar Contract”):

(i) any Contract that constitutes a commitment relating to any outstanding Indebtedness of any member of the TexStar Group (in either case, whether incurred, assumed, guaranteed or secured by any asset) other than agreements solely between or among one or more of members of the TexStar Group or BBTS;

(ii) each natural gas transportation, gathering, treating, processing or other contract, each natural gas liquids fractionation, transportation, purchase, sales or storage Contract and each natural gas purchase Contract that during the 12 months ended March 31, 2014 individually involved, or is reasonably expected in the future to involve, annual revenues received by or payments made by any member of the TexStar Group in excess of $5,000,000 in the aggregate;

(iii) each Contract for lease of personal property or real property involving aggregate payments in excess of $1,000,000 in any calendar year;

(iv) each Contract (other than a Benefit Plan) containing a non-compete or similar type of provision that, following the Closing, would by its terms materially restrict the ability of the Company or any member of the TexStar Group to compete in any line of business or with any Person or in any geographic area during any period of time after the Closing and any Contract that grants to any Person any right of first refusal, right of first offer or similar right in any material asset or property of any member of the TexStar Group;

(v) each Contract involving the pending acquisition or sale of (or option to purchase or sell) any assets or properties of any member of the TexStar Group, other than an acquisition or sale in the ordinary course of business consistent with past practice;

(vi) each Contract for futures, swap, collar, put, call, floor, cap, option, or other Contract that is intended to reduce or eliminate the fluctuations in the prices of commodities, including natural gas, natural gas liquids, crude oil and condensate that will be binding on any member of the TexStar Group after the Closing;

(vii) each partnership, joint venture or limited liability company agreement to which any member of the TexStar Group is a party;

(viii) any collective bargaining, works council or similar labor Contract (a “Labor Agreement”) to which any member of the TexStar Group is a party or is subject;

(ix) any Contract for employment with any employee of the TexStar Group;

(x) any Contract (other than Contracts of the type described in Section 5.7(a)(ii)) for the purchase by any member of the TexStar Group of materials, supplies, goods, services, equipment or other assets with a value in excess of $5,000,000 that cannot be terminated by such member of the TexStar Group on not more than 90 days’ notice without penalty; and

(xi) each Contract under which any member of the TexStar Group has advanced or loaned any amount of money to any of its officers, directors, employees or consultants (other than with respect to immaterial loans or advances to employees in the Ordinary Course of Business).

(b) BBTS has made available to Southcross true and complete copies of each TexStar Contract. No member of the TexStar Group, nor to the Knowledge of BBTS is any other Person, in material breach or default in the performance of its duties or obligations under any TexStar Contract.

(c) Except as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally, (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (iii) public policy considerations with respect to the enforceability of rights of indemnification, each TexStar Contract is in full force and effect against, and constitutes the enforceable obligations of, the member of the TexStar Group party to such Contract and, to the Knowledge of BBTS, the other parties thereto, and each of the TexStar Contracts will continue to be in full force and effect against, and constitute the enforceable obligations of, the member of the TexStar Group party to such Contract and the other parties thereto on identical terms immediately after the Closing. Neither BBTS nor any member of the TexStar Group has received written notice of any material violation or default under (or any condition which with the passage of time or the giving of notice would cause such a material violation of or default under) any TexStar Contract.

5.8 Permits. Each member of the TexStar Group has all material Permits necessary for the conduct of the TexStar Business as currently being conducted, and such Permits are valid and in full force and effect. Neither BBTS nor any member of the TexStar Group has received any written notice of Proceedings relating to the revocation, modification, cancelation, termination or nonrenewal of any material Permit. No member of the TexStar Group is in default under, and to the Knowledge of BBTS, no condition exists that with or without the giving of notice or the passage of time, or both, would constitute a default under, any material Permit. All applications required to have been filed for the renewal of any material Permits have been duly filed on a timely basis with the appropriate Governmental Authorities. All notices, applications

or other actions, if any, required to ensure that none of such material Permits shall be suspended, terminated, impaired, adversely modified or become terminable, in whole or in part, as a result of any of the Transactions, have been or will be timely completed, and none of such material Permits shall be suspended, terminated, impaired, adversely modified or become terminable, in whole or in part, as a result of any of the Transactions.

5.9 Environmental Matters. Except as set forth on Schedule 5.9:

(a) except as would not reasonably be expected to result in any member of the TexStar Group incurring material liabilities, (i) no written claim, notice, order, request for information, complaint, directive or penalty has been received by BBTS or any member of the TexStar Group with respect to the TexStar Assets or the TexStar Business and (ii) there are no judicial, administrative or other Proceedings pending or, to the Knowledge of BBTS, threatened or reasonably anticipated, and, to the Knowledge of BBTS, there are no conditions or circumstances that would reasonably be expected to result in the receipt of such written claim, notice, order, request for information, directive, complaint, penalty or judicial, administrative or other Proceedings, which, in the case of each of (i) and (ii), allege a violation of or result in liability under any Environmental Law by or of a member of the TexStar Group with respect to the TexStar Assets or the TexStar Business;

(b) the TexStar Assets and the operation of the TexStar Business are in compliance in all material respects with applicable Environmental Laws, which includes obtaining, maintaining and complying with all material Permits necessary for the operation of the TexStar Business under applicable Environmental Laws;

(c) to the Knowledge of BBTS, there are no written environmental reports, studies, tests, analyses or other material documents specifically addressing unresolved environmental liabilities related to the ownership or operation of the TexStar Assets or environmental conditions of the TexStar Assets (i) that are in the possession or under the control of, or that are accessible by, BBTS or any member of the TexStar Group or (ii) that are in the possession of any Person other than BBTS or a member of the TexStar Group, in each case, that have not been made available to Southcross (other than, in the case of each of (i) and (ii) of this paragraph, any privileged reports or documents that have been indicated as such in a written privilege log made available to Southcross); and

(d) except as would not reasonably be expected to result in any member of the TexStar Group incurring material liabilities, the operations of the TexStar Business have not resulted in a Release of any Hazardous Substances at any real property currently or formerly owned, operated or leased by a member of the TexStar Group requiring any reporting, investigation, remediation or other response action under any Environmental Laws, and, to the Knowledge of BBTS no such Release of any Hazardous Substance has occurred at any real property currently or formerly owned, operated or leased by a member of the TexStar Group.

5.10 Taxes. Except as set forth on Schedule 5.10:

(a) All Tax Returns required to be filed pursuant to applicable Law by or with respect to BBTS and each member of the TexStar Group have been timely filed with the appropriate Governmental Authority (taking into account any applicable extensions), and each such Tax Return is complete and accurate in all material respects. All material amounts of Taxes owed by BBTS and each member of the TexStar Group (or for which BBTS or a member of the TexStar Group may be liable) that have become due and payable under applicable Law have been timely paid in full, whether or not shown on any Tax Return.

(b) There are no actions pending by any Governmental Authority with respect to BBTS or any member of the TexStar Group for any unpaid Taxes, and no Tax assessment, deficiency or adjustment has been asserted, proposed or, to BBTS’s Knowledge, threatened with respect to BBTS or any member of the TexStar Group. Neither BBTS nor any member of the TexStar Group has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the assessment or collection of Taxes for which BBTS or any member of the TexStar Group may be liable, and there is not in force any extension of time with respect to the due date for the filing of any Tax Return of or with respect to BBTS or any member of the TexStar Group. No Tax audit, examination, judicial proceeding or other Proceeding is pending or, to BBTS’s Knowledge, threatened with respect to any Taxes due from or with respect to BBTS or any member of the TexStar Group.

(c) To the extent relevant to BBTS or any member of the TexStar Group, all Tax withholding and deposit requirements imposed on or with respect to BBTS and/or each other member of the TexStar Group have been satisfied in full in all material respects and, to the extent required, any withheld Taxes have been timely paid to the proper Governmental Authority.

(d) Neither BBTS nor any member of the TexStar Group has been a party to a “listed transaction,” as such term is defined in Treasury Regulation § 1.6011-4(b)(2).

(e) There are no Encumbrances with respect to Taxes on the TexStar Interests, except for Encumbrances for Taxes that are not yet due and payable.

(f) Since its inception, BBTS and each member of the TexStar Group has at all times been properly classified as a partnership or a disregarded entity for U.S. federal income tax and any applicable state and local Tax purposes (other than for Texas franchise tax purposes).

(g) There are no outstanding appeals, requests for rulings, claims for refund or credit, or subpoenas relating to Taxes of BBTS or any member of the TexStar Group.

(h) None of BBTS (as related to the TexStar Group) or any member of the TexStar Group has received any claim in writing from any Governmental Authority in a jurisdiction in which such Person does not file Tax Returns that it may be subject to taxation by (or liable for Tax in) that jurisdiction.

(i) None of BBTS (as related to the TexStar Group) or any member of the TexStar Group is a party to (or currently negotiating or pursuing) any rulings, closing agreements or similar agreements between BBTS or any member of the TexStar Group, on the one hand, and any tax authority, on the other hand, that could reasonably be expected to increase materially the Taxes imposed on a member of the TexStar Group for any period ending after the Closing Date.

(j) There is no Tax sharing, allocation or indemnification agreement or any similar contract or arrangement with respect to Taxes of a member of the TexStar Group that will not be terminated as of the Closing Date, other than customary provisions of commercial agreements and arrangements not primarily related to Taxes such as leases, credit facilities, customer agreements and loan agreements.

(k) Neither BBTS nor any member of the TexStar Group (i) has been a member of any Consolidated Group (other than a combined group of BlackBrush Oil & Gas, L.P. for Texas franchise tax purposes) or (ii) has any liability for the Taxes of any Person under Treasury Regulations § 1.1502-6 (or any corresponding provisions of state, local or foreign Law), or as a transferee, successor, by Contract or otherwise, except for joint and several liability for Texas franchise Taxes of the combined group of which BBTS or the member of the TexStar Group is a member.

(l) No power of attorney that is currently in force has been granted with respect to any matter relating to Taxes that could affect a member of the TexStar Group.

(m) To the Knowledge of BBTS, all of the assets of each member of the TexStar Group have been properly listed and described on the property tax rolls for the Tax units in which such assets are located and no portion of such assets constitutes omitted property for property tax purposes.

5.11 Compliance with Law. Except for Environmental Laws, Laws requiring the obtaining or maintenance of a Permit and Tax matters, that are the subject of Section 5.8, Section 5.9 and Section 5.10, respectively, (a) to the Knowledge of BBTS, each member of the TexStar Group is in compliance in all material respects with all applicable Laws and (b) no member of the TexStar Group has received written notice of any material violation of any applicable Law.

5.12 Governmental Approvals. Except as set forth on Schedule 5.12, no consent, approval, order, or authorization of, or declaration, filing, notice to or registration with, any Governmental Authority is required to be obtained or made by a member of the TexStar Group in connection with the execution, delivery or performance by BBTS of this Agreement or by BBTS or any other member of the TexStar Group of any other Operative Document.

5.13 Proceedings. Other than as set forth on Schedule 5.13, there are no material Proceedings pending or, to the Knowledge of BBTS, threatened against, any member of the TexStar Group or its business or the TexStar Assets. There is no unsatisfied judgment, court

order, arbitral award or administrative decision against a member of the TexStar Group, its business or the TexStar Assets, and no order has been made or petition presented or resolution passed or other steps taken for the winding up or dissolution of any member of the TexStar Group. There has been no appointment, and no such appointment is planned by a member of the TexStar Group, of an administrator, receiver, liquidator or liquidation committee or like body or officer of a member of the TexStar Group or the TexStar Assets. To the Knowledge of BBTS, there is no basis for any Proceeding which, if adversely determined against a member of the TexStar Group or its Representatives (in the capacity in which such Representative is affiliated with such Person), would reasonably be expected to result in a loss to the TexStar Group in excess of $500,000.

5.14 Absence of Changes. Except as set forth on Schedule 5.14:

(a) Since the date of the TexStar Latest Financial Statement, there has not been any event or occurrence which has had or which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the TexStar Group.

(b) Since the date of the TexStar Latest Financial Statement, except for this Agreement and the Transactions, each member of the TexStar Group has carried on and operated its respective businesses in all material respects in the Ordinary Course of Business and from such date through the date hereof, no member of the TexStar Group has:

(i) amended its Organizational Documents;

(ii) transferred, issued, sold or disposed of any of its Equity Interests (including any options, warrants, or other securities convertible into or exercisable or exchangeable for such Equity Interests, or other rights of any kind with respect to such Equity Interests) other than transfers, issuances, sales or dispositions to another member of the TexStar Group;

(iii) adopted a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization;

(iv) made any material change in such Person’s accounting methods, policies or procedures, other than as required by GAAP or a change in applicable Law;

(v) made any acquisitions (by merger, consolidation, acquisition of equity interests or otherwise) of assets, properties, equity interests or business of any other Person;

(vi) other than in the Ordinary Course of Business, sold, transferred, assigned, disposed of, leased, pledged or encumbered any assets;

(vii) commenced or settled any litigation;

(viii) made any loan, advance or capital contribution to, or other investment in, any Person that is not a member of the TexStar Group;

(ix) paid, or agreed to pay upon the satisfaction of any condition, any increase in the compensation of any employee of the TexStar Group other than in the Ordinary Course of Business, or agreed to pay upon the satisfaction of any condition any severance or termination pay to any such Persons, except as specifically agreed to in writing between Southcross and BBTS as part of the Transactions;

(x) adopted, established, entered into, amended, modified or agreed to amend or modify (or announced an intention to establish, amend or modify) or terminated any Benefit Plan or become liable with respect to any Benefit Plan with respect to which such member of the TexStar Group was not liable immediately before the date of the TexStar Latest Financial Statement;

(xi) made any material amendment to any Tax Return, or made, changed or rescinded any Tax election, in each case, which would reasonably be expected to materially increase the Tax liability of the TexStar Group or the direct or indirect owners of the TexStar Group for any taxable period beginning after the Closing Date;

(xii) other than in the Ordinary Course of Business, incurred any Indebtedness or incurred, assumed, guaranteed or otherwise become liable or responsible (whether directly, contingently or otherwise) for any Indebtedness or other obligations of any Person (other than a member of the TexStar Group) that will not be extinguished at Closing;

(xiii) committed to any capital expenditures outside of the Ordinary Course of Business after March 31, 2014, to the extent not included in the TexStar Capex Budget and in excess of $2,000,000 individually or $10,000,000 in the aggregate;

(xiv) suffered any material damage, destruction or loss affecting any assets of any member of the TexStar Group, but in each case only to the extent not covered by payments or approved claims under the TexStar Group’s insurance policies;

(xv) accelerated, terminated, materially amended, modified or canceled any TexStar Contract, except for any such accelerations, terminations, amendments, modifications or cancelations in the Ordinary Course of Business and that individually would not reasonably be expected to have an adverse impact on the TexStar Group in excess of $2,000,000 in any fiscal year; or

(xvi) agreed or committed to do any of the foregoing.

5.15 Transactions with Interested Persons. Except as set forth on Schedule 5.15, none of BBTS, an employee or officer of a member of the TexStar Group (or spouse or any child

thereof or other related person (by blood or marriage)) or any Affiliate of BBTS or any member of the TexStar Group owns, directly or indirectly, on an individual or joint basis, (a) any material interest in, or serves as an officer, director or employee of, any customer or supplier of or any Person that has a Contract with a member of the TexStar Group or (b) any material interest in any asset, tangible or intangible, that is used (or contemplated to be used) in the TexStar Business, nor has any such Person engaged in any material transaction, arrangement or understanding with a member of the TexStar Group other than as contemplated by this Agreement.

5.16 Financial Advisors. Except as set forth on Schedule 5.16, no brokerage or finder’s fees or commissions are or will be payable by a member of the TexStar Group to any broker, financial advisor or consultant, finder, placement agent, investment banker, intermediary, bank or other Person in connection with the Transactions.

5.17 Employee Matters.

(a) Except as disclosed on Schedule 5.17 or rights that are extinguished prior to or at Closing, neither the execution and delivery of this Agreement nor the consummation of the Transactions will result in the acceleration or creation of any rights of any current or former employee of a member of the TexStar Group to payments or benefits or increases in or funding of any payments or benefits or any loan forgiveness.

(b) Except as would not reasonably be expected to result in a Material Adverse Effect on a member of the TexStar Group, (i) to the Knowledge of BBTS, each member of the TexStar Group is in compliance with all applicable labor and employment Laws including all Laws, rules, regulations, orders, rulings, decrees, judgments and awards relating to employment discrimination, payment of wages, overtime compensation, immigration, occupational health and safety, wrongful discharge, collective bargaining, discrimination, civil rights, workers’ compensation, the Fair Labor Standards Act and the Worker Adjustment and Retraining Notification Act or any similar state or local mass-layoff or plant-closing law (collectively, the “WARN Act”), (ii) no action, suit, complaint, charge, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority, brought by or on behalf of any employee, prospective or former employee, individual independent contractor or labor organization or other representative of the employees or of any prospective or former employees of any member of the TexStar Group is pending or, to the Knowledge of BBTS, threatened against any member of the TexStar Group and (iii) no member of the TexStar Group is subject to any employment-related audit, investigation, lawsuit or other challenge or otherwise bound by any material consent decree, order or agreement with any current or former employee or individual independent contractor or any Governmental Authority relating to current or former employees or individual independent contractors of any member of the TexStar Group.

(c) No employee of the TexStar Group is covered by, and no member of the TexStar Group is party to, any Labor Agreement. No collective labor organizing activity is ongoing or threatened with respect to any employee of the TexStar Group, and no such activity has occurred or been threatened within the past five years. No pickets, strikes, slowdowns, work stoppages, other job actions, lockouts, arbitrations, grievances or other

labor disputes involving any of the employees of the TexStar Group is pending or threatened, and no such activity has occurred or been threatened within the past five years.

(d) There has been no “mass layoff” or “plant closing,” as defined under the WARN Act, with respect to any employee of the TexStar Group within the six-month period immediately preceding the Closing.

5.18 Benefit Plans.

(a) Schedule 5.18(a) sets forth a true and complete list of all material Benefit Plans that are or are required to be sponsored, maintained or contributed to by each member of the TexStar Group or any other corporation or trade or business under common control with any of them or treated as a single employer with any of them as determined under Sections 414(b), (c), (m) or (o) of the Code (an “TexStar ERISA Affiliate”), or under which any of them or any TexStar ERISA Affiliate has any current or future obligation or liability, contingent or otherwise with respect to a present or former officer, employee, agent or consultant of any member of the TexStar Group or under which any present or former officer, employee, agent or consultant of any member of the TexStar Group, or such present or former officer’s, employee’s, agent’s or consultant’s dependents or beneficiaries, have any current or future right to benefits. For purposes of this Section 5.18, the term “Benefit Plans” refers to the Benefit Plans applicable to the TexStar Group, and shall not refer to the Benefit Plans of any member of the SXE Group.

(b) Schedule 5.18(b) identifies as such all Benefit Plans, if any, which are (i) qualified under Section 401(a) of the Code, (ii) severance, continuation pay, termination pay or deferred compensation arrangements (including any such arrangements contained in an employment, advisory or consulting agreement), (iii) welfare benefit plans within the meaning of Section 3(1) of ERISA and (iv) plans that provide benefits of any kind after termination of employment.

(c) With respect to each Benefit Plan, BBTS has made available to Southcross true and complete copies of all current written documents setting forth the terms and conditions of such Benefit Plan (or a written summary of such terms in the case of an unwritten Plan) and, in the case of each Benefit Plan subject to ERISA, copies of the plan document, the most current summary plan description and any modifications thereto, and if applicable, the most recently filed IRS Form 5500 (including attachments), the most recent trust agreement, insurance or annuity contract or other funding vehicle, the most recent actuarial valuation and report or financial report, as applicable, the most recent IRS determination or opinion letter and other material related documents applicable to such Benefit Plan.

(d) No member of the TexStar Group or any TexStar ERISA Affiliate has within the past six years maintained, had an obligation to contribute to or has had any other liability, contingent or otherwise, with respect to a “defined benefit plan” as defined in Section 3(35) of ERISA, a pension plan subject to the minimum funding standards of

Section 302 of ERISA or Section 412 of the Code, or a “multiemployer plan” as defined in Section 3(37) of ERISA. No other trade or business (other than a member of the TexStar Group or a TexStar ERISA Affiliate) is, or, at any time within the past six years, has been treated, together with any member of the TexStar Group or any TexStar ERISA Affiliate, as a single employer under Section 414 of the Code or Section 4001 of ERISA.

(e) There does not exist any condition, there has not occurred any event, and there has not been any omission, with respect to the sponsorship, funding or administration of any Benefit Plan, which has or could result in a material Encumbrance upon or material claim with respect to any of the TexStar Assets, or the Company’s being liable for any contribution, withdrawal liability, benefit, claim, settlement, Tax, penalty, payment or liability of any material nature. All contributions required to be made under the terms of any Benefit Plan (including all employer contributions and employee salary reduction contributions) have been timely made in accordance with applicable Law, including 29 C.F.R. § 2510.3-102.

(f) Each group health plan that provides health coverage to any present or former employee of a member of the TexStar Group has operated in compliance, except for any immaterial error, with all requirements of Sections 601 through 608 of ERISA and Section 4980B of the Code and the regulations promulgated thereunder (and any applicable similar state Law), relating to the continuation of coverage under certain circumstances in which coverage would otherwise cease.

(g) Each Benefit Plan has at all times been maintained, administered and operated in all material respects in accordance with its terms, all applicable provisions of ERISA (including the “fiduciary responsibility” and “prohibited transaction” rules thereof), the Code and other applicable Laws, and each Benefit Plan intended to be a qualified plan under Section 401(a) of the Code and each trust forming a part thereof is the subject of a favorable determination or opinion letter from the Internal Revenue Service as to the qualification under the Code of such Benefit Plan and the tax-exempt status of such related trust, and nothing has occurred since the date of such determination letter that could reasonably be expected to adversely affect the qualification of such Benefit Plan or the tax-exempt status of such related trust. There are no active suits, governmental investigations or proceedings pending or, to the Knowledge of BBTS, threatened against or concerning any Benefit Plan or against any fiduciary thereof respecting the fiduciary’s duties to the Benefit Plan or any trust under the Benefit Plan. There is no action or claim (other than routine claims for benefits made in the ordinary course of Plan administration) pending or, to the Knowledge of BBTS, threatened against or with respect to any Benefit Plan and, to the Knowledge of BBTS, no facts exist which could give rise to any such action or claim.

(h) No member of the TexStar Group or any TexStar ERISA Affiliate has ever maintained or contributed to a trust that is subject to Section 501(c)(9) of the Code and none of the Benefit Plans that are welfare benefit plans within the meaning of Section 3(1) of ERISA provide for health or life insurance or other welfare-type benefits for current or future retired or terminated directors, officers or employees of a member of the TexStar Group or any TexStar ERISA Affiliate or their beneficiaries, except to the extent

required under ERISA Section 601 et seq., or by Section 4980B of the Code and the regulations promulgated thereunder or other similar state Law, and, except as disclosed on Schedule 5.18(h), at the sole expense of the participant.

(i) All insurance premiums due or payable with respect to the periods from the end of the most recent Benefit Plan or contract year to and including the Closing Date have been paid or fully accrued in the TexStar Financial Statements. No such premium is overdue or in a grace period for late payments.

(j) All contributions, expenses and unfunded liabilities for prior plan years which are not yet due and with respect to the current Benefit Plan year for the period ending on the Closing Date relating to all of the Benefit Plans have been made or accrued in accordance with GAAP in the TexStar Financial Statements, and, to the extent required, in the TexStar Financial Statements of the applicable Benefit Plan.

(k) Any fidelity bond required to be obtained under ERISA with respect to any Benefit Plan has been obtained and is in full force and effect.

(l) The consummation of the Transactions will not (either alone or in connection with the occurrence of any additional or subsequent events) result in a nondeductible expense pursuant to Section 280G of the Code or an excise tax to any “disqualified individual” pursuant to Section 4999 of the Code.

(m) Except as disclosed on Schedule 5.18(m), neither the execution of this Agreement nor other Operative Documents by the members of the TexStar Group and the performance by each of them hereunder or thereunder, nor the consummation of the Transactions will (i) entitle any employees, former employees or other service providers of any member of the TexStar Group or any TexStar ERISA Affiliate to severance pay or severance benefits, (ii) accelerate the time of payment or vesting, trigger any payment of compensation or benefits or forgiveness of indebtedness under, increase the amount payable under or trigger any other obligation pursuant to, any of the Benefit Plans, (iii) obligate the Company to continue any of the Benefit Plans or (iv) result in any breach or violation of, or a default under, any of the Benefit Plans.

(n) No provision of any Benefit Plan would prevent the amendment or termination of any such Benefit Plan assumed or continued by the Company pursuant to the Transactions without material liability, other than the (i) the obligation for ordinary benefits accrued before the termination of such Benefit Plan and (ii) payment of any insurance premiums and plan administration fees for the remaining term of the applicable contract. No action or omission of any member of the TexStar Group or any TexStar ERISA Affiliate, or any manager, officer, or agent thereof in any way restricts, impairs or prohibits any of the members of the TexStar Group or any TexStar ERISA Affiliate, or any successor, from amending, merging or terminating any of the Benefit Plans in accordance with the express terms of any such plan and applicable Law.

(o) No Person that was engaged by a member of the TexStar Group or any TexStar ERISA Affiliate as an independent contractor or in any other non-employee

capacity can or will be characterized or deemed to be an employee of a member of the TexStar Group or any TexStar ERISA Affiliate under applicable laws, statutes, rules, regulations and administrative proceedings for any purpose whatsoever including for purposes of federal, state and local income taxation, workers’ compensation and unemployment insurance and eligibility for the Benefit Plans or for purposes of applying any fee, Tax or penalty under applicable Law.

5.19 Insurance Coverage. Schedule 5.19 sets forth a list of all insurance policies, formal self-insurance programs and bonds currently maintained by each member of the TexStar Group. All such insurance policies and bonds have been made available to Southcross. All such insurance policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the Closing have been paid and no notice of cancelation or termination has been received with respect to any such insurance policy.

5.20 Intellectual Property. No member of the TexStar Group has received any written notice asserting that the conduct of the TexStar Business infringes upon or violates any Intellectual Property of any Person. Schedule 5.20 lists all material software licenses, patents and other registered Intellectual Property used in the conduct of the TexStar Business, other than programs existing on any personal computers owned by members of the TexStar Group, back-office accounting software or otherwise generally available off the shelf software. Each member of the TexStar Group owns or has valid rights to use all the Intellectual Property of such Person without conflict with the rights of others.

5.21 Customers and Suppliers. Schedule 5.21 sets forth a true and complete list of the top ten customers and top ten suppliers to the TexStar Group, taken as a whole, as measured by the dollar amount of purchases therefrom or thereby for the fiscal year ended December 31, 2013. None of such customers or suppliers has provided to any member of the TexStar Group any written notice which canceled, materially modified or otherwise terminated its relationship with such Person or materially decreased its services, supplies or materials to such Person or its usage or purchase of the services or products of such Person.

5.22 Current Business. Except as set forth on Schedule 5.22, no member of the TexStar Group has engaged in any material business activity other than the TexStar Business.

5.23 Condemnation; Casualty Loss. Since the date of the TexStar Latest Financial Statement, there has been no condemnation, seizure, damage, destruction or other casualty loss (whether or not covered by insurance) affecting any of the TexStar Assets in any material respect which has not subsequently been repaired, replaced or restored. Neither BBTS nor any member of the TexStar Group has received written notice of and there is not any pending or, to the Knowledge of BBTS, threatened or contemplated condemnation Proceeding affecting any of the TexStar Assets (or any portion thereof), or of any sale or other disposition of any of the TexStar Assets (or any portion thereof) in lieu of condemnation.

5.24 Books and Records. The books and records of each member of the TexStar Group that are necessary for the ownership and operation of the TexStar Assets have been maintained in accordance with prudent industry practice and such books and records have been made available to Southcross.

5.25 No Representations or Warranties Implied; Independent Investigation; Forecasts.

(a) EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV AND THIS ARTICLE V OR ELSEWHERE IN THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, NEITHER BBTS NOR ANY OTHER PERSON HAS MADE, DOES NOT MAKE AND BBTS SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (i) THE VALUE, NATURE, QUALITY, ADEQUACY OR CONDITION OF THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS, (ii) THE INCOME TO BE DERIVED FROM THE TEXSTAR INTERESTS, THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS, (iii) THE SUITABILITY OF THE TEXSTAR ASSETS FOR ANY ACTIVITIES OR USES WHICH THE COMPANY (DIRECTLY OR INDIRECTLY) MAY CONDUCT THEREON OR (iv) THE MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF THE TEXSTAR INTERESTS, THE TEXSTAR BUSINESS OR THE TEXSTAR ASSETS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE IV, THIS ARTICLE V OR ELSEWHERE IN THIS AGREEMENT OR ANY OPERATIVE DOCUMENT, EACH OF SOUTHCROSS AND THE COMPANY FURTHER ACKNOWLEDGES AND AGREES THAT THE COMPANY (i) IS ACQUIRING THE TEXSTAR INTERESTS AND ACCEPTING THE TEXSTAR ASSETS ON AN AS IS, WHERE IS CONDITION AND BASIS WITH ALL FAULTS AND (ii) WITHOUT LIMITING THEIR RIGHTS IN THE CASE OF KNOWING AND INTENTIONAL FRAUD OR WILLFUL MISCONDUCT, WILL NOT ASSERT ANY CLAIMS OR TAKE ANY POSITION IN ANY LEGAL PROCEEDING THAT IS INCONSISTENT WITH THIS SECTION 5.25.

(b) BBTS HAS CONDUCTED ITS OWN INDEPENDENT INVESTIGATION, REVIEW AND ANALYSIS OF THE BUSINESS, RESULTS OF OPERATIONS, PROSPECTS, CONDITION (FINANCIAL OR OTHERWISE) OR ASSETS OF THE SXE GROUP, AND ACKNOWLEDGES THAT IT HAS BEEN PROVIDED ADEQUATE ACCESS TO THE PERSONNEL, PROPERTIES, ASSETS, PREMISES, BOOKS AND RECORDS, AND OTHER DOCUMENTS AND DATA OF THE SXE GROUP FOR SUCH PURPOSE. BBTS ACKNOWLEDGES AND AGREES THAT, IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS, BBTS HAS RELIED SOLELY UPON ITS OWN INVESTIGATION AND THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SOUTHCROSS SET FORTH IN ARTICLE VI AND ARTICLE VII (INCLUDING THE RELATED PORTIONS OF THE SCHEDULES) AND IS NOT RELYING ON THE ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION, MATERIALS, REPRESENTATIONS OR WARRANTIES PROVIDED BY OR ON BEHALF OF SOUTHCROSS OR THE SXE GROUP.

(c) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BBTS ACKNOWLEDGES AND EXPRESSLY CONFIRMS THAT BBTS HAS RECEIVED FROM SOUTHCROSS AND THE SXE GROUP CERTAIN PROJECTIONS, INCLUDING PROJECTED BALANCE SHEETS AND STATEMENTS OF OPERATING REVENUES AND INCOME AND CERTAIN BUSINESS PLAN INFORMATION RELATED TO THE SXE GROUP. BBTS ACKNOWLEDGES THAT (i) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS, (ii) BBTS IS FAMILIAR WITH SUCH UNCERTAINTIES, (iii) BBTS IS TAKING FULL RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS, UNDERLYING ESTIMATES, PROJECTIONS AND FORECASTS FURNISHED TO IT) AND (iv) BBTS SHALL HAVE NO CLAIM AGAINST SOUTHCROSS OR ANY MEMBER OF THE SXE GROUP WITH RESPECT THERETO.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF SOUTHCROSS REGARDING SOUTHCROSS

Southcross hereby represents and warrants to BBTS and the Company as follows:

6.1 Organization and Good Standing. Southcross is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and any other Operative Document to which it is a party and to consummate the Transactions.

6.2 Power and Authority. The execution and delivery by Southcross of this Agreement and the other Operative Documents to which it is a party, and the performance of the Transactions by Southcross, have been duly authorized by the board of managers of Southcross, and no other action on the part of Southcross is necessary to authorize this Agreement and the other Operative Documents to which Southcross is a party or to consummate the Transactions. This Agreement and each other Operative Document to which Southcross is a party has been or will be duly and validly executed and delivered by Southcross and constitutes or will constitute a valid and binding obligation of Southcross enforceable against Southcross in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally, (b) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (c) public policy considerations with respect to the enforceability of rights of indemnification.

6.3 No Conflict; Consents.

(a) Except as set forth on Schedule 6.3, neither the execution and delivery by Southcross of this Agreement and the other Operative Documents to which it is a party

nor consummation or performance by Southcross of the Transactions will: (i) conflict with or violate any Law binding upon Southcross, (ii) conflict with or violate the Organizational Documents of Southcross, (iii) conflict with or violate any judgment, decree or order to which Southcross is bound, (iv) conflict with or result in a material violation of any provision of or constitute (with or without the giving of notice or the passage of time or both) a material default under or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancelation, acceleration or loss of benefit under, or require any actions (including obtaining the consent of any Person or providing notice to any Person) under, any material Contract to which Southcross is a party or by which Southcross or any of its properties may be bound or result in the imposition of an Encumbrance on any of the SXE Interests, other than in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults, terminations, cancelations or accelerations that would not have a Material Adverse Effect on Southcross’ ability to perform its obligations under this Agreement or to consummate the Transactions.

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

6.4 SXE Interests. Southcross owns and has good and valid title to the SXE Interests, free and clear of any Encumbrances (other than restrictions on transfer pursuant to applicable securities Laws and the Organizational Documents applicable to the SXE Interests). Southcross is not a party to any voting trusts, proxy or other agreement or understanding with respect to the voting of the SXE Interests held by Southcross. Except pursuant to this Agreement, Southcross is not party to any Contract pursuant to which Southcross has, directly or indirectly, granted any option, warrant or other right to any Person to acquire any Equity Interests in SXE GP or SXE.

6.5 Financial Advisors. Except as set forth on Schedule 6.5, no brokerage or finder’s fees or commissions are or will be payable by Southcross or its Affiliates to any broker, financial advisor or consultant, finder, placement agent, investment banker, intermediary, bank or other Person with respect to the Transactions.

6.6 No Litigation. There is no Proceeding pending or, to the Knowledge of Southcross, threatened against Southcross that seeks to enjoin, restrict, limit or obtain monetary damages in respect of the execution and delivery of this Agreement or Southcross’ performance under this Agreement or in respect of the Transactions.

6.7 Acquisition of Membership Interests.

(a) Southcross has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the membership interests of the Company being issued to Southcross in connection with the Southcross Contribution (the “SXE Company Interest”), and is capable of bearing the economic risk of such investment. Southcross is an “accredited investor” as that term is defined in Rule 501 of Regulation D (without regard to Rule 501(a)(4)) promulgated

under the Securities Act. Southcross is acquiring the SXE Company Interest for investment for its own account and not with a view toward or for sale in connection with any distribution thereof, or with any present intention of distributing or selling the SXE Company Interest (except with respect to the proposed distribution of the SXE Company Interest immediately after the Closing to the owners of Southcross as of the date hereof). Southcross does not have any Contract with any Person to sell, transfer or grant participations to such Person or to any other Person with respect to the SXE Company Interest. Southcross acknowledges and understands that (i) its acquisition of the SXE Company Interest has not been registered under the Securities Act in reliance on an exemption therefrom and (ii) the SXE Company Interest will, upon such acquisition, be characterized as “restricted securities” under state and federal securities Laws. Southcross further acknowledges and understands that the SXE Company Interest may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of except pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act, and in compliance with other applicable state and federal securities Laws and the LLC Agreement.

(b) Southcross has undertaken such investigation as it has deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the LLC Agreement and the other Operative Documents, and the acquisition of the SXE Company Interest and the consummation of the Related Transactions. In respect of the Related Transactions and the composition of the assets of the Company and its Subsidiaries upon consummation of the Transactions, Southcross, in addition to the representations and warranties of BBTS in Article V upon which it is relying, Southcross has had an opportunity to ask questions and receive answers from BBTS regarding the business, properties, prospects and financial condition of the members of the SXE Group.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF SOUTHCROSS REGARDING THE SXE GROUP AND THE SXE BUSINESS

Southcross hereby represents and warrants to BBTS and the Company as follows:

7.1 Organization and Qualification.

(a) Each member of the SXE Group (i) is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized and is duly authorized and qualified to carry on its respective SXE Business, (ii) is duly qualified to do business and is in good standing in each jurisdiction where the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect on SXE Group, and (iii) has the requisite power and authority to own, lease and operate its respective SXE Assets and to carry on its respective SXE Business.

(b) Southcross has made available to BBTS true and complete copies of (i) the Organizational Documents of each member of the SXE Group and (ii) the minute books of each member of the SXE Group, which contain records of all meetings held of, and other actions taken by, the partners, members, shareholders or other holders of Equity Interests in members of the SXE Group, the Boards of Directors (or equivalent governing body) of each member of the SXE Group, and each committee thereof.

(c) Except as has been obtained before the Closing, no action by a member of the SXE Group is necessary to authorize this Agreement or the other Operative Documents or to consummate the Transactions.

7.2 Capitalization. Except as set forth on Schedule 7.2:

(a) SXE GP is the sole general partner of SXE, and there has been no other general partner of SXE since its formation. No member of the SXE Group owns, directly or indirectly, any Equity Interest in any Person (other than with respect to Equity Interests of another member of the SXE Group). Schedule 7.2 sets forth, for each member of the SXE Group, the issued and outstanding Equity Interests (including the SXE Interests) of such Person and the owners thereof.

(b) There are no outstanding options, restricted units, appreciation rights, profit interests, subscriptions, warrants, securities or rights of any kind (whether debt or equity) that are convertible into, exercisable or exchangeable for Equity Interests (including the SXE Interests) of any member of the SXE Group, or calls, commitments, pre-emptive or anti-dilutive rights, rights of first offer or refusal or other rights obligating a member of the SXE Group to issue or sell any securities or Equity Interests (including any SXE Interests), or otherwise requiring Southcross or a member of the SXE Group to give any Person the right to participate in the equity or net income of any other member of the SXE Group.

(c) The respective Equity Interests set forth on Schedule 7.2 (including the SXE Interests) constitute all of the outstanding Equity Interests in the respective members of the SXE Group and such Equity Interests are owned by SXE or another member of the SXE Group free and clear of any and all Encumbrances (other than restrictions on transfer pursuant to applicable securities Laws, Encumbrances under the SXE Credit Facility (and its predecessor facility, as applicable) and Encumbrances existing under the Organizational Documents of the members of the SXE Group). All Equity Interests (including the SXE Group) of each member of the SXE Group (i) were issued in compliance with all Laws and any preemptive or anti-dilutive rights, rights of first offer or refusal and any other statutory or contractual rights of any Person and (ii) have been duly authorized, validly issued, fully paid and are non-assessable (except as such nonassessability may be affected by matters expressly set forth in the Law of the jurisdiction of organization of such Person).

(d) Except for this Agreement and the Organizational Documents of the members of the SXE Group, there are no agreements, voting trusts or other agreements or understandings between or among Southcross or any member of the SXE Group to which

any such Person is a party or by which it is bound with respect to the transfer or voting of any Equity Interests of a member of the SXE Group (including the SXE Interests). Other than this Agreement, there are no Contracts to purchase or redeem any of the outstanding Equity Interests of any member of the SXE Group.

7.3 No Conflict; Consents.

(a) Except as set forth on Schedule 7.3, neither the execution and delivery by Southcross of this Agreement or by Southcross or any member of the SXE Group of the other Operative Documents to which they are a Party, nor consummation or performance by Southcross or any member of the SXE Group of the Transactions will: (i) conflict with or violate any Law binding on a member of the SXE Group, (ii) conflict with or violate the Organizational Documents of a member of the SXE Group, (iii) conflict with or violate any judgment, decree or order to which a member of the SXE Group is bound or (iv) conflict with or result in a material violation of any provision of or constitute (with or without the giving of notice or the passage of time or both) a material default under or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancelation, acceleration or loss of benefit under, or require any actions (including obtaining the consent of any Person or providing notice to any Person) under, any SXE Contract or result in the imposition of an Encumbrance on any of the SXE Assets or on any of the Equity Interests of a member of the SXE Group (including the SXE Interests), other than in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults, terminations, cancelations or accelerations that would not have a Material Adverse Effect on the SXE Group, taken as a whole.

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

7.4 Southcross Financial Statements. Each of the financial statements of SXE included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “SXE Historical Financial Statements”) and its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014 (the “SXE Latest Financial Statement” and, together with the SXE Historical Financial Statements, as filed with the SEC the “SXE Financial Statements”). The SXE Financial Statements fairly present in all material respects the financial condition, results of operations and cash flows of the SXE Group on a consolidated basis as of the respective dates thereof and for the periods therein referred to, all in accordance with GAAP consistently applied throughout the periods involved. The SXE Financial Statements have been prepared from and are in accordance with the accounting records of the SXE Group (and such records are true, correct and accurately reflect in all material respects all transactions engaged in by the members of the SXE Group). Since January 1, 2012, except as set forth in the SXE Financial Statements, there has been no material change of the accounting (tax or otherwise) policies, practices or procedures of any member of the SXE Group. The representations in this Section 7.4, as applicable, are subject, in the case of unaudited financial statements, to normal year-end audit adjustments and accruals and the absence of notes and other textual disclosures as permitted by the rules and regulations of the SEC.

7.5 Liabilities; Indebtedness.

(a) Except for liabilities reflected or reserved against in the SXE Latest Financial Statement, as of the date of this Agreement, no member of the SXE Group has any liabilities or obligations (whether absolute, accrued, contingent or otherwise) that would be required to be reflected on a balance sheet prepared in accordance with GAAP, except liabilities and obligations that (i) constitute Transaction Expenses, (ii) have been incurred by such member of the SXE Group in the Ordinary Course of Business since the date of the SXE Latest Financial Statement, (iii) are set forth on Schedule 7.5(a), (iv) arise under any SXE Contract (other than liabilities arising from any breach or default under such Contracts) or (v) are not material to the SXE Group, taken as a whole.

(b) Schedule 7.5(b) sets forth and describes all Third Party Debt of each member of the SXE Group.

(c) Except as set forth on Schedule 7.5(c), no member of the SXE Group owes any liabilities or obligations, whether known or unknown, suspected or unsuspected, absolute or contingent, direct or indirect or nominally or beneficially possessed or claimed, to Southcross or its Affiliates, and there are no claims or Proceedings with respect thereto.

7.6 Title to Properties and Assets; Easements.

(a) Each member of the SXE Group has title to or rights or interests in its real property and personal property, free and clear of all Encumbrances (except Permitted Encumbrances and Encumbrances under the SXE Credit Facility and its predecessor facility), sufficient to allow it to conduct its SXE Business as currently being conducted in all material respects.

(b) Each member of the SXE Group has such Easements as are necessary to use, own and operate such Person’s assets in the manner such assets are currently used, owned and operated by such Person, in each case, except as would not reasonably be expected to have a Material Adverse Effect on the SXE Group. No event has occurred that allows, or after the giving of notice or the passage of time, or both, would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Easements, in each case, except as would not reasonably be expected to have a Material Adverse Effect on the SXE Group.

(c) Except as set forth on Schedule 7.6, the SXE Assets constitute all of the assets held by Southcross and its Affiliates for use in the SXE Business and the SXE Assets are and at the Closing will be, sufficient to permit the conduct of the SXE Business in the manner presently conducted in all material respects and for the performance of all obligations of the SXE Group (or any member thereof) under any Contracts relating to the SXE Business.

7.7 Contracts.

(a) Schedule 7.7 contains a list of the following contracts to which any member of the SXE Group is a party or bound (each being a “SXE Contract”):

(i) Any Contract that constitutes a commitment relating to any outstanding Indebtedness of any member of the SXE Group (in either case, whether incurred, assumed, guaranteed or secured by any asset) other than agreements solely between or among one or more of members of the SXE Group or Southcross;

(ii) each natural gas transportation, gathering, treating, processing or other contract, each natural gas liquids fractionation, transportation, purchase, sales or storage Contract and each natural gas purchase Contract that during the 12 months ended March 31, 2014 individually involved, or is reasonably expected in the future to involve, annual revenues received by or payments made by any member of the SXE Group in excess of $5,000,000 in the aggregate;

(iii) each Contract for lease of personal property or real property involving aggregate payments in excess of $1,000,000 in any calendar year;

(iv) each Contract (other than a Benefit Plan) containing a non-compete or similar type of provision that, following the Closing, would by its terms materially restrict the ability of the Company or any member of the SXE Group to compete in any line of business or with any Person or in any geographic area during any period of time after the Closing and any Contract that grants to any Person any right of first refusal, right of first offer or similar right in any material asset or property of any member of the SXE Group;

(v) each Contract involving the pending acquisition or sale of (or option to purchase or sell) any assets or properties of any member of the SXE Group, other than an acquisition or sale in the ordinary course of business consistent with past practice;

(vii) each partnership, joint venture or limited liability company agreement to which any member of the SXE Group is a party;

(viii) any Labor Agreement to which any member of the SXE Group is a party or is subject;

(ix) any Contract for employment with any employee of the SXE Group;

(x) any Contract (other than Contracts of the type described in Section 7.7(a)(ii)) for the purchase by any member of the SXE Group of materials, supplies, goods, services, equipment or other assets with a value in excess of $5,000,000 that cannot be terminated by such member of the SXE Group on not more than 90 days’ notice without penalty; and

(xi) each Contract under which any member of the SXE Group has advanced or loaned any amount of money to any of its officers, directors, employees or consultants (other than with respect to immaterial loans or advances to employees in the Ordinary Course of Business).

(b) Southcross has made available to BBTS true and complete copies of each SXE Contract. No member of the SXE Group, nor to the Knowledge of Southcross is any other Person, in material breach or default in the performance of its duties or obligations under any SXE Contract.

(c) Except as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally, (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (iii) public policy considerations with respect to the enforceability of rights of indemnification, each SXE Contract is in full force and effect against, and constitutes the enforceable obligations of, the member of the SXE Group party to such Contract and, to the Knowledge of Southcross, the other parties thereto, and each of the SXE Contracts will continue to be in full force and effect against, and constitute the enforceable obligations of, the member of the SXE Group party to such Contract and the other parties thereto on identical terms immediately after the Closing. Neither Southcross nor any member of the SXE Group has received written notice of any material violation or default under (or any condition which with the passage of time or the giving of notice would cause such a material violation of or default under) any SXE Contract.

7.8 Permits. Each member of the SXE Group has all material Permits necessary for the conduct of the SXE Business as currently being conducted in all material respects, and such Permits are valid and in full force and effect. Neither Southcross nor any member of the SXE Group has received any written notice of Proceedings relating to the revocation, modification, cancelation, termination or nonrenewal of any material Permit. No member of the SXE Group is in default under, and to the Knowledge of Southcross, no condition exists that with or without the giving of notice or the passage of time, or both, would constitute a default under, any material Permit. All applications required to have been filed for the renewal of any material Permits have been duly filed on a timely basis with the appropriate Governmental Authorities. All notices, applications or other actions, if any, required to ensure that none of such material Permits shall be suspended, terminated, impaired, adversely modified or become terminable, in whole or in part, as a result of any of the Transactions, have been or will be timely completed, and none of such material Permits shall be suspended, terminated, impaired, adversely modified or become terminable, in whole or in part, as a result of any of the Transactions.

7.9 Environmental Matters. Except as set forth on Schedule 7.9:

(a) except as would not reasonably be expected to result in any member of the SXE Group incurring material liabilities, (i) no written claim, notice, order, request for information, complaint, directive or penalty has been received by Southcross or any member of the SXE Group with respect to the SXE Assets or SXE Business and (ii) there are no judicial, administrative or other Proceedings pending or, to the Knowledge of Southcross, threatened or reasonably anticipated, and, to the Knowledge of Southcross, there are no conditions or circumstances that would reasonably be expected to result in the receipt of such written claim, notice, order, request for information, directive, complaint, penalty or judicial, administrative or other Proceedings, which, in the case of each of (i) and (ii), allege a violation of or result in liability under any Environmental Law by or of a member of the SXE Group with respect to the SXE Assets or the SXE Business;

(b) the SXE Assets and the operation of the SXE Business are in compliance in all material respects with applicable Environmental Laws, which includes obtaining, maintaining and complying with all material Permits necessary for the operation of the SXE Business under applicable Environmental Laws;

(c) to the Knowledge of Southcross, there are no written environmental reports, studies, tests, analyses or other material documents specifically addressing unresolved environmental liabilities related to the ownership or operation of the SXE Assets, or environmental conditions of the SXE Assets (i) that are in the possession or under the control of, or that are accessible by, Southcross or any member of the SXE Group, or (ii) that are in the possession of any Person other than Southcross or a member of the SXE Group, in each case that have not been made available to BBTS (other than, in the case of (i) and (ii) of this paragraph, any privileged reports or documents that have been indicated as such in a written privilege log made available to BBTS); and

(d) except as would not reasonably be expected to result in any member of the SXE Group or Southcross incurring material liabilities, the operations of the SXE Business have not resulted in a Release of any Hazardous Substances at any real property currently or formerly owned, operated or leased by a member of the SXE Group requiring any reporting, investigation, remediation or other response action under any Environmental Laws, and, to the Knowledge of Southcross, no such Release of any Hazardous Substance has occurred at any real property currently or formerly owned, operated or leased by a member of the SXE Group.

7.10 Taxes.

(a) All Tax Returns required to be filed pursuant to applicable Law by or with respect to Southcross and each member of the SXE Group have been timely filed with the appropriate Governmental Authority (taking into account any applicable extensions), and each such Tax Return is complete and accurate in all material respects. All material amounts of Taxes owed by Southcross and each member of the SXE Group (or for which Southcross or a member of the SXE Group may be liable) that have become due and payable under applicable Law have been timely paid in full, whether or not shown on any Tax Return.

(b) There are no actions pending by any Governmental Authority with respect to Southcross or any member of the SXE Group for any unpaid Taxes, and no Tax assessment, deficiency or adjustment has been asserted, proposed or, to Southcross’ Knowledge, threatened with respect to Southcross or any member of the SXE Group. Neither Southcross nor any member of the SXE Group has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the assessment or collection of Taxes for which Southcross or any member of the SXE Group may be liable, and there is not in force any extension of time with respect to the due date for the filing of any Tax Return of or with respect to Southcross or any member of the SXE Group. No Tax audit, examination, judicial proceeding or other Proceeding is pending or, to Southcross’ Knowledge, threatened with respect to any Taxes due from or with respect to Southcross or any member of the SXE Group.

(c) To the extent relevant to SXE or any member of the SXE Group, all Tax withholding and deposit requirements imposed on or with respect to Southcross (to the extent relevant to any member of the SXE Group) and/or each other member of the SXE Group have been satisfied in full in all material respects and, to the extent required, any withheld Taxes have been timely paid to the proper Governmental Authority.

(d) Neither Southcross nor any member of the SXE Group has been a party to a “listed transaction,” as such term is defined in Treasury Regulation § 1.6011-4(b)(2).

(e) There are no Encumbrances with respect to Taxes on the SXE Interests, except for Encumbrances for Taxes that are not yet due and payable.

(f) Since its inception, Southcross and each member of the SXE Group has at all times been properly classified as a partnership or a disregarded entity for U.S. federal income tax and any applicable state and local Tax purposes (other than for Texas franchise tax purposes).

(g) There are no outstanding appeals, requests for rulings, claims for refund or credit, or subpoenas relating to Taxes of Southcross or any member of the SXE Group.

(h) None of Southcross (as related to the SXE Group) or any member of the SXE Group has received any claim in writing from any Governmental Authority in a jurisdiction in which such Person does not file Tax Returns that it may be subject to taxation by (or liable for Tax in) that jurisdiction.

(i) None of Southcross (as related to the SXE Group) or any member of the SXE Group is a party to (or currently negotiating or pursuing) any rulings, closing agreements or similar agreements between Southcross or any member of the SXE Group, on the one hand, and any tax authority, on the other hand, that could reasonably be expected to increase materially the Taxes imposed on a member of the SXE Group for any period ending after the Closing Date.

(j) There is no Tax sharing, allocation or indemnification agreement or any similar contract or arrangement with respect to Taxes of a member of the SXE Group that will not be terminated as of the Closing Date other than customary provisions of commercial agreements and arrangements not primarily related to Taxes such as leases, credit facilities, customer agreements and loan agreements.

(k) Neither Southcross nor any member of the SXE Group (i) has been a member of any Consolidated Group (other than a combined group for Texas franchise tax purposes), or (ii) has any liability for the Taxes of any Person under Treasury Regulations § 1.1502-6 (or any corresponding provisions of state, local or foreign Law), or as a transferee, successor, by Contract or otherwise, except for joint and several liability for Texas franchise Taxes of the combined group of which Southcross or the member of the SXE Group is a member.

(l) No power of attorney that is currently in force has been granted with respect to any matter relating to Taxes that could affect a member of the SXE Group.

(m) To the Knowledge of Southcross, all of the assets of each member of the SXE Group have been properly listed and described on the property tax rolls for the Tax units in which such assets are located and no portion of such assets constitutes omitted property for property tax purposes.

7.11 Compliance with Law. Except for Environmental Laws, Laws requiring the obtaining or maintenance of a Permit and Tax matters, that are the subject of Section 7.8, Section 7.9 and Section 7.10, respectively, and except as to specific matters disclosed in the SXE SEC Documents (excluding any disclosures in such SXE SEC Documents to the extent they are predictive or forward-looking and general in nature) (a) to the Knowledge of Southcross, each member of the SXE Group is in compliance in all material respects with all applicable Laws and (b) no member of the SXE Group has received written notice of any material violation of any applicable Law.

7.12 Governmental Approvals. Except as set forth in Schedule 7.12, no consent, approval, order, or authorization of, or declaration, filing, notice to or registration with, any Governmental Authority is required to be obtained or made by a member of the SXE Group in connection with the execution, delivery or performance by Southcross of this Agreement or by Southcross or any other member of the SXE Group of any other Operative Document.

7.13 Proceedings. Other than as set forth on Schedule 7.13, there are no material Proceedings pending or, to the Knowledge of Southcross, threatened against, any member of the SXE Group or its business or the SXE Assets. There is no unsatisfied judgment, court order, arbitral award or administrative decision against a member of the SXE Group, its business or the SXE Assets, and no order has been made or petition presented or resolution passed or other steps taken for the winding up or dissolution of any member of the SXE Group. There has been no appointment, and no such appointment is planned by a member of the SXE Group, of an administrator, receiver, liquidator or liquidation committee or like body or officer of a member of the SXE Group or the SXE Assets. To the Knowledge of Southcross, there is no basis for any Proceeding which, if adversely determined against a member of the SXE Group or its Representatives (in the capacity in which such Representative is affiliated with such Person), would reasonably be expected to result in a loss to the SXE Group in excess of $500,000.

7.14 Absence of Changes. Except as set forth on Schedule 7.14:

(a) Since the date of the SXE Latest Financial Statement, there has not been any event or occurrence which has had or which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the SXE Group.

(b) Since the date of the SXE Latest Financial Statement, except for this Agreement and the Transactions, each member of the SXE Group has carried on and operated its respective businesses in all material respects in the Ordinary Course of Business and from such date through the date hereof, no member of the SXE Group has:

(i) amended its Organizational Documents;

(ii) transferred, issued, sold or disposed of any of its equity interests (including any options, warrants, or other securities convertible into or exercisable or exchangeable for such equity interests, or other rights of any kind with respect to such equity interests) other than transfers, issuances, sales or dispositions to another member of the SXE Group;

(iii) adopted a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization;

(iv) made any material change in such Person’s accounting methods, policies or procedures, other than as required by GAAP or a change in applicable Law;

(v) made any acquisitions (by merger, consolidation, acquisition of equity interests or otherwise) of assets, properties, equity interests or business of any other Person;

(vi) other than in the Ordinary Course of Business, sold, transferred, assigned, disposed of, leased, pledged or encumbered any assets;

(vii) commenced or settled any litigation;

(viii) made any loan, advance or capital contribution to, or other investment in, any Person that is not a member of the SXE Group;

(ix) paid, or agreed to pay upon the satisfaction of any condition, any increase in the compensation of any employee of the SXE Group other than in the Ordinary Course of Business, or agreed to pay upon the satisfaction of any condition any severance or termination pay to any such Persons, except as specifically agreed to in writing between Southcross and BBTS as part of the Transactions;

(x) adopted, established, entered into, amended, modified or agreed to amend or modify (or announced an intention to establish, amend or modify) or terminated any Benefit Plan or become liable with respect to any Benefit Plan with respect to which such member of the SXE Group was not liable immediately before the date of the SXE Latest Financial Statement;

(xi) made any material amendment to any Tax Return, or made, changed or rescinded any Tax election, in each case, which would reasonably be expected to materially increase the Tax liability of the SXE Group or the direct or indirect owners of the SXE Group for any taxable period beginning after the Closing Date;

(xii) other than in the Ordinary Course of Business, incurred any Indebtedness or incurred, assumed, guaranteed or otherwise become liable or responsible (whether directly, contingently or otherwise) for any Indebtedness or other obligations of any Person (other than a member of the SXE Group) that will not be extinguished at Closing;

(xiii) committed to any capital expenditures outside of the Ordinary Course of Business after March 31, 2014 that have not been funded or made as of the date hereof in excess of $2,000,000 individually or $10,000,000 in the aggregate;

(xiv) suffered any material damage, destruction or loss affecting any assets of any member of the SXE Group, but in each case only to the extent not covered by payments or approved claims under the SXE Group’s insurance policies;

(xv) accelerated, terminated, materially amended, modified or canceled any SXE Contract, except for any such accelerations, terminations, amendments, modifications or cancelations in the Ordinary Course of Business and that individually would not reasonably be expected to have an adverse impact on the SXE Group in excess of $2,000,000 in any fiscal year; or

(xvi) agreed or committed to do any of the foregoing.

7.15 Transactions with Interested Persons. Except as set forth on Schedule 7.15, none of Southcross, an employee or officer of a member of the SXE Group (or spouse or any child thereof or other related person (by blood or marriage)) or any Affiliate of Southcross or any member of the SXE Group owns, directly or indirectly, on an individual or joint basis, (a) any material interest in, or serves as an officer, director or employee of, any customer or supplier of or any Person that has a Contract with a member of the SXE Group or (b) any material interest in any asset, tangible or intangible, that is used (or contemplated to be used) in the SXE Business, nor has any such Person engaged in any material transaction, arrangement or understanding with a member of the SXE Group other than as contemplated by this Agreement.

7.16 Financial Advisors. Except as set forth on Schedule 7.16, no brokerage or finder’s fees or commissions are or will be payable by a member of the SXE Group to any broker, financial advisor or consultant, finder, placement agent, investment banker, intermediary, bank or other Person in connection with the Transactions.

7.17 Employee Matters.

(a) Except as disclosed on Schedule 7.17 or rights that are extinguished prior to or at Closing, neither the execution and delivery of this Agreement nor the consummation of the Transactions will result in the acceleration or creation of any rights of any current or former employee of a member of the SXE Group to payments or benefits or increases in or funding of any payments or benefits or any loan forgiveness.

(b) Except as would not reasonably be expected to result in a Material Adverse Effect on a member of the SXE Group, (i) to the Knowledge of Southcross, each member of the SXE Group is in compliance with all applicable labor and employment Laws including all Laws, rules, regulations, orders, rulings, decrees, judgments and awards relating to employment discrimination, payment of wages, overtime compensation, immigration, occupational health and safety, wrongful discharge, collective bargaining, discrimination, civil rights, workers’ compensation, the Fair Labor Standards Act and the WARN Act, (ii) no action, suit, complaint, charge, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority, brought by or on behalf of any employee, prospective or former employee, individual independent contractor or labor organization or other representative of the employees or of any prospective or former employees of any member of the SXE Group is pending or, to the Knowledge of Southcross, threatened against any member of the SXE Group and (iii) no member of the SXE Group is subject to any employment-related audit, investigation, lawsuit or other challenge or otherwise bound by any material consent decree, order or agreement with any current or former employee or individual independent contractor or any Governmental Authority relating to current or former employees or individual independent contractors of any member of the SXE Group.

(c) No employee of the SXE Group is covered by, and no member of the SXE Group is party to, any Labor Agreement. No collective labor organizing activity is ongoing or threatened with respect to any employee of the SXE Group, and no such activity has occurred or been threatened within the past five years. No pickets, strikes, slowdowns, work stoppages, other job actions, lockouts, arbitrations, grievances or other labor disputes involving any of the employees of the SXE Group is pending or threatened, and no such activity has occurred or been threatened within the past five years.

(d) There has been no “mass layoff” or “plant closing,” as defined under the WARN Act, with respect to any employee of the SXE Group within the six-month period immediately preceding the Closing.

7.18 Benefit Plans.

(a) Schedule 7.18(a) sets forth a true and complete list of all material Benefit Plans that are or are required to be sponsored, maintained or contributed to by each

member of the SXE Group or any other corporation or trade or business under common control with any of them or treated as a single employer with any of them as determined under Sections 414(b), (c), (m) or (o) of the Code (an “SXE ERISA Affiliate”), or under which any of them or any SXE ERISA Affiliate has any current or future obligation or liability, contingent or otherwise with respect to a present or former officer, employee, agent or consultant of any member of the SXE Group or under which any present or former officer, employee, agent or consultant of any member of the SXE Group, or such present or former officer’s, employee’s, agent’s or consultant’s dependents or beneficiaries, have any current or future right to benefits. For purposes of this Section 7.18, the term “Benefit Plans” refers to the Benefit Plans applicable to the SXE Group, and shall not refer to the Benefit Plans of any member of the TexStar Group.

(b) Schedule 7.18(b) identifies as such all Benefit Plans, if any, which are (i) qualified under Section 401(a) of the Code, (ii) severance, continuation pay, termination pay or deferred compensation arrangements (including any such arrangements contained in an employment, advisory or consulting agreement), (iii) welfare benefit plans within the meaning of Section 3(1) of ERISA and (iv) plans that provide benefits of any kind after termination of employment.

(c) With respect to each Benefit Plan, Southcross has made available to BBTS true and complete copies of all current written documents setting forth the terms and conditions of such Benefit Plan (or a written summary of such terms in the case of an unwritten Plan) and, in the case of each Benefit Plan subject to ERISA, copies of the plan document, the most current summary plan description and any modifications thereto, and if applicable, the most recently filed IRS Form 5500 (including attachments), the most recent trust agreement, insurance or annuity contract or other funding vehicle, the most recent actuarial valuation and report or financial report, as applicable, the most recent IRS determination or opinion letter and other material related documents applicable to such Benefit Plan.

(d) No member of the SXE Group or any SXE ERISA Affiliate has within the past six years maintained, had an obligation to contribute to or has had any other liability, contingent or otherwise, with respect to a “defined benefit plan” as defined in Section 3(35) of ERISA, a pension plan subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, or a “multiemployer plan” as defined in Section 3(37) of ERISA. No other trade or business (other than a member of the SXE Group or a SXE ERISA Affiliate) is, or, at any time within the past six years, has been treated, together with any member of the SXE Group or any SXE ERISA Affiliate, as a single employer under Section 414 of the Code or Section 4001 of ERISA.

(e) There does not exist any condition, there has not occurred any event, and there has not been any omission, with respect to the sponsorship, funding or administration of any Benefit Plan, which has or could result in a material Encumbrance upon or material claim with respect to any of the SXE Assets, or the Company’s being liable for any contribution, withdrawal liability, benefit, claim, settlement, Tax, penalty, payment or liability of any material nature. All contributions required to be made under the terms of any Benefit Plan (including all employer contributions and employee salary reduction contributions) have been timely made in accordance with applicable Law, including 29 C.F.R. § 2510.3-102.

(f) Each group health plan that provides health coverage to any present or former employee of a member of the SXE Group has operated in compliance except for any immaterial error, with all requirements of Sections 601 through 608 of ERISA and Section 4980B of the Code and the regulations promulgated thereunder (and any applicable similar state Law), relating to the continuation of coverage under certain circumstances in which coverage would otherwise cease.

(g) Each Benefit Plan has at all times been maintained, administered, and operated in all material respects in accordance with its terms, all applicable provisions of ERISA (including the “fiduciary responsibility” and “prohibited transaction” rules thereof), the Code and other applicable Laws, and each Benefit Plan intended to be a qualified plan under Section 401(a) of the Code and each trust forming a part thereof is the subject of a favorable determination or opinion letter from the Internal Revenue Service as to the qualification under the Code of such Benefit Plan and the tax-exempt status of such related trust, and nothing has occurred since the date of such determination letter that could reasonably be expected to adversely affect the qualification of such Benefit Plan or the tax-exempt status of such related trust. There are no active suits, governmental investigations or proceedings pending or, to the Knowledge of Southcross, threatened against or concerning any Benefit Plan or against any fiduciary thereof respecting the fiduciary’s duties to the Benefit Plan or any trust under the Benefit Plan. There is no action or claim (other than routine claims for benefits made in the ordinary course of Plan administration) pending or, to the Knowledge of Southcross, threatened against or with respect to any Benefit Plan and, to the Knowledge of Southcross, no facts exist which could give rise to any such action or claim.

(h) No member of the SXE Group or any SXE ERISA Affiliate has ever maintained or contributed to a trust that is subject to Section 501(c)(9) of the Code and none of the Benefit Plans that are welfare benefit plans within the meaning of Section 3(1) of ERISA provide for health or life insurance or other welfare-type benefits for current or future retired or terminated directors, officers or employees of a member of the SXE Group or any SXE ERISA Affiliate or their beneficiaries, except to the extent required under ERISA Section 601 et seq., or by Section 4980B of the Code and the regulations promulgated thereunder or other similar state Law, and, except as disclosed on Schedule 7.18(h), at the sole expense of the participant.

(i) All insurance premiums due or payable with respect to the periods from the end of the most recent Benefit Plan or contract year to and including the Closing Date have been paid or fully accrued in the SXE Financial Statements. No such premium is overdue or in a grace period for late payments.

(j) All contributions, expenses and unfunded liabilities for prior plan years which are not yet due and with respect to the current Benefit Plan year for the period ending on the Closing Date relating to all of the Benefit Plans have been made or accrued in accordance with GAAP in the SXE Financial Statements, and, to the extent required, in the SXE Financial Statements of the applicable Benefit Plan.

(k) Any fidelity bond required to be obtained under ERISA with respect to any Benefit Plan has been obtained and is in full force and effect.

(m) Except as disclosed on Schedule 7.18(m), neither the execution of this Agreement nor other Operative Documents by the members of the SXE Group and the performance by each of them hereunder or thereunder, nor the consummation of the Transactions will (i) entitle any employees, former employees or other service providers of any member of the SXE Group or any SXE ERISA Affiliate to severance pay or severance benefits, (ii) accelerate the time of payment or vesting, trigger any payment of compensation or benefits or forgiveness of indebtedness under, increase the amount payable under or trigger any other obligation pursuant to, any of the Benefit Plans, (iii) obligate the Company to continue any of the Benefit Plans or (iv) result in any breach or violation of, or a default under, any of the Benefit Plans.

(n) No provision of any Benefit Plan would prevent the amendment or termination of any such Benefit Plan assumed or continued by the Company pursuant to the Transactions without material liability, other than the (i) the obligation for ordinary benefits accrued before the termination of such Benefit Plan and (ii) payment of any insurance premiums and plan administration fees for the remaining term of the applicable contract. No action or omission of any member of the SXE Group or any SXE ERISA Affiliate, or any manager, officer, or agent thereof in any way restricts, impairs or prohibits any of the members of the SXE Group or any SXE ERISA Affiliate, or any successor, from amending, merging or terminating any of the Benefit Plans in accordance with the express terms of any such plan and applicable Law.

(o) No Person that was engaged by a member of the SXE Group or any SXE ERISA Affiliate as an independent contractor or in any other non-employee capacity can or will be characterized or deemed to be an employee of a member of the SXE Group or any SXE ERISA Affiliate under applicable laws, statutes, rules, regulations and administrative proceedings for any purpose whatsoever including for purposes of federal, state and local income taxation, workers’ compensation and unemployment insurance and eligibility for the Benefit Plans or for purposes of applying any fee, Tax or penalty under applicable Law.

7.19 Insurance Coverage. Schedule 7.19 sets forth a list of all insurance policies, formal self-insurance programs and bonds currently maintained by each member of the SXE Group. All such insurance policies and bonds have been made available to BBTS. All such insurance policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the Closing have been paid and no notice of cancelation or termination has been received with respect to any such insurance policy.

7.20 Intellectual Property. No member of the SXE Group has received any written notice asserting that the conduct of the SXE Business infringes upon or violates any Intellectual Property of any Person. Schedule 7.20 lists all material software licenses, patents and other registered Intellectual Property used in the conduct of the SXE Business, other than programs existing on any personal computers owned by members of the SXE Group, back-office accounting software or otherwise generally available off the shelf software. Each member of the SXE Group owns or has valid rights to use all the Intellectual Property of such Person without conflict with the rights of others.

7.21 Customers and Suppliers. Schedule 7.21 sets forth a true and complete list of the top ten customers and top ten suppliers to the SXE Group, taken as a whole, as measured by the dollar amount of purchases therefrom or thereby for the fiscal year ended December 31, 2013. Except as set forth on Schedule 7.21, none of such customers or suppliers has provided to any member of the SXE Group any written notice which canceled, materially modified or otherwise terminated its relationship with such Person or materially decreased its services, supplies or materials to such Person or its usage or purchase of the services or products of such Person.

7.22 Current Business. Except as set forth on Schedule 7.22, no member of the SXE Group has engaged in any material business activity other than the SXE Business.

7.23 Condemnation; Casualty Loss. Since the date of the SXE Latest Financial Statement, there has been no condemnation, seizure, damage, destruction or other casualty loss (whether or not covered by insurance) affecting any of the SXE Assets in any material respect which has not subsequently been repaired, replaced or restored. Neither Southcross nor any member of the SXE Group has received written notice of and there is not any pending or, to the Knowledge of Southcross, threatened or contemplated condemnation Proceeding affecting any of the SXE Assets (or any portion thereof), or of any sale or other disposition of any of the SXE Assets (or any portion thereof) in lieu of condemnation.

7.24 Books and Records. The books and records of each member of the SXE Group that are necessary for the ownership and operation of the SXE Assets have been maintained in accordance with prudent industry practice and such books and records have been made available to BBTS.

7.25 No Representations or Warranties Implied; Independent Investigation; Forecasts.

(a) EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE VI AND THIS ARTICLE VII OR ELSEWHERE IN THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, NEITHER SOUTHCROSS NOR ANY OTHER PERSON HAS MADE, DOES NOT MAKE AND SOUTHCROSS SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,

CONCERNING OR WITH RESPECT TO (i) THE VALUE, NATURE, QUALITY, ADEQUACY OR CONDITION OF THE SXE BUSINESS OR THE SXE ASSETS, (ii) THE INCOME TO BE DERIVED FROM THE SXE INTERESTS, THE SXE BUSINESS OR THE SXE ASSETS, (iii) THE SUITABILITY OF THE SXE ASSETS FOR ANY ACTIVITIES OR USES WHICH THE COMPANY (DIRECTLY OR INDIRECTLY) MAY CONDUCT THEREON OR (iv) THE MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF THE SXE INTERESTS, THE SXE BUSINESS OR THE SXE ASSETS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE VI, THIS ARTICLE VII OR ELSEWHERE IN THIS AGREEMENT OR ANY OPERATIVE DOCUMENT, EACH OF BBTS AND THE COMPANY FURTHER ACKNOWLEDGES AND AGREES THAT THE COMPANY (i) IS ACQUIRING THE SXE INTERESTS AND ACCEPTING THE SXE ASSETS ON AN AS IS, WHERE IS CONDITION AND BASIS WITH ALL FAULTS AND (ii) WITHOUT LIMITING THEIR RIGHTS IN THE CASE OF KNOWING AND INTENTIONAL FRAUD OR WILLFUL MISCONDUCT, WILL NOT ASSERT ANY CLAIMS OR TAKE ANY POSITION IN ANY LEGAL PROCEEDING THAT IS INCONSISTENT WITH THIS SECTION 7.25.

(b) SOUTHCROSS HAS CONDUCTED ITS OWN INDEPENDENT INVESTIGATION, REVIEW AND ANALYSIS OF THE BUSINESS, RESULTS OF OPERATIONS, PROSPECTS, CONDITION (FINANCIAL OR OTHERWISE) OR ASSETS OF THE TEXSTAR GROUP, AND ACKNOWLEDGES THAT IT HAS BEEN PROVIDED ADEQUATE ACCESS TO THE PERSONNEL, PROPERTIES, ASSETS, PREMISES, BOOKS AND RECORDS, AND OTHER DOCUMENTS AND DATA OF THE TEXSTAR GROUP FOR SUCH PURPOSE. SOUTHCROSS ACKNOWLEDGES AND AGREES THAT, IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS, SOUTHCROSS HAS RELIED SOLELY UPON ITS OWN INVESTIGATION AND THE EXPRESS REPRESENTATIONS AND WARRANTIES OF BBTS SET FORTH IN ARTICLE IV AND ARTICLE V (INCLUDING THE RELATED PORTIONS OF THE SCHEDULES) AND IS NOT RELYING ON THE ACCURACY OR COMPLETENESS OF ANY OTHER INFORMATION, MATERIALS, REPRESENTATIONS OR WARRANTIES PROVIDED BY OR ON BEHALF OF BBTS OR THE TEXSTAR GROUP.

(c) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SOUTHCROSS ACKNOWLEDGES AND EXPRESSLY CONFIRMS THAT SOUTHCROSS HAS RECEIVED FROM BBTS AND THE TEXSTAR GROUP CERTAIN PROJECTIONS, INCLUDING PROJECTED BALANCE SHEETS AND STATEMENTS OF OPERATING REVENUES AND INCOME AND CERTAIN BUSINESS PLAN INFORMATION RELATED TO THE TEXSTAR GROUP. SOUTHCROSS ACKNOWLEDGES THAT (i) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS, (ii) SOUTHCROSS IS FAMILIAR WITH SUCH UNCERTAINTIES, (iii) SOUTHCROSS IS TAKING FULL RESPONSIBILITY FOR MAKING ITS OWN

EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS, UNDERLYING ESTIMATES, PROJECTIONS AND FORECASTS FURNISHED TO IT) AND (iv) SOUTHCROSS SHALL HAVE NO CLAIM AGAINST BBTS OR ANY MEMBER OF THE TEXSTAR GROUP WITH RESPECT THERETO.

ARTICLE VIII

COVENANTS OF THE PARTIES

8.1 Conduct of the Business.

(a) From the date hereof until the Closing or the termination of this Agreement in accordance with Article IX, other than as provided for in, or contemplated by, this Agreement, (i) BBTS shall not transfer, assign or convey any of its TexStar Interest, or commit to or enter into any Contract to effect the foregoing, or permit any Encumbrance to be placed on any of its TexStar Interest, and (ii) except as set forth on Schedule 8.1(a), BBTS shall, and shall cause each member of the TexStar Group to, conduct its business and operations in the Ordinary Course of Business, and use commercially reasonable efforts to maintain the value of the TexStar Business as a going concern consistent with past practice, including by preserving intact its business organization, keeping available the services of its current managers, partners, officers and employees, preserving its relationships with customers, creditors and suppliers consistent with past practice, maintaining its books and records and complying in all material respects with applicable Law.

(b) From the date hereof until the Closing or the termination of this Agreement in accordance with Article IX, other than as provided for in, or contemplated by, this Agreement, (i) Southcross shall not transfer, assign or convey any of its SXE Interest, or commit to or enter into any Contract effect the foregoing, or permit any Encumbrance to be placed on any of its SXE Interest, and (ii) Southcross shall, and shall cause each member of the SXE Group to, conduct its business and operations in the Ordinary Course of Business consistent with past practice, and use commercially reasonable efforts to maintain the value of the SXE Business as a going concern consistent with past practice, including by preserving intact its business organization, keeping available the services of its current managers, partners, officers and employees, preserving its relationships with customers, creditors and suppliers consistent with past practice, maintaining its books and records and complying in all material respects with applicable Law.

8.2 Access to Books and Records. From the date hereof until the Closing Date or the earlier termination of this Agreement:

(a) BBTS shall provide to Southcross and its authorized Representatives (the “Southcross Representatives”) (a) access at all reasonable times and upon at least two Business Days’ advance notice to the offices, properties, books and records of the members of the TexStar Group in order for the Southcross Representatives to have the

opportunity to make such investigation as Southcross shall reasonably desire to make of the affairs of the members of the TexStar Group and (b) such additional financial and operating data and other information regarding the assets, properties and business of members of the TexStar Group as Southcross may from time to time reasonably request; provided that such access and provision of information does not unreasonably interfere with the normal operations of the members of the TexStar Group or contravene any Law or require substantial time to compile or provide.

(b) Southcross shall provide to BBTS and its authorized Representatives (the “BBTS Representatives”) (a) access at all reasonable times and upon at least two Business Days’ advance notice to the offices, properties, books and records of the members of the SXE Group in order for the BBTS Representatives to have the opportunity to make such investigation as BBTS shall reasonably desire to make of the affairs of the members of the SXE Group and (b) such additional financial and operating data and other information regarding the assets, properties and business of members of the SXE Group as BBTS may from time to time reasonably request; provided that such access and provision of information does not unreasonably interfere with the normal operations of the members of the SXE Group or contravene any Law or require substantial time to compile or provide.

Notwithstanding anything herein to the contrary, no such access or examination shall be permitted to the extent that (i) it would require any member of the TexStar Group or the SXE Group to disclose information subject to attorney-client privilege or (ii) legal counsel for BBTS or Southcross, as applicable, reasonably concludes that it may give rise to antitrust or competition law issues or violates a protective order or otherwise may not be disclosed pursuant to applicable Law. Further, BBTS and Southcross shall not be permitted to perform invasive or subsurface investigations of the properties or facilities of the SXE Group or the TexStar Group, respectively.

8.3 Contact with Customers and Suppliers.

(a) BBTS acknowledges and agrees that it is not authorized to and shall not (and shall not permit any of its Representatives or Affiliates to) contact any customer, supplier or other material business relation of a member of the SXE Group (except any current or prospective customers, suppliers or other such Persons of the TexStar Group, if the same) before the Closing without the prior written consent of Southcross.

(b) Southcross acknowledges and agrees that it is not authorized to and shall not (and shall not permit any of its Representatives or Affiliates to) contact any customer, supplier or other material business relation of a member of the TexStar Group (except any current or prospective customers, suppliers or other such Persons of the SXE Group, if the same) before the Closing without the prior written consent of BBTS.

8.4 Closing Efforts. Subject to the terms and conditions herein, each Party shall use commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done as promptly as practicable, all things necessary, proper and advisable under applicable Laws to consummate and make effective as promptly as practicable the Transactions. Subject to

appropriate confidentiality protections, each Party shall furnish to the other Parties such necessary information and reasonable assistance as such other Parties may reasonably request in connection with the foregoing.

8.5 Notification. From the date hereof until the Closing Date, upon discovery thereof, each Party shall provide prompt written notice to the other Party of (a) in the case of BBTS, the occurrence, or failure to occur, of any event of which to the Knowledge of BBTS causes or would be reasonably likely to cause the condition in Section 2.3(a) to fail to be satisfied or the failure of BBTS to comply with or satisfy in any material respect any covenant or agreement to be complied with by it hereunder prior to Closing and (b) in the case of Southcross, the occurrence, or failure to occur, of any event of which to the Knowledge of Southcross causes or would be reasonably likely to cause the condition in Section 2.2(a) to fail to be satisfied or the failure of Southcross to comply with or satisfy in any material respect any covenant or agreement to be complied with by it hereunder prior to Closing. The delivery of any notice pursuant to this Section 8.5 shall be for informational purposes only, and shall not in any way be deemed to cure any inaccuracy or breach of any provision of this Agreement or in any way limit or affect any rights or remedies under this Agreement (including rights to indemnification).

8.6 Conditions. Each Party shall use commercially reasonable efforts to cause the conditions to closing applicable to such Party in Article II to be satisfied and to consummate the Transactions as soon reasonably possible after the satisfaction of the conditions set forth in Article II (other than those to be satisfied at the Closing).

8.7 Preparation of Supporting Documents. BBTS (on its on behalf and on behalf of Holdings GP), Southcross and the Company shall take such actions, shall furnish such information and shall prepare, or cooperate in preparing, and execute and deliver, such certificates, agreements and other instruments as the other such Party or Parties may reasonably request from time to time, before, at or after the Closing, with respect to the Transactions and the performance of the obligations under this Agreement and each other Operative Document to which it is a party or, with respect to BBTS, to which a member of the TexStar Group is a party, and with respect to Southcross, to which a member of the SXE Group is a party.

8.8 Transaction Expenses. If the Closing occurs, the Company shall bear, and shall promptly reimburse BBTS and Southcross (and, as applicable, their Affiliates) for, all reasonable out-of-pocket fees and expenses (but excluding any brokerage, advisor and similar transaction fees) incurred by such Party (whether incurred before, at or after the date of this Agreement) in connection with the Transactions, including the reasonable fees and expenses of legal counsel, accountants and all other third party consultants and advisors engaged by such Party to assist it in the structuring, negotiation, documentation and implementation of the Transactions (“Transaction Expenses”). If the Closing does not occur, each Party (and its Affiliates, as applicable) shall bear and be responsible for the Transaction Expenses incurred by such Person.

8.9 Exclusivity. From the date hereof until consummation of the Transactions or the earlier termination of this Agreement, each of the Parties shall not, and shall cause their respective Subsidiaries, and the Representatives of the foregoing, not to, directly or indirectly (a) solicit or initiate, or encourage the submission of, proposals or offers relating to, (b) respond to any submissions, proposals or offers relating to (other than to inform any person of such Party’s

obligations under this paragraph), (c) engage in any negotiations or discussions with any Person relating to or (d) enter into any Contract or otherwise cooperate in any way with any other Person in connection with, in each case, any acquisition, equity investment, merger, recapitalization, liquidation, dissolution or similar transaction involving all or any portion of the assets of such Party or any of its Subsidiaries or all or any portion of the Equity Interest of such Party or any of its Subsidiaries without first obtaining the written approval of the other Parties.

8.10 Publicity. The Parties shall promptly advise and cooperate with each other before issuing, or permitting any of a Party’s Representatives to issue, any press release or other form of public announcement with respect to any Operative Documents or the Transactions. The Parties agree that all such press releases or other forms of public announcement with respect to the Operative Documents or the Transactions are subject to the prior approval of the other Parties, which approval shall not be unreasonably withheld; provided, however, that the Parties shall be entitled to issue a press release or make a public announcement with respect to the Operative Documents or the Transactions if such Party, as the issuer of such press release or other form of public announcement, has received advice from its counsel to the effect that such press release is required by Law or listing agreement with a national security exchange or the rules of such exchange, including the NYSE or the SEC. If a Party is required by Law or listing agreement with a national security exchange or the rules of such exchange to make any release concerning any Operative Document or the Transactions, then such Party agrees to use its commercially reasonable efforts to: (a) provide advance notice of at least two Business Days to the other Parties of such release, which such notice shall include the content of such release, and (b) incorporate the reasonable comments proposed by the non-issuing Party.

8.11 Confidentiality. The Parties shall maintain in confidence the terms and conditions of this Agreement and each other Operative Document in accordance with the terms of the Confidentiality Agreement, the terms of which shall remain in full force and effect and shall be applicable to the Parties as if each such Party had been a signatory thereto. The preceding confidentiality covenant will not apply to any such information that (a) is in the public domain other than as a result of a violation of this Section 8.11 by a Party or its Representatives, (b) necessarily must be disclosed in connection with any actions brought to enforce the terms of this Agreement or with respect to the Transactions or (c) is required to be disclosed in response to a valid judgment, decree or order by a Governmental Authority or pursuant to the listing agreement with a national security exchange or the rules of such exchange, including the NYSE, or the SEC; provided, that, the Party subject to such judgment, decree or order shall notify the other Parties in writing of such required disclosure with sufficient time to permit such Parties to seek confidential treatment of such information. If the Closing occurs, the Confidentiality Agreement shall terminate (which termination shall be effective as of the Closing).

8.12 Right of First Offer for Excluded TexStar Assets.

(a) If at any time BBTS proposes to sell, transfer, assign, convey, gift, exchange or otherwise dispose (other than to an Affiliate of BBTS) (“Transfer”) of any asset that is an Excluded TexStar Asset, then the Company, or any Person designated by the Company, shall have a right of first offer relating to such assets and BBTS shall deliver written notice (the “Transfer Notice”) to the Company specifying the asset(s) to be Transferred (the “Offered Assets”), stating BBTS’ bona fide intention to Transfer such Offered Assets and, if known, the identity of any prospective transferees.

(b) The Transfer Notice shall constitute BBTS’ offer to Transfer the Offered Assets to the Company or its designee, which offer shall be irrevocable for a period of 45 Days (the “ROFO Notice Period”). By delivering the Transfer Notice, BBTS represents and warrants to the Company and any designee thereof that (i) BBTS has full right, title and interest in and to the Offered Assets, (ii) BBTS has all the necessary power and authority and has taken all necessary action to sell such Offered Assets as contemplated by this Section 8.12 and (iii) the Offered Assets will be conveyed free and clear of any and all Encumbrances (other than Permitted Encumbrances).

(c) Upon receipt of the Transfer Notice, the Company or any designee thereof shall have until the end of the ROFO Notice Period to offer to purchase all (but not less than all) of the Offered Assets by delivering a written notice (a “ROFO Offer Notice”) to BBTS stating that it offers to purchase such Offered Assets and setting forth the material terms and conditions upon which the Company or any designee thereof will purchase the Offered Assets, including the proposed purchase price (which price shall be payable solely in cash at the closing of the transaction). Any ROFO Offer Notice so delivered shall be binding on the Company upon delivery and shall be irrevocable by the Company.

(d) If the Company does not deliver a ROFO Offer Notice in accordance with Section 8.12(c), BBTS may, during the 120 day period following the expiration of the ROFO Notice Period (which period may be extended for a reasonable time not to exceed 180 days to the extent reasonably necessary to obtain any required approvals of any Governmental Authority) (the “Waived ROFO Transfer Period”), Transfer all of the Offered Assets to a third Person on terms and conditions no more favorable in the aggregate to such third Person than those set forth in the ROFO Offer Notice. If BBTS does not Transfer the Offered Assets within such period or, if such Transfer is not consummated within the Waived ROFO Transfer Period, the rights provided hereunder shall be deemed to be revived and the Offered Assets shall not be Transferred or offered to any Person unless first re-offered to the Company in accordance with this Section 8.12.

(e) BBTS and the Company agree that the terms and conditions of any sale of Offered Assets to the Company or its designee in accordance with this Section 8.12 will be memorialized in, and governed by, a written purchase and sale agreement between BBTS and the Company or its designee with customary terms and provisions for such a transaction. At the closing of any sale and purchase with the Company or its designee pursuant to this Section 8.12, BBTS shall deliver or cause to be delivered to the Company or its designee the Offered Assets free and clear of all Encumbrances (other than the Permitted Encumbrances), against receipt of the purchase price therefor by certified check or by wire transfer of immediately available funds.

8.13 Tax Matters.

(a) Closing of the Books. The Company shall, to the extent permitted under Law and each such entity’s Organizational Documents, cause each Contributed Entity to

allocate all items of income, gain, loss, deduction or credit attributable to the taxable period of the Contributed Entity in which the Closing occurs based on an interim closing of the Contributed Entity Company’s books as of the end of the Closing Date consistent with Section 8.13(c) (to the extent the Contributed Entity’s Tax period does not otherwise end on the Closing Date).

(b) Return Preparation and Tax Payment. SXE GP shall, at its sole cost and expense, prepare or cause to be prepared all Tax Returns of the Contributed Entities due after the Closing Date that relate to a Pre-Closing Tax Period, including a Straddle Period (the “Post-Closing Returns”), other than Tax Returns of, or that include, BBTS or any of its Affiliates other than members of the TexStar Group (the “Excluded Returns”). SXE GP shall timely file or cause to be timely filed all Post-Closing Returns (other than Excluded Returns) and timely pay, or cause the Contributed Entities to timely pay, all Taxes shown as due on such Post-Closing Returns, as finalized pursuant to this Section 8.13(b), provided however that (i)if the Southcross Contribution causes SXE to close its books on the Closing Date, federal income Tax Return of SXE for the short period (a) ending on the Closing Date shall be filed no later than January 21, 2015 (on extension), and (b) beginning the day immediately after the Closing Date shall be filed no later than January 31, 2015, and (ii) if the Southcross Contribution does not cause SXE to close its books, the SXE federal income Straddle Return shall be filed no later than January 31, 2015. BBTS shall prepare or cause to be prepared, and file or cause to be filed, the Excluded Returns at its cost and expense and shall remit the Tax shown to be due thereon to the appropriate Tax authority. The Post-Closing Returns and the TexStar Excluded Returns shall, to the extent permitted by applicable Law, be prepared on a basis consistent with existing procedures and practices and accounting methods of the applicable Contributed Entity, except for inconsistencies required by changes in Law or facts.

At least 20 days prior to the due date of any Post-Closing Return (other than any Excluded Return or any federal income Tax Return of SXE) that is an income or franchise Tax Return (including, for the avoidance of doubt, any Texas franchise tax return), or a reasonable period of time with respect to a Post-Closing Return that is a non-income or non-franchise Tax Return, or at least 10 days prior to the date any federal income Tax Return of SXE is filed, SXE GP shall submit a draft of such Post-Closing Returns (including Straddle Returns) for review and approval to both the BBTS Director and the Southcross Director. The Southcross Director and the BBTS Director shall each consider in good faith any comments made by the other Party, and shall attempt in good faith to resolve any disagreements regarding such Post-Closing Returns prior to the due date for filing. At least 20 days prior to the due date of any TexStar Excluded Return that is an income or franchise Tax Return (including, for the avoidance of doubt, any Texas franchise tax return), or a reasonable period of time with respect to a TexStar Excluded Return that is not an income or franchise Tax Return, BBTS shall submit a draft of such TexStar Excluded Returns to the Southcross Director for review and approval. Any approval pursuant to rights granted to a Person under this Section 8.13(b) shall not be unreasonably withheld, conditioned or delayed.

With respect to any such Post-Closing Return, the amount of undisputed Tax due with respect to such Pre-Closing Tax Period (as determined under Section 8.13(c) with respect to Straddle Periods) shall become a Redirected Distribution Amount with respect to the following Parties (the “Disputing Party”) (i) Southcross for Post-Closing Returns of SXE GP and the members of the SXE Group, and (ii) BBTS for Post-Closing Returns of the members of the TexStar Group. In the event of a dispute with respect to any such Post-Closing Return, the disputed amounts become a Redirected Distribution Amount of the Disputing Party promptly when such items in dispute are resolved pursuant Section 8.13(g). No amount treated as a Redirected Distribution Amount pursuant to this Section 8.13(b) shall excuse the Disputing Party from its indemnification obligations (if any) pursuant to Article X if the amount of Taxes as ultimately determined (on audit or otherwise) for the periods covered by such Pre-Closing Returns exceeds the amount of the Redirected Distribution Amount under this Section 8.13(b). With respect to any Excluded Return that is for a Straddle Period, the Company shall pay to BBTS at least two days prior to the filing of such Excluded Return, the amount of undisputed Tax due with respect such Excluded Return that is attributable to a Post-Closing Tax Period (as determined under Section 8.13(c)). In the event of a dispute with respect to any such Excluded Return, the disputed amounts attributable to the Company shall become payable by the Company to BBTS promptly when such items in dispute are resolved pursuant to Section 8.13(g).

In the event that at least five days prior to the due date for filing (or, with respect to any federal income Tax Return of SXE, at least five days prior to the date such Tax Return is filed) (the “Disputed Return Date”) (i) any Post-Closing Return, SXE GP and the party or parties entitled to approve such return pursuant to Section 8.13(b) are unable to resolve any dispute with respect to such Post-Closing Return, or (ii) any TexStar Excluded Return that is a Straddle Return, the Southcross Director and BBTS are unable to resolve any dispute with respect to any such return, such dispute shall be resolved pursuant to Section 8.13(g), which resolution shall be binding on the Parties.

(c) Straddle Period Tax Returns. To the extent permissible under applicable Laws, the Company shall elect to have each taxable period of the Contributed Entities (other than SXE) during which the Closing Date occurs end at the end of the Closing Date and, if such election is not permitted or required in a jurisdiction such that any of the Contributed Entities is required to file a Tax Return for a Straddle Period, the Company shall use the following conventions for determining the amount of Taxes attributable to the Pre-Closing Tax Period: (i) in the case of property Taxes and other similar Taxes imposed on a periodic basis, the amount attributable to the Pre-Closing Tax Period shall be determined by multiplying the Taxes for the entire Straddle Period by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period; and (ii) in the case of all other Taxes (including income Taxes, sales Taxes, employment Taxes, withholding Taxes and other transaction based Taxes) to the extent the Contributed Entity’s Organizational Documents permit, the amount attributable to the Pre-Closing Tax Period shall be determined using a “closing of the books methodology”; provided, however, with respect to SXE, the amount of federal and state income Taxes shall be allocated based on a pro rata basis using the conventions set forth

in the SXE Partnership Agreement. For purposes of clause (ii), any item determined on an annual or periodic basis (including amortization and depreciation deductions) shall be allocated to the Pre-Closing Tax Period by multiplying the amount of such item for the entire Straddle Period by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period, with such reasonable adjustments as may be necessary to appropriately take the items into account (e.g., to appropriately reflect the period during which depreciable property was in service).

(d) Tax Contests. If the Company or any member Contributed Entity receives notice of any deficiency, proposed adjustment, assessment, audit, examination, inquiry, suit, dispute or other claim with respect to any Pre-Closing Taxes (a “Tax Claim”), the Company will cause such entity to notify in writing within ten days of receipt of any Tax Claim the Southcross Director and the BBTS Director, but the failure to so notify will not relieve the BBTS or Southcross, as applicable, of any liability it may have under Section 10.1(b)(iii) or Section 10.2(b)(iii), except to the extent such Party has suffered actual and material prejudice thereby. With respect to any Tax Claim, the provisions of this Section 8.13(d) and not Section 10.4 or Section 10.5 shall apply.

With respect to any Tax Claim, the following Person (the “Controlling Person”) shall assume and control all claims, actions, administrative appeals, proceedings, hearings and conferences, investigations or inquiries, suits with any applicable Governmental Authorities with respect thereto (the “Tax Proceedings”) (i) the Southcross Director with respect to a Tax Claim attributable to SXE GP and any member of the SXE Group, or (ii) the BBTS Director with respect to a Tax Claim attributable to a member of the TexStar Group. With respect to any Tax Claim, the Controlling Person may either pay the Tax claimed and sue for a refund where applicable Law permits such refund suits or contest the Tax Claim in any permissible manner; provided, however, that (A) the Person, as between the Southcross Director and the BBTS Director, who is not the Controlling Person as to a Tax Claim (the “Non-Controlling Person”) will be permitted to participate fully in all such Tax Proceedings at such Person’s sole cost and the Controlling Person will consult in good faith with the Non-Controlling Person in the negotiation and settlement of any Tax Claim, and (B) the Controlling Person will not, without the written consent of the Non-Controlling Person (which consent shall not be unreasonably withheld) settle or compromise any Tax Claim in any manner; provided, that to the extent that a Tax Claim relates to a Straddle Period, the Southcross Director and the BBTS Director will jointly have the right to control all Tax Proceedings taken in connection with any such Tax Claim and such Straddle Period Tax Claim will not settle or compromise such Straddle Period Tax Claim, without the written consent of both the Southcross Director and the BBTS Director, which consents shall not be unreasonably withheld, conditioned or delayed.

(e) Cooperation on Tax Matters. Southcross and BBTS shall (and the Company shall cause the Contributed Entities to) (i) assist in the preparation and timely filing of all Tax Returns of the Contributed Entities; (ii) assist in any audit or other proceeding with respect to the Tax Returns or Taxes of the Contributed Entities (whether or not involving a Tax contest); (iii) make available any information, records or other

documents relating to any Taxes or Tax Returns of the Contributed Entities (including copies of Tax Returns and related work papers) with respect to a Pre-Closing Tax Period; and (iv) provide certificates or forms, and timely execute any Tax Returns, that are necessary or appropriate to establish an exemption for (or reduction in) any Tax. Without limiting the foregoing, BBTS agrees to provide to the Company no later than March 1, 2015, the following information as of the Closing Date (i) the tax basis of all assets and the amount of liabilities of the members of the TexStar Group; (ii) the amount of any tax items under Section 704(c) of the Code with respect to assets of the members of the TexStar Group; and (iii) to the extent reasonably available, such other information as the Company may reasonably request in writing for purposes of complying with its applicable tax reporting requirements. Neither the Company or SXE GP shall, nor shall they allow the Contributed Entities to, amend any Tax Return of any of the Contributed Entities for a Pre-Closing Tax Period or otherwise initiate any other Post-Closing Tax Event without the prior written consent of (i) the Southcross Director, with respect to a Post-Closing Tax Event of SXE GP or any member of the SXE Group, or (ii) the BBTS Director, with respect to a Post-Closing Tax Event of any members of the TexStar Group.

(f) Refunds. Any refund of Taxes of the Contributed Entities, including any interest with respect thereto, attributable to any Tax period occurring on or before the Closing Date (or attributable to the portion of any Straddle Period ending on the Closing Date determined in a manner specified in Section 8.13(c)) shall be for the account of (i) Southcross, with respect to Tax refunds relating to SXE GP or any member of the SXE Group, and (ii) BBTS, with respect to Tax refunds relating to any member of the TexStar Group. If the amount of any such Tax refund is received by the Company or any of the Contributed Entities, such refund shall be paid promptly to the appropriate Party consistent with this Section 8.13(f).

(g) Disputes. If a dispute arises under Section 8.13(b) with respect to approval of a Tax Return, then within 20 days after the Disputed Return Date, the disagreeing parties shall submit any unresolved disagreements to the Audit Firm for a final and binding determination and the disagreeing parties shall execute such engagement, indemnity and other agreements as such Audit Firm may reasonably require in connection with or as a condition to such engagement. The party failing to approve the Tax return in question shall provide in writing all of such party’s disagreements to the Audit Firm within two days of the submission of the disagreement to the Audit Firm, with respect to any portion of the disputed return, together with proposed changes thereto, and an explanation in reasonable detail of, and such supporting documentation as is reasonably necessary to support, such changes. The disagreeing parties shall cooperate diligently with any reasonable request of the Audit Firm and furnish to the Audit Firm such workpapers, schedules, calculations, analysis and other documents and information relating to such objections as the Audit Firm may reasonably request and are available to such disagreeing party or its Affiliates (or its independent public accountants) and will be afforded the opportunity to present to the Audit Firm any additional material relating to the determination of the matters in dispute and to discuss such determination with the Audit Firm prior to any written notice of determination hereunder being delivered by the Audit Firm. The Audit Firm’s engagement shall be limited to the resolution of designated items of the disputed Tax Return arising under Section 8.13(b). The decision of the Audit

Firm shall be set forth in a written statement delivered to the disagreeing parties and shall be final and binding on such parties, absent fraud or manifest error. Judgment may be entered on the decision of the Audit Firm in any court of competent jurisdiction. The fees and expenses of the Independent Auditor shall be borne in the same manner and based on the same principles provided in Section 2.7(h).

(h) Tax Characterization of Transaction. The Parties acknowledge and agree that the transactions hereunder may cause a tax termination of SXE for U.S. federal income tax purposes under Section 708 of the Code. If such termination occurs, SXE will have two short period Tax Returns for U.S. federal income tax purposes for the 2014 calendar year, one for the period from January 1, 2014 through and including the Closing Date and one for the period beginning on the day after the Closing Date. The Parties shall treat (i) the Southcross Contribution and the BBTS Contribution as transactions described in Section 721(a) of the Code, (ii) the payments to Southcross and BBTS pursuant to Section 2.5(h) as distributions pursuant to a plan of a portion of the proceeds of the Credit Facility to Southcross and BBTS as described in Treasury Regulations Section 1.707-5(b)(2)(ii)(A), and (iii) the assumption of the Assumed Debt Amount pursuant to Section 2.5(g) as an assumption of a “qualified liability” pursuant to Treasury Regulation Section 1.707-5(a). The Parties shall not adopt positions inconsistent with the characterization or treatment described in this Section 8.13(h) in any Tax Return or Tax contest, except to the extent a change in Tax Law requires a different characterization. Unless otherwise required by applicable Law, the Parties agree that all indemnification payments made pursuant to Section 10.1(b) and Section 10.2(b) will be treated by the Parties and reflected on their Tax Returns as a reimbursement to the Company to restore the value of the contributions made by the payee Limited Partner as of the Closing Date, and such payment shall neither increase such Partner’s Capital Account (as defined in the LP Agreement) nor affect the Sharing Percentages (as defined in the LP Agreement).

(i) Termination of Tax Sharing Agreements. The Parties shall ensure that any tax sharing or similar agreements to which any Contributed Entity was or is a party prior to the Closing (other than those solely between a Contributed Entity and another Contributed Entity) shall be terminated as of the Closing as to such Contributed Entity, and no Contributed Entity or any successor thereto shall have any further rights or obligations under any such agreement, including for prior periods covered by any such agreements.

(j) Tax Indemnity. The Company shall indemnify, defend and hold harmless TexStar (or any of its Affiliates, other than the Company or its Subsidiaries) from and against (i) any and all taxes (including any interest, penalties or additions to tax and any tax sharing payment otherwise due under any tax sharing agreements, except to the extent that such tax sharing agreement is described in Section 8.13(i)) of the Company or any of its Subsidiaries (or any Contributed Entity) for any Post-Closing Tax Period, including, for the avoidance of doubt, any taxes imposed on TexStar (or any of its Affiliates, other than the Company or its Subsidiaries) for Post-Closing Tax Period taxes attributable to the income, assets or operations of the Company, any of its Subsidiaries or any Contributed Entity on account of TexStar (or any of its Affiliates, other than the Company or its Subsidiaries) being deemed to be a member of a consolidated, combined

or unitary group with the Company and/or its Subsidiaries or any Contributed Entity; and (ii) any reasonable out of pocket expenses (e.g., reasonable attorneys’ and accountants’ fees and expenses) relating to matters covered by the foregoing.

8.14 Series A Change of Control Offer. Southcross shall promptly (and in no event later than five Business Days following the date hereof) cause SXE to take such actions as may be necessary to comply with the terms and provisions of Section 5.12(b)(viii)(E) of the SXE Partnership Agreement to effect the Series A Change of Control Offer and thereafter to consummate the transactions contemplated thereby, in each case, in accordance with the terms and conditions of the SXE Partnership Agreement.

8.15 Mutual Releases.

(a) Effective as of the Closing, (i) Southcross, on its own behalf and on behalf of its Affiliates (other than the members of the SXE Group) and their respective heirs, estates, executors, administrators, successors and assigns, hereby unconditionally and irrevocably releases and waives any claims that Southcross or any of its Affiliates (other than the members of the SXE Group) has or may in the future have, in its capacity as an equity holder, member, manager, director, officer, employee or similar capacity, against each member of the SXE Group or any of their respective directors, officers, employees or equity holders, in each case, arising out of, resulting from or relating to actions, omissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any other Operative Document and (ii) the Company shall cause each member of the SXE Group, on its own behalf and on behalf of its Affiliates or their respective heirs, estates, executors, administrators, successors and assigns, to unconditionally release and waive any claims that such member of the SXE Group has or may in the future have against Southcross or any of its directors, officers, employees, Affiliates or equity holders in Southcross’ capacity as an equity holder, member, manager or similar capacity of any member of the SXE Group, in each case, arising out of, resulting from or relating to actions, commissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any other Operative Document.

(b) Effective as of the Closing, (i) BBTS, on its own behalf and on behalf of its Affiliates (other than the Company, Holdings GP and members of the TexStar Group) and their respective heirs, estates, executors, administrators, successors and assigns, hereby unconditionally and irrevocably releases and waives any claims that BBTS or any of its Affiliates (other than the Company, Holdings GP and members of the TexStar Group) has or may in the future have, in its capacity as an equity holder, member, manager, director, officer, employee or similar capacity, against each member of the TexStar Group or any of their respective directors, officers, employees or equity holders, in each case, arising out of, resulting from or relating to actions, omissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any other Operative Document and (ii) the Company shall cause each member of the TexStar Group or their respective heirs, estates, executors, administrators, successors and assigns, to unconditionally release and

waive any claims that such member of the TexStar Group has or may in the future have against BBTS or any of such Person’s directors, officers, employees, Affiliates or equity holders in (as applicable) BBTS’ capacity as an equity holder, member, manager or similar capacity of any member of the TexStar Group, in each case, arising out of, resulting from or relating to actions, commissions, facts or circumstances occurring, arising or existing at or prior to the Closing, in each case, other than with respect to claims under this Agreement or any other Operative Document.

8.16 Restructuring. Prior to the Closing, BBTS shall cause to be taken the following actions (collectively, the “TexStar Rich Gas Restructuring”):

(a) Frio LaSalle Pipeline shall effect a divisive merger (the “Merger”), in form and substance reasonably acceptable to SXE, in accordance with Chapter 10 of the Texas Business Organizations Code and pursuant to which, among other things:

(i) Frio LaSalle Pipeline shall be a surviving entity in the Merger and shall change its name in connection with the Merger;

(ii) a new Texas limited partnership shall be created by the Merger (“New Frio LP”), whose sole general partner shall be a newly-formed Texas limited liability company of which TexStar LP will be the sole member; and

(iii) all of the assets of Frio LaSalle Pipeline, other than assets related to the TexStar rich gas system (including those assets set forth on Schedule 8.16), shall be vested in New Frio LP.

(b) TexStar LP shall contribute to Frio LaSalle Pipeline all of the Equity Interests in the TexStar JV Entities held by TexStar LP and TexStar LP and Frio LaSalle Pipeline shall take such other actions as may be reasonably necessary to further evidence such transfer, including delivering notice of such transfer to Atlas and executing a joinder agreement to the Organizational Documents of T2 EFC Holdings, T2 EF Gathering and T2 LaSalle Gathering.

8.17 Financing. Prior to the Closing BBTS and Southcross shall use commercially reasonable efforts to provide and to cause their respective Representatives, including legal and accounting, to provide all cooperation reasonably requested by the Company that is necessary or advisable in connection with the arrangement of the Financing (the “Financing Cooperation”), including: (a) using commercially reasonable efforts to participate in informational meetings, conference calls and other direct contact with potential lenders at such times and places as the lenders may reasonably request; (b) using commercially reasonable efforts to ensure that the syndication effort benefits from existing lending relationships; (c) assisting (including using commercially reasonable efforts to cause affiliates and advisors to assist) in the preparation of a confidential information memorandum for the Credit Facility and other marketing materials to be used in connection with the syndication contemplated by the SXE Commitment Letter, (d) using commercially reasonable efforts to assist the borrower under the Credit Facility in obtaining public corporate family and public corporate credit ratings for the Company and public credit ratings for the Credit Facility from each of Standard & Poor’s Ratings Group and Moody’s

Investors Service, Inc. prior to the Closing Date and (e) promptly providing the lenders with all available information reasonably deemed necessary by them to successfully complete the syndication contemplated by the SXE Commitment Letter.

ARTICLE IX

TERMINATION

9.1 Grounds for Termination. Subject to Section 9.2, this Agreement may be terminated at any time before the Closing upon the occurrence of any one or more of the following:

(a) by the mutual written agreement of the Parties;

(b) by either Party (by giving written notice to the other Party), if the consummation of the Transactions would violate any final judgment, decree or order of any Governmental Authority having appropriate jurisdiction enjoining the consummation of the Transactions;

(c) by either Party (by giving written notice to the other Party), if the other Party has breached this Agreement in any material respect and such breach causes any of the conditions to Closing for the other Party not to be satisfied (or, if before the Closing, is of such a magnitude that it will not be possible for such condition to be satisfied); provided, however, that in the case of a breach that is capable of being cured, the breaching Party shall have until the earlier of (i) the Outside Date and (ii) 30 days following receipt of such notice to attempt to cure the breach and the termination under this Section 9.1(c) shall not become effective until the end of such period;

(d) by either Party (by giving written notice to the other Party), if the Closing has not occurred by September 30, 2014 (the “Outside Date”), through no breach (including a willful failure to perform an obligation under this Agreement) of this Agreement by the terminating Party or its Affiliates;

(e) by BBTS (by giving written notice to Southcross) if there shall have occurred a Material Adverse Effect on the SXE Group; and

(f) by Southcross (by giving written notice to Southcross) if there shall have occurred a Material Adverse Effect on the TexStar Group.

9.2 Effect of Termination. A Party shall not have the right to terminate this Agreement under Section 9.1 if it is then in material breach of this Agreement. If this Agreement is terminated in accordance with Section 9.1, such termination shall be without liability to any Party, except with respect to any Party that has intentionally and willfully breached this Agreement and except that performance of the obligations contained in Section 8.11, this Section 9.2, Article X and Article XI, and such defined terms in Exhibit A as may be required to give meaning to such Sections, shall survive termination of this Agreement. No termination of this Agreement under this Article IX shall relieve any Party of liability for breach of this Agreement arising before such termination.

ARTICLE X

INDEMNIFICATION

10.1 Indemnification by BBTS. Subject to the limitations set forth in this Article X, from and after the Closing:

(a) BBTS shall indemnify and hold Southcross and its members, managers, officers, employees, agents, Affiliates and assignees (collectively, the “Southcross Indemnitees”) and the Company harmless from and against any and all Losses actually incurred by any such Southcross Indemnitee either directly or indirectly (by virtue of ownership of partnership interests in the Company) as a result of, arising from or related to any failure of the representations and warranties of BBTS set forth in Article IV to be true and correct as of the Closing Date (or, if such representations and warranties relate to an earlier date, as of such earlier date); and

(b) BBTS shall indemnify and hold the Company and its directors, managers, officers, employees, agents and assignees (collectively, the “Company Indemnitees”) harmless from and against any and all Losses actually incurred by any such Company Indemnitee as a result of, arising from or related to:

(i) any failure of the representations and warranties of BBTS set forth in Article V to be true and correct as of the Closing Date (or, if such representations and warranties relate to an earlier date, as of such earlier date);

(ii) any breach or non-fulfillment of any covenant or agreement on the part of BBTS under this Agreement;

(iii) any amounts for indemnification that are owing by TexStar LP pursuant to and in accordance with Section 9.1 of the Drop Down Agreement; and

(iv) any Indemnified Taxes of any member of the TexStar Group.

10.2 Indemnification by Southcross. Subject to the limitations set forth in this Article X, from and after the Closing:

(a) Southcross shall indemnify and hold BBTS and its partners, members, managers, officers, employees, agents, Affiliates and assignees (collectively, the “TexStar Indemnitees”) and the Company harmless from and against any and all Losses actually incurred by any such TexStar Indemnitee either directly or indirectly (by virtue of ownership of partnership interests in the Company) as a result of, arising from or related to any failure of the representations and warranties of Southcross set forth in Article VI to be true and correct as of the Closing Date (or, if such representations and warranties relate to an earlier date, as of such earlier date); and

(b) Southcross shall indemnify and hold the Company Indemnitees harmless from and against any and all Losses actually incurred by any such Company Indemnitee as a result of, arising from or related to:

(i) any failure of the representations and warranties of Southcross set forth in Article VII to be true and correct as of the Closing Date (or, if such representations and warranties relate to an earlier date, as of such earlier date);

(ii) any breach or non-fulfillment of any covenant or agreement on the part of Southcross under this Agreement; and

(iii) any Indemnified Taxes of SXE GP or any member of the SXE Group.

10.3 Survival. Regardless of any investigation at any time made by or on behalf of any Party, each of the representations and warranties contained in this Agreement shall survive the Closing for the applicable period of time set forth in this Section 10.3 and any and all claims and causes of action for indemnification under this Article X arising out of the inaccuracy or breach of any representation or warranty of a Party must be made before the termination of the applicable survival period.

(a) All of the representations, warranties, covenants and agreements of the Parties contained in this Agreement and any and all claims and causes of action for indemnification under this Article X shall survive as follows (with the date on which the relevant representation, warranty, covenant or agreement expires pursuant to this Section 10.3 being the “Expiration Date”):

(i) the representations and warranties set forth in (A) Sections 4.1, 4.2, 4.4, 4.5, 4.8, 5.1, 5.2, 5.16, 6.1, 6.2, 6.4, 6.5, 6.7, 7.1, 7.2 and 7.16 shall survive indefinitely and (B) Sections 5.10, 5.18, 7.10 and 7.18 shall survive for a period ending 60 days after the expiration of the statute of limitations applicable to any matters or other liabilities that are the subject thereof (together, the representations and warranties set forth in clauses (A) and (B), except for those set forth in Sections 5.18 and 7.18, the “Fundamental Representations”), and any covenants or agreements in this Agreement that by their terms are to be performed after the Closing shall survive until fully discharged; and

(ii) except for the Fundamental Representations and the representations and warranties set forth in Section 5.18 and 7.18, all representations and warranties set forth in Article IV, Article V, Article VI and Article VII shall survive until the date that is 12 months after the Closing Date (collectively, the “Non-Fundamental Representations”).

(b) No action for a breach of any representation, warranty, covenant or agreement contained herein (other than Fundamental Representations, which survive in accordance with Section 10.3(a)(i)) shall be brought after the applicable Expiration Date, except for claims of which a Party has received a Claim Notice before the applicable Expiration Date.

10.4 Third Person Claims.

(a) If any Southcross Indemnitee, TexStar Indemnitee or Company Indemnitee (any such Person, an “Indemnified Party”) has received notice or otherwise has knowledge of any claim by any Person who is not a Party or the commencement of any Proceeding by such Person who the Indemnified Party believes in good faith has an indemnifiable claim under this Agreement (a “Third Person Claim”), the Indemnified Party shall deliver a Claim Notice with respect thereto to the Party obligated to provide indemnification pursuant to Section 10.1 or Section 10.2 (the “Indemnifying Party”); provided, however, that the failure or delay to so notify the Indemnifying Party shall not relieve the Indemnifying Party from liability for such Third Person Claim except to the extent that such failure or delay results in the loss or forfeiture by the Indemnifying Party of material rights and defenses otherwise available to the Indemnifying Party with respect to such Third Person Claim or increased indemnification expenses incurred as a direct result of such failure or delay to so notify. The Claim Notice shall state the nature and the basis of such Third Person Claim. The Indemnifying Party shall have the right to defend and settle any such Third Person Claim, at its own expense and by its own counsel (reasonably acceptable to the Indemnified Party) if the Indemnifying Party provides written notice to the Indemnified Party (within five Business Days of its receipt of the Claim Notice) declaring its intention to defend or settle such Third Person Claim and acknowledging its obligations to indemnify the Indemnified Party with respect to such Third Person Claim in accordance with this Article X.

(b) If the Indemnifying Party notifies the Indemnified Party of its intention to undertake the defense or settlement of such Third Person Claim pursuant to Section 10.4(a), the Indemnified Party shall cooperate with the Indemnifying Party and its counsel, at the Indemnifying Party’s sole cost and expense, in all commercially reasonable respects in the defense thereof and in any settlement thereof. Such cooperation shall include furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake the defense or settlement of such Third Person Claim pursuant to Section 10.4(a), the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such Third Person Claim; provided, however, that the Indemnified Party shall be entitled, at its expense, to participate in the defense of such Third Person Claim and the negotiations of the settlement thereof.

(c) The Indemnifying Party shall not settle any Third Person Claim without the consent of the Indemnified Party unless the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, and the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, the Indemnified Party and further involves no injunction or equitable relief upon the Indemnified Party and no limitation on the future operation of the business, assets or property of the Company, its Subsidiaries or their respective Affiliates.

(d) If, upon receiving a Claim Notice with respect to a Third Person Claim, the Indemnifying Party does not timely undertake to defend such Third Person Claim, or fails to pursue such defense diligently or is otherwise not entitled to assume the defense of such Third Person Claim or the Indemnified Party is otherwise entitled to assume such defense, the Indemnified Party may undertake such defense through counsel of its choice, at the cost and expense of the Indemnifying Party, and the Indemnified Party may settle such Third Person Claim, in its discretion, and the Indemnifying Party shall reimburse the Indemnified Party for the amount paid in such settlement and any other Losses incurred by the Indemnified Party in connection therewith.

10.5 Direct Claims.

(a) If the Indemnified Party asserts the existence of a claim giving rise to Losses that is not a Third Person Claim (a “Direct Claim”), the Indemnified Party shall deliver a Claim Notice with respect thereto to the Indemnifying Party. If the Company, as an Indemnified Party hereunder, suffers an indemnifiable Loss, the Party that is not responsible for such Loss is hereby granted all power and authority to cause the Company to bring a Direct Claim and make decisions on behalf of the Company as an Indemnified Party hereunder.

(b) A Claim Notice delivered in connection with a Direct Claim shall state that it is being given pursuant to this Section 10.5 and shall specify the nature and, if known, the amount of the Losses associated therewith. If the Indemnifying Party, within 30 days after the receipt of such Claim Notice from the Indemnified Party, shall not give written notice to the Indemnified Party stating the Indemnifying Party’s intent to contest such Direct Claim, the Indemnified Party’s assertion shall be deemed accepted and the amount of such Direct Claim shall be deemed a valid Direct Claim.

(c) If, however, the Indemnifying Party contests such Direct Claim by giving written notice, setting forth in reasonable detail the basis for contesting the Direct Claim, to the Indemnified Party within such 30-day period, then the Indemnifying Party and the Indemnified Party shall negotiate in good faith to reach agreement regarding such Direct Claim. If the Indemnifying Party and the Indemnified Party cannot reach an agreement regarding such Direct Claim within 30 days after the notice contesting such Direct Claim provided by the Indemnifying Party has been received by the Indemnified Party, the Indemnifying Party shall be deemed to have rejected such Direct Claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

10.6 Basket; Indemnification Cap.

(a) An Indemnifying Party shall not have any obligation to provide indemnification for Losses arising out of breaches of the Non-Fundamental Representations (“Covered Losses”) except to the extent that the aggregate amount of all Covered Losses exceeds (i) in the event that BBTS is the Indemnifying Party, $5,500,000 and (ii) in the event that Southcross is the Indemnifying Party, $2,312,500 (each of (i) and (ii), as applicable, the “Basket”) in which case the Indemnifying Party

shall be liable under this Article X only for Covered Losses that exceed the Basket. The Basket shall not be applicable to Losses arising out of breaches of the Fundamental Representations, Section 5.5(b) or Section 7.5(b).

(b) The maximum amount for which a Party may be liable, other than in cases of knowing and intentional fraud or willful misconduct, in respect of breaches of any of the Non-Fundamental Representations, shall be limited to an amount equal to (i) in the event that BBTS is the Indemnifying Party, $82,500,000 and (ii) in the event Southcross is the Indemnifying Party, $34,687,500, and in respect of any breaches of the Fundamental Representations or any other covenant or agreement under this Agreement, shall be limited to an amount equal to the Contribution Consideration applicable to such Party. Notwithstanding the foregoing, there shall be no maximum amount for which a Party may be liable in connection with such Party’s breach of Section 5.5(b) or Section 7.5(b), as applicable.

10.7 Calculation of Losses. In calculating amounts payable to any Indemnified Party for a claim for indemnification hereunder, the amount of any indemnified Losses shall be determined without duplication of any other Loss for which an indemnification claim has been made or could be made under any other representation, warranty, agreement or covenant and shall be computed net of payments actually recovered by the Indemnified Party (or its Affiliates) under any insurance policy with respect to such Losses.

10.8 Other Limitations.

(a) Waiver of Certain Damages. Notwithstanding any other provision of this Agreement, no Party shall be liable for punitive, special, indirect, exemplary, consequential, remote or speculative damages of any kind or nature or any damages calculated using diminution of value or any multiple of value, regardless of the form of action through which such damages are sought, except (A) for any such damages recovered by any Person who is not a Party against an Indemnified Party in respect of which such Indemnified Party would otherwise be entitled to indemnification pursuant to the terms hereof and (B) in the case of consequential damages to an Indemnified Party arising from knowing and intentional fraud or willful misconduct.

(b) Sole and Exclusive Remedy. Except for the indemnity obligations described in Section 8.13, or the assertion of any claim based on knowing and intentional fraud or willful misconduct or with respect to the determination of the Final Adjustment Amount pursuant to Section 2.7, the remedies provided in this Article X shall be the sole and exclusive legal remedies of the Parties from and after the Closing with respect to this Agreement and the Transactions expressly contemplated by this Agreement. This Article X shall not govern the remedies available under any other Operative Document to which a Party is party or in respect of the Related Transactions and nothing contained in this Agreement shall limit the ability of any Party (or any of its Affiliates) to pursue any remedy under the Operative Documents (excluding this Agreement). Subject to the rights of the parties to the SXE Commitment Letter under the terms thereof, none of the Parties, nor or any of their respective affiliates, shall have any rights or claims against the Debt Financing Sources in connection with the SXE Credit Facility described in the SXE Commitment Letter, whether at law or equity, in contract, in tort or otherwise.

(c) No Duplication. No Southcross Indemnitee shall be entitled to indemnification under this Article X in respect of any matter to the extent such matter is taken into account in the determination of the amount of Preferred Equity to be issued at Closing or for any variations in any amount reflected in (including as a result of a determination by the Audit Firm) in the determination of the Final Adjustment Amount pursuant to Section 2.7.

(d) For purposes of determining whether a representation or warranty has been breached for purposes of this Article X and determining the amount of Losses suffered by any TexStar Indemnitee or Southcross Indemnitee, as the case may be, each representation and warranty set forth in this Agreement, and any qualification with respect to any representation or warranty set forth in the Schedules, shall be read without regard or giving effect to any “material,” “materiality” or “Material Adverse Effect” qualifications that may be contained in any such representation or warranty.

10.9 Payment of Indemnification by a Party. The sole and exclusive remedy of any Indemnified Party for any Losses under Section 10.1 or Section 10.2, as applicable, shall be as set forth in this Section 10.9:

(a) Upon (i) any Southcross Indemnitee or Company Indemnitee becoming entitled to any Losses pursuant to any claim for indemnification under Section 10.1 or (ii) any TexStar Indemnitee or Company Indemnitee becoming entitled to any Losses pursuant to any claim for indemnification under Section 10.2, the Southcross Indemnitee, the Company Indemnitee or the TexStar Indemnitee, as applicable, shall give written notice (an “Indemnity Notice”) thereof (which notice shall state the amount of such Losses) to BBTS or Southcross, as applicable. At any time on or prior to 30 days after BBTS’ or Southcross’ receipt, as applicable, of an Indemnity Notice (“CP Deadline”), BBTS or Southcross, as applicable, shall have the right, at its option and sole discretion, to deliver to the Company, by check or wire transfer of immediately available funds, cash in an amount up to the amount of the Losses with respect to which such Indemnity Notice has been given (“Subject Losses”).

(b) To the extent BBTS or Southcross, as applicable, delivers cash to the Company pursuant to this Section 10.9 on or before the CP Deadline, such Subject Losses shall be reduced dollar for dollar by the amount of such cash so paid and shall be deemed satisfied to the extent of such payment and (i) in the case of such payment by BBTS, neither the Southcross Indemnitees nor the Company Indemnitees shall have any further rights under this Agreement with respect to such Subject Losses to the extent so satisfied and (ii) in the case of such payment by Southcross, neither the TexStar Indemnitees nor the Company Indemnitees shall have any further rights under this Agreement with respect to such Subject Losses to the extent so satisfied, in each case, absent knowing and intentional fraud on the part of BBTS or Southcross, as applicable.

(c) If BBTS or Southcross, as applicable, shall not have paid to the Company cash in the full amount of such Subject Losses on or before the CP Deadline applicable to such Subject Loss (the amount by which the Subject Losses exceed the amount of cash so paid by BBTS or Southcross, as applicable, the “Adjustment Loss”), such Adjustment Loss shall be satisfied in accordance with Section 4.5, Section 5.1(b) and Section 5.1(c) of the LP Agreement, as applicable.

(d) Any amounts paid, either in cash or in accordance with Section 4.5, Section 5.1(b) and Section 5.1(c) of the LP Agreement, as applicable, shall not have any effect on the Capital Accounts (as defined in the LP Agreement) of Southcross or BBTS (or their respective collective assignees) applicable to such Person as a partner of the Company.

ARTICLE XI

MISCELLANEOUS

11.1 Governing Law; Venue; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed and interpreted in accordance with the Laws of the State of Texas, without giving effect to any conflicts of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Texas.

(b) The Parties hereby irrevocably submit to the jurisdiction of the courts of the State of Texas and the federal courts of the United States of America located in Dallas, Texas, and appropriate appellate courts therefrom, over any dispute arising out of or relating to this Agreement or any of the Transactions, and each Party hereby irrevocably agrees that all claims in respect of such dispute or Proceeding may be heard and determined in such courts. The Parties hereby irrevocably waive, to the fullest extent permitted by Law, any objection which they may now or hereafter have to the laying of venue of any dispute arising out of or relating to this Agreement or any of the Transactions brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each Party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. This consent to jurisdiction is being given solely for purposes of this Agreement and is not intended to, and shall not, confer consent to jurisdiction with respect to any other dispute in which a Party to this Agreement may become involved. Each Party consents to process being served by any other Party to this Agreement in any Proceeding of the nature specified in this Section 11.1(b) by the mailing of a copy thereof in the manner specified by the provisions of Section 11.7.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE, INCLUDING ANY DISPUTE ARISING OUT OF OR RELATED TO THE SXE COMMITMENT LETTER OR THE PERFORMANCE THEREOF.

(d) Notwithstanding anything in this Section 11.1 to the contrary, each of the Parties agrees that it will not bring or support any action or proceeding (whether at law, in equity, in contract, in tort or otherwise) against any Commitment Party (as defined in the SXE Commitment Letter), any Lender (as defined in the SXE Commitment Letter), any affiliate of a Commitment Party or a Lender or any other Person that has committed to provide or otherwise entered into agreements in connection with the SXE Commitment Letter or the financings related thereto in connection with the transactions contemplated hereby (each such Person, a “Debt Financing Source”, and, collectively, the “Debt Financing Sources”) in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the SXE Commitment Letter or the performance thereof, in any forum other than the Supreme Court of the State of New York, County of New York, or, if under applicable law exclusive jurisdiction is vested in the Federal courts, the United States District Court for the Southern District of New York (and appellate courts thereof). The provisions of the foregoing sentence in this Section 11.1(d) shall be enforceable by each Debt Financing Source, its affiliates and their respective successors and permitted assigns.

11.2 Third-Party Beneficiaries. Nothing in this Agreement shall provide any benefit to any third Person or entitle any third Person to any claim, cause of action, remedy or right of any kind, it being the intent of the Parties that this Agreement shall not be construed as a third-party beneficiary contract; provided, however, that the indemnification provisions of Article X shall inure to the benefit of the Southcross Indemnitees and the TexStar Indemnitees as provided therein; provided that each of the Debt Financing Sources are third-party beneficiaries of this Agreement with respect to the provisions in this Section 11.2 and provisions in Sections 10.8, 11.1 and 11.6 of this Agreement regarding venue, jury waiver, recourse and amendment of this Contribution Agreement to the extent related to the Debt Financing Sources.

11.3 No Partnership. Nothing in this Agreement shall constitute a joint venture or partnership between or among the Parties or constitute any Party as agent or attorney of any other Party for any purpose whatever, and, except as expressly provided for in this Agreement, no Party shall have authority or power to bind any other Party or to contract in the name of or create liability against any other Party in any way or for any purpose, except as expressly authorized in writing by one Party in favor of another Party from time to time.

11.4 Assignment. No Party may assign its rights and obligations under this Agreement without the prior written consent of the other Parties; provided, however, at any time prior to the Closing BBTS shall be permitted to assign all of its rights and obligations under this Agreement to any wholly-owned Subsidiary of BBTS upon written notice to Southcross and from and after such assignment any and all references to BBTS in this Agreement shall be deemed to be references to such assignee, unless the context dictates otherwise. By way of clarification, no such assignment by BBTS shall affect the release and related agreements of BBTS set forth in Section 8.15, which shall remain in effect notwithstanding such assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

11.5 Entire Agreement. This Agreement, the other Operative Documents and the Confidentiality Agreement collectively constitute the sole understanding of the Parties with respect to the subject matter hereof; provided, however, that this provision is not intended to abrogate any other written agreement between or among the Parties executed before or with this Agreement that relates to any subject matter other than the Transactions.

11.6 Amendment. This Agreement may only be amended, modified or supplemented by an instrument in writing signed by the Parties. Further, the Parties shall not amend the provisions in this Section 11.6 or in Sections 10.8, 11.1 or 11.2 of this Agreement in a manner that is adverse to the Debt Financing Sources without the Debt Financing Sources’ prior written consent.

11.7 Notices. All notices, demands or communications required or permitted under this Agreement shall be in writing and delivered personally, by reputable overnight delivery service or other courier with charges prepaid, by certified mail, postage prepaid and return receipt requested, or by facsimile transmission or Email that is confirmed by another writing, sent to the Parties as follows:

If to BBTS or, prior to the Closing, the Company:

BBTS Borrower LP

18615 Tuscany Stone, Suite 300

San Antonio, Texas 78258

Attn: Phil Mezey

Facsimile: (210) 495-0075

Email: phil.mezey@texstarms.com

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

Tailwater Capital LLC

300 Crescent Court, Suite 200

Dallas, Texas 75201

Attn: Jason H. Downie

Facsimile: (214) 292-8562

Email: jdownie@tailwatercapital.com

and

EIG Global Energy Partners

Three Allen Center

333 Clay Street, Suite 4150

Houston, Texas 77002

Attn: Clayton R. Taylor

Email: clay.taylor@eigpartners.com

and

Weil, Gotshal & Manges LLP

200 Crescent Court, Suite 300

Dallas, Texas 75201

Attn: Rodney L. Moore

Email: rodney.moore@weil.com

If to Southcross:

Southcross Energy LLC

1700 Pacific Avenue, Suite 2900

Dallas, Texas 75201

Attn: David W. Biegler

Facsimile: (214) 979-3710

Email: biegler@southcrossenergy.com

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

Charlesbank Capital Partners LLC

200 Clarendon Street, 54^th Floor

Boston, Massachusetts 02116

Attn: Jon M. Biotti

Facsimile: (617) 619-5402

Email: jbiotti@charlesbank.com

and

Gardere Wynne Sewell LLP

1601 Elm Street, Suite 3000

Dallas, Texas 75201

Attn: Robert Sarfatis

Facsimile: (214) 999-3245

Email: rsarfatis@gardere.com

If, following the Closing, to the Company:

Southcross Holdings LP

1700 Pacific Avenue, Suite 2900

Dallas, Texas 75201

Attn: David W. Biegler

Facsimile: (214) 979-3710

Email: biegler@southcrossenergy.com

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

BBTS Borrower LP

18615 Tuscany Stone, Suite 300

San Antonio, Texas 78258

Attn: Phil Mezey

Facsimile: (210) 495-0075

Email: phil.mezey@texstarms.com

and

Charlesbank Capital Partners LLC

200 Clarendon Street, 54^th Floor

Boston, Massachusetts 02116

Attn: Jon M. Biotti

Facsimile: (617) 619-5402

Email: jbiotti@charlesbank.com

and

Tailwater Capital LLC

300 Crescent Court, Suite 200

Dallas, Texas 75201

Attn: Jason H. Downie

Facsimile: (214) 292-8562

Email: jdownie@tailwatercapital.com

and

EIG Global Energy Partners

Three Allen Center

333 Clay Street, Suite 4150

Houston, Texas 77002

Attn: Clayton R. Taylor

Email: clay.taylor@eigpartners.com

All such notices shall be deemed to have been duly given, (a) as of the date of delivery, if delivered personally or by overnight delivery service or other courier, (b) on the date receipt is acknowledged, if delivered by certified mail, and (c) upon the date on which the transmission is separately confirmed in writing, if delivered by facsimile or Email. A Party may change its address for notice by notice to the other Parties in the manner set forth above.

11.8 Waiver.

(a) Any waiver of a breach of any of the terms of this Agreement or of any default hereunder shall be in writing and shall not be deemed a waiver of any subsequent breach or default and shall in no way affect the other terms of this Agreement.

(b) No failure to exercise and no relaxation, forbearance, indulgence or delay on the part of any Party in exercising any right, remedy, power or privilege of that Party under this Agreement and no course of dealing among the Parties shall be construed or operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

11.9 Severability. If any provision of this Agreement or the application of any such provision to any Person or circumstance, shall be declared judicially to be invalid, unenforceable or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, it being the intent and agreement of the Parties that this Agreement shall be deemed amended to modify such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent or, if such modification is not possible, by substituting therefor another provision that is valid, legal and enforceable and that achieves the same objective.

11.10 Conspicuousness of Provisions. The Parties acknowledge and agree that the provisions contained in this Agreement that are set out in “bold” and “all capital letters” satisfy the requirement of the “express negligence rule” and any other requirement at Law or in equity that provisions contained in a contract be conspicuously marked or highlighted.

11.11 Deliveries to a Party. Any document or item will be deemed “delivered,” “provided” or “made available” by a Person for all purposes within the meaning of this Agreement if such document or item (a) is included in the electronic data site hosted by Merrill Corporation at the Parties’ request for “Project Landry,” (b) is actually delivered or provided to the subject Person or its Representatives or (c) is made available upon request, including at such Person’s or any of its Affiliates’ offices.

11.12 Counterparts; Delivery. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original instrument, but all of which taken together shall constitute one and the same instrument. A Party’s delivery of an executed counterpart signature page by facsimile or Email transmission is as effective as executing and delivering this Agreement in the presence of the other Parties. No Party shall be bound until such time as all of the Parties have executed this Agreement (or counterparts hereof).

11.13 Representation by Counsel. Each Party acknowledges that it has been represented by independent counsel of its choice during the negotiation and execution of this Agreement and the documents referred to herein, and that it has executed the same upon the advice of such independent counsel. Each Party and its counsel cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto shall be deemed the work product of the Parties and may not be construed against any Party by reason of its preparation. Therefore, the Parties waive the application of any Law providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

11.14 Time of the Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

11.15 Schedules. The Parties agree as follows:

(a) The information in any Schedule constitutes (i) exceptions to particular representations, warranties, covenants and obligations of the Parties, as applicable, as set forth in this Agreement or (ii) descriptions or lists and other items referred to in this Agreement. Capitalized terms used but not defined in the Schedules have the meanings given them in this Agreement.

(b) The Schedules are not intended to broaden the scope of any representation or warranty contained in this Agreement or create any covenant. Any disclosure in one Schedule applicable to a Party will be deemed to be disclosed in any other Schedule applicable to such Party where such disclosure is reasonably apparent on the face of such disclosure that it applies to such other Schedule.

(c) The inclusion of any item in any Schedule (i) does not represent a determination or belief that such item is required to be disclosed or is material (nor does such inclusion establish a standard of materiality), (ii) does not represent a determination that such item did not arise in the Ordinary Course of Business and (iii) will not constitute, or be deemed to be, an admission to any Person (other than the Parties) concerning such item.

(d) Any specific factual matters disclosed in the SXE SEC Documents filed or furnished on or after January 1, 2013 and prior to June 1, 2014 (and expressly excluding any disclosures in such SXE SEC Documents to the extent they are predictive or forward-looking or otherwise general in nature) shall be deemed to have been set forth on the Schedules applicable to Southcross for purposes of Article VII; provided, however, this Section 11.15(d) shall not be applicable (and no disclosure shall be deemed to have been made unless set forth on the applicable Schedule) with respect to any Fundamental Representations or any of the representations and warranties of Southcross set forth in Sections 7.3, 7.5, 7.7 (except as to 7.7(a) to the extent such Contracts are listed as an Exhibit to any such SXE SEC Documents), 7.9 or 7.14.

[Signature Page Follows]

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


BBTS:

BBTS BORROWER LP

By:		BBTS BORROWER GP LLC
		Its General Partner

By:		/s/ P. Scott Martin
Name:		P. Scott Martin
Title:		Co-Chief Executive Officer, President and Chief Financial Officer


SOUTHCROSS:

SOUTHCROSS ENERGY LLC

By:		/s/ David W. Biegler
		David W. Biegler, Chairman


COMPANY:

SOUTHCROSS HOLDINGS LP

By:		SOUTHCROSS HOLDINGS GP LLC
		Its General Partner

By:		/s/ Phillip M. Mezey
		Phillip M. Mezey, Chief Executive Officer

Exhibit A

Definitions

“Adjustment Amount” means an amount equal to (a) the Qualified Reimbursement Amount and (b)(i) if Closing Working Capital exceeds $5,000,000, plus the amount of such excess or (ii) if Closing Working Capital is less than negative $15,000,000, minus the absolute value of such deficiency.

“Adjustment Loss” has the meaning set forth in Section 10.9(c).

“Adjustment Statement” has the meaning set forth in Section 2.6(a).

“Affiliate” means any Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the Person specified; provided, however, that notwithstanding the foregoing, neither Atlas nor any of its Affiliates (other than the TexStar JV Entities) shall be considered an “Affiliate” of BBTS or any member of the TexStar Group. For the purpose of the immediately preceding sentence, the terms “control” or “controlled” mean the possession, directly or indirectly, of the power, directly or indirectly, to direct or cause the direction of the management or policies of the controlled Person, whether through the ownership of equity interests in or voting rights attributable to the equity interests in such Person, by contract or agency, by the general partner of a Person that is a partnership, or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Assignment” means a membership interest and/or limited partnership interest power or assignment, or similar document or instrument of conveyance, that irrevocably assigns, transfers and conveys the Equity Interest being contributed.

“Assumed Debt Amount” has the meaning set forth in Section 2.5(g).

“Atlas” means APL SouthTex Processing Company LP, a Texas limited partnership.

“Audit Fees” has the meaning set forth in Section 2.7(h).

“Audit Firm” means PricewaterhouseCoopers LLP or such other accounting firm as the Parties may mutually select.

“Basket” has the meaning set forth in Section 10.6(a).

“BBTS” has the meaning set forth in the Preamble.

“BBTS Contribution” has the meaning set forth in Section 2.5(f).

“BBTS Credit Facility” means that certain Credit Agreement, dated as of June 4, 2013, as amended, restated, amended and restated, supplemented or otherwise modified from time to time, among BBTS, BBTS Borrower GP LLC, a Delaware limited liability company, BBTS Guarantor LP, a Delaware limited partnership, the subsidiaries of BBTS party thereto as guarantors, the lenders party thereto from time to time, UBS AG, Stamford Branch, as administrative agent and collateral agent, and the other parties thereto.

“BBTS Director” means the director designated by the directors of the Company appointed by BBTS.

“BBTS Lender” means UBS AG, Stamford Branch, as administrative agent.

“BBTS’ Proposed Adjustment Amount” has the meaning set forth in Section 2.6(a).

“BBTS Representatives” has the meaning set forth in Section 8.2(b).

“Benefit Plan” means (a) each “employee benefit plan,” as such term is defined in Section 3(3) of ERISA, (b) each plan that would be an “employee benefit plan,” as such term is defined in Section 3(3) of ERISA, if it were subject to ERISA, such as foreign plans and plans for directors, (c) each equity bonus, equity ownership, equity option, equity purchase, equity appreciation rights, phantom equity or other equity-based plan and (d) each bonus, commission, incentive, deferred compensation plan, severance, employment, consulting, retention, transaction, change-of-control, “stay,” “sale,” group insurance, retirement, health, welfare, fringe or other compensation plan, agreement, contract, arrangement or practice.

“Business Day” means any day other than (a) Saturday or Sunday or (b) any day on which the Federal Reserve Bank of Dallas, Texas is closed.

“Claim Notice” means written notice from an Indemnified Party to an Indemnifying Party with respect to a Loss.

“Closing” has the meaning set forth in Section 2.1.

“Closing Date” has the meaning set forth in Section 2.1.

“Closing Working Capital” means Current Assets minus Current Liabilities.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor law, and the Treasury Regulations.

“Company” has the meaning set forth in the Preamble.

“Company Indemnitees” has the meaning set forth in Section 10.1(b).

“Company GP Interest” has the meaning set forth in the Recitals.

“Company Interests” has the meaning set forth in the Recitals.

“Company LP Interest” has the meaning set forth in the Recitals.

“Confidentiality Agreement” means that certain Confidentiality and Nondisclosure Agreement, dated as of December 5, 2013, by and between SXE and TexStar LP.

“Consolidated Group” means any affiliated, combined, consolidated, unitary or similar group with respect to any Taxes, including any affiliated group within the meaning of Section 1504 of the Code electing to file consolidated federal income Tax Returns and any similar group under foreign, state or local law.

“Contract” means, with respect to any Person, any agreement, arrangement, commitment, obligation, contract, or instrument of any type whatsoever, whether oral or written, express or implied, including any concessions, conditional sales agreements, deeds of trust, guaranties, leases, license agreements, mortgages, non-competition agreements, notes, pledge agreements, purchase and sales orders, security agreements or warranties, to which a Person is a party or by which any of its properties or assets may be bound.

“Contributed Entities” means the members of the SXE Group and the members of the TexStar Group.

“Contribution Consideration” means, with respect to the BBTS Contribution and the Southcross Contribution, the respective amount set forth in the LLC Agreement representing the agreed value of such contribution.

“Controlling Person” has the meaning set forth in Section 8.13(d).

“Covered Losses” has the meaning set forth in Section 10.6(a).

“CP Deadline” has the meaning set forth in Section 10.9(a).

“Credit Facility” means the credit arrangements applicable to the Company on substantially the same terms as set forth in the SXE Commitment Letter.

“Current Assets” means the sum of all current assets of the TexStar Group (other than the TexStar JV Entities) as of the Measurement Date as determined in accordance with GAAP (as applied on a basis consistent with past practice and the preparation of the most recent balance sheet included in the TexStar Historical Financial Statements), as adjusted (whether or not making such adjustment is in accordance with GAAP) (a) to give effect to this Agreement, (b) to utilize the methodologies, principles and procedures otherwise specified in or consistent with the Sample Balance Sheet, (c) to give effect to the inclusion of receivables owed by any TexStar JV Entity to any other member of the TexStar Group and (d) to give effect to the exclusion of the following: (i) accounts receivable evidencing indebtedness, accounts and obligations owed by any member of the TexStar Group (other than the TexStar JV Entities) to any other member of the TexStar Group (other than the TexStar JV Entities), (ii) amounts receivable from Representatives of BBTS or any member of the TexStar Group (other than the TexStar JV Entities), (iii) accounts receivable aged over 90 days (other than as contemplated by clause (c) above); (iv) any amounts held in any escrow account; (v) assets arising from or related to derivative transactions or contracts; (vi) accounts receivable arising from the sale of Hydrocarbons; (vii) accounts receivable resulting from any reimbursements or similar payments in connection with Qualified Capital Expenditures; and (viii) deferred tax assets and tax refunds. A sample computation of Current Assets is illustrated in the Sample Balance Sheet.

“Current Liabilities” means the sum of all current liabilities of the TexStar Group (other than the TexStar JV Entities) as of the Measurement Date as determined in accordance with GAAP (as applied on a basis consistent with past practice and the preparation of the most recent balance sheet included in the TexStar Historical Financial Statements), as adjusted (whether or not making such adjustment is in accordance with GAAP) (a) to give effect to this Agreement, (b) to utilize the methodologies, principles and procedures otherwise specified in or consistent with the Sample Balance Sheet, (c) to give effect to the inclusion of payables owed by any member of the TexStar Group to any TexStar JV Entity and (d) to give effect to the exclusion of the following: (i) accounts payable evidencing obligations owed by any member of the TexStar Group (other than the TexStar JV Entities) to any other member of the TexStar Group (other than the TexStar JV Entities), (ii) any amounts held in any escrow account; (iii) amounts payable arising from or related to derivative transactions or contracts; (iv) amounts payable arising from the purchase of Hydrocarbons; (v) amounts payable resulting from Qualified Capital Expenditures to the extent such expenditures would be included in the Qualified Reimbursement Amount if they had been paid before the Measurement Date; (vi) liabilities arising from Transaction Expenses; and (vii) liabilities under the BBTS Credit Facility. A sample computation of Current Liabilities is illustrated in the Sample Balance Sheet.

“Debt Financing Sources” has the meaning set forth in Section 11.1(d).

“Direct Claim” has the meaning set forth in Section 10.5(a).

“Dispute Notice” has the meaning set forth in Section 2.7(b).

“Disputed Return Date” has the meaning set forth in Section 8.13(b).

“Disputing Party” has the meaning set forth in Section 8.13(b).

“Drop-Down Agreement” means a Purchase and Sale Agreement, in substantially the form attached as Exhibit B pursuant to which the Company will transfer to the SXE Group the partnership interests and membership interests in Frio LaSalle Pipeline and Frio LaSalle GP, respectively, in exchange for the consideration set forth therein.

“Easements” means the rights-of-way, easements, leases and servitudes that are used by TexStar LP and its Subsidiaries in the location, operation, maintenance, repair, replacement, use or ownership of TexStar Assets.

“Email” means electronic mail.

“Encumbrances” means any claim, lien, mortgage, deed of trust, security interest, pledge, charge, setoff, option, attachment, right of first refusal, covenant, encroachment, encumbrance, restriction or any other adverse claim of any kind, and additionally with respect to Equity Interests includes preemptive rights, rights of first offer, purchase options or other restrictions or limitations affecting transferability.

“Environmental Laws” means any federal, tribal, state, local or foreign Law (including common law), consent decree, settlement agreement, judgment, order or other legal requirement issued by or entered into with a Governmental Authority pertaining or relating to: (a) pollution

or pollution control, including storm water; or (b) protection of human health from exposure to Hazardous Substances or protection, preservation or remediation of the environment. “Environmental Laws” includes the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. § 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251 et seq., the Federal Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq., the Rivers and Harbors Act, as amended 33 U.S.C. 401 et seq., the Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Federal Air Pollution Control Act, 42 U.S.C. § 7401 et seq., the National Environmental Policy Act, as amended 42 U.S.C. 4321 et seq., the Endangered Species Act, 16 U.S.C. § 1531 et seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §§ 11001 et seq., the Pollution Prevention Act of 1990, 42 U.S.C. §§ 13101 et seq., each as amended, and any regulations, orders and requirements thereunder, each as amended, or any equivalent or analogous state or local Laws, any regulation, order or requirements thereunder and any amendments thereto.

“Equity Interest” means, with respect to any Person, (a) any capital stock, partnership or membership interest (including a profits interest), unit of participation or other similar interest (however designated) in such Person and (b) any option, restricted share, restricted stock unit, stock appreciation right, profits interest, warrant, purchase right, conversion right, exchange right or other Contract which would entitle any other Person to acquire any such interest in such Person or otherwise entitle any other Person to share in the equity, profits, earnings, losses or gains of such Person (including stock appreciation, phantom equity, profit participation or other similar rights).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“Estimated Adjustment Amount” has the meaning set forth in Section 2.6(b).

“Excluded Returns” has the meaning set forth in Section 8.13(b).

“Excluded TexStar Assets” means the assets set forth on Schedule 1.1(a) hereto.

“Expiration Date” has the meaning set forth in Section 10.3(a).

“Final Adjustment Amount” has the meaning set forth in Section 2.7(e).

“Final Adjustment Statement” has the meaning set forth in Section 2.7(a).

“Financing” means the full amount of the debt financing necessary to consummate the Transactions pursuant to the Commitment Letter.

“Financing Cooperation” has the meaning set forth in Section 8.17.

“Financing Source” means each Person that provides or commits to provide financing (whether as the original source or as an alternative) to Company or any of its Affiliates in connection with the Transactions, and the respective Affiliates and Representatives of any such Person, including the parties to any joinder agreements, credit agreements, indentures, or related documents entered into in connection therewith or relating thereto.

“Frio LaSalle GP” means Frio LaSalle GP, LLC, a Texas limited liability company.

“Frio LaSalle Pipeline” means Frio LaSalle Pipeline, LP, a Texas limited partnership.

“Fundamental Representations” has the meaning set forth in Section 10.3(a)(i).

“GAAP” means U.S. generally accepted accounting principles consistently applied.

“Governmental Authority” means any federal, state, local, or foreign government, political subdivision, or governmental or regulatory authority, agency, board, bureau, commission, instrumentality, or court, arbitral tribunal or quasi-governmental authority.

“Hazardous Substances” means any hazardous waste, hazardous substance, extremely hazardous substance, hazardous material, pollutant, contaminant, toxic substance, toxic chemical, asbestos or asbestos-containing materials, petroleum, petroleum constituents, petroleum byproducts, Hydrocarbons, naturally occurring radioactive material, each as defined in, listed or designated, or which otherwise is the subject of any rule, regulation or other requirement, pursuant to any Environmental Law.

“Holdings GP” has the meaning set forth in the Recitals.

“Hydrocarbons” means oil, gas, condensate and other gaseous and liquid hydrocarbons or any combination thereof.

“Indebtedness” means, with respect to any Person, funded indebtedness for borrowed money owed to any other Person (whether in respect of principal, interest, prepayment penalties, reimbursement of costs and expenses, interest swap breakage fees or otherwise) and includes: (a) obligations related to drawn letters of credit or similar instruments; (b) obligations evidenced by bonds, debentures, notes and similar instruments; (c) obligations to pay the deferred purchase price of property or services; (d) obligations under leases that are required by GAAP to be classified as capital leases; (e) obligations under any currency or interest rate swap, hedge or similar protection device; and (f) Indebtedness of third parties that is either guaranteed by such Person or secured by an Encumbrance on such Person’s assets. For the avoidance of doubt, “Indebtedness” does not include trade payables or accrued expenses.

“Indemnified Party” has the meaning set forth in Section 10.4(a).

“Indemnified Taxes” means (i) any Tax of the Contributed Entities for a Pre-Closing Tax Period (as determined under Section 8.13(c) with respect to Straddle Periods); (ii) Taxes that a Contributed Entity assumes or otherwise becomes liable for by Contract, pursuant to applicable Law as a successor or transferee, or otherwise for any Pre-Closing Tax Period; (iii) Taxes that a Contributed Entity is liable for (including under Treasury Regulation section 1.1502-6 or any

similar provision of state, local, or non-U.S. applicable Laws) as a result of being a member of (or leaving) a consolidated, combined or unitary Tax group on or before the Closing Date; and (iv) Taxes that a Contributed Entity is liable for as a result of the transactions contemplated by this Agreement.

“Indemnifying Party” has the meaning set forth in Section 10.4(a).

“Indemnity Notice” has the meaning set forth in Section 10.9(a).

“Intellectual Property” means patents, patent applications, trademarks, trademark registrations or applications therefor, trade names, service marks, service mark rights, logos, domain names, corporate names and associated goodwill, copyrights (including software), copyright registrations or applications therefor, trade secrets, know-how, processes, confidential business information, engineering data, maps, interpretations and other confidential and proprietary information.

“Knowledge” or any similar term means (a) with respect to BBTS, the actual knowledge of any of the Persons set forth on Schedule 1.1(b) and (b) with respect to Southcross, the actual knowledge of any of the Persons set forth on Schedule 1.1(c).

“Labor Agreement” has the meaning set forth in Section 5.7(a)(viii).

“Law” or “Laws” means any and all laws, statutes, ordinances, proclamations, codes, regulations, Permits, orders, decrees and rules of any Governmental Authority.

“LLC Agreement” means the Amended and Restated Limited Liability Agreement of Holdings GP in the form attached as Exhibit C.

“Loss” or “Losses” means all liabilities, losses, claims, damages, Proceedings, demands, assessments, adjustments, fees, fines, penalties, Taxes, judgments, orders, costs and expenses (including reasonable attorneys’ fees, expert witness fees and costs and expenses of investigation, defense and prosecution).

“LP Agreement” means the Amended and Restated Agreement of Limited Partnership of the Company in the form attached as Exhibit D, as amended before the Closing to incorporate provisions necessary to effect the creation and designation, and the issuance by the Company to BBTS at the Closing, of Preferred Equity (the amount of such Preferred Equity to be adjusted or wholly or partially redeemed as contemplated in Section 2.7(f)), such amendment to be in form and substance reasonably satisfactory to the Parties.

“Maintenance Capital Expenditures” means any cash expenditures (including expenditures for the addition or improvement to, or the replacement of, capital assets or for the acquisition of existing, or the construction or development of new capital assets) made to maintain long-term operating income or operating capacity of the TexStar Group. For purposes of this definition, “long term” generally refers to a period of not less than twelve months.

“Marketing Period” means a period of 15 consecutive calendar days following the receipt by BBTS Lender of a pro forma consolidated balance sheet (calculated at the most recent

available balance sheet date) of the Company, its subsidiaries, SXE GP, and SXE and its subsidiaries, and an income statement for the twelve months most recently ended at the Closing Date, prepared after giving effect to the Transactions and such other adjustments as shall be agreed between the Company and BBTS Lender as if such transactions or adjustments had occurred as of such date.

“Material Adverse Effect” means, with respect to any Person or Persons, any change, event or development that is materially adverse to the business, financial condition or operations of such Person or Persons, taken as a whole; provided, however, that a “Material Adverse Effect” shall not be deemed to have occurred as a result of any of the following changes, events, circumstances, developments or occurrences (either alone or in combination): (a) changes, after the date hereof, in GAAP or regulatory accounting requirements applicable generally to companies in the industries in which such Person or Persons operate; (b) changes, after the date hereof, in Laws or the interpretation of Laws by Governmental Authorities of general applicability to companies in the industries in which such Person or Persons operate; (c) actions or omissions taken with the prior written consent of the Party not at issue or as expressly required by this Agreement; (d) changes in global, national or regional political conditions (including acts of terrorism or war) or general business, economic or market conditions, in each case, generally affecting the industries in which such Person or Persons operate; or (e) changes resulting from the execution of this Agreement or the public disclosure of this Agreement or the Transactions, except, with respect to clauses (a), (b) and (d) of this paragraph, to the extent that the effects of such change are disproportionately adverse to the financial condition, results of operations or business of such Person or Persons, taken as a whole, as compared to other companies in the industry in which such Person or Persons operate.

“Measurement Date” means 11:59 p.m. (local time) on the day immediately preceding the Closing Date.

“Merger” has the meaning set forth in Section 8.16(a).

“New Frio LP” has the meaning set forth in Section 8.16(a)(ii).

“Non-Controlling Person” has the meaning set forth in Section 8.13(d).

“Non-Fundamental Representations” has the meaning set forth in Section 10.3(a)(ii).

“NYSE” means the New York Stock Exchange.

“Offered Assets” has the meaning set forth in Section 8.12(a).

“Operative Documents” means this Agreement and the other documents, instruments and certificates contemplated hereby or in respect of the Related Transactions.

“Ordinary Course of Business” means the ordinary course of business of such Person consistent with past custom and practice.

“Organizational Documents” means, with respect to any Person (other than an individual), (a) the certificate or articles of incorporation, formation or organization and any joint

venture, limited liability company, operating or partnership agreement and other similar documents adopted or filed in connection with the creation, formation or organization of such Person and (b) all bylaws, voting agreements and similar documents, instruments or agreements relating to the organization or governance of such Person, in each case, as amended or supplemented.

“Outside Date” has the meaning set forth in Section 9.1(d).

“Party” or “Parties” has the meaning set forth in the Preamble.

“Permits” means, with respect to any Person, any license, franchise, permit, consent, approval, right, privilege, certificate or other similar authorization issued by, or otherwise granted by, any Governmental Authority to which or by which such Person is subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

“Permitted Encumbrances” means:

(a) Encumbrances for Taxes that are not yet due and payable or the validity of which is being contested in good faith by appropriate proceedings, provided in each case that adequate reserves (in accordance with GAAP) have been made in respect thereof;

(b) mechanic’s, materialman’s, carrier’s, repairer’s and other similar Encumbrances arising or incurred in the Ordinary Course of Business that are not yet due and payable;

(c) rights of use, easements, rights-of-way, permits, licenses, servitudes, surface leases, sub-surface leases, grazing rights, and logging rights on, over or through the applicable asset and other minor defects or irregularities in title, or encumbrances on, the applicable asset that do not materially affect or impair the use or operation or the cost of operation of the asset to which they relate or the ability of the specified Person to conduct its business;

(d) zoning, municipal planning, building codes or other applicable Laws regulating the use, development or occupancy of real property, including building and use restrictions and covenants;

(e) the terms and conditions of the instruments creating the asset, provided that no current violations exist with respect to same;

(f) the terms of any Contract in existence as of the date hereof to which such Person is party;

(g) Encumbrances that will be fully released at or prior to Closing; and

(h) (i) with respect to the members of the TexStar Group, defects that Southcross waives in writing pursuant to a separate agreement, and (ii) with respect to the SXE Group, defects that BBTS waives in writing pursuant to a separate agreement.

“Person” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or any other entity.

“Post-Closing Returns” has the meaning set forth in Section 8.13(b).

“Post-Closing Tax Event” means: (a) amending a Tax Return of any of the Contributed Entities for a Pre-Closing Tax Period; (b) extending or waiving the applicable statute of limitations with respect to a Tax of any of the Contributed Entities for a Pre-Closing Tax Period; (c) filing any ruling request with any Governmental Authority that relates to Taxes or Tax Returns of any of the Contributed Entities for a Pre-Closing Tax Period; (d) filing Tax Returns or paying Taxes for a Pre-Closing Tax Period in jurisdictions that any Contributed Entity did not previously file a Tax Return (or pay Taxes) for such periods; (e) making, changing or rescinding any Tax election, adopting or changing any Tax accounting method; and (f) surrendering any right to claim a refund of Taxes, or taking any action or entering into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset (including a refund of any Tax), in each case, with respect to any Pre-Closing Tax Period.

“Post-Closing Tax Period” means any taxable period other than a Pre-Closing Tax Period, including the portion of a Straddle Period beginning on the date following the Closing Date as determined in Section 8.13(c).

“Pre-Closing Tax Period” means any taxable period that ends on or before the Closing Date, including the portion of a Straddle Period ending on the Closing Date as determined in Section 8.13(c).

“Preferred Equity” means a limited partnership interest in the Company that is non-voting and is entitled to a preferred return of 7% per annum, and when the face amount of such equity and such preferred return is paid in full, is not entitled to any other distributions, rights, preferences or privileges under the LP Agreement.

“Proceeding” means any claim, action, suit, investigation or inquiry before or by any Governmental Authority or arbitrator.

“Qualified Capital Expenditures” means those activities creating an increase in book entries for “property, plant and equipment” according to GAAP by any member of the TexStar Group for such activities performed during the period from March 1, 2014 through the Measurement Date (to the extent the related project is set forth in the TexStar Capex Budget) for the construction of new capital assets or the replacement, improvement or expansion of existing capital assets, in each case, if and to the extent such construction, replacement, improvement or expansion is made to increase, over the long-term, the operating capacity or operating income of the TexStar Group existing immediately before such construction, replacement, improvement, expansion or capital contribution. For purposes of this definition, “long-term” generally refers to a period of not less than twelve months. Notwithstanding the foregoing, the term “Qualified Capital Expenditures” shall not include any Maintenance Capital Expenditures.

“Qualified Reimbursement Amount” means an amount equal to the cash expended by any member of the TexStar Group in payment for Qualified Capital Expenditures.

“Redirected Distribution Amount” has the meaning given such term in the LP Agreement.

“Related Affiliates” means (a) TexStar Midstream Products GP, LLC, a Texas limited liability company, (b) TexStar Midstream Products, LP, a Texas limited partnership, (c) TexStar Midstream Operating, LLC, a Texas limited liability company, and (d) TexStar Midstream II GP, LLC, a Texas limited liability company (successor to TexStar Crude Oil Services, LP, TexStar Midstream Transport, LP, and TexStar COP, LP).

“Related Transactions” means the transactions contemplated by the Credit Facility, the SXE Credit Facility and the Drop-Down Agreement.

“Release” means any depositing, spilling, leaking, pumping, pouring, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or disposing.

“Representatives” means (a) partners, employees, officers, directors, members, equity owners and counsel of a Party or any of its Affiliates or any prospective purchaser of a Party or an interest in a Party, (b) any consultant or agent retained by a Party or the parties listed in subsection (a) above and (c) any bank, other financial institution or entity funding, or proposing to fund, a Party or its Affiliates.

“ROFO Notice Period” has the meaning set forth in Section 8.12(b).

“ROFO Offer Notice” has the meaning set forth in Section 8.12(c).

“Sample Balance Sheet” means the balance sheet attached as Exhibit E providing an illustrative calculation of Current Assets and Current Liabilities.

“SEC” means the Securities and Exchange Commission.

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

“Series A Change of Control Offer” has the meaning given to such term in the SXE Partnership Agreement.

“Sharing Ratio” has the meaning given such term in the LLC Agreement.

“Southcross” has the meaning set forth in the Preamble.

“Southcross Contribution” has the meaning set forth in Section 2.5(a).

“Southcross Director” means the director designated by the directors of the Company appointed by Southcross.

“Southcross Indemnitees” has the meaning set forth in Section 10.1(a).

“Southcross Representatives” has the meaning set forth in Section 8.2(a).

“Specified Person” has the meaning set forth in Section 4.1.

“Straddle Period” means any taxable period that includes, but does not end on, the Closing Date.

“Straddle Return” means a Tax Return of, or that includes, a Contributed Entity for a Straddle Period, excluding an Excluded Return.

“Subject Losses” has the meaning set forth in Section 10.9(a).

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

“SXE” has the meaning set forth in the Recitals.

“SXE Assets” means all of the assets owned or used by the SXE Group.

“SXE Business” means the business of natural gas gathering, processing, treating, compression and transportation services, crude oil transportation services and NGL fractionation and transportation services conducted by the SXE Group as of the date hereof.

“SXE Company Interest” has the meaning set forth in Section 6.7(a).

“SXE Commitment Letter” means a commitment letter from the lender parties to SXE dated June 11, 2014.

“SXE Contract” has the meaning set forth in Section 7.7(a).

“SXE Credit Facility” means the credit arrangements applicable to SXE on substantially the same terms as set forth in the SXE Commitment Letter.

“SXE ERISA Affiliate” has the meaning set forth in Section 7.18(a).

“SXE Financial Statements” has the meaning set forth in Section 7.4.

“SXE GP” has the meaning set forth in the Recitals.

“SXE GP Interest” has the meaning set forth in the Recitals.

“SXE Group” means SXE and SXE GP and each of their Subsidiaries.

“SXE Historical Financial Statements” has the meaning set forth in Section 7.4.

“SXE Interests” has the meaning set forth in the Recitals.

“SXE Latest Financial Statements” has the meaning set forth in Section 7.4.

“SXE LP Interest” has the meaning set forth in the Recitals. For purposes of this Agreement, the term “SXE LP Interest” shall include any additional common units, subordinated units and Series A preferred units of SXE acquired by Southcross after the date hereof and on or before the Closing Date (including, for the avoidance of doubt, any common units acquired by Southcross in connection with the Series A preferred unit conversion contemplated by the Series A Change of Control Offer).

“SXE Partnership Agreement” means that certain Second Amended and Restated Agreement of Limited Partnership of SXE, dated as of April 12, 2013, as amended from time to time.

“SXE SEC Documents” means all reports, schedules, forms, statements, financials and other documents (including exhibits and other information incorporated therein) required to be furnished or filed by SXE with the SEC since January 1, 2014 subject to applicable extensions.

“T2 EF Gathering” means T2 Eagle Ford Gathering Company LLC, a Delaware limited liability company.

“T2 EFC” means T2 EF Cogeneration LLC, a Texas limited liability company and wholly-owned Subsidiary of T2 EFC Holdings.

“T2 EFC Holdings” means T2 EF Cogeneration Holdings LLC, a Delaware limited liability company.

“T2 LaSalle” means T2 LaSalle Gas Utility LLC, a Texas limited liability company and wholly-owned Subsidiary of T2 LaSalle Gathering.

“T2 LaSalle Gathering” means T2 LaSalle Gathering Company LLC, a Delaware limited liability company.

“T2GU” means T2 Gas Utility LLC, a Texas limited liability company and wholly-owned Subsidiary of T2 EF Gathering.

“Target Closing Date” has the meaning set forth in Section 2.1.

“Tax Claim” has the meaning set forth in Section 8.13(d).

“Tax Proceedings” has the meaning set forth in Section 8.13(d).

“Tax Return” means any return, declaration, report, claim for refund, information return, or statement relating to Taxes, including any attachment thereto and any amendment thereof.

“Taxes” means (a) all federal, state, local and foreign income, gross income, profits, ad valorem, severance, production, gain, gross receipts, excise, property, sales, withholding, social security, unemployment, occupation, use, goods and services, license, payroll, franchise, real property, personal property, fuel, severance, transfer, and recording taxes or other assessments, fees, and charges, imposed by any Government Authority, including any interest, penalty or addition thereto, whether disputed or not; (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated or combined group for any period; and (c) any liability for the payment of any amounts of the type described in clauses (a) or (b) as a result of the operation of Law or any express or implied obligation to indemnify any other Person.

“TexStar” means, together, TexStar LP and TexStar GP.

“TexStar Assets” means all of the assets owned or used by the TexStar Group, other than the Excluded TexStar Assets.

“TexStar Business” means the business of natural gas gathering, processing, treating, compression and transportation services, crude oil transportation services and NGL fractionation and transportation services conducted by the TexStar Group as of the date hereof.

“TexStar Capex Budget” means the capital expenditure plan set forth on Schedule 1.1(d) related to capital expenditures to be incurred after the date hereof.

“TexStar Contracts” has the meaning set forth in Section 5.7(a).

“TexStar ERISA Affiliate” has the meaning set forth in Section 5.18(a).

“TexStar Excluded Return” means an Excluded Return that includes a member of the TexStar Group.

“TexStar Financial Statements” has the meaning set forth in Section 5.4.

“TexStar GP” has the meaning set forth in the Recitals.

“TexStar GP Interest” has the meaning set forth in the Recitals.

“TexStar Group” means TexStar GP, TexStar LP, Frio LaSalle GP, Frio LaSalle Pipeline, TexStar Midstream T/U, TexStar Midstream Utility and TexStar Transmission.

“TexStar Historical Financial Statements” has the meaning set forth in Section 5.4.

“TexStar Indemnitees” has the meaning set forth in Section 10.2(a).

“TexStar Interests” has the meaning set forth in the Recitals.

“TexStar JV Entities” means T2 EFC Holdings, T2 EF Gathering and T2 LaSalle Gathering and each of their respective Subsidiaries.

“TexStar Latest Financial Statement” has the meaning set forth in Section 5.4.

“TexStar LP” has the meaning set forth in the Recitals.

“TexStar LP Interest” has the meaning set forth in the Recitals.

“TexStar Midstream T/U” means TexStar Midstream T/U GP, LLC, a Texas limited liability company.

“TexStar Midstream Utility” means TexStar Midstream Utility, LP, a Texas limited partnership.

“TexStar Rich Gas Restructuring” means assigning all of the assets and rights of way owned by members of the TexStar Group to a newly formed entity in order to more easily effectuate the transactions contemplated by the Drop-Down Agreement.

“TexStar Transmission” means TexStar Transmission, LP, a Texas limited partnership.

“Third Party Debt” means all (a) outstanding indebtedness for borrowed money owed to any Person (other than (i) in the case of the TexStar Group, any other member of the TexStar Group, and (ii) in the case of the SXE Group, any other member of the SXE Group) and (b) outstanding indebtedness of any third person that is guaranteed by, or secured by a lien on any assets or Equity Interests of, (i) in the case of the TexStar Group, any member of the TexStar Group, and (ii) in the case of the SXE Group, any member of the SXE Group.

“Third Person Claim” has the meaning set forth in Section 10.4(a).

“Transaction Expenses” has the meaning set forth in Section 8.8.

“Transactions” means the transactions contemplated by this Agreement and the other Operative Documents, including the BBTS Contribution and the Southcross Contribution.

“Transfer Notice” has the meaning set forth in Section 8.12(a).

“Transfer” has the meaning set forth in Section 8.12(a).

“Treasury Regulations” means the regulations (including temporary regulations) promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code. All references herein to sections of the Treasury Regulations shall include any corresponding provision or provisions of succeeding, similar or substitute, temporary or final Treasury Regulations.

“Waived ROFO Transfer Period” has the meaning set forth in Section 8.12(d).

“WARN Act” has the meaning set forth in Section 5.17(b).

EX-99.3 3 d772644dex993.htm EX-3 EX-3

Exhibit 3

EXECUTION VERSION

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

SOUTHCROSS HOLDINGS GP LLC

A Delaware Limited Liability Company

Dated as of

August 4, 2014

THE UNITS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR AN EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

TABLE OF CONTENTS


ARTICLE I	DEFINITIONS	2

Section 1.1	Definitions	2

Section 1.2	Construction	13

ARTICLE II	ORGANIZATION	14

Section 2.1	Formation	14

Section 2.2	Name	14

Section 2.3	Registered Office; Registered Agent; Principal Office	14

Section 2.4	Purposes	14

Section 2.5	Term	14

Section 2.6	No State Law Partnership	14

Section 2.7	Certain Undertakings Relating to the Separateness	15

ARTICLE III	MEMBERSHIP	16

Section 3.1	Membership Interests; Units; Additional Members	16

Section 3.2	Liability	16

Section 3.3	Withdrawal	16

Section 3.4	Meetings	16

Section 3.5	Notice	17

Section 3.6	Action of Members	17

Section 3.7	Conference Telephone Meetings	17

Section 3.8	Quorum	17

Section 3.9	Investment Opportunities and Conflicts of Interest	17

ARTICLE IV	ADMISSION OF MEMBERS; DISPOSITION OF MEMBERSHIP INTERESTS	18

Section 4.1	General Restriction	18

Section 4.2	Disposition Restrictions	18

Section 4.3	Admission of Assignee as a Member	19

Section 4.4	Requirements Applicable to All Dispositions and Admissions	20

ARTICLE V	CAPITAL CONTRIBUTIONS	20

Section 5.1	Initial Capital Contributions	20

Section 5.2	Additional Capital Contributions by Members	20

Section 5.3	Loans	20

Section 5.4	Return of Contributions	21

Section 5.5	Capital Accounts	21


ARTICLE VI	DISTRIBUTIONS AND ALLOCATIONS	21

Section 6.1	Distributions	21

Section 6.2	Distributions on Dissolution and Winding Up	23

Section 6.3	Allocations	23

Section 6.4	Varying Interests	29

Section 6.5	Withheld Taxes	29

Section 6.6	Limitations on Distributions	29

ARTICLE VII	MANAGEMENT	29

Section 7.1	Management by Board	29

Section 7.2	Number; Qualification; Tenure	30

Section 7.3	Regular Meetings	31

Section 7.4	Special Meetings	31

Section 7.5	Notice	31

Section 7.6	Action by Consent of Board	31

Section 7.7	Conference Telephone Meetings	31

Section 7.8	Quorum	31

Section 7.9	Committees	32

Section 7.10	No Compensation of Directors	32

Section 7.11	Voting on Certain Matters	32

Section 7.12	No Fiduciary Duty	35

Section 7.13	Liquidity Event	35

ARTICLE VIII	OFFICERS	38

Section 8.1	Officers; No Compensation of Officers	38

Section 8.2	Election and Term of Office	39

Section 8.3	Chairman of the Board	39

Section 8.4	Chief Executive Officer	39

Section 8.5	President	39

Section 8.6	Vice Presidents	39

Section 8.7	Treasurer	39

Section 8.8	Secretary	40

Section 8.9	Removal	40

Section 8.10	Vacancies	40


ARTICLE IX	INDEMNITY AND LIMITATION OF LIABILITY	41

Section 9.1	Indemnification; Limitation of Liability	41

Section 9.2	Limited Liability of Indemnitees	42

ARTICLE X	TAXES	43

Section 10.1	Tax Returns	43

Section 10.2	Tax Matters	43

Section 10.3	Tax Matters Member	43

Section 10.4	Tax Information	44

ARTICLE XI	BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS	44

Section 11.1	Maintenance of Books	44

Section 11.2	Reports and Inspection	44

Section 11.3	Bank Accounts	45

ARTICLE XII	DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION	45

Section 12.1	Dissolution	45

Section 12.2	Winding-Up and Termination	46

Section 12.3	Deficit Capital Accounts	47

Section 12.4	Certificate of Cancellation	47

ARTICLE XIII	GENERAL PROVISIONS	47

Section 13.1	Offset	47

Section 13.2	Notices	47

Section 13.3	Entire Agreement; Superseding Effect	48

Section 13.4	Effect of Waiver or Consent	48

Section 13.5	Amendment or Restatement	49

Section 13.6	Binding Effect	49

Section 13.7	Governing Law; Severability	49

Section 13.8	Consent to Jurisdiction; Waiver of Jury Trial	49

Section 13.9	Dispute Resolution	50

Section 13.10	Further Assurances	51

Section 13.11	Waiver of Certain Rights	51

Section 13.12	Counterparts	51

Section 13.13	Suspension of Certain Provisions If Only One Member	51

iii

Exhibit A – Members

Exhibit B – Directors

Exhibit C – Board of Directors of General Partner

Exhibit D – Officers

Exhibit E – Veto Ratio

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

SOUTHCROSS HOLDINGS GP LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of SOUTHCROSS HOLDINGS GP LLC (the “Company”), dated as of August 4, 2014 (the “Effective Date”), is adopted, executed and agreed to by BBTS Borrower LP, a Delaware limited partnership (“BBTS”), and Southcross Energy LLC, a Delaware limited liability company (“Southcross”).

R E C I T A L S:

WHEREAS, the Company has been formed as a Delaware limited liability company by the filing of a Certificate of Formation that was accepted for filing by the Delaware Secretary of State on June 9, 2014 and is the sole general partner of the Partnership (as defined below);

WHEREAS, BBTS entered into the Limited Liability Company Agreement of the Company (the “Original Agreement”) as of June 9, 2014;

WHEREAS, pursuant to the Contribution Agreement (as defined below), Southcross contributed all of the equity interests owned by Southcross in Southcross Energy Partners, LP, a Delaware limited partnership (“SXE”), and 100% of the equity interests of Southcross Energy Partners GP, LLC, a Delaware limited liability company and the sole general partner of SXE (the “SXE GP”), in exchange for Membership Interests (as defined below) in the Company and limited partnership interests in the Partnership;

WHEREAS, pursuant to the Contribution Agreement (as defined below), BBTS contributed 100% of the equity interests of TexStar Midstream Services, LP, a Texas limited partnership (“TexStar”), and 100% of the equity interests of TexStar Midstream GP, LLC, a Texas limited liability and the sole general partner of TexStar (“TexStar GP”), in exchange for Membership Interests in the Company and Partnership Interests in the Partnership; and

WHEREAS, BBTS and Southcross desire to amend and restate the Original Agreement in its entirety;

NOW THEREFORE, for and in consideration of the premises, the covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Members hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

(a) As used in this Agreement, the following terms have the respective meanings set forth below or set forth in the Sections referred to below:

“Act” means the Delaware Limited Liability Company Act (Delaware General Corporations Code Sections 18-101, et seq.), as it may be amended from time to time, and any corresponding provisions of succeeding law. All references to provisions of the Act shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.

“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(i) Credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(ii) Debit to such Capital Account the items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing; provided, however, that with respect to any Member, the term “Affiliate” shall not include the Company, the Partnership or any of their respective Subsidiaries.

“Agreement” has the meaning given such term in the introductory paragraph, as it may be further amended, modified, supplemented or restated from time to time, or any successor agreement.

“Allocation Period” means (a) the period commencing on the Effective Date and ending on the last day of the Company’s tax year, (b) any subsequent period commencing on the first

day of the Company’s tax year and ending on the last day of the Company’s tax year, or (c) any portion of any period described in clause (a) or (b) for which the Company is required to allocate Profits, Losses, and other items of Company income, gain, loss, or deduction pursuant to Section 6.3.

“Applicable Law” means (i) any United States federal, state or local law, statute or ordinance or any rule, regulation, order, writ, injunction, judgment, decree or permit of any Governmental Authority and (ii) any rule or listing requirement of any applicable national stock exchange or listing requirement of any National Securities Exchange or Commission-recognized trading market on which securities issued by SXE, SXE GP or the Partnership (or any successor to any of the foregoing) are listed or quoted.

“Assignee” means any Person that acquires a Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company or any portion thereof through a Disposition; provided, however, that an Assignee shall have no right to be admitted to the Company as a Member except in accordance with Article IV. The Assignee of a dissolved Member is the shareholder, partner, member or other equity owner or owners of the dissolved Member to whom such Member’s Membership Interest is assigned by the Person conducting the liquidation or winding up of such Member.

“Bankruptcy” means, with respect to any Person, that (i) such Person (A) makes a general assignment for the benefit of creditors; (B) files a voluntary bankruptcy petition; (C) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings; (D) files a petition or answer seeking for such Person a reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any Applicable Law; (E) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (A) through (D) of this clause (i); or (E) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of such Person or of all or any substantial part of such Person’s properties; or (ii) a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any Applicable Law has been commenced against such Person and 120 Days have expired without dismissal thereof or with respect to which, without such Person’s consent or acquiescence, a trustee, receiver or liquidator of such Person or of all or any substantial part of such Person’s properties has been appointed and 90 Days have expired without the appointment’s having been vacated or stayed, or 90 Days have expired after the date of expiration of a stay, if the appointment has not previously been vacated. The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in the Act.

“BlackBrush TexStar” means BlackBrush TexStar LP, a Delaware limited partnership.

“Board” has the meaning given such term in Section 7.1(c).

“BBTS” has the meaning set forth in the introductory paragraph and includes any successor to BBTS and any transferee of all but not less than all of BBTS’ Partnership Interests.

“BBTS Distribution” means a distribution by BBTS or any wholly-owned Subsidiary of BlackBrush TexStar of all (and not less than all) of the Partnership Units held by BBTS and wholly-owned Subsidiaries of BlackBrush TexStar to members of the TW Group and EIG Group in proportion to their respective ownership interests in BlackBrush TexStar.

“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks in New York City, New York or Dallas, Texas, are authorized or obligated by law to close.

“Capital Account” means, with respect to any Member, the capital account maintained for such Member in accordance with the following provisions:

(i) To each Member’s Capital Account there shall be credited such Member’s Capital Contributions, such Member’s distributive share of Profits and any items in the nature of income or gain that are specially allocated pursuant to Section 6.3(d), and the amount of any Company liabilities assumed by such Member or that are secured by any property (other than money) distributed to such Member.

(ii) To each Member’s Capital Account there shall be debited the amount of cash and the Gross Asset Value of any property (other than money) distributed to such Member pursuant to any provision of this Agreement, such Member’s distributive share of Losses and any items in the nature of expenses or losses that are specially allocated pursuant to Section 6.3(d), and the amount of any liabilities of such Member assumed by the Company or that are secured by any property (other than money) contributed by such Member to the Company.

(iii) If all or a portion of a Membership Interest is Disposed of accordance with the terms of this Agreement, the Assignee shall succeed to the Capital Account of the transferor to the extent it relates to the Membership Interest so Disposed of.

(iv) In determining the amount of any liability for purposes of the foregoing subparagraphs (i) and (ii) of this definition of “Capital Account,” Section 752(c) of the Code and any other applicable provisions of the Code and Treasury Regulations shall be taken into account.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

“Capital Contribution” means, with respect to any Member, the amount of money and the Gross Asset Value of any tangible or intangible property (other than money) contributed to the capital of the Company by such Member. Any reference in this Agreement to the Capital Contribution of a Member shall include any Capital Contribution of its predecessors in interest.

“Certificate” means a certificate, in such form as may be adopted by the Board, issued by the Company evidencing ownership of one or more Units.

“Claim” means any and all judgments, claims, causes of action, demands, lawsuits, suits, proceedings, Governmental investigations or audits, losses, assessments, fines, penalties, administrative orders, obligations, costs, expenses, liabilities and damages (whether actual, consequential or punitive), including interest, penalties, reasonable attorneys’ fees, disbursements and costs of investigations, deficiencies, levies, duties and imposts.

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

“Commission” means the United States Securities and Exchange Commission.

“Company” has the meaning given such term in the introductory paragraph.

“Company Minimum Gain” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase “partnership minimum gain.”

“Contribution Agreement” means that certain Contribution Agreement dated as of June 11, 2014 among Southcross, BBTS and the Partnership.

“Controlling Entities” means the Members and their respective Affiliates (other than the Company, the Partnership Group, SXE GP and the SXE Group).

“Day” or “day” means a calendar day; provided, however, that, if any period of Days referred to in this Agreement shall end on a Day that is not a Business Day, then the expiration of such period shall be automatically extended until the end of the next succeeding Business Day.

“Deficit Capital Account” has the meaning given such term in Section 12.3.

“Delaware Certificate” has the meaning given such term in Section 2.1.

“Depletable Property” means each separate oil and gas property as defined in Section 614 of the Code owned from time to time by the Partnership as a result of a Capital Contribution, acquisition or otherwise.

“Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction (other than Simulated Depletion) allowable for federal income tax purposes with respect to an asset for such year or other period, except that (i) with respect to any property the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such year or other period will be the amount of book basis recovered for such Allocation Period or other period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2) and (ii) with respect to any other property the Gross Asset Value of which differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation for such year or other period will be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis. Notwithstanding the foregoing, if the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period is zero, Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Company.

“Designating Party” means (i) prior to a BBTS Distribution, each of BBTS and Southcross (or any of their respective Assignees to which such Designating Party assigns its rights to designate Directors as permitted under Section 7.2(c)), so long as such Person has a Sharing Ratio of at least 10% and has the right to designate a Director pursuant to Section 7.2(b), and (ii) from and after a BBTS Distribution, each of EIG, TW Aggregator and Southcross (or any of their respective Assignees to which such Designating Party assigns its rights to designate Directors as permitted under Section 7.2(c)), so long as such Person (or its Permitted Transferees or, in the case of EIG or TW Aggregator any other member of the EIG Group or TW Group, respectively, to whom Partnership Units are distributed pursuant to a BBTS Distribution) has a Sharing Ratio of at least 10% and has the right to designate a Director pursuant to Section 7.2(b).

“Director” or “Directors” means a member or members of the Board.

“Dispose” or “Disposition” means with respect to any asset (including a Membership Interest or any portion thereof), a sale, assignment, transfer, conveyance, gift, exchange or other disposition of such asset, whether such disposition be voluntary, involuntary or by operation of Applicable Law.

“Dispute” has the meaning set forth in Section 13.9(a).

“Dissolution Event” has the meaning given such term in Section 12.1(a).

“DWB” means David W. Biegler.

“Effective Date” has the meaning set forth in the introductory paragraph.

“EIG” means EIG BlackBrush Holdings, a Delaware limited partnership.

“EIG Group” means EIG, TCW Energy Fund XIV, L.P., TCW Energy Fund XIV-A, L.P., TCW Energy Fund XIV (Cayman), L.P., TCW Energy Fund XIV-B, L.P., Energy XIV Blocker (BlackBrush), LLC, Energy Fund XV, L.P., Energy Fund XV-A, L.P., Energy Fund XV (Cayman), L.P., Energy Fund XV-B, L.P., Energy XV Blocker (BlackBrush), LLC, EIG Management Company, LLC and their respective Affiliates and any investment fund or separate account managed by any of the foregoing.

“Equity Securities” means all forms of equity securities in the Company (including Units) or the Partnership, as applicable, all securities convertible into or exchangeable for equity securities in the Company or the Partnership, as applicable, and all options, warrants, and other rights to purchase or otherwise acquire equity securities, or securities convertible into or exchangeable for equity securities, from the Company or the Partnership, as applicable.

“GAAP” means generally accepted accounting principles as applied in the United States.

“Governmental Authority” or “Governmental” means any federal, state or local court or governmental or regulatory agency or authority or any arbitration board, tribunal or mediator having jurisdiction over the Company or its assets or Members.

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of said asset, as determined by the contributing Member and the Board, in a manner that is consistent with Section 7701(g) of the Code and this Agreement;

(ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Board, in a manner that is consistent with Section 7701(g) of the Code and this Agreement, as of the following times: (a) the acquisition of an additional Membership Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution or as consideration for the performance of services on behalf of the Company; (b) the distribution by the Company to a Member of more than a de minimis amount of property other than money as consideration for an Membership Interest; (c) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) and (d) at such other times as the Company may reasonably determine to be necessary or advisable in order to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2; provided, however, that adjustments pursuant to clauses (a) and (b) above shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(iii) The Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market value (taking Section 7701(g) of the Code into account) of such asset on the date of distribution; and

(iv) The Gross Asset Values of any Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) of the Code or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and the definition of Capital Account; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the Tax Matters Member determines that an adjustment pursuant to the foregoing subparagraph (ii) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to the foregoing subparagraphs (i), (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses and for purposes of computing Simulated Depletion and other items allocated pursuant to Article VI.

“Indemnitee” means (i) any Person who is or was an Affiliate of the Company (other than any Person in the SXE Group), (ii) any Person who is or was a member, manager, partner, officer, director, employee, agent, fiduciary or trustee of the Company or any Affiliate of the Company (other than any Person in the SXE Group), (iii) any Person who is or was serving at the request of the Company or any Affiliate of the Company (other than any Person in the SXE Group) as an member, manager, partner, officer, director, employee, agent, fiduciary or trustee of another Person; provided, however, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services and (iv) any Person the Company designates as an “Indemnitee” for purposes of this Agreement.

“Independent Director” means a director satisfying the rules and regulations of the New York Stock Exchange or any National Securities Exchange on which any securities of SXE are listed from time to time and of the Commission, as amended from time to time, pertaining to qualification for service on an audit committee.

“Liquidity Event” means a (i) Qualified IPO and (ii) any other event wherein cash or cash equivalent proceeds to the Members (and any Assignees) on account of their respective Sharing Ratios in the Company and the Partnership are generated outside the ordinary operation of the Partnership Group in conjunction with a Disposition of equity of the Company and/or the Partnership Group (by merger, consolidation or otherwise) or all or any material portion of the assets of the Company and the Partnership Group.

“Liquidity Event Notice” has the meaning given such term in Section 7.13(a).

“Member” means any Person executing this Agreement as of the date of this Agreement as a member of the Company or hereafter admitted to the Company as a member as provided in this Agreement, but such term does not include any Person who has ceased to be a member in the Company.

“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i).

“Member Nonrecourse Debt” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(4) for the phrase “partner nonrecourse debt.”

“Member Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section 1.704-2(i) for the phrase “partner nonrecourse deductions.”

“Membership Interest” means, with respect to any Member, (i) that Member’s status as a Member; (ii) that Member’s share of the income, gain, loss, deduction and credits of, and the right to receive distributions from, the Company; (iii) all other rights, benefits and privileges enjoyed by that Member (under the Act, this Agreement, or otherwise) in its capacity as a Member, including that Member’s rights to vote, consent and approve and otherwise to participate in the management of the Company; and (iv) all obligations, duties and liabilities imposed on that Member (under the Act, this Agreement or otherwise) in its capacity as a Member.

“National Securities Exchange” means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time (or any successor to such section).

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).

“Notices” has the meaning given such term in Section 13.2.

“Original Agreement” has the meaning given such term in the recitals.

“Other Business” has the meaning given such term in Section 3.9.

“Partnership” means Southcross Holdings LP, a Delaware limited partnership.

“Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the Effective Date, as it may be further amended, modified, supplemented or restated from time to time, or any successor agreement.

“Partnership Group” means the Partnership and its Subsidiaries.

“Partnership Interests” means an Interest as defined in the Partnership Agreement.

“Partnership Units” means a Unit as defined in the Partnership Agreement.

“Permitted Transferee” means (i) as to BBTS, any wholly-owned Subsidiary of BlackBrush TexStar, (ii) as to TW Aggregator, any Affiliate of TW Aggregator controlled by any member of the TW Group, (iii) as to EIG, any Affiliate of EIG controlled by any member of the EIG Group, (iv) as to Southcross, any Affiliate of Southcross controlled by any member of the Southcross Group and (v) as any other Member, any Person controlled by the Ultimate Parent of such Member.

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government, government agency or political subdivision thereof or other entity.

“PMM” means Philip M. Mezey.

“Profits” and “Losses” means, for each Allocation Period or other period, an amount equal to the Company’s taxable income or loss for such Allocation Period or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments (without duplication):

(i) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses will increase the amount of such income and/or decrease the amount of such loss;

(ii) any expenditure of the Company described in Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses, will decrease the amount of such income and/or increase the amount of such loss;

(iii) gain or loss resulting from any disposition of any Company assets (other than Depletable Property) where such gain or loss is recognized for federal income tax purposes will be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

(iv) gain or loss resulting from any disposition of a Depletable Property shall be treated as being equal to the corresponding Simulated Gain or Simulated Loss, as applicable;

(v) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such income or loss, Depreciation will be taken into account for such Allocation Period or other period;

(vi) to the extent an adjustment to the adjusted tax basis of any asset included in Company assets pursuant to Code Section 734(b) or Code Section 7430 is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s Interest, the amount of such adjustment will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and will be taken into account for the purposes of computing Profits and Losses;

(vii) if the Gross Asset Value of any Company asset is adjusted in accordance with subparagraph (ii) or subparagraph (iii) of the definition of “Gross Asset Value” above, the amount of such adjustment will be taken into account in the Allocation Period of such adjustment as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; and

(viii) notwithstanding any other provision of this definition of Profits and Losses, any items that are specially allocated pursuant to Section 6.3(d) hereof will not be taken into account in computing Profits or Losses.

The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 6.3(b) hereof will be determined by applying rules analogous to those set forth in this definition of Profits and Losses.

“Public Offering” means the sale in a firm underwritten public offering registered under the Securities Act of any class of Equity Securities of the Partnership (or any successor thereto).

“Qualified IPO” means any transaction that results in at least $75 million of Equity Securities of the Partnership or any successor thereto (if and only if the Partnership or such successor has no assets other than ownership in SXE GP or any successor thereto) or SXE GP (or any successor thereto) being publicly traded pursuant to an underwritten public offering of securities.

“Registration Rights Agreement” means a registration rights agreement, in a form reasonably acceptable to the Member entering into such agreement, relating to the registration of Equity Securities of the applicable issuer held by such Member.

“Rules” has the meaning set forth in Section 13.9(a).

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

“Sharing Ratio” means, subject in each case to adjustments in accordance with this Agreement or in connection with Dispositions of Membership Interests, (i) in the case of a Member executing this Agreement as of the Effective Date or a Person acquiring such Member’s Membership Interest, the percentage specified for that Member as its Sharing Ratio on Exhibit A, and (ii) in the case of Membership Interests issued pursuant to Section 3.1, the Sharing Ratio established pursuant thereto; provided, however, that the total of all Sharing Ratios shall always equal 100%.

“Simulated Basis” shall mean the book value of any Depletable Property. The Simulated Basis of each Depletable Property shall be allocated to each Member in accordance with Member’s Sharing Ratio as of the time such Depletable Property is contributed to or acquired by the Company (and any additions to such Simulated Basis resulting from expenditures required to be capitalized in such Simulated Basis shall be allocated among the Members in a manner designed to cause the Members’ proportionate shares of such Simulated Basis to be in accordance with their Sharing Ratio as determined at the time of any such additions), and shall be reallocated among the Members in accordance with the Members’ Sharing Ratios as determined immediately following the occurrence of an event giving rise to an adjustment to the book values of the Company’s Depletable Properties pursuant to clause (ii) of the definition of Gross Asset Value.

“Simulated Depletion” shall mean, with respect to each Depletable Property, a depletion allowance computed in accordance with federal income tax principles (as if the Simulated Basis of the property were its adjusted tax basis) and in the manner specified in Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated Depletion with respect to any Depletable Property, the Simulated Basis of such property shall be deemed to be the book value of such property, and in no event shall such allowance, in the aggregate, exceed such Simulated Basis. For purposes of computing Simulated Depletion, the Company will apply on a property by property basis the simulated percentage depletion method or the simulated cost depletion method, as determined by the Company, under Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2).

“Simulated Gain” or “Simulated Loss” shall mean the simulated gain or simulated loss computed by the Company with respect to each amount of gain or loss realized from the sale or other disposition of Depletable Property as calculated in Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2).

“Southcross” has the meaning given such term in the introductory paragraph.

“Southcross Group” means Southcross and its members, and their Affiliates.

“Super Majority Decisions” has the meaning given such term in Section 7.11(c).

“SXE” has the meaning given such term in the recitals.

“SXE GP” has the meaning given such term in the recitals.

“SXE GP Board” has the meaning given such term in Section 7.11(a).

“SXE Group” means SXE and its Subsidiaries treated as a single consolidated entity.

“Subsidiary” means, with respect to any Person, (i) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (ii) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, or (iii) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person or a combination thereof, directly or indirectly, at the date of determination, has (A) at least a majority ownership interest or (B) the power to elect or direct the election of a majority of the directors or other governing body of such Person. Notwithstanding the foregoing, SXE shall not be considered a Subsidiary of the Company.

“Tax Amount” means has the meaning set forth in Section 6.1(b)(ii).

“Tax Distribution” has the meaning given such term in Section 6.1(b)(i).

“Tax Matters Member” has the meaning given such term in Section 10.3.

“TexStar” has the meaning given such term in the recitals.

“TexStar GP” has the meaning given such term in the recitals.

“TW” means Tailwater Capital, a Texas limited liability company.

“TW Aggregator” means BBTS Aggregator LP, a Delaware limited partnership.

“TW Group” has the meaning given such term in the Partnership Agreement.

“Unit” means a unit representing a Membership Interest.

“Veto Interest” means with respect to (i) each of Southcross and, from and after a BBTS Distribution, EIG and TW, such Person has a Sharing Ratio that is at least 50% of the Veto Ratio set forth opposite such Person’s name on Exhibit E (ii) BBTS prior to a BBTS Distribution, BBTS has a Sharing Ratio that is at least 50% of the Veto Ratio set forth opposite BBTS’ name on Exhibit E, (iii) an Assignee of Southcross or BBTS (other than pursuant to a BBTS Distribution) (or any subsequent Assignee), such Assignee has a Sharing Ratio that is at least 50% of the Veto Ratio set forth opposite the name of the original transferors of such Units (e.g., Southcross or BBTS (other than pursuant to a BBTS Distribution)) on Exhibit E and (iv) after a BBTS Distribution, an Assignee of TW or EIG (or any subsequent Assignee), such Assignee has a Sharing Ratio that is at least equal to 50% of the Veto Ratio set forth opposite TW or EIG’s name, on Exhibit E.

“Voting Support” by a Member with respect to a given action means that such Member will (i) appear at any equity holder meeting of the Company to consider such action or otherwise cause its applicable Membership Interest owned by such Member (or any of its Affiliates) as of the relevant time to be counted as present for purposes of calculating a quorum for such purpose, and respond to any other request by the Company for written consent, if any, with respect to such action, (ii) vote, or cause to be voted, all of its applicable Membership Interests (A) in favor of the approval of such action, and (B) against any action or agreement that would reasonably be expected to interfere with, delay or attempt to discourage the consummation of such action, and (iii) cause the directors appointed by it to (A) the Board or (B) the SXE GP Board, to appear at any meeting of the Board or the SXE GP Board to consider such action and direct such directors to vote (y) in favor of the approval of such action, and (z) against any action or agreement that would reasonably be expected to interfere with, delay or attempt to discourage the consummation of such action.

“Withdraw,” “Withdrawing” or “Withdrawal” means the withdrawal, resignation or retirement of a Member from the Company as a Member. Such terms shall not include any Dispositions of Membership Interest (which are governed by Article IV), even though the Member making a Disposition may cease to be a Member as a result of such Disposition.

(b) Other terms defined herein have the meanings so given them.

Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) the terms “include,”

“includes,” “including” or words of like import shall be deemed to be followed by the words “without limitation;” and (d) the terms “hereof,” “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

ARTICLE II

ORGANIZATION

Section 2.1 Formation. The Company was formed as a Delaware limited liability company by the filing of a Certificate of Formation (the “Delaware Certificate”) on June 9, 2014 with the Secretary of State of the State of Delaware under and pursuant to the Act.

Section 2.2 Name. The name of the Company is “Southcross Holdings GP LLC” and all Company business must be conducted in that name and such other names that comply with Applicable Law as the Board or the Members may select.

Section 2.3 Registered Office; Registered Agent; Principal Office. The name of the Company’s registered agent for service of process is The Corporation Trust Company, and the address of the Company’s registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The principal place of business of the Company shall be located at 1700 Pacific Avenue, Suite 2900, Dallas, Texas 75201. The Board may change the Company’s registered agent or the location of the Company’s registered office or principal place of business as the Board may from time to time determine.

Section 2.4 Purposes. The purpose of the Company is to own, acquire, hold, Dispose of and exercise the rights and powers relating to the Partnership or other interests of the Partnership, and act as general partner or other interest holder of, the Partnership as described in the Partnership Agreement and to engage in any lawful business or activity ancillary or related to the foregoing. The Company shall possess and may exercise all the powers and privileges granted by the Act, by any other law or by this Agreement, together with any powers incidental thereto, including such powers and privileges as are necessary or appropriate to the conduct, promotion or attainment of the business, purposes or activities of the Company.

Section 2.5 Term. The period of existence of the Company shall end at such time as a certificate of cancellation is filed with the Secretary of State of Delaware in accordance with Section 12.4.

Section 2.6 No State Law Partnership. The Members intend that the Company shall not be a partnership (whether general, limited or other) or joint venture, and that no Member shall be a partner or joint venturer with any other Member, for any purposes other than (if the Company has more than one Member) federal and state income tax purposes, and this Agreement may not be construed or interpreted to the contrary.

Section 2.7 Certain Undertakings Relating to the Separateness.

(a) Separateness Generally. The Company shall conduct its business and operations separate and apart from those of any other Person (including the Controlling Entities) in accordance with this Section 2.7.

(b) Separate Records. The Company shall (i) maintain its books and records and its accounts separate from those of any other Person, (ii) maintain its financial records, which will be used by it in its ordinary course of business, showing its assets and liabilities separate and apart from those of any other Person, except its consolidated Subsidiaries, and (iii) file its own tax returns separate from those of any other Person, except (A) to the extent that the Company (x) is treated as a “disregarded entity” for tax purposes or (y) is not otherwise required to file tax returns under Applicable Law or (B) as may otherwise be required by Applicable Law.

(c) Separate Assets. The Company shall not commingle or pool its funds or other assets with those of any other Person, except its consolidated Subsidiaries, and shall maintain its assets in a manner in which it is not costly or difficult to segregate, ascertain or otherwise identify its assets as separate from those of any other Person.

(d) Separate Name. The Company shall (i) conduct its business in its own name, (ii) use its separate stationery, invoices, and checks, (iii) correct any known misunderstanding regarding its separate identity from that of any other Person (including the Controlling Entities), and (iv) generally hold itself out as an entity separate from any other Person (including the Controlling Entities).

(e) Separate Credit. The Company shall (i) pay its obligations and liabilities from its own funds (whether on hand or borrowed), (ii) maintain adequate capital in light of its business operations, (iii) not pledge its assets for the benefit of any Person or guarantee or become obligated for the debts of any other Person, other than the Company, (iv) not hold out its credit as being available to satisfy the obligations or liabilities of any other Person, (v) not acquire debt obligations or debt securities of the Controlling Entities, (vi) not make loans or advances to any Person, and (vii) use its commercially reasonable efforts to cause the operative documents under which the Company borrows money, is an issuer of debt securities, or guarantees any such borrowing or issuance to contain provisions to the effect that (A) the lenders or purchasers of debt securities, respectively, acknowledge that they have advanced funds or purchased debt securities, respectively, in reliance upon the separateness of the Company from any other Persons, including the Controlling Entities, and (B) the Company has assets and liabilities that are separate from those of other Persons, including the Controlling Entities; provided that the Company may engage in any transaction described in clauses (v)-(vi) of this Section 2.7(e) if prior Board approval has been obtained for such transaction and either (A) the Board has determined that the borrower or recipient of the credit support is not then insolvent and will not be rendered insolvent as a result of such transaction or (B) in the case of transactions described in clause (v), such transaction is completed through a public auction or a National Securities Exchange.

(f) Separate Formalities. The Company shall (i) observe all limited liability company formalities, and other formalities required by its organizational documents, the laws of

Delaware and other Applicable Laws, (ii) engage in transactions with any Controlling Entity only if approved in accordance with this Agreement and (iii) promptly pay, from its own funds, and on a current basis, its allocable share of general and administrative expenses, capital expenditures, and costs for shared services performed by any member of the Controlling Entities. Each material contract between the Company, on the one hand, and any of the Controlling Entities, on the other hand, shall be in writing.

(g) No Effect. Failure by the Company to comply with any of the obligations set forth above shall not affect the status of the Company as a separate legal entity, with its separate assets and separate liabilities or restrict or limit the Company from engaging or contracting with any of the Controlling Entities for the provision of services or the purchase or sale of products.

ARTICLE III

MEMBERSHIP

Section 3.1 Membership Interests; Units; Additional Members. Southcross and BBTS are the sole Members of the Company at the Effective Date as reflected in Exhibit A. Assignees may be admitted to the Company as Members in accordance with Section 4.3 and purchasers of additional Equity Securities may be admitted to the Company as Members in accordance with Section 5.2(b). Any such admission shall be effective only after such new Member has executed and delivered to the Members and the Company an instrument containing the notice address of the new Member and the new Member’s ratification of this Agreement and agreement to be bound by it. Membership Interests in the Company shall be represented by Units with each Unit representing one percent of the Sharing Ratios. Upon the Company’s issuance of Units to any Person, the Company shall issue, upon the request of such Person, one or more Certificates in the name of such Person evidencing the number of such Units being so issued. The Company hereby irrevocably elects that all Units shall be securities governed by Article 8 of the Uniform Commercial Code as in effect in the State of Delaware.

Section 3.2 Liability.

(a) No Member shall be liable for the debts, obligations or liabilities of the Company solely by reason of being a member of the Company.

(b) The Members agree that the rights, duties and obligations of the Members in their capacities as members of the Company are only as set forth in this Agreement. Furthermore, the Members agree that the existence of any rights of a Member, or the exercise or forbearance from exercise of any such rights, shall not create any duties or obligations of the Member in its capacity as a member of the Company, nor shall such rights be construed to enlarge or otherwise to alter in any manner the duties and obligations of such Member.

Section 3.3 Withdrawal. A Member does not have the right or power to Withdraw.

Section 3.4 Meetings. A meeting of the Members may be called at any time at the request of any Member with a Sharing Ratio of at least 10%.

Section 3.5 Notice. Written notice of all meetings of the Members must be given to all Members at least one Business Day prior to any meeting of Members. All notices and other communications to be given to Members shall be sufficiently given for all purposes hereunder (i) if in writing and delivered by hand, courier or overnight delivery service, then upon receipt, (ii) if mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, then three days after the date of mailing, or (iii) if sent by e-mail, telegram or facsimile, then when received. All such notices and communications shall be directed to the address, e-mail address or facsimile number of each Member as such Member shall designate by notice to the Company. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Members need be specified in the notice of such meeting, except for amendments to this Agreement, as provided herein. A meeting may be held at any time without notice if all the Members are present or if those not present waive notice of the meeting either before or after such meeting.

Section 3.6 Action of Members. Except as otherwise required by Applicable Law or by this Agreement, all decisions reserved to the Members hereunder shall require the affirmative vote of the Members owning a majority of Sharing Ratios present at a meeting at which a quorum is present in accordance with Section 3.8. To the extent permitted by Applicable Law, the Members may act without a meeting and without prior notice so long as the Members who would be required to take such action at a duly held meeting shall have executed and delivered to the Company a written consent with respect to any such action taken in lieu of a meeting.

Section 3.7 Conference Telephone Meetings. Any Member may participate in a meeting of the Members or by means of conference telephone or similar communications equipment by means of which all Persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

Section 3.8 Quorum. The Members owning a majority of Sharing Ratios, present in person or participating in a meeting shall constitute a quorum for the transaction of business.

Section 3.9 Investment Opportunities and Conflicts of Interest. (a) The Members expressly acknowledge that (i) each Member and its Affiliates are permitted to have, and may in the future have, direct and/or indirect investments and/or other business relationships with entities engaged in the business of the Company, the Partnership Group, the SXE Group or any of their respective Subsidiaries other than through the Company, the Partnership Group, the SXE Group or any of their respective Subsidiaries and that are, may or will be competitive with the Company, the Partnership Group, the SXE Group and/or their respective Subsidiaries (an “Other Business”), (ii) each Member and its Affiliates may develop a strategic relationship with businesses that are and may be competitive or complementary with the Company, the Partnership Group, the SXE Group and/or any of their respective Subsidiaries, (iii) no Member or any of its Affiliates will be prohibited from pursuing and engaging in any activities by virtue of its investment in the Company, the Partnership Group, the SXE Group or any of their respective Subsidiaries or its or their service on the Board, the SXE GP Board or any governing body of any of the Partnership Group, the SXE Group, or any of their respective Subsidiaries, (iv) no Member or any of its Affiliates will be obligated to inform or present to the Company, the Board, the SXE GP Board or the governing body of any of the Partnership Group, the SXE Group, or any of their respective Subsidiaries any such opportunity, relationship or investment, (v) the

other Members will not acquire or be entitled to any interest or participation in any Other Business as a result of the participation therein by another Member or any of its Affiliates, (vi) the involvement of a Member and its Affiliates in any Other Business will not constitute a conflict of interest by such Persons with respect to the Company, the Partnership Group, the SXE Group or any of their respective Subsidiaries or any of the other Members, and (vii) none of the foregoing shall constitute a conflict of interest or breach of this Agreement or any duty otherwise existing at law, in equity or otherwise, to the Company or any other Member. Notwithstanding anything to contrary in this Agreement or any duty, otherwise existing at law or in equity, the doctrine of corporate opportunity or any analogous doctrine shall not apply to any Member or any of their Affiliates.

(b) Without limiting Section 3.9(a) (and in furtherance of Section 7.12), to the fullest extent permitted by Applicable Law, the Company and each Member waives all fiduciary duties and all liability of any Member and any Director (in its capacity as a Member or Director, as applicable, but not in its capacity as an Officer of the Company, if applicable) for breaches of fiduciary duties; provided, however, that such waiver does not extend to liability for any action or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.

ARTICLE IV

ADMISSION OF MEMBERS; DISPOSITION OF MEMBERSHIP INTERESTS

Section 4.1 General Restriction. A Member may not Dispose of all or any portion of its Membership Interests except in strict accordance with this Article IV; provided, however, that a Member shall not Dispose of its Membership Interests unless such Member is permitted to Dispose of its Partnership Units under the Partnership Agreement, and if so permitted, the provisions of Section 4.2 shall govern the number of Units subject to such Disposition. References in this Article IV to Dispositions of a Membership Interest shall also refer to Dispositions of a portion of a Membership Interest. Any attempted Disposition of a Membership Interest, other than in strict accordance with this Article IV, shall be, and is hereby declared, null and void ab initio. The Members agree that a breach of the provisions of this Article IV may cause irreparable injury to the Company and to the other Members for which monetary damages (or other remedies at law) are inadequate in view of (a) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Member to comply with such provision and (b) the uniqueness of the business of the Company and the relationship among the Members. Accordingly, the Members agree that the provisions of this Article IV may be enforced by specific performance.

Section 4.2 Disposition Restrictions.

(a) In the event that Southcross or any of its Permitted Transferees Dispose to an unaffiliated third party transferee any of their Partnership Units (or exchanges its Partnership Units for Equity Securities of SXE pursuant to Section 3.16 of the Partnership Agreement), such Person shall also be required to Dispose to such transferee, and such transferee shall be required to accept the Disposition of, a portion of the Units held by such Person equal to the number of outstanding Units held by such Person immediately prior to such Disposition multiplied by a

fraction, the numerator of which is the number of Partnership Units so Disposed of and the denominator of which is the total number of Partnership Units held by such Person immediately prior to such Disposition;

(b) In the event of a BBTS Distribution, BBTS or any of its Permitted Transferees shall also be required to Dispose to each member of the TW Group and each member of the EIG Group to whom Partnership Units are distributed, and each such member of the TW Group and the EIG Group shall be required to accept the Disposition of, a portion of the Units held by BBTS and its Permitted Transferees equal to the number of outstanding Units held by BBTS and its Permitted Transferees immediately prior to such Disposition multiplied by a fraction, the numerator of which is the number of Partnership Units so Disposed of to such Person and the denominator of which is the total number of Partnership Units held by BBTS and its Permitted Transferees immediately prior to such BBTS Distribution;

(c) In the event that, after a BBTS Distribution, any member of the EIG Group or their Permitted Transferees Dispose to an unaffiliated third party transferee any of its Partnership Units (or exchanges its Partnership Units for Equity Securities of SXE pursuant to Section 3.16 of the Partnership Agreement), such Person shall also be required to Dispose to such transferee, and such transferee shall be required to accept the Disposition of, a portion of the Units held by such Person equal to the number of outstanding Units held by such Person immediately prior to such Disposition multiplied by a fraction, the numerator of which is the number of Partnership Units so Disposed of and the denominator of which is the total number of Partnership Units held by such Person immediately prior to such Disposition;

(d) In the event that, after a BBTS Distribution, any Member of the TW Group or their Permitted Transferees Dispose to an unaffiliated third party transferee any of its Partnership Units (or exchanges its Partnership Units for Equity Securities of SXE pursuant to Section 3.16 of the Partnership Agreement), such Person shall also be required to Dispose to such transferee, and such transferee shall be required to accept the Disposition of, a portion of the Units held by such Person equal to the number of outstanding Units held by such Person immediately prior to such Disposition multiplied by a fraction, the numerator of which is the number of Partnership Units so Disposed of and the denominator of which is the total number of Partnership Units held by such Person immediately prior to such Disposition.

(e) If any other Member (including BBTS prior to a BBTS Distribution) Disposes to an unaffiliated third party transferee any of its Partnership Units (or exchanges its Partnership Units for Equity Securities of SXE pursuant to Section 3.16 of the Partnership Agreement), such Member shall also be required to Dispose to such transferee, and such transferee shall be required to accept the Disposition of, a portion of the Units held by such Person equal to the number of outstanding Units held by such Person immediately prior to such Disposition multiplied by a fraction, the numerator of which is the number of Partnership Units so Disposed of and the denominator of which is the total number of Partnership Units held by such Person immediately prior to such Disposition.

Section 4.3 Admission of Assignee as a Member. An Assignee has the right to be admitted to the Company as a Member, with the Membership Interests, including the attendant Sharing Ratio and rights of the transferring Member (e. g., any rights as a Designating Party and any rights of a Designating Party with a Veto Interest) so transferred to such Assignee, only if such Disposition is effected in strict compliance with this Article IV.

Section 4.4 Requirements Applicable to All Dispositions and Admissions. Any Disposition of Membership Interests may be made only if the Board shall have received an executed written joinder agreement of the transferee, in form and substance reasonably satisfactory to the Board, whereby the transferee, if applicable, agrees to be bound by all of the terms and conditions of this Agreement applicable to Members. Unless waived by the Board, a Disposition of Membership Interests may be made only if (a) such Disposition would not violate the Securities Act or any state securities or blue sky laws applicable to the Company or the Membership Interest to be transferred; (b) such Disposition would not cause the Company to be considered a publicly traded partnership under Code Section 7704(b); (c) such Disposition would not cause the Company to lose its status as a partnership for federal income tax purposes; (d) such Disposition would not require the Company to register as an investment adviser under the Investment Advisers Act of 1940, as amended, or to register as an investment company under the Investment Company Act of 1940, as amended; and (e) the transferor or transferee shall pay or reimburse the Company for all reasonable costs and expenses incurred by the Company in connection with the Disposition and, if also desired, admission of the Assignee as a Member. Unless waived by the Board, the transferor of Membership Interests shall, prior to the effectiveness of such Disposition, deliver to the Company an opinion of counsel, in form and substance satisfactory to the Board, to the effect that such Transfer complies with clauses (a) through (e) of the preceding sentence.

ARTICLE V

CAPITAL CONTRIBUTIONS

Section 5.1 Initial Capital Contributions. Southcross and BBTS, as the sole Members of the Company as of the Effective Date, have respectively made or are deemed to have made the Capital Contribution set forth next to such Member’s name on Exhibit A.

Section 5.2 Additional Capital Contributions by Members.

(a) If, at any time, the Board determines that the Company is in need of additional capital, then, with the prior written consent of each Member, each Member shall be obligated to contribute in cash such capital, subject to the limitations contained in this Section 5.2 or elsewhere in this Agreement, pro rata in accordance with its Sharing Ratio in effect at the time of such contribution.

(b) Except as set forth in this Section 5.2, no Member will be (i) permitted to make additional Capital Contributions to the Company without the prior approval of the Board or (ii) required to make additional Capital Contributions to the Company.

Section 5.3 Loans. If the Company does not have sufficient cash to pay its obligations, any Member(s) that may agree to do so may advance all or part of the needed funds to or on behalf of the Company at an interest rate and on other terms approved by the Board in accordance with this Agreement. An advance described in this Section 5.3 constitutes a loan from the Member to the Company, bears interest at such rate from the date of the advance until the date of payment and is not a Capital Contribution.

Section 5.4 Return of Contributions. Except as expressly provided herein, no Member is entitled to the return of any part of its Capital Contributions or to be paid interest in respect of either its Capital Account or its Capital Contributions. A Capital Contribution remaining unpaid by the Company is not a liability of the Company or of any Member. A Member is not required to contribute or to lend any cash or property to the Company to enable the Company to return any Member’s Capital Contributions.

Section 5.5 Capital Accounts. An individual Capital Account shall be established and maintained for each Member with respect to each class or series of Membership Interest held by such Member. Upon the Disposition of all or a portion of a Membership Interest, the Capital Account of the Member that is making a Disposition and that is attributable to such Membership Interest shall carry over to the Assignee in accordance with the provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(l).

ARTICLE VI

DISTRIBUTIONS AND ALLOCATIONS

Section 6.1 Distributions. (a) Except as otherwise provided in Section 6.2, distributions to the Members shall be made only to all Members simultaneously in proportion to their respective Sharing Ratios (at the time the amounts of such distributions are determined) and in such aggregate amounts and at such times as shall be determined by the Board; provided, however, that any loans from Members pursuant to Section 5.3 shall be repaid prior to any distributions to Members pursuant to this Section 6.1.

(b)

(i) Subject to the availability of sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Company or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available), the Company shall distribute to each Member with respect to each taxable quarter of the Company an amount of cash sufficient to permit such Member to satisfy its tax liabilities arising from allocations of income, gain, loss, deduction and credit and guaranteed payments (if any) deemed received by such Member pursuant to Code Section 707(c) (other than guaranteed payments in respect of services performed by such Member) (a “Tax Distribution”), in each case, to the extent attributable to such Member’s Membership Interest in the Company in any taxable quarter for which such an allocation is made, determined using the same principles as described in Section 6.1(b)(ii) (as applicable), but for the taxable quarter in question and adjusted for prior taxable quarters of the tax year and losses and deductions of the Company realized in prior tax years to the extent such losses and deductions have not been offset by income or gain of the Company realized in subsequent taxable periods. In the event the

Company does not have sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Company or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available) to make Tax Distributions as and when required by the terms of this Agreement, the Company shall use its commercially reasonable efforts to obtain funds necessary to make such Tax Distributions as promptly as possible.

(ii) The Tax Distribution payable to the Members shall be pro rata based on the Members’ Sharing Ratios; provided, however, that the Tax Distribution to each Member shall be equal at least to its “Tax Amount.” As used herein, “Tax Amount” means the product of (x) the Company’s reasonable estimation of the taxable income, gain, loss, deduction, credit, and guaranteed payments (to the extent described in Section 6.1(b)(i) above) allocated to such Member for such Allocation Period, multiplied by (y) the highest marginal effective rate of U.S. federal, state and local income tax (including for this purpose any tax under Code Section 1411 or similar provisions of law) applicable to an individual or corporation (whichever has the higher rate) resident in New York, New York, taking account of any difference in rates applicable to ordinary income, capital gains and “qualified dividends,” as such term is defined in Code Section 1(h) and any allowable deductions in respect of such state and local taxes in computing such Member’s liability for U.S. federal income taxes, and such other assumptions as the Company shall reasonably determine.

For the avoidance of doubt, in determining the Tax Amount for any Member, there shall be taken into account any items allocated to such Member pursuant to Code Section 704(c) (including any amounts allocable pursuant to the “remedial allocation method” described in Treasury Regulation Section 1.704-3(d), if applicable), and any items taken into account by such Partner (or its direct or indirect owner) pursuant to the provisions of Code Section 613A(c)(7)(D) and the Treasury Regulations promulgated thereunder).

(iii) Notwithstanding anything in this Section 6.1(b) to the contrary, for any taxable quarter, if the Company does not have sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Company or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available) available to provide all Members with the full amount of their Tax Distributions, then Tax Distributions shall be made to the Members pro rata in proportion to the amount of their respective Tax Distributions.

(iv) A final accounting for Tax Distributions shall be made for each Allocation Period after the Company’s actual taxable income has been determined, and any shortfall in the amount of Tax Distributions a Member received for such taxable year based on such final determination shall promptly be distributed to such Member, and any excess in the amount of Tax Distributions a Member received for such taxable year shall be applied against the subsequent Tax Distributions due to such Member;

provided, however, for any Allocation Period, if the Company does not have funds sufficient to distribute to each Member the amount of such Member’s shortfall, then such available funds shall be distributed in a manner and priority analogous to the manner and priority described in Section 6.1(b)(iii) (regarding insufficient funds with respect to a given taxable quarter). For any Allocation Period, if any shortfall remains for any Member after giving effect to the preceding sentence, the amount of such shortfall shall be added to the Tax Distributions payable to such Member in succeeding Allocation Periods until the time such shortfall is paid. In addition, in the event of any audit adjustment by a taxing authority which affects the amount of taxable income allocated or required to be allocated to the Members in any year, or in the event the Company files an amended return which has such effect, the aggregate amount of Tax Distributions that should have been made with respect to such year shall be recalculated by giving effect to such audit adjustment or changes reflected in the amended return, as applicable (treating any interest or penalties incurred by any of the Members in connection therewith as an addition to the assumed tax liability of such Members), and any excess or shortfall in the resulting amount of Tax Distributions shall be treated in accordance with the preceding two (2) sentences.

(v) Tax Distributions shall be considered advanced distributions made pursuant to the applicable provisions of Section 6.1 and shall reduce such future distributions (including distributions under Section 12.2).

(vi) The parties agree that it is not expected that the Company will have any Profit or Loss and, as such, a Tax Distribution under this Section 6.1(b) is unlikely to be needed.

Section 6.2 Distributions on Dissolution and Winding Up. Upon the dissolution and winding up of the Company, after adjusting the Capital Accounts, if any, for all distributions made under Section 6.1 and all allocations under Article VI, all available proceeds distributable to the Members as determined under Section 12.2 shall be distributed (i) in the manner set forth in Section 6.1(a), or (ii) if the obligation to maintain Capital Accounts has been suspended under Section 13.11, to the sole Member.

Section 6.3 Allocations.

(a) Profits and Losses.

(i) General Application. For each Allocation Period, after giving effect to Section 6.3(b), the rules set forth below in this Section 6.3(a) shall apply for the purpose of determining each Member’s allocable share of the items of income, gain, loss and expense of the Company comprising Profits or Losses of the Company for such Allocation Period.

(ii) Hypothetical Liquidation. The items of income, expense, gain and loss of the Company comprising Profits or Losses for an Allocation Period shall be allocated among the Persons who were Members during such Allocation Period in a manner that shall, as nearly as possible, cause the Capital Account balance of each Member at the end of such fiscal year to equal the excess (which may be negative) of:

(A) the amount of the hypothetical distribution (if any) that such Member would receive if, on the last day of the fiscal year, (x) all Company assets were sold for cash equal to their respective Gross Asset Values, taking into account any adjustments thereto for such fiscal year, (y) all Company liabilities were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability or any Member Nonrecourse Debt with respect to such Member, to the Gross Asset Values of the assets securing such liability), and (z) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to Section 12.2(a)(iii) hereof; over

(B) the sum of (x) the amount, if any, without duplication, that such Member would be obligated to contribute to the capital of the Company, (y) such Member’s share of Company Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(g), and (z) such Member’s share of Member Minimum Gain determined pursuant to Treasury Regulations Section 1.704 2(i)(5), all computed as of the hypothetical sale described in Section 6.3(a)(ii)(A) hereof;

(b) Regulatory Allocations. Notwithstanding the foregoing provisions of Section 6.3(a), the following special allocations will be made in the following order of priority:

(i) Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain during an Allocation Period, then each Member will be allocated items of Company income and gain for such Allocation Period (and, if necessary, for subsequent Allocation Periods) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 6.3(b)(i) is intended to comply with the minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(f) and will be interpreted consistently therewith.

(ii) Member Minimum Gain Chargeback. If there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Company Allocation Period, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), will be specially allocated items of Company income and gain for such Allocation Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Member’s share of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in a manner consistent with the provisions of Treasury Regulations Section 1.704-2(i)(4). This Section 6.3(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(i)(4) and will be interpreted consistently therewith.

(iii) Qualified Income Offset. If any Member unexpectedly receives an adjustment, allocation, or distribution of the type contemplated by Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income, gain and Simulated Gain will be allocated to all such Members (in proportion to the amounts of their respective deficit Adjusted Capital Accounts) in an amount and manner sufficient to eliminate the deficit balance in the Adjusted Capital Account of such Member as quickly as possible, provided that an allocation pursuant to this Section 6.3(b)(iii) shall be made if and only to the extent that such Member would have an Adjusted Capital Account deficit after all other allocations provided for in this Section 6.3 have been tentatively made as if this Section 6.3(b)(iii) were not in this Agreement. It is intended that this Section 6.3(b)(iii) qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

(iv) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Allocation Period which is in excess of the sum of (x) the amount such Member is obligated to restore pursuant to any provision of this Agreement and (y) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 6.3(b)(iv) shall be made only if and to the extent that such Member would have a deficit Capital Account balance in excess of such sum after all other allocations provided for in this Section 6.3 have been made as if Section 6.3(b)(iii) hereof and this Section 6.3(b)(iv) were not in this Agreement.

(v) Limitation on Allocation of Net Loss. If the allocation of Losses, Simulated Depletion or Simulated Losses to a Member as provided in Section 6.3(a) hereof would create or increase an Adjusted Capital Account deficit, there will be allocated to such Member only that amount of Losses, Simulated Depletion or Simulated Losses as will not create or increase an Adjusted Capital Account deficit. The Losses, Simulated Depletion or Simulated Losses that would, absent the application of the preceding sentence, otherwise be allocated to such Member will be allocated to the other Members in accordance with their relative proportion of Units, subject to the limitations of this Section 6.3(b)(v).

(vi) Certain Additional Adjustments. To the extent that an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss will be specially allocated to the Members in accordance with their Interests in the Company in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Members to whom such distribution was made in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(vii) Nonrecourse Deductions. Nonrecourse Deductions for each Allocation Period of the Company will be allocated to the Members in proportion to their respective Sharing Ratios.

(viii) Member Nonrecourse Deductions. Member Nonrecourse Deductions will be allocated each Allocation Period to the Member that bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.752-2) for the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable.

(ix) Simulated Depletion, Simulated Loss. Simulated Depletion for each Depletable Property, and Simulated Loss upon disposition of Depletable Property, shall be allocated among the Members in proportion to their shares of Simulated Basis in such property.

(i) Except as provided in Section 6.3(c)(ii), Section 6.3(c)(iii), and Section 6.3(d) hereof, for income tax purposes under the Code and the Treasury Regulations, each Company item of income, gain, loss, deduction and credit will be allocated between the Members as its correlative item of “book” income, gain, loss, deduction or credit is allocated pursuant to this Article VI.

(ii) Tax items with respect to Company assets that are contributed to the Company with a Gross Asset Value that varies from its basis in the hands of the contributing Member immediately preceding the date of contribution will be allocated between the Members for income tax purposes pursuant to Treasury Regulations promulgated under Code Section 704(c) so as to take into account such variation. The Company will account for such variation under any method approved under Code Section 704(c) and the applicable Treasury Regulations and, the Parties agree that, unless and until a different method is selected pursuant to the provisions of this Agreement, the Company shall use the remedial method pursuant to Treasury Regulations Section 1.704-3(d). If the Gross Asset Value of any Company asset is adjusted pursuant to the definition of “Gross Asset Value” herein, subsequent allocations of income, gain, loss, deduction and credit with respect to such Company asset will take account of any variation between the adjusted basis of such Company asset for federal income tax purposes and its Gross Asset Value in a manner consistent with Code Section 704(c) and the Treasury Regulations promulgated thereunder under any method approved under Code Section 704(c) and the applicable Treasury Regulations as chosen by the Company. Allocations pursuant to this Section 6.3(c)(ii) are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of net Profits, net Losses and any other items or distributions pursuant to any provision of this Agreement.

(iii)

(A) If the Company recognizes Depreciation Recapture with respect to the sale of any Company asset, (i) the portion of the gain on such sale which is allocated to a Member pursuant to Section 6.3(a) and Section 6.3(b) shall be treated as consisting of a portion of the Company’s Depreciation Recapture on the sale and a portion of the balance of the Company’s remaining gain on such sale under principles consistent with Treasury Regulations Section 1.1245-1 and (ii) if, for U.S. federal income tax purposes, the Company recognizes both “unrecaptured section 1250 gain” (as defined in Code Section 1(h)) and gain treated as ordinary income under Code Section 1250(a) with respect to such sale, the amount treated as Depreciation Recapture under Section 6.3(d)(iii) hereof shall be comprised of a proportionate share of both such types of gain.

(B) For purposes of this Section 6.3(c)(iii), “Depreciation Recapture” means the portion of any gain from the disposition of an asset of the Company which, for U.S. federal income tax purposes, (i) is treated as ordinary income under Code Section 1245, (ii) is treated as ordinary income under Code Section 1250 or (iii) is “unrecaptured section 1250 gain” as such term is defined in Code Section 1(h).

(d) Income Tax Allocations with respect to Depletable Properties.

(i) Pursuant to Code Section 613A(c)(7)(D) and the Treasury Regulations promulgated thereunder, cost and percentage depletion deductions with respect to any Depletable Property shall be computed separately by the Members rather than the Company. For purposes of such computations, the federal income tax basis of each Depletable Property shall be allocated to each Member in accordance with such Member’s Sharing Ratio as of the time such Depletable Property is contributed to or acquired by the Company (and any additions to such federal income tax basis resulting from expenditures required to be capitalized in such basis shall be allocated among the Members in a manner designed to cause the Members’ proportionate shares of such adjusted federal income tax basis to be in accordance with their Sharing Ratios as determined at the time of any such additions), and shall be reallocated among the Member in accordance with the Members’ Sharing Ratios as determined immediately following the occurrence of an event giving rise to an adjustment to the Gross Asset Values of the Company’s Depletable Properties pursuant to clause (ii) of the definition of Gross Asset Value.

(ii) For purposes of the separate computation of gain or loss by each Member on the taxable disposition of Depletable Property, the amount realized from such disposition shall be allocated (i) first, to the Members in an amount equal to the Simulated Basis in such Depletable Property in proportion to their allocable shares thereof and (ii) second, any remaining amount realized shall be allocated consistent with the allocation of Simulated Gains.

(iii) The allocations described in clauses (i) and (ii) of this Section 6.3(d) are intended to be applied in accordance with the Members’ “interests in partnership capital” under Code Section 613A(c)(7)(D); provided that the Members understand and agree that the Company, in good faith, authorize special allocations of federal income tax basis, income, gain, deduction or loss, as computed for federal income tax purposes, in order to eliminate differences between Simulated Basis and adjusted federal income tax basis with respect to Depletable Properties, in such manner as determined consistent with the principles outlined in Section 6.3(c)(ii). The provisions of this Section 6.3(d) and the other provisions of this Agreement relating to allocations under Code Section 613A(c)(7)(D) are intended to comply with Treasury Regulation Section 1.704-1(b)(4)(v) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

(iv) Each Member shall separately keep records of its share of the adjusted tax basis in each Depletable Property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the disposition of such property by the Company. Upon the request of the Company, each Member shall advise the Company of its adjusted tax basis in each Depletable Property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Company may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto. The Company shall provide each Member with information reasonably requested by such Member to comply with this Section 6.3(d)(iv) and other tax reporting obligations.

(e) Other Provisions.

(i) For any Allocation Period or other period during which any part of any Interest in the Company is Transferred between the Members or to another Person (other than by pledge of, or grant of a security interest in, such Interest), the portion of the Profits, Losses and other items of income, gain, loss, deduction and credit that are allocable with respect to such part of an Interest in the Company will be apportioned between the Transferor and the Transferee under any method allowed pursuant to Code Section 706 and the applicable Treasury Regulations as determined by the Company, although an interim closing of the books method shall be used if the Transferor agrees to reimburse the Company for reasonable costs incurred.

(ii) In the event that the Code or any Treasury Regulations require allocations of items of income, gain, loss, deduction or credit different from those set forth in this Article V, the Company is hereby authorized to adjust or amend the allocations to the extent necessary to satisfy the Code and any Treasury Regulations, and no such new allocation will give rise to any claim or cause of action by any Member.

(iii) For purposes of determining the Members’ proportional share of the Company’s “excess nonrecourse liabilities” within the meaning of Treasury Regulations Section 1.752-3(a)(3), the Members’ interests in profits will be equal to their respective Sharing Ratios.

(iv) Credits. All tax credits shall be allocated among the Members as determined by the Company, consistent with applicable law.

(f) Valuation; Revaluation. Except as otherwise specifically provided in this Agreement, valuations will be made by the Company or by independent third parties appointed by the Company and deemed qualified by the Company to render an opinion as to the value of the Company’s assets, using such methods and considering such information relating to the investments, assets and liabilities of the Company as the Company or independent third party, as the case may be, may determine in the discretion of the Company.

The Parties agree that the Company will not receive a distributive share of profits or losses (or underlying items of income, gain, deduction or loss) from the Partnership.

Section 6.4 Varying Interests. All items of income, gain, loss, deduction or credit shall be allocated, and all distributions shall be made, to the Persons shown on the records of the Company to have been Members as of the last calendar day of the period for which the allocation or distribution is to be made. Notwithstanding the foregoing, if during any taxable year there is a change in any Member’s Sharing Ratio, the Members agree that their allocable shares of such items for the taxable year shall be determined on any method determined by the Board to be permissible under Code Section 706 and the related Treasury Regulations to take account of the Members’ varying Sharing Ratios.

Section 6.5 Withheld Taxes. All amounts withheld pursuant to the Code or any provision of any state, local or foreign tax law with respect to any payment, distribution or allocation to the Company or the Members shall be treated as amounts distributed to the Members pursuant to this Article VI for all purposes of this Agreement. The Company is authorized to withhold from distributions, or with respect to allocations, to the Members and to pay over to any federal, state, local or foreign government any amounts required to be so withheld pursuant to the Code or any provision of any other federal, state, local or foreign law and shall allocate such amounts to those Members with respect to which such amounts were withheld.

Section 6.6 Limitations on Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or other Applicable Law.

ARTICLE VII

MANAGEMENT

Section 7.1 Management by Board. (a) The management of the Company is fully reserved to the Members, and the Company shall not have “managers” as that term is used in the Act. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Members, who shall make all decisions and take all actions for the Company.

(b) The Members shall have the power and authority to delegate to one or more other persons the Members’ rights and power to manage and control the business and affairs, or any portion thereof, of the Company, including to delegate to agents, officers and employees of a Member or the Company, and to delegate by a management agreement with or otherwise to other Persons.

(c) The Members hereby expressly delegate to the board of directors of the Company (the “Board”), to the fullest extent permitted under this Agreement and the Act, all of the Members’ power and authority to manage and control the business and affairs of the Company. The Board may at any time designate one or more other Persons to be officers of the Company and/or to assist in carrying out the Board’s decisions and the day-to-day activities of the Company. SXE GP and any officers are not “managers” as that term is used in the Act. Any officers who are designated as such shall have such titles and authority and perform such duties as the Board may delegate to them. The salaries or other compensation, if any, of the officers of the Company shall be fixed by the Board in accordance with Section 7.11(c)(vii). Any officer may be removed as such, either with or without cause, by the Board and any vacancy occurring in any office of the Company may be filled by the Board, in each case in accordance with Section 7.11(c)(vi). Designation of an officer shall not of itself create contract rights.

Section 7.2 Number; Qualification; Tenure. (a) The number of Directors constituting the Board shall initially be eight. A Director need not be a Member.

(b) So long as (i) BBTS is a Designating Party, BBTS shall have the right to designate four Directors (two of whom shall be designated by BBTS as “TW Directors” and two of whom shall be designated by BBTS as “EIG Directors”), (ii) Southcross is a Designating Party, Southcross shall have the right to designate two Directors, (iii) PMM is affiliated with the Company or any Designating Party, PMM shall have the right to designate one Director, and (iv) DWB is affiliated with the Company or any Designating Party, DWB shall have the right to designate one Director; and each such Person shall have the sole right to remove (with or without cause), and to fill vacancies with respect to the Director(s) designated by such Person. Each Director designated by PMM and DWB shall not have any voting rights. The initial Directors of the Company so designated are set forth on Exhibit B. Each Director shall serve as a Director of the Company indefinitely (until his or her earlier death, resignation or removal).

(c) The right of each Designating Party to designate Directors is transferable, and may be transferred by a Designating Party in whole (and not in part), to any transferee of Units of such Designating Party (or its Permitted Transferees) to the extent permitted pursuant to Section 4.2, provided such transferee has a Sharing Ratio of at least 10% after giving effect to such transfer. Upon any assignment by a Designating Party of its right to designate Directors, such Designating Party shall cease to be a Designating Party.

(d) Upon the date a Member ceases to be a Designating Party (i) such Person shall no longer have the right to designate any Director or any member of the SXE GP Board, (ii) other than upon BBTS ceasing to be a Designating Party as a result of a BBTS Distribution,

the size of the Board shall be reduced by the number of such forfeited board seats and (iii) any Director or member of the SXE GP Board designated by such Person shall be deemed to have resigned as a Director or member of the Board and as a member of the SXE GP Board, as applicable. At any time when the first sentence of Section 7.2(b) is not applicable, any Director or the entire Board may be removed at any time (with or without cause), by vote of the Members, and the Members will have the right to fill any vacancies on the Board.

(e) Any matter involving a conflict between the Company, a Member or any Affiliate of a Member shall be administered on behalf of the Board by the Directors who are disinterested in such matter.

Section 7.3 Regular Meetings. Regular quarterly and annual meetings of the Board shall be held at such time and place as shall be designated from time to time by resolution of the Board. Notice of such regular quarterly and annual meetings shall not be required.

Section 7.4 Special Meetings. A special meeting of the Board may be called at any time at the request of (a) the Chairman of the Board or (b) any two Directors then in office.

Section 7.5 Notice. Written notice of all special meetings of the Board must be given to all Directors at least one Business Day prior to any special meeting of the Board. All notices and other communications to be given to Directors shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service or three Days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when received in the form of an e-mail or facsimile, and shall be directed to the address, e-mail address or facsimile number as such Director shall designate by notice to the Company. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, except for amendments to this Agreement, as provided herein. A meeting may be held at any time without notice if all the Directors are present or if those not present waive notice of the meeting either before or after such meeting.

Section 7.6 Action by Consent of Board. To the extent permitted by Applicable Law and this Agreement, the Board, or any committee of the Board, may act without a meeting so long as a written consent with respect to any action taken in lieu of a meeting is signed by not less than the number of Directors (or committee members) entitled to vote that would be necessary to authorize or take such action at a meeting of the Board (or such committee) at which all Directors (or members of such committee) entitled to vote thereto were present and voted.

Section 7.7 Conference Telephone Meetings. Directors or members of any committee of the Board may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

Section 7.8 Quorum. A majority of all Directors entitled to vote, present in person or participating in a Board meeting, shall constitute a quorum for the transaction of business, but if

at any meeting of the Board there shall be less than a quorum present, a majority of the Directors entitled to vote and present may adjourn the meeting from time to time without further notice. Except as otherwise required by Applicable Law or this Agreement, all decisions of the Board, or any committee of the Board, shall require the affirmative vote of a majority of all Directors entitled to vote, or of the members of any committee of the Board, respectively. The Directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.

Section 7.9 Committees.

(a) Unless agreed by all Designating Parties with a Veto Interest, the Board may not establish any committees of the Board or delegate any of its responsibilities to any committee.

(b) A majority of any committee, present in person or participating in accordance with Section 7.7, shall constitute a quorum for the transaction of business of such committee.

(c) A majority of any committee may determine its action and fix the time and place of its meetings unless the Board shall otherwise provide. Notice of such meetings shall be given to each member of the committee in the manner provided for in Section 7.5. The Board shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.

Section 7.10 No Compensation of Directors. No Director shall receive any compensation from the Company for services provided to the Company in its capacity as a Director (including as a committee member), nor shall any Director be entitled to be reimbursed for out-of-pocket costs and expenses incurred in connection with attending meetings of the Board or committees thereof.

Section 7.11 Voting on Certain Matters. The Members shall cooperate in good faith, and shall provide all Voting Support necessary, such that:

(a) The board of directors of SXE GP (the “SXE GP Board”) shall be composed of seven directors. The initial directors to serve on the SXE GP Board are set forth on Exhibit C. So long as (i) BBTS is a Designating Party, BBTS shall have the right to designate four directors to serve on the SXE GP Board (two of whom must be an Independent Director) and (ii) Southcross is a Designating Party, Southcross shall have the right to designate two directors to serve on the SXE GP Board (one of whom must be an Independent Director); provided, however, an Independent Director designated by a Designating Party may be removed upon the vote or consent of a majority of the SXE GP Board (including the approval of the chairman of the SXE GP Board); provided, further, however, that the Designating Party that designated such removed Independent Director shall have the right to designate an Independent Director to replace the removed Independent Director. The seventh member of SXE GP Board and the chairman of the SXE GP Board shall be determined by a vote or consent of a majority of the other directors on the SXE GP Board; provided, however, the initial chairman of the SXE GP Board shall be DWB until the second anniversary of the Effective Date (or until his earlier death

or resignation). There shall always be three Independent Directors on SXE GP Board and if a Designating Party has forfeited its right to designate directors to serve on the SXE GP Board, the remaining Designating Party(ies) shall determine such forfeited directors, and if the Designating Parties cannot agree on such directors within 15 Business Days after the deemed resignation of such forfeited directors, the remaining members of the SXE GP Board, by majority vote or consent, shall determine such forfeited directors.

(b) The initial Chairman of the Board shall be DWB. The position of Chairman of the Board shall be filled on an annually rotating basis by the Designating Parties (provided, prior to a BBTS Distribution (and for so long as BBTS is a Designating Party) BBTS shall designate two successor Chairmen to each one designated by Southcross), such that the next Chairman of the Board after DWB’s initial two-year term shall be designated by BBTS (so long as BBTS is a Designating Party) for a term of one year, his successor shall be designated by BBTS (so long as BBTS is a Designating Party) for a term of one year, his successor shall be designated by Southcross (so long as Southcross is a Designating Party), and so on (and after the BBTS Distribution, such rights of BBTS will be exercised by EIG and TW Aggregator, in succession, so long as such Person is a Designating Person).

(c) The following actions (the “Super Majority Decisions”) of the Company, any Person in the Partnership Group or any of their respective Subsidiaries will require approval of a majority of all Directors entitled to vote and the approval of at least one Director designated by each Designating Party that has a Veto Interest:

(i) approval by the Company (in its capacity as general partner of the Partnership) of any matter set forth in Section 6.2(a) or Section 10.1(a) of the Partnership Agreement;

(ii) prior to the fifth anniversary of the Effective Date (or such shorter period specified in Section 6.2(b) of the Partnership Agreement), approval by the Company (in its capacity as general partner of the Partnership) of any matter set forth in Section 6.2(b) of the Partnership Agreement;

(iii) any Disposition by the Company of any interest in the Partnership, other than in conjunction with the consummation of a Liquidity Event otherwise approved in accordance with this Agreement;

(iv) the making of any distribution by the Company, other than in accordance with Section 6.1 and Section 6.2;

(v) any incurrence by the Company of indebtedness for borrowed money;

(vi) the appointment, termination or removal by the Company of any Officer of the Company;

(vii) approving or making material modifications of the salaries, bonuses or other compensation (including incentive compensation) payable by the Company to any individual (including any employee, Officer, seconded employee,

independent contractor, service provider or other individual providing services to the Company or adopt or amend any employee compensation, benefit or incentive plans of the Company;

(viii) the Company’s entering into a partnership or a joint venture with any other party for the purpose of carrying on any business;

(ix) any amalgamation, reconstruction, liquidation, dissolution, or similar proceedings with respect to the Company, or compromise with the creditors of the Company;

(x) any issuance of units, debentures, bonds or any other security by the Company (including units, warrants or securities convertible into or exchangeable or exercisable for any other security of the Company);

(xi) other than the Contribution Agreement as in effect on the date hereof, any transaction or series of related transactions (not otherwise expressly permitted herein) between the Company, on the one hand, and any Member or Affiliate of any Member on the other hand;

(xii) any amendment to this Agreement or the Certificate;

(xiii) making capital calls for the Company;

(xiv) any voluntary act of Bankruptcy of the Company;

(xv) any reorganization, recapitalization, consolidation, exchange of securities or merger of the Company;

(xvi) any change in the nature of the business of the Company from that described in Section 2.4;

(xvii) the Company’s adoption or change of its tax elections, including those for Section 704(c) methods, tax accounting methods or tax reporting positions, except as required by applicable regulatory authorities;

(xviii) the formation of any Subsidiary of the Company (other than the Partnership and its Subsidiaries); and

(xix) any actions to be taken by the Company and the Partnership in connection with the approval of any Liquidity Event approved pursuant to clause (i) or clause (ii) above.

(d) The following actions of the Company, any Person in the Partnership Group or any of their respective Subsidiaries will require approval of a majority of all Directors entitled to vote:

(i) after the fifth anniversary of the Effective Date (or after such shorter period after which any matter set forth in Section 6.2(b) of the Partnership Agreement no longer requires approval under such Section 6.2), approval by the Company (in its capacity as general partner of the Partnership) of any matter set forth in Section 6.2(b) of the Partnership Agreement;

(ii) approval by the Company (in its capacity as general partner of the Partnership) of any matter set forth in Section 6.2(c) of the Partnership Agreement;

(iii) the approval of any actions to be taken by the Company and the Partnership in connection with any Liquidity Event approved pursuant to clause (i) or clause (ii) above.

Section 7.12 No Fiduciary Duty.

No Director shall owe any fiduciary duty or other duty (including any agency, equitable or quasi-fiduciary duty) to the Company or any other Member in connection with the activities of the Board or any committee thereof, and no Director, and no Designating Party appointing any such Director, shall be obligated to act in the interests of the Company or any other Member. Any Director in performing his or her obligations under this Agreement shall be entitled to vote, consent, act or omit to act in his sole discretion and/or at the direction of the Designating Party who designated such Director, considering only such factors, including the separate interests of such Designating Party, as such Director chooses to consider (which interests may differ from, and be given priority over, the interests of the Company or any other Member), and any action or failure to act by a Director, taken or omitted in reliance on this Section 7.12 shall not constitute a breach of any duty (including any fiduciary duty, and all of which are hereby expressly waived) on the part of such Director. To the fullest extent permitted by Applicable Law, the Directors shall not be subject to any other or different standards (including fiduciary standards) imposed by this Agreement or the Act or any other Applicable Law or at equity. The Members acknowledge and agree that the foregoing is intended to comply with the provisions of the Act (including Section 18-1101 of the Act) permitting members of a limited liability company to eliminate fiduciary duties.

Section 7.13 Liquidity Event.

(a) Liquidity Event. At any time following 1642 days after the Effective Date and (ii) so long as the Partnership (or any successor thereto) has not effected a Qualified IPO, each Designating Party shall each have the right, at each of their express direction and in each of their sole discretion, to direct the Board to take such actions to effect a Qualified IPO (and, after the fifth anniversary of the Effective Date, a Liquidity Event), upon delivering a written notice thereof to the Board (a “Liquidity Event Notice”) of such decision.

(b) Effecting a Liquidity Event. Upon receipt of a Liquidity Event Notice or approval by the Board of a Liquidity Event, the Company shall initiate a process to effect a Liquidity Event, including without limitation engaging an independent investment banking firm to advise the Board with respect to consummating such Liquidity Event. Such investment banking firm shall be selected by the Board (pursuant to the approval standard required for such

Liquidity Event) in accordance with Section 7.11(c) or Section 7.11(d), as applicable; provided that if the Board does not select an investment banking firm within 30 days after the date that the Liquidity Event Notice is delivered to the Board the investment banking firm shall be selected by the Directors designated by Designating Party who delivered the Liquidity Event Notice. The Company shall, and shall cause the Partnership to, execute such engagement and indemnity agreements as such investment banking firm shall require, and the fees and expenses of such investment banking firm shall be paid by the Partnership. The Board shall use commercially reasonable efforts to consummate a Liquidity Event as soon as practicable following the delivery of a Liquidity Event Notice (provided that the Board shall first use good faith efforts to effect a Qualified IPO prior to effecting any other Liquidity Event unless such Liquidity Event is approved by the Board as a Super Majority Decision pursuant to Section 7.11(c)).

(c) Certain Obligations of the Company and the Members. Upon receipt of a Liquidity Event Notice or approval by the Board of a Liquidity Event, the Company (in its capacity as general partner of the Partnership) shall diligently pursue the consummation of a Liquidity Event in good faith and the Board shall manage the business and affairs of the Company primarily with a view toward the consummation of such Liquidity Event as soon as reasonably practicable following the exercise of such right. Each Member shall, and shall cause its Affiliates to, take all actions, including those set forth in Section 7.13(d), if applicable, reasonably necessary or appropriate to (i) cooperate with the Company (in its capacity as the general partner of the Partnership) in working toward the consummation of a Liquidity Event and (ii) cause its Director designees to act in accordance with this Section 7.13 (including replacing its Director designees, if necessary).

(d) Public Offering. If the Board determines that the Liquidity Event shall be a Public Offering:

(i) each Member agrees that it will, and will cause its Affiliates and any Director appointed by such Member to, and the Company shall:

(A) if the underwriters in any Public Offering request that all Partners hold their Partnership Units for a period of time following the Public Offering, do so and enter into a customary lock-up agreement;

(B) complete and execute all consents, questionnaires, powers of attorney, indemnities, underwriting agreements and other documents as may reasonably be required or advisable in connection with a Public Offering; provided that no such Person shall be required to make any representations or warranties in connection with a Public Offering other than representations and warranties regarding such Person and, if applicable, such Person’s intended method of distribution;

(C) if determined by the Board to be reasonably necessary or appropriate in connection with a Public Offering, do all things reasonably necessary or advisable to effect any recapitalization, reorganization, conversion, contribution and/or exchange of Partnership Units into other equity interests and related reorganization of the Partnership and its Subsidiaries; provided that any

such recapitalization, reorganization, conversion, contribution and/or exchange does not change the relative rights, obligations and preferences of the partners in the Partnership with respect to their ownership of Partnership Units (or its successor), except in accordance with Section 3.11(b) of the Partnership Agreement;

(D) consent to certain additional restrictions on the transfer of Partnership Units or other equity interests in the Partnership (or its successor) which the Board determines may be required in order to permit compliance with the Securities Act or other Applicable Law;

(E) use commercially reasonable efforts to accommodate any such other reasonable actions required by the Commission or similar Governmental Authority to effect the Public Offering; and

(F) make modifications to this Agreement or the Partnership Agreement (or any other agreement then governing the rights and obligations of the Members with respect to the Company or the partners in the Partnership with respect to the Partnership or any of their Subsidiaries or any successor to the Company or the Partnership or any of their Subsidiaries) as are customary and appropriate for companies that conduct a Public Offering, such modifications to be in form and substance reasonably satisfactory to the Board.

(ii) The Company shall be responsible for its own costs, fees and expenses in connection with a Public Offering and shall reimburse the Members and their Affiliates for the reasonable out-of-pocket costs, fees and expenses (excluding underwriting discounts, selling commissions and similar fees) incurred by them in connection with a Public Offering, including the reasonable costs, fees and expenses of one outside counsel for each Member with, a Sharing Ratio of greater than 10% immediately prior to the occurrence of the Liquidity Event.

(iii) If the managing underwriter or the placement agent advises the Partnership, the Company or the Board that the inclusion of securities of the partners in the Partnership requested to be included for sale in a secondary offering in connection with the Public Offering would materially and adversely affect the price, distribution or timing of the offering, then the Partnership shall have the right to exclude all or any portion of such securities of the Partnership from sale in connection with the Public Offering, with such exclusions applied to the partners’ of the Partnership pro rata share (based on the relative percentages of securities to be included in the Public Offering held by the Partners immediately prior to the Public Offering).

(iv) Without limiting Section 7.13(d)(i)(D) above, without the prior written consent of the underwriters managing any Qualified IPO, for a period beginning seven days immediately preceding, and ending on the 180th day following, the effective date of the registration statement used in connection with such offering, no holder of Membership Interests, except pursuant to an effective registration statement as part of such Qualified IPO, shall (i) offer, pledge, sell, contract to sell, sell any option or

contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer, directly or indirectly, any Membership Interests or any securities convertible into or exercisable or exchangeable for Membership Interests or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Membership Interests, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of such Membership Interests or such other securities, in cash or otherwise; provided, however, that the foregoing restrictions shall not apply to (x) transactions relating to such Membership Interests or securities acquired in open market transactions after the completion of the Qualified IPO, (y) Membership Transfers required in accordance with the terms of this Agreement or the Partnership Agreement or (z) conversions of such Membership Interests or securities into other classes of Membership Interests or securities without change of holder.

(v) The Members shall cooperate in good faith, and shall provide all Voting Support necessary, such that if equity securities are offered to the public in a Qualified IPO or any secondary offering after a Qualified IPO, each Member will be provided with customary registration rights, including demand and piggyback registration rights (pursuant to a Registration Rights Agreement), in any such offering, subject to standard underwriters’ cutback provisions. The registration rights will be assignable by any Designating Party upon any Disposition by such Designating Party of any interest in the Company to any Assignee who holds at least a 10% Membership Interest after giving effect to such Disposition. If any Member desires to exercise or exercises any such registration rights, each non-exercising Member shall cooperate with respect to such registration demand, including providing Voting Support.

ARTICLE VIII

OFFICERS

Section 8.1 Officers; No Compensation of Officers. The officers, if any, of the Company shall serve at the pleasure of the Board. Such officers shall have the authority and duties delegated to each of them, respectively, by the Board from time to time. The officers of the Company shall include a Chairman of the Board and may include a Chief Executive Officer, a President, a Secretary, a Treasurer, and such other officers (including, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents) as the Board from time to time may deem proper. The Chairman of the Board shall be chosen from among the Directors and as provided in Section 7.11(b). All officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VIII. The Board or any committee thereof may from time to time elect such other officers (including one or more Vice Presidents, General Counsels, Controllers, Assistant Secretaries and Assistant Treasurers) as may be necessary or desirable for the conduct of the business of the Company. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in this Agreement or as may be prescribed by the Board or such committee, as the case may be from time to time. Except as approved by the Board in accordance with Section 7.11(c)(vii), no officer of the Company shall receive any compensation from the Company for services provided to the Company in his capacity as an officer.

Section 8.2 Election and Term of Office. The names and titles of the officers of the Company in office as of the Effective Date are set forth on Exhibit D. Thereafter, the officers of the Company shall be elected from time to time by the Board in accordance with Section 7.11(c)(vi). Each officer shall hold office until such person’s successor shall have been duly elected and shall have qualified or until such person’s death or until he shall resign or be removed pursuant to Section 8.9.

Section 8.3 Chairman of the Board. The Chairman of the Board shall preside, if present, at all meetings of the Board and shall perform such additional functions and duties as the Board may prescribe from time to time. The Directors also may elect a Vice Chairman of the Board to act in the place of the Chairman of the Board upon his or her absence or inability to act.

Section 8.4 Chief Executive Officer. The Chief Executive Officer, who may be the Chairman of the Board or the Vice Chairman of the Board and/or the President, if any, shall have general and active management of the business of the Company and shall see that all orders and resolutions of the Board are carried into effect. The Chief Executive Officer may sign deeds, mortgages, bonds, contracts or other instruments, where the signing and execution thereof shall be expressly delegated by the Board to the Chief Executive Officer. The Chief Executive Officer shall also perform all duties and have all powers incident to the office of Chief Executive Officer and perform such other duties and may exercise such other powers as may be assigned by this Agreement or prescribed by the Board from time to time.

Section 8.5 President. The President, if any, shall, subject to the control of the Board and (if the President is not the Chief Executive Officer) the Chief Executive Officer, in general, supervise and control all of the business and affairs of the Company. The President may sign any deeds, mortgages, bonds, contracts or other instruments where the signing and execution thereof shall be expressly delegated by the Board to the President. The President shall also perform all duties and have all powers incident to the office of President and perform such other duties as may be prescribed by the Board from time to time.

Section 8.6 Vice Presidents. Any Executive Vice President, Senior Vice President and Vice President, in the order of seniority, unless otherwise determined by the Board, shall, in the absence or disability of the President, if any, perform the duties and exercise the powers of the President. They shall also perform the usual and customary duties and have the powers that pertain to such office and generally assist the President by executing contracts and agreements and exercising such other powers and performing such other duties as are delegated to them by the President and as the Board may further prescribe.

Section 8.7 Treasurer.

(a) The Treasurer, if any, shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Treasurer shall cause the funds of the Company to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositories in the manner provided by resolution of the Board. The

Treasurer shall, in general, perform all duties incident to the office of the Treasurer and shall have such further powers and duties and shall be subject to such directions as may be granted or imposed from time to time by the Board.

(b) Any Assistant Treasurers shall have such authority and perform such duties of the Treasurer as may be provided in this Agreement or assigned to them by the Board or the Treasurer. Assistant Treasurers shall assist the Treasurer in the performance of the duties assigned to the Treasurer, and in assisting the Treasurer, each Assistant Treasurer shall for such purpose have the powers of the Treasurer. During the Treasurer’s absence or inability, the Secretary’s authority and duties shall be possessed by such Assistant Treasurer or Assistant Treasurers as the Board may designate.

Section 8.8 Secretary.

(a) The Secretary shall keep or cause to be kept, in one or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and the Members pursuant to Articles III and VII. The Secretary shall see that all Notices are duly given in accordance with the provisions of this Agreement and as required by law; shall be custodian of the records and the seal, if any, of the Company and affix and attest the seal to all documents to be executed on behalf of the Company under its seal; and shall see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and in general, shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Board.

(b) Any Assistant Secretaries shall have such authority and perform such duties of the Secretary as may be provided in this Agreement or assigned to them by the Board or the Secretary. Assistant Secretaries shall assist the Secretary in the performance of the duties assigned to the Secretary, and in assisting the Secretary, each Assistant Secretary shall for such purpose have the powers of the Secretary. During the Secretary’s absence or inability, the Secretary’s authority and duties shall be possessed by such Assistant Secretary or Assistant Secretaries as the Board may designate.

Section 8.9 Removal. Any officer elected, or agent appointed, by the Board may be removed by the Board in accordance with Section 7.11(c)(vi) whenever, in the Board’s judgment, the best interests of the Company would be served thereby. No officer shall have any contractual rights against the Company for compensation by virtue of such election beyond the date of the election of such person’s successor, such person’s death, such person’s resignation or such person’s removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan.

Section 8.10 Vacancies. A newly created elected office and a vacancy in any elected office because of death, resignation or removal may be filled by the Board in accordance with Section 7.11(c)(vi) for the unexpired portion of the term at any meeting of the Board.

ARTICLE IX

INDEMNITY AND LIMITATION OF LIABILITY

Section 9.1 Indemnification; Limitation of Liability.

(a) To the fullest extent permitted by Applicable Law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all Claims or other amounts arising from any and all Claims, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided, however, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 9.1, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. Any indemnification pursuant to this Section 9.1 shall be made only out of the assets of the Company, it being agreed that the Members shall not be personally liable for such indemnification and shall have no obligation to contribute or lend any monies or property to the Company to enable it to effectuate such indemnification. Except as required by the Act, and to the fullest extent such limitation is permitted by Applicable Law, no Member shall owe any fiduciary or other duties (including any duty of loyalty or duty of care) to the Company or the other Members. The Members acknowledge and agree that the foregoing is intended to comply with the provisions of the Act (including Section 18-1101 of the Act) permitting members of a limited liability company to eliminate fiduciary duties.

(b) To the fullest extent permitted by Applicable Law, expenses (including legal fees and expenses) incurred by an Indemnitee shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 9.1.

(c) The indemnification provided by this Section 9.1 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

(d) The Company may purchase and maintain insurance on behalf of the Indemnitees, the Company and its Affiliates and such other Persons as the Company shall determine, against any liability that may be asserted against or expense that may be incurred by such Person in connection with the Company’s activities or such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(e) For purposes of this Section 9.1, the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Company also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to Applicable Law shall constitute “fines”; and action taken or omitted by it with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Company.

(f) An Indemnitee shall not be denied indemnification in whole or in part under this Section 9.1 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(g) The provisions of this Section 9.1 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(h) No amendment, modification or repeal of this Section 9.1 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Company or the obligations of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this Section 9.1 as in effect immediately prior to such amendment, modification or repeal with respect to Claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such Claims may arise or be asserted.

(i) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 9.1 ARE INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

Section 9.2 Limited Liability of Indemnitees.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Members or any other Persons who have acquired Membership Interests in the Company for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

(b) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Company, such Indemnitee acting in connection with the Company’s business or affairs shall not be liable to the Company or to any Member for its good faith reliance on the provisions of this Agreement.

(c) Any amendment, modification or repeal of this Section 9.2 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 9.2 as in effect immediately prior to such amendment, modification or repeal with respect to Claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such Claims may arise or be asserted.

ARTICLE X

TAXES

Section 10.1 Tax Returns. The Board shall cause to be prepared and timely filed (on behalf of the Company) all federal, state and local tax returns required to be filed by the Company, including (in accordance with Section 7.11(c)(xvii) as required) making all elections on such tax returns. Each Member shall furnish to the Company all pertinent information in its possession relating to the Company’s operations that is necessary to enable the Company’s tax returns to be timely prepared and filed. The Company shall bear the costs of the preparation and filing of its returns.

Section 10.2 Tax Matters. For so long as there are two or more Members of the Company, no Member shall make any election or take any position that would cause the Company to be classified as an association taxable as a corporation for federal income tax purposes.

Section 10.3 Tax Matters Member. The Board shall from time to time designate a Member to act as the “tax matters partner” of the Company pursuant to Section 6231(a)(7) of the Code or under any similar provision under applicable tax law (the “Tax Matters Member”). The initial Tax Matters Member shall be BlackBrush TexStar before the BBTS Distribution, and the initial Tax Matters Member after the BBTS Distribution shall be EIG. The Tax Matters Member shall not take any material action as Tax Matters Member without the consent of the Designating Parties (such consent not to be unreasonably conditioned, withheld or delayed). The Tax Matters Member shall take such action as may be necessary to cause, to the extent applicable, (x) the Company to make the election described in Section 6231(a)(1)(B)(ii) of the Code, and (ii) to the extent possible, each Member to become a “notice partner” within the meaning of Section 6223 of the Code. The Tax Matters Member shall inform each Member of all significant matters that may come to its attention in its capacity as Tax Matters Member by giving notice thereof on or before the fifth Business Day after becoming aware thereof and, within that time, shall forward to each Member copies of all significant written communications it may receive in that capacity. The Tax Matters Member shall circulate to each Member a draft of all federal and state income tax returns of the Company, and the Company shall cause the Partnership to circulate to each Member a draft of all federal and state income tax returns of the Partnership, in each case not later than 15 days prior to the due date for filing of such return(s), and upon any Member’s reasonable request, the Tax Matters Member shall consult with such Member regarding such returns. The Company shall not be obligated to pay any fees or other compensation to the Tax

Matters Member in its capacity as such, provided, that the Company shall reimburse the Tax Matters Member for any and all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by it in its capacity as the Tax Matters Member. Notwithstanding anything to the contrary contained in this Agreement, without the approval of the Board, the Tax Matters Member shall not in its capacity as Tax Matters Member make any material decisions or enter into any material agreements on behalf of the Company or the other Members if such decisions or agreements may reasonably be considered to have a material and adverse effect upon the Company or any other Member; for the avoidance of doubt, any settlement agreements with the Internal Revenue Service or consent to extend the period of limitation as contemplated by Section 6229(b)(1)(B) of the Code shall be considered such a material agreement.

Section 10.4 Tax Information. Each Member shall provide the Company with any information related to such Member necessary to (i) allow the Company to comply with any tax reporting, tax withholding or tax payment obligations of the Company or (ii) establish the Company’s legal entitlement to an exemption from, or reduction of, withholding tax, including U.S. federal withholding tax under Sections 1471 and 1472 of the Code.

ARTICLE XI

BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS

Section 11.1 Maintenance of Books.

(a) The Board shall keep or cause to be kept at the principal office of the Company or at such other location approved by the Board complete and accurate books and records of the Company, supporting documentation of the transactions with respect to the conduct of the Company’s business and minutes of the proceedings of the Board and any other books and records that are required to be maintained by Applicable Law.

(b) The books of account of the Company shall be maintained on the basis of a fiscal year that is the calendar year and on an accrual basis in accordance with GAAP, consistently applied.

Section 11.2 Reports and Inspection. (a) So long as a Member has a Sharing Ratio of at least 1%, the Board shall cause to be prepared and delivered to each Member such reports, forecasts, studies, budgets and other information as the Member may reasonably request from time to time, including periodic financial statements (not less than quarterly) and access to all operating and financial data provided to the senior lenders of the Company or any Person in the Partnership Group; provided, however, that this Section 11.2 shall not obligate the Company to create any information that does not already exist at the time of such request (other than to convert existing information from one medium to another, such as providing a printout of information that is stored in a computer database).

(b) The Company shall permit each Member that has a Sharing Ratio of at least 1%, at such Member’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its

officers, during normal business hours of the Company as may be reasonably requested by the Member; provided, however, that the Company shall not be obligated pursuant to this Section 11.2(b) to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

(c) At the request of a Designating Party, the Company will, and will cause its Subsidiaries to, enter into a management rights letter in form and substance satisfactory to such Designating Party and the Company.

Section 11.3 Bank Accounts. Funds of the Company shall be deposited in such banks or other depositories as shall be designated from time to time by the Board. All withdrawals from any such depository shall be made only as authorized by the Board and shall be made only by check, wire transfer, debit memorandum or other written instruction.

ARTICLE XII

DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION

Section 12.1 Dissolution.

(a) The Company shall dissolve and its affairs shall be wound up on the first to occur of the following events (each a “Dissolution Event”):

(i) the unanimous consent of the Designating Parties; or

(ii) entry of a decree of judicial dissolution of the Company under the Act; or

(iii) at any time there are no Members of the Company, unless the Company is continued in accordance with the Act or this Agreement.

(b) No other event shall cause a dissolution of the Company.

(c) Upon the occurrence of any event that causes there to be no Members of the Company, to the fullest extent permitted by law, the personal representative of the last remaining Member is hereby authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such Member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of a personal representative of a Member or its nominee or designee, as the case may be, as a substitute Member of the Company, effective as of the occurrence of the event that terminated the continued membership of such Member in the Company.

(d) Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall not cause such Member to cease to be a member of the Company and, upon the occurrence of such an event, the Company shall continue without dissolution.

Section 12.2 Winding-Up and Termination.

(a) On the occurrence of a Dissolution Event, the Board shall act as, or alternatively appoint, a liquidator. The liquidator shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of winding up shall be borne as a Company expense. The steps to be accomplished by the liquidator are as follows:

(i) as promptly as possible after dissolution and again after final winding up, the liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities, and operations through the last Day of the month in which the dissolution occurs or the final winding up is completed, as applicable;

(ii) the liquidator shall discharge from Company funds all of the debts, liabilities and obligations of the Company (including all expenses incurred in winding up or otherwise make adequate provision for payment and discharge thereof (including the establishment of a cash escrow fund for contingent, conditional and unmatured liabilities in such amount and for such term as the liquidator may reasonably determine); and

(iii) all remaining assets of the Company shall be distributed to the Members as follows:

(A) the liquidator may sell any or all Company property, including to Members, and any resulting gain or loss from each sale shall be computed and allocated to the Capital Accounts of the Members in accordance with the provisions of Article VI;

(B) with respect to all Company property that has not been sold, the fair market value of that property shall be determined and the Capital Accounts of the Members shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously would be allocated among the Members if there were a taxable disposition of that property for the fair market value of that property on the date of distribution; and

(C) Company property (including cash) shall be distributed among the Members in accordance with Section 6.2; and, to the extent practicable, those distributions shall be made by the end of the taxable year of the Company during which the liquidation of the Company occurs (or, if later, 90 Days after the date of the liquidation); provided, however, that notwithstanding the foregoing provisions of clauses (A), (B) and (C) immediately above, if the obligation to maintain Capital Accounts has been suspended under Section 13.11 of this Agreement, no allocations shall be made and all Company property shall be distributed to the sole Member.

(b) The distribution of cash or property to a Member in accordance with the provisions of this Section 12.2 constitutes a complete return to the Member of its Capital Contributions and a complete distribution to the Member of its Membership Interest and all the Company’s property and constitutes a compromise to which all Members have consented pursuant to Section 18-502(b) of the Act. To the extent that a Member returns funds to the Company, it has no claim against any other Member for those funds.

Section 12.3 Deficit Capital Accounts. No Member will be required to pay to the Company, to any other Member or to any third party any deficit balance that may exist from time to time in the Member’s Capital Account (“Deficit Capital Account”).

Section 12.4 Certificate of Cancellation. On completion of the distribution of Company assets as provided herein, the Members (or such other Person or Persons as the Act may require or permit) shall file a certificate of cancellation with the Secretary of State of Delaware and take such other actions as may be necessary to terminate the existence of the Company. Upon the filing of such certificate of cancellation, the existence of the Company shall terminate, except as may be otherwise provided by the Act or by Applicable Law.

ARTICLE XIII

GENERAL PROVISIONS

Section 13.1 Offset. Whenever the Company is to pay any sum to any Member, any amounts that Member owes the Company may be deducted from that sum before payment.

Section 13.2 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be delivered personally, by reputable overnight delivery service or other courier with charges prepaid, by certified mail, postage prepaid and return receipt requested, or by facsimile transmission or Email that is confirmed by another writing, sent to the appropriate address set forth below:

To the Company:

Southcross Holdings GP LLC

1700 Pacific Avenue, Suite 2900

Dallas, Texas 75201

Telephone: (214) 979-3200

Fax: (214) 979-3710

Attention: David W. Biegler

To BBTS: (before the BBTS Distribution)

BBTS Borrower LP

18615 Tuscany Stone

Suite 300

San Antonio, Texas 78258

Fax: (210) 495-0075

Email: phil.mezey@blackbrushenergy.com

Attention: Phillip M. Mezey

To EIG: (after the BBTS Distribution)

EIG BlackBrush Holdings

c/o EIG Management Company, LLC

333 Clay Street, Suite 3500

Houston, Texas 77002

Fax: (713) 615-7453

Attention: Curt S. Taylor

To TW: (after the BBTS Distribution)

Tailwater Capital LLC

300 Crescent Court

Suite 200

Dallas, Texas 75201

Fax: (214) 292-8562

Email: jdownie@tailwatercapital.com

Attention: Jason H. Downie

To Southcross:

Southcross Energy LLC

c/o Charlesbank Capital Partners

200 Clarendon Street, 54^th Floor

Boston, Massachusetts 02116

Fax: (617) 619-5402

Email: jbiotti@charlesbank.com

Attention: Mr. Jon M. Biotti

All such Notices shall be deemed to have been duly given, (a) as of the date of delivery, if delivered personally or by overnight delivery service or other courier, (b) on the date receipt is acknowledged, if delivered by certified mail, and (c) upon the date on which the transmission is separately confirmed in writing, if delivered by facsimile or Email. A party may change its address for notice by notice to the other parties in the manner set forth above.

Section 13.3 Entire Agreement; Superseding Effect. This Agreement constitutes the entire agreement of the Members relating to the Company and the transactions contemplated hereby, and supersedes all provisions and concepts contained in all prior contracts or agreements between the Members with respect to the Company, whether oral or written.

Section 13.4 Effect of Waiver or Consent. Except as otherwise provided in this Agreement, a waiver or consent, express or implied, to or of any breach or default by any Member in the performance by that Member of its obligations with respect to the Company is not a consent or waiver to or of any other breach or default in the performance by that Member of

the same or any other obligations of that Member with respect to the Company. Except as otherwise provided in this Agreement, failure on the part of a Member to complain of any act of any Member or to declare any Member in default with respect to the Company, irrespective of how long that failure continues, does not constitute a waiver by that Member of its rights with respect to that default until the applicable statute-of-limitations period has run.

Section 13.5 Amendment or Restatement. Subject to the right of the Board to amend this Agreement as expressly provided herein, this Agreement may be amended or restated only by a written instrument executed by all Members; provided, however, that notwithstanding anything to the contrary contained in this Agreement, each Member agrees that the Board, without the approval of any Member, may amend any provision of the Delaware Certificate and this Agreement, and may authorize any Officer to execute, swear to, acknowledge, deliver, file and record any such amendment and whatever documents may be required in connection therewith, to reflect any change that does not require consent or approval (or for which such consent or approval has been obtained) under this Agreement or does not adversely affect the rights of the Members.

Section 13.6 Binding Effect. This Agreement is binding on and shall inure to the benefit of the Members and, subject to the restrictions on Dispositions set forth in this Agreement, their respective successors and permitted assigns.

Section 13.7 Governing Law; Severability. This Agreement is governed by and will be construed in accordance with the laws of the State of Delaware, excluding any conflict-of-laws rule or principle (whether under the laws of Delaware or any other jurisdiction) that might refer the governance or the construction of this Agreement to the law of another jurisdiction. If any provision of this Agreement or its application to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected thereby, and such provision will be enforced to the greatest extent permitted by law.

Section 13.8 Consent to Jurisdiction; Waiver of Jury Trial. THE COMPANY AND THE PARTIES HERETO VOLUNTARILY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA IN DALLAS COUNTY, TEXAS OVER ANY DISPUTE BETWEEN OR AMONG THE PARTIES OR THE COMPANY AND THE PARTIES ARISING OUT OF THIS AGREEMENT, IN EACH CASE OTHER THAN A DISPUTE SUBJECT TO SECTION 13.9, AND THE COMPANY AND EACH PARTY IRREVOCABLY AGREES THAT ALL SUCH CLAIMS IN RESPECT OF SUCH DISPUTE SHALL BE HEARD AND DETERMINED IN SUCH COURTS. THE COMPANY AND THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH DISPUTE ARISING OUT OF THIS AGREEMENT BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. THE COMPANY AND EACH PARTY AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT.

Section 13.9 Dispute Resolution.

(a) Any dispute, controversy or claim, of any and every kind or type, whether based on contract, tort, statute, regulations, or otherwise, arising out of, connected with, or relating in any way to the Company, its business or to this Agreement or the obligations of the parties hereunder, including without limitation, any dispute as to the existence, validity, construction, interpretation, negotiation, performance, non-performance, breach, termination or enforceability of this Agreement (in each case, a “Dispute”) shall be resolved solely and exclusively in accordance with the procedures specified in this Section 13.9. The parties shall attempt in good faith to settle any Dispute by mutual discussions within 30 days after the date that one party gives notice to the other parties of such a Dispute. If the Dispute is not resolved within such 30 day period, any party may refer the Dispute to arbitration and the Dispute shall be finally settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall be held in Dallas, Texas, and presided over by three arbitrators. The party giving notice of the Dispute shall appoint one arbitrator, and the other parties to the Dispute shall appoint one arbitrator. The two appointed arbitrators shall together appoint a third arbitrator. If the appointed arbitrators fail to appoint the third arbitrator within 30 days after their appointment, then the third arbitrator shall be selected in accordance with the Rules. The parties to such Dispute and the Company shall execute such engagement and indemnity agreements as the arbitrators shall require. Notwithstanding this agreement to arbitrate Disputes, any party to a Dispute may apply to a court sitting on Dallas, Texas, for temporary restraining orders, temporary injunctive relief or other interim measures pending arbitration. No court other than a court sitting in Dallas, Texas, shall have authority or jurisdiction to enter temporary restraining orders, temporary injunctive relief or other interim orders pending arbitration, and no party to a Dispute shall make any application for interim orders to any court other than a court sitting in Dallas, Texas. The arbitrators shall award costs, attorneys’ fees and expert witness fees to the prevailing party or parties. The arbitrators may not award indirect, consequential, special or punitive damages, and recovery of any such damages in any Dispute is hereby waived. The award rendered by the arbitrators shall be final and binding, subject only to grounds and procedures for vacating or modifying the award under the Federal Arbitration Act, 9 U.S.C. §§ 1 et. seq.

(b) To the extent that any party hereto (including assignees of any party’s rights or obligations under this Agreement) may be entitled, in any jurisdiction, to claim for itself or its revenues, assets or properties, immunity from service of process, from suit, from the jurisdiction of any court, from an interlocutory order or injunction or the enforcement of the same against its property in such court, from attachment prior to judgment, from attachment in aid of execution of an arbitral award or judgment (interlocutory or final), or from any other legal process, and to the extent that, in any such jurisdiction there may be attributed such immunity (whether claimed or not), each party hereto hereby irrevocably agrees not to claim, and hereby irrevocably waives, such immunity.

(c) This agreement to arbitrate shall be binding upon the successors, assignees and any trustee or receiver of any party.

Section 13.10 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions.

Section 13.11 Waiver of Certain Rights. Each Member irrevocably waives any right it may have to maintain any action for dissolution of the Company or for partition of the property of the Company.

Section 13.12 Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument.

Section 13.13 Suspension of Certain Provisions If Only One Member.

(a) The following definitions in Article I of this Agreement shall be suspended and shall have no force or effect at any time that there is only one Member of the Company:

(i) “Adjusted Capital Account Deficit;”

(ii) “Capital Account;”

(iii) “Depreciation;”

(iv) “Gross Asset Value;”

(v) “Profits” and “Losses;” and

(vi) “Tax Matters Member.”

(b) The following provision of this Agreement shall be suspended and shall have no force or effect at any time that there is only one Member of the Company:

(i) Section 3.6 (Notice);

(ii) Section 4.1 (General Restriction);

(iii) Section 5.4 (Capital Accounts);

(iv) Section 6.3 (Allocations);

(v) Section 6.4 (Varying Interests);

(vi) Section 6.5 (Withheld Taxes); and

(vii) Section 10.3 (Tax Matters Member).

[Signature Page Follows]

IN WITNESS WHEREOF, each Member has executed this Agreement as of the date first set forth above.


MEMBERS:

BBTS BORROWER LP

By:		BBTS Borrower GP LLC its General Partner

By:		/s/ Phillip M. Mezey
Name:		Phillip M. Mezey
Title:		Co-Chief Executive Officer and Chief Operating Officer

SOUTHCROSS ENERGY LLC

By:		/s/ J. Michael Anderson
Name:		J. Michael Anderson
Title:		Senior Vice President and Chief Financial Officer

EX-99.4 4 d772644dex994.htm EX-4 EX-4

Exhibit 4

EXECUTION VERSION

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

SOUTHCROSS HOLDINGS LP

a Delaware Limited Partnership

Dated as of August 4, 2014

LIMITED PARTNERSHIP INTERESTS IN SOUTHCROSS HOLDINGS LP, A DELAWARE LIMITED PARTNERSHIP, HAVE NOT BEEN REGISTERED WITH OR QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE. THE INTERESTS ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS. THE INTERESTS CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SOUTHCROSS HOLDINGS LP, AS SUCH MAY BE AMENDED OR RESTATED FROM TIME TO TIME, AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

TABLE OF CONTENTS


ARTICLE I
DEFINITIONS

1.1.	Certain Definitions	2

1.2.	Construction	20

ARTICLE II
ORGANIZATION

2.1.	Continuation of the Partnership	21

2.2.	Name	21

2.3.	Registered Office; Registered Agent	21

2.4.	Principal Office	21

2.5.	Purpose; Powers	21

2.6.	Fiscal Year	21

2.7.	Foreign Qualification Governmental Filings	21

2.8.	Term	22

ARTICLE III
PARTNERS; DISPOSITIONS OF INTERESTS

3.1.	Partners	22

3.2.	Liability of Partners	22

3.3.	Restrictions on Management by Limited Partners	22

3.4.	Restrictions on the Transfer of Interests	22

3.5.	Additional Partners	24

3.6.	Liability to Third Parties	24

3.7.	Tag Along Rights	25

3.8.	Right of First Offer	27

3.9.	Limitation of Rights	28

3.10.	Indirect Transfers	28

3.11.	Liquidity Event	31

3.12.	Certain Events Not Deemed Transfers	34

3.13.	Determination of Fair Market Value	34

3.14.	Transferability of Set-Off Distribution Rights	35

3.15.	MAC Cure Amounts; Redirected Distribution Amounts	35

3.16.	Exchange of Class A Units for SXE Equity Securities	36



ARTICLE IV
CAPITAL CONTRIBUTIONS

4.1.	Interests	39

4.2.	Return of Contribution	41

4.3.	Withdrawal of Capital	41

4.4.	Capital Accounts	42

4.5.	MAC Coverage Contributions	42

ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS

5.1.	Distributions	42

5.2.	Tax Distributions	44

5.3.	Allocations	46

5.4.	Withholding	51

ARTICLE VI
MANAGEMENT

6.1.	Management	52

6.2.	Super Majority Decisions; Major Decisions	52

6.3.	Officers	56

6.4.	Annual Budget	56

6.5.	Limitation of Liability; Indemnification	58

6.6.	Directors’ and Officers’ Insurance	60

6.7.	Limitation of Duties; Waiver of Fiduciary Duties	60

ARTICLE VII
RIGHTS OF PARTNERS; CONFIDENTIALITY

7.1.	Access to Information	61

7.2.	Financial Reports	61

7.3.	Audits	62

7.4.	Confidentiality	62

7.5.	Press Releases	62

7.6.	Reimbursement of Expenses	63

ARTICLE VIII
TAXES

8.1.	Tax Returns	63

8.2.	Tax Elections	63


8.3.	Tax Characterization of the Partnership	64

8.4.	Tax Matters Partner	64

8.5.	Tax Information	65

ARTICLE IX
BOOKS, RECORDS, AND BANK ACCOUNTS

9.1.	Maintenance of Books and Records	65

9.2.	Bank Accounts	65

ARTICLE X
DISSOLUTION, LIQUIDATION, TERMINATION AND CONVERSION

10.1.	Dissolution	65

10.2.	Liquidation and Termination	65

10.3.	Cancellation of Filing	66

ARTICLE XI
GENERAL PROVISIONS

11.1.	Offset	66

11.2.	Notices	66

11.3.	Entire Agreement; Supersedure	67

11.4.	Effect of Waiver or Consent	67

11.5.	Amendment or Modification	67

11.6.	Binding Effect	68

11.7.	Governing Law; Severability	68

11.8.	Consent to Jurisdiction; Waiver of Jury Trial	68

11.9.	Dispute Resolution	68

11.10.	Further Assurances	69

11.11.	Waiver of Certain Rights	69

11.12.	Title to Partnership Property	70

11.13.	Counterparts	70

11.14.	Electronic Transmissions	70

11.15.	Aggregation of Interests	70

11.16.	BBTS Adjustment Amount	70

iii

Exhibit A – Partners, Classes, Capital Contributions and Units

Exhibit B – Officers

Exhibit C – Joinder Agreement

Exhibit D – Representations and Warranties

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

SOUTHCROSS HOLDINGS LP

This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the “Agreement”) of Southcross Holdings LP, a Delaware limited partnership (the “Partnership”), is made and entered into by and among Southcross Holdings GP LLC, a Delaware limited liability company (the “General Partner”), Southcross Energy LLC, a Delaware limited liability company (“Southcross”), BBTS Borrower LP, a Delaware limited partnership (“BBTS,” Southcross and BBTS are sometimes referred to collectively as the “Limited Partners”) effective as of August 4, 2014 (the “Effective Date”).

WHEREAS, on June 9, 2014, the General Partner and BBTS formed the Partnership by filing a certificate of limited partnership with the Delaware Secretary of State and entered into a Limited Partnership Agreement of the Partnership (the “Prior Partnership Agreement”) to set forth the respective rights and obligations of the General Partner and BBTS with respect to the Partnership;

WHEREAS, concurrently with entering into this Agreement, (a) BBTS is making (or committing to make) a capital contribution to the Partnership by contributing to Southcross Holdings Borrower LP, a Delaware limited partnership and wholly-owned Subsidiary of the Partnership (“Borrower LP”), the Contributed TS Interests (the “BBTS ED Contribution”), and (b) Southcross is making a capital contribution to the Partnership by contributing to Borrower LP (x) the SXE Units and (y) the Contributed SEP GP Interest ((x) and (y), collectively, the “Southcross ED Contribution”), in each case, in exchange for certain Class A Units and pursuant to the Contribution Agreement; and

WHEREAS, in connection with the consummation of the transactions contemplated by the Contribution Agreement, the General Partner and the Limited Partners desire to amend and restate the Prior Partnership Agreement in the manner set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual agreements set forth in this Agreement and intending to be legally bound, the parties hereto hereby amend and restate the Prior Partnership Agreement in its entirety to read as follows:

ARTICLE I

DEFINITIONS

1.1. Certain Definitions. As used in this Agreement, the following terms have the following meanings:

“Access Partner” means a Limited Partner who, together with its Affiliates, holds a Class A Sharing Percentage that is equal to or greater than one percent (1%).

“Accredited Investor” has the meaning set forth in Regulation D promulgated under the Securities Act.

“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time, and any corresponding provisions of succeeding law. All references to provisions of the Act shall be deemed to refer, if applicable, to their successor statutory provisions to the extent appropriate in light of the context herein in which such references are used.

“Additional Notice of Exercise” has the meaning set forth in Section 3.8(b).

“Adjusted Capital Account” means, with respect to any Partner, the balance, if any, in such Partner’s Capital Account as of the end of the relevant Tax Year or other relevant period, after giving effect to the following adjustments:

(a) add to such Capital Account any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore to the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) subtract from such Capital Account such Partner’s share of the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith.

“Adjustment Loss” has the meaning set forth in the Contribution Agreement.

“Affiliate” means, with respect to a Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with the first Person. For purposes of this definition, “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of voting securities, by agreement or otherwise; provided, however, that with respect to any Partner, the term “Affiliate” shall not include the General Partner, the Partnership or any of their respective Subsidiaries.

“Agreement” has the meaning set forth in the introductory paragraph, as it may be further amended, modified, supplemented or restated from time to time, or any successor agreement.

“Allocation Period” means (a) the period commencing on the Effective Date and ending on the last day of the Partnership’s Tax Year, (b) any subsequent period commencing on the first day of the Partnership’s Tax Year and ending on the last day of the Partnership’s Tax Year, or (c) any portion of any period described in clause (a) or (b) for which the Partnership is required to allocate Profits, Losses, and other items of Partnership income, gain, loss, or deduction pursuant to Section 5.3.

“Amended Tag-Along Notice” has the meaning set forth in Section 3.7(b).

“Annual Budget” means each annual operating, general and administrative expense and capital budget of the Partnership for a given calendar year (or the portion of calendar year 2014 from the date of this Agreement through December 31, 2014, in the case of the Initial Budget), as approved, revised or otherwise modified by the General Partner or effective pursuant to Section 6.4(f), as such budget may be modified or amended from time to time by the General Partner or with the approval of the General Partner.

“Approved Exit” has the meaning set forth in Section 3.11(a).

“Available Cash” means the sum of (a) gross cash proceeds from the operations of the Partnership or its Subsidiaries, as applicable (including sales and dispositions of property whether or not in the ordinary course of business), (b) any net cash proceeds from any issuance of equity or refinancing of debt or new debt issuance or incurrence, and (c) other cash on hand less amounts used to pay or establish reserves for all expenses of the Partnership or its Subsidiaries, as applicable (including general and administrative expenses), contract and marketing costs, debt payments, taxes, capital expenditures, replacements, future acquisitions and investments and contingencies, all as reasonably determined on a periodic basis by the General Partner.

“Bankruptcy” or “Bankrupt” means, with respect to any Person, that (a) such Person (i) makes a general assignment for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings; (iv) files a petition or answer seeking for such Person a reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any applicable law; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of this clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person’s properties; or (b) a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any applicable law has been commenced against such Person and 120 days have expired without dismissal thereof or with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person’s properties has been appointed and 90 days have expired without the appointment’s having been vacated or stayed, or 90 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated. The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in the Act.

“BBTS” has the meaning set forth in the introductory paragraph hereof and includes any successor to BBTS and any Transferee of all but not less than all of BBTS’ Interest.

“BBTS Adjustment Amount” means an amount equal to the Estimated Adjustment Amount (as defined in the Contribution Agreement), which shall be subject to adjustment in accordance with Section 2.7(f) of the Contribution Agreement.

“BBTS Adjustment Amount Payout” has the meaning set forth in Section 11.16(a).

“BBTS Distribution” means a distribution by BBTS or any wholly-owned Subsidiary of BlackBrush TexStar of all (and not less than all) of the Units held by BBTS and wholly-owned Subsidiaries of BlackBrush TexStar to members of the TW Group and members of the EIG Group in proportion of their respective ownership interests in BlackBrush TexStar.

“BBTS ED Contribution” has the meaning set forth in the Recitals.

“BBTX Note” means BBTX Note LP, a Delaware limited partnership.

“BBTX Note II” means BBTX Note-II LP, a Delaware limited partnership.

“BBTX Unit” means BBTX Unit LP, a Delaware limited partnership.

“BBTX Unit II” means BBTX Unit-II LP, a Delaware limited partnership.

“BlackBrush TexStar” means BlackBrush TexStar LP, a Delaware limited partnership.

“Board of Directors” means the Board of Directors of the General Partner.

“Borrower LP” has the meaning set forth in the Recitals.

“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks in New York City, New York or Dallas, Texas, are authorized or obligated by law to close.

“Business Opportunity” has the meaning set forth in Section 6.7(b).

“Capital Account” means the Capital Account maintained for each Partner on the Partnership’s books and records in accordance with the following provisions:

(a) To each Partner’s Capital Account there will be added (i) the amount of cash and the Gross Asset Value of any other asset contributed by such Partner to the Partnership, (ii) such Partner’s allocable share of Profits and any items in the nature of income or gain that are specially allocated to such Partner pursuant to Section 5.3(b) hereof or other provisions of this Agreement, and (iii) the amount of any Partnership liabilities assumed by such Partner or which are secured by any property distributed to such Partner.

(b) From each Partner’s Capital Account there will be subtracted (i) the amount of cash and the Gross Asset Value of any other Partnership assets distributed to such Partner pursuant to any provision of this Agreement, (ii) such Partner’s allocable share of Losses

and any other items in the nature of expenses or losses that are specially allocated to such Partner pursuant to Section 5.3(b) or other provisions of this Agreement, and (iii) liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership.

(c) Determination of the amount of any liability for purposes of subparagraphs (a) and (b) above will take into account Code Section 752(c) and any other applicable provisions of the Code and Treasury Regulations.

(d) If all or a portion of an Interest is disposed of accordance with the terms of this Agreement, the Assignee shall succeed to the Capital Account of the transferor to the extent it relates to the Interest so disposed of.

(e) For purposes of computing the Partners’ Capital Accounts, the Simulated Basis of each Depletable Property of the Partnership will be allocated among the Partners based on their Class A Sharing Percentages.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 and will be interpreted and applied in a manner consistent with such Treasury Regulations.

“Capital Call Notice” has the meaning set forth in Section 4.1(d)(i).

“Capital Contribution” means, with respect to any Partner, the amount of money and the Gross Asset Value of any tangible or intangible property (other than money) contributed to the capital of the Partnership by such Partner. Any reference in this Agreement to the Capital Contribution of a Partner shall include any Capital Contribution of its predecessors in interest.

“Certificate” has the meaning set forth in Section 2.1.

“Change in Control” means, (a) with respect to BBTS (or any Permitted Transferee of BBTS who holds Class A Units), any transaction which results in BBTS (or such Permitted Transferee) ceasing to be Controlled by the TW Group and/or the EIG Group, (b) with respect to Southcross (or any Permitted Transferee of Southcross who holds Class A Units), any transaction which results in Southcross (or such Permitted Transferee) ceasing to be Controlled by the Southcross Group, (c) from and after a BBTS Distribution, with respect to any member of the EIG Group to whom Class A Units are distributed pursuant to a BBTS Distribution (or any Permitted Transferee of EIG who holds Class A Units), any transaction which results in EIG (or such Permitted Transferee) ceasing to be Controlled by the EIG Group, (d) from and after a BBTS Distribution, with respect to any member of the TW Group to whom Class A Units are distributed pursuant to a BBTS Distribution (or any Permitted Transferee of TW who holds Class A Units), any transaction which results in TW (or such Permitted Transferee) ceasing to be Controlled by TW Group and (e) with respect to any other Person (for purposes of this definition, the “first Person”), any transaction or series of related transactions pursuant to which any Person (or any “person” or “group” (as those terms are used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934)) that is not, at the time of the transaction, Affiliated with the first Person, directly or indirectly by acquiring interests in a Parent of the first Person, acquires beneficial ownership of a majority of the outstanding equity interests or Voting Interests in the first Person.

“Class A Limited Partner” means Southcross, BBTS and any Person acquiring Class A Units in accordance with the terms of this Agreement, including pursuant to a BBTS Distribution.

“Class A Sharing Percentage” means, with respect to any Partner, a fraction (expressed as a percentage), the numerator of which is the total number of Class A Units held by such Partner and the denominator of which is the total number of Class A Units held by all Partners.

“Class A Unit Price” means,

(a) $1,000 per Class A Unit until the first Capital Contribution in which each Class A Limited Partner fails to contribute its full Class A Sharing Percentage of such Capital Contribution (a “Disproportionate Contribution”), and

(b) for purposes of the first Disproportionate Contribution and each Capital Contribution thereafter pursuant to which Class A Units are issued, the Class A Unit Fair Market Value.

“Class A Units” means the units of the Partnership designated as Class A Units and having the rights associated with Class A Units as described herein.

“Class A Unit Fair Market Value” the amount that would be distributed to a Class A Limited Partner on account of a Class A Unit if an amount equal to the Partnership Sale Value was distributed pursuant to Section 5.1(a).

“Closing Period” has the meaning set forth in Section 3.8(b).

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

“Contributed TS Interests” means, collectively (i) 100% of the limited liability company interest of TexStar GP and (ii) 100% of the limited partnership interest in TexStar, as contributed by BBTS to the Partnership pursuant to the Contribution Agreement.

“Contributed SEP GP Interest” means 100% of the limited liability company interest of SEP GP, as contributed by Southcross to the Partnership pursuant to the Contribution Agreement.

“Contribution Agreement” means that certain Contribution Agreement, dated as of June 11, 2014, among BBTS, Southcross and the Partnership.

“Control,” “Controlling” or “Controlled” means, as to a specified Person, the beneficial ownership, directly or indirectly, of more than 50% of the voting power of the outstanding Voting Interests of such Person or the power or authority, by contract or otherwise, to direct the management, activities or policies of such Entity.

“CP Deadline” has the meaning given such term in the Contribution Agreement.

“Cure Notice” has the meaning set forth in Section 3.10(d).

“Cure Period” has the meaning set forth in Section 3.10(d).

“Current Market Value” when used with reference to any capital stock or other security on any date means: (a) if the capital stock or security is then listed or admitted to trading on a national securities exchange, is quoted on the OTC Bulletin Board or is quoted on any other interdealer quotation system or regularly quoted by member firms of the Financial Industry Regulatory Authority, the volume weighted average of the Trading Prices of such security on the date of determination (if a trading day) and on each of the five trading days immediately preceding, and on each of the five trading days immediately following, the date of the determination (any such capital stock or security so listed, traded or quoted being referred to as “Publicly Traded”) or (b) if the capital stock or security is not Publicly Traded, the Fair Market Value of such capital stock or security.

“Damages” has the meaning set forth in Section 6.5(b).

“Depletable Property” means each separate oil and gas property as defined in Code Section 614 owned from time to time by the Partnership as a result of a Capital Contribution, acquisition or otherwise.

“Depreciation” means, for each Allocation Period or other period, an amount equal to the depreciation, amortization or other cost recovery deduction (other than Simulated Depletion) allowable for federal income tax purposes with respect to an asset for such Allocation Period or other period, except that (a) with respect to any property the Gross Asset Value of which differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Allocation Period or other period will be the amount of book basis recovered for such Allocation Period or other period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2) and (b) with respect to any other property the Gross Asset Value of which differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Period or other period, Depreciation for such Allocation Period or other period will be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Allocation Period or other period bears to such beginning adjusted tax basis. Notwithstanding the foregoing, if the federal income tax depreciation, amortization or other cost recovery deduction for such Allocation Period or other period is zero, Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

“Depreciation Recapture” has the meaning set forth in Section 5.3(c)(iii)(B).

“Designating Party” has the meaning set forth in the GP Agreement.

“Director” or “Directors” means any member or members of the Board of Directors.

“Dispute” has the meaning set forth in Section 11.9(a).

“Distributable Property” means Available Cash and non-cash proceeds from sales and dispositions of property of the Partnership and its Subsidiaries.

“Exchange Tax Dispute Notice” has the meaning set forth in Section 3.16(a)(ii)(B).

“Dropdown Transaction” means a contribution by the Partnership, the General Partner or the Subsidiaries of the Partnership of all or a portion of their assets to any member of the SXE Group.

“EBITDA” for any period, means the net income or loss for such period plus, to the extent the following amounts have been deducted in the determination of net income or loss for the period: (1) interest expense (net of interest income) for such period; (2) the provision for income taxes for such period; (3) the amount of all management fees for such period; (4) the amount of all amortization and depreciation for such period; (5) loss (gain) from asset dispositions for such period; and (6) rent related to facilities owned by Partnership and its wholly owned Subsidiaries for such period.

“Effective Date” has the meaning set forth in the introductory paragraph hereof.

“EIG” means EIG BlackBrush Holdings LLC, a Texas limited liability company.

“Emergency Expenditures” means expenditures which are reasonably necessary to be expended in order to mitigate or remedy the endangerment of property, the health or safety of any Person or the environment.

“Entity” means any corporation, limited liability company, general partnership, limited partnership, venture, trust, business trust, unincorporated association, estate or other entity.

“Equity Security” means (a) the equity ownership rights in a business Entity, whether a corporation, company, joint stock company, limited liability company, general or limited partnership, joint venture, bank, association, trust, trust company, land trust, business trust, sole proprietorship or other business Entity or organization, and whether in the form of capital stock, ownership unit, limited liability company interest, limited or general partnership interest or any other form of ownership, and (b) also includes all Equity Interest Equivalents.

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

“Exchange FMV” has the meaning set forth in Section 3.16(b).

“Exchange Tax Dispute Notice” has the meaning set forth in Section 3.16(a)(ii)(B).

“Exchange Tax Loss” means the amount of tax payable (assuming no offset for any refunds, credits or other similar tax attributes) by the Non-Requesting Partner or any of its Affiliates (either directly or the applicable portion of any tax borne by such party as a result of its status as a Partner in the Partnership) as a result of the exchange of Equity Securities of SXE to the Requesting Partner pursuant to Section 3.16. For this purpose, each dollar of “additional income” for purposes of an income or franchise tax shall be considered taxable at the highest marginal rate for an individual or a corporation (whichever rate is higher) subject to such tax.

“Exchanging Partner” has the meaning set forth in Section 3.16(b).

“Exercising Partner” has the meaning set forth in Section 3.10(c).

“Extended Offer Period” has the meaning set forth in Section 3.8(b).

“Fair Market Value” means the fair market value as determined in good faith by the General Partner; provided that the determination of Fair Market Value shall be subject to Section 3.13. In determining the Fair Market Value of any non-cash property, all factors which the General Partner determines might reasonably affect such value shall be taken into account; provided, however, that (a) the Fair Market Value of any non-cash property that consists of Publicly Traded securities or similar instruments shall be the Current Market Value thereof determined by reference to a record date which shall be fixed by the General Partner as of a date not less than five trading days before and no more than ten trading days before the proposed action requiring a determination of Fair Market Value of any such non-cash property and (b) in no event shall any non-cash property be valued at less than the price at which the Partnership can require a third Person to buy the non-cash property, taking into account the creditworthiness of the Person with such purchase obligation, the availability of any collateral for the obligation, and other factors that the General Partner deems appropriate. The Fair Market Value shall be determined without reduction based upon any lack of control, minority ownership, marketability or other similar discounts. Notwithstanding the above, it is agreed that as of the Effective Date, the Fair Market Value of the BBTS ED Contribution was $1,100,000,000 and the Fair Market Value of the Southcross ED Contribution was $462,500,000.

“Final Exchange Tax Loss” has the meaning set forth in Section 3.16(a)(ii)(E).

“Fiscal Year” has the meaning set forth in Section 2.6.

“FMV Notice” has the meaning set forth in Section 3.13(a).

“FMV Objection” has the meaning set forth in Section 3.13(b).

“Fully Participating Partners” has the meaning set forth in Section 4.1(d)(i).

“GAAP” has the meaning set forth in Section 7.2(a).

“General Partner” has the meaning set forth in the introductory paragraph of this Agreement and includes any successor to the General Partner and any Transferee of all but not less than all of the General Partner’s Interest in the Partnership.

“GP Agreement” means the Limited Liability Company Agreement of the General Partner, as it may be amended, modified, supplemented or restated from time to time, or any successor agreement.

“GP Obligation” means (a) any indemnity obligation owed by the General Partner to any of its officers or directors or any third party and (b) any obligation owed by the General Partner for any taxes and any tax, accounting, legal advisors or any other party that performs general and administrative services on behalf of the General Partner that are reasonably necessary to the conduct of the business of the General Partner.

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership is the gross fair market value of such asset as agreed upon between the General Partner and the contributing Partner at the time of contribution.

(b) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the Board of Directors, in a manner that is consistent with Code Section 7701(g) and this Agreement, as of the following times:

(i) the acquisition of an additional Interest by any new or existing Partner in exchange for more than a de minimis Capital Contribution or as consideration for the performance of services on behalf of the Partnership;

(ii) the distribution by the Partnership to a Partner of more than a de minimis amount of property other than money as consideration for an Interest;

(iii) the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); and

(iv) at such other times as the Board of Directors may reasonably determine to be necessary or advisable in order to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2; provided, however, that adjustments pursuant to clauses (i) and (ii) above shall be made only if the Board of Directors reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership.

(c) The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross Fair Market Value of such asset (taking Code Section 7701(g) into account) on the date of distribution.

(d) The Gross Asset Values of Partnership assets will be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code

Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), except that Gross Asset Values will not be adjusted pursuant to this subparagraph (d) to the extent that an adjustment pursuant to subparagraph (b) above is made in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).

(e) If the Gross Asset Values of Partnership assets has been determined or adjusted pursuant to clauses (b) or (d) hereof, such Gross Asset Value shall thereafter be adjusted by the Deprecation taken into account with respect to such property for purposes of computing Profits and Losses and for purposes of computing Simulated Depletion and other items allocated pursuant to Article V.

“Indemnitee” means (a) the General Partner, (b) each Officer or officer the General Partner, (c) the Directors, (d) each Organizing Person, (e) the Tax Matters Partner (or Person acting in a similar capacity), (f) any Person who is or was an Affiliate of the Partnership (other than any Person in the SXE Group), (g) any Person who is or was a partner, officer, director, employee, agent, fiduciary or trustee of the Partnership or any Affiliate of the Partnership (other than any Person in the SXE Group), (h) any Person who is or was serving at the request of the Partnership or any Affiliate of the Partnership (other than any Person in the SXE Group) as a partner, officer, director, employee, agent, fiduciary or trustee of another Person; provided, however, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services and (i) any Person the Partnership designates as an “Indemnitee” for purposes of this Agreement.

“Independent Appraiser” means an independent investment bank or appraisal firm with no material engagement within the three years prior to any engagement under this Agreement (other than as an Independent Appraiser pursuant to this Agreement) with the Partnership, any Partner or their Affiliates with experience involving non-public securities in the midstream industry.

“Indirect Parent Transfer” has the meaning set forth in Section 3.10(a).

“Initial Appraiser” has the meaning set forth in Section 3.10(c)(i).

“Initial Budget” has the meaning set forth in Section 6.4(a).

“Initial Limited Partner” or “Initial Limited Partners” means Southcross and/or BBTS.

“Initial Sharing Ratio” means, as to Southcross or BBTS, such Partner’s Class A Sharing Percentage as of the Effective Date.

“Interest” means the limited partnership interest of a Partner in the Partnership at any particular time, including, without limitation, all Units held by such Partner.

“Interest Rate” means a rate per annum equal to the lesser of (a) a varying rate per annum that is equal to the interest rate publicly quoted by JPMorgan Chase Bank (or its successor) from time to time as its prime commercial or similar reference interest rate, with adjustments in that varying rate to be made on the same date as any change in that rate, compounded annually, and (b) the maximum rate permitted by applicable law.

“IPT Exercise Notice” has the meaning set forth in Section 3.10(a)(ii).

“IPT Notice” has the meaning set forth in Section 3.10(a).

“IPT Notice Recipient” has the meaning set forth in Section 3.10(a)(i).

“IPT Transaction Value” has the meaning set forth in Section 3.10(a)(i).

“Joinder” has the meaning set forth in Section 3.4(b).

“Liens” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge, right of first refusal or other encumbrance of any kind, or any conditional sale contract, title retention contract or other contract or agreement to give any of the foregoing.

“Limited Partner” means each Class A Limited Partner and each other Person hereafter admitted as a Limited Partner of the Partnership in accordance with this Agreement.

“Liquidation Event” has the meaning set forth in Section 10.1.

“Liquidity Event” means a (a) Qualified IPO and (b) any other event wherein cash or cash equivalent proceeds to the Partners (and any Assignees) on account of their respective Interests in the Partnership are generated outside the ordinary operation of the Partnership Group in conjunction with a disposition of equity of the General Partner and/or the Partnership Group (by merger, consolidation or otherwise) or all or any material portion of the assets of the General Partner and the Partnership Group.

“Lock-Up Period” means the period from the Effective Date through the second anniversary of the Effective Date.

“LLC Units” means Units (as defined in the GP Agreement).

“MAC Contributing Partner” has the meaning set forth in Section 4.5.

“MAC Cure Amount” has the meaning set forth in Section 4.5.

“MAC Defaulting Partner” has the meaning set forth in Section 4.5.

“MAC Default” means an event or occurrence giving rise to an indemnification obligation of Southcross or BBTS to the Partnership for Subject Losses pursuant to Section 10.1 or Section 10.2 of the Contribution Agreement to the extent the effect of such event or occurrence giving rise to such indemnification obligation results in an obligation of any member of the Partnership Group to make payment to any third party for such Subject Losses.

“Management Services Agreement” means that certain Management Services Agreement, dated as of the Effective Date, among SXE GP, TexStar Midstream Logistics, LP and TexStar Midstream Products, LP.

“Midstream Activities” means the ownership, operation, maintenance, expansion, construction, commissioning and decommissioning of, and acquisition of, gathering systems, pipelines and treatment and processing facilities, marketing of capacity on such gathering systems, buying and selling gas and condensate in connection therewith, the provision of compression services in connection therewith, and all other acts or activities incidental or related to any of the foregoing.

“Neutral Appraiser” has the meaning set forth in Section 3.10(c)(ii).

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).

“Non-Requesting Partner” has the meaning set forth in Section 3.16(a)(ii).

“Notice of Exercise” has the meaning set forth in Section 3.8(b).

“Offer Period” has the meaning set forth in Section 3.8(b).

“Offerees” has the meaning set forth in Section 3.8(a).

“Offeror” has the meaning set forth in Section 3.10(a).

“Officer” has the meaning set forth in Section 6.3.

“Organizing Person” means each Person executing the Certificate on behalf of the General Partner or the Partnership.

“Parent” means with respect to any Entity, any other Entity that Controls such first Entity.

“Partner” means the General Partner and the Limited Partners and any Person admitted to the Partnership as a Partner after the Effective Date in accordance with this Agreement.

“Partner Indemnitors” has the meaning set forth in Section 6.5(f).

“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i).

“Partner Nonrecourse Debt” has the meaning set forth for such term in Treasury Regulations Section 1.704-2(b)(4).

“Partner Nonrecourse Deductions” has the meaning set forth for such term in Treasury Regulations Section 1.704-2(i).

“Partnership” has the meaning set forth in the introductory paragraph hereof.

“Partnership Group” means the Partnership and its Subsidiaries.

“Partnership Minimum Gain” has the meaning set forth for such term in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d)(1).

“Partnership Sale Value” means the amount that the Partnership would receive in an all cash sale of all of the assets and businesses of the Partnership and its wholly owned Subsidiaries as a going concern (giving effect to (a) all existing Liens on such assets and (b) all outstanding indebtedness for borrowed money, of the Partnership and its wholly-owned Subsidiaries) in an arm’s length transaction with an unaffiliated third-party consummated immediately preceding the event giving rise to the determination of the Partnership Sale Value (assuming that all of the proceeds of such sale were paid directly to the Partnership).

“Permitted Transferee” has the meaning set forth in Section 3.4(d).

“Person” means any individual or Entity.

“Primary Objecting Holder” has the meaning set forth in Section 3.13(b).

“Primary Exercising Partner” has the meaning set forth in Section 3.10(c).

“Prior Partnership Agreement” has the meaning set forth in the Recitals.

“Profits” and “Losses” means, for each Allocation Period or other period, an amount equal to the Partnership’s taxable income or loss for such Allocation Period determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, deduction or credit required to be stated separately pursuant to Code Section 703(a)(1) will be included in taxable income or loss), with the following adjustments (without duplication):

(a) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses will increase the amount of such income and/or decrease the amount of such loss;

(b) any expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits and Losses, will decrease the amount of such income and/or increase the amount of such loss;

(c) gain or loss resulting from any disposition of any Partnership assets (other than Depletable Property) where such gain or loss is recognized for federal income tax purposes will be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

(d) gain or loss resulting from any disposition of a Depletable Property shall be treated as being equal to the corresponding Simulated Gain or Simulated Loss, as applicable;

(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such income or loss, Depreciation will be taken into account for such Allocation Period or other period;

(f) to the extent an adjustment to the adjusted tax basis of any asset included in Partnership assets pursuant to Code Section 734(b) or Code Section 7430 is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s Interest, the amount of such adjustment will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and will be taken into account for the purposes of computing Profits and Losses;

(g) if the Gross Asset Value of any Partnership asset is adjusted in accordance with subparagraph (b) or subparagraph (c) of the definition of “Gross Asset Value” above, the amount of such adjustment will be taken into account in the Allocation Period of such adjustment as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; and

(h) notwithstanding any other provision of this definition of Profits and Losses, any items that are specially allocated pursuant to Section 5.3(b) hereof will not be taken into account in computing Profits or Losses.

The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Section 5.3(b) hereof will be determined by applying rules analogous to those set forth in this definition of Profits and Losses.

“Proposed Budget” has the meaning set forth in Section 6.4(c).

“Proposed Exchange Tax Loss Statement” has the meaning set forth in Section 3.16(a)(ii)(A).

“Prudent Industry Practices” means, at a particular time, any of the practices, methods, standards of care, skill, safety and diligence, as the same may change from time to time, but applied in light of the facts known at the time, that are consistent with the general standards applied or utilized under comparable circumstances by a reasonably prudent operator, in a good and workmanlike manner, with due diligence and dispatch, in accordance with good midstream industry practice.

“Public Offering” means the sale in a firm underwritten public offering registered under the Securities Act of any class of Equity Securities of the Partnership (or any successor thereto).

“Publicly Traded” has the meaning set forth in the definition of Current Market Value.

“Purchase Offer” has the meaning set forth in Section 3.8(a).

“Qualified IPO” means any transaction that results in at least $75 million of Equity Securities of the Partnership or any successor thereto (if and only if the Partnership or such successor has no assets other than ownership in SXE GP or any successor thereto) or SXE GP (or any successor thereto), being Publicly Traded pursuant to an underwritten Public Offering of securities.

“Redirected Distribution Amount” means, other than MAC Cure Amounts, the amount of Adjustment Loss attributable to a Redirected Partner.

“Redirected Partner” means BBTS or Southcross, as applicable, at any time an Adjustment Loss is attributable to such Initial Limited Partner.

“Registration Rights Agreement” means a registration rights agreement, in a form reasonably acceptable to the Limited Partner entering into such agreement, relating to the registration of Equity Securities of the applicable issuer held by such Limited Partner.

“Remaining ROFO Securities” has the meaning set forth in Section 3.8(b).

“Remaining Securities Notice” has the meaning set forth in Section 3.8(b).

“Requesting Partner” has the meaning set forth in Section 3.16(a).

“ROFO Securities” has the meaning set forth in Section 3.8(a).

“ROFR Interests” has the meaning set forth in Section 3.16(b).

“ROFR Interest PSA” has the meaning set forth in Section 3.16(b)(iv).

“ROFR Offer Notice” has the meaning set forth in Section 3.16(b)(ii).

“ROFR Notice” has the meaning set forth in Section 3.16(b).

“ROFR Notice Period” has the meaning set forth in Section 3.16(b)(i).

“Rules” has the meaning set forth in Section 11.9(a).

“Second Appraiser” has the meaning set forth in Section 3.10(c)(ii).

“Secretary of State” means the Secretary of State of the State of Delaware.

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

“Seller” has the meaning set forth in Section 3.8(a).

“Set-Off Distributions” means Set-Off MAC Distributions and Set-Off RDA Distributions.

“Set-Off MAC Distributions” has the meaning set forth in Section 5.1(b).

“Set-Off RDA Distributions” has the meaning set forth in Section 5.1(c).

“SEP GP” means Southcross Energy GP LLC, a Delaware limited liability company.

“Simulated Basis” shall mean the book value of any Depletable Property. The Simulated Basis of each Depletable Property shall be allocated to each Partner in accordance with such Partner’s Class A Sharing Percentage as of the time such Depletable Property is contributed to or acquired by the Partnership (and any additions to such Simulated Basis resulting from expenditures required to be capitalized in such Simulated Basis shall be allocated among the Partners in a manner designed to cause the Partners’ proportionate shares of such Simulated Basis to be in accordance with their Class A Sharing Percentages as determined at the time of any such additions), and shall be reallocated among the Partners in accordance with the Partners’ Class A Sharing Percentages as determined immediately following the occurrence of an event giving rise to an adjustment to the book value of the Partnership’s Depletable Properties pursuant to clause (b) of the definition of Gross Asset Value.

“Simulated Depletion” shall mean, with respect to each Depletable Property, a depletion allowance computed in accordance with federal income tax principles (as if the Simulated Basis of the property were its adjusted tax basis) and in the manner specified in Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated Depletion with respect to any Depletable Property, the Simulated Basis of such property shall be deemed to be the book value of such property, and in no event shall such allowance, in the aggregate, exceed such Simulated Basis. For purposes of computing Simulated Depletion, the General Partner will apply on a property by property basis the simulated percentage depletion method or the simulated cost depletion method, as determined by the General Partner, under Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2).

“Simulated Gain” or “Simulated Loss” shall mean the simulated gain or simulated loss computed by the Partnership with respect to each amount of gain or loss realized from the sale or other disposition of Depletable Property as calculated in Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2).

“Southcross” has the meaning set forth in the introductory paragraph of this Agreement and includes any successor to Southcross and any Transfer of all but not less than all of Southcross’ Interest.

“Southcross ED Contribution” has the meaning set forth in the Recitals.

“Subject Company” has the meaning set forth in Section 3.10(a).

“Subject Losses” has the meaning given such term in the Contribution Agreement.

of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person. Notwithstanding the foregoing, SXE shall not be considered a Subsidiary of the Partnership.

“SXE” means Southcross Energy Partners LP, a Delaware limited partnership.

“SXE GP” means Southcross Energy Partners GP, LLC.

“SXE Group” means SXE and its Subsidiaries.

“SXE Units” means 2,116,400 Common Units of SXE and 12,213,713 Subordinated Units of SXE.

“Tag-Along Notice” has the meaning set forth in Section 3.7(b).

“Tag-Along Sale” has the meaning set forth in Section 3.7(a).

“Tag-Along Sale Percentage” means a number, expressed as a percentage, equal to the number of Class A Units of the Tag-Along Seller proposed to be transferred in a Tag-Along Sale divided by the total number of Class A Units held by such Tag-Along Seller as of the date of the applicable Tag-Along Notice.

“Tag-Along Seller” has the meaning set forth in Section 3.7(a).

“Tag-Along Transferee” has the meaning set forth in Section 3.7(a).

“Tag Transferring Person” has the meaning set forth in Section 3.7(b).

“Tax Amount” means has the meaning set forth in Section 5.2(b).

“Tax Distribution” has the meaning set forth in Section 5.2(a).

“Tax Matters Partner” has the meaning set forth in Section 8.4.

“Tax Year” has the meaning set forth in Section 2.6.

“TexStar” means TexStar Midstream Services, LP, a Texas limited partnership.

“TexStar GP” means TexStar Midstream GP, LLC, a Texas limited liability company and the general partner of TexStar.

“Third Party Purchaser” has the meaning set forth in Section 3.8(c).

“Total Capital Contribution” has the meaning set forth in Section 4.1(d)(i).

“Total Consideration” means, as to any applicable Transfer or Approved Exit pursuant to the terms hereof, the sum of all cash and the Fair Market Value of all non-cash consideration to be paid for all Units Transferred in such transaction.

“Trading Price” means, for any trading day, the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices regular way for such day, in each case, (a) on the principal national securities exchange on which the shares of such capital stock are listed, (b) if (a) does not apply, as quoted on the OTC Bulletin Board, (c) if (a) and (b) do not apply, as reported or quoted on any other interdealer quotation system, including the Pink Sheets, on which such capital stock or security is then traded or quoted or (d) if (a) through (c) do not apply, as otherwise reported by any member firm of the National Association of Securities Dealers, Inc. selected by the General Partner.

“Transfer” means a disposition, sale, assignment, transfer, exchange, pledge or the grant of a security interest or other encumbrance.

“Transferor” means a Person that Transfers or prepares to Transfer.

“Transferee” is a Person to whom a Transfer is made or is prepared to be made.

“TW” means Tailwater Capital LLC, a Texas limited liability company.

“TW Aggregator” means TW BBTS Aggregator LP, a Delaware limited partnership.

“TW Group” means TW, TW Energy Fund, TW Aggregator, BBTX Unit, BBTX Unit II, BBTX Note, BBTX Note II and their respective Affiliates.

“TW Energy Fund” means Tailwater Energy Fund I, LP, a Delaware limited partnership.

“Ultimate Parent” means (a) with respect to Southcross, Charlesbank Capital Partners, LLC, (b) with respect to BBTS, each of TW and EIG Management Company, LLC, (c) from and after a BBTS Distribution, with respect to any member of the TW Group, TW and (d) from and after a BBTS Distribution, with respect to any member of the EIG Group, EIG Management Company, LLC, with respect to any other Partner, the Person designated by the Board of Directors reasonably and in good faith as the ultimate Person that Controls such Partner upon its admission as a Partner.

“Unfunded Notice” has the meaning set forth in Section 4.1(d)(i).

“Units” means the Class A Units of the Partnership and any other class of Units of the Partnership authorized and issued after the Effective Date.

“Veto Interest” has the meaning set forth in the GP Agreement.

“Voting Interests” means, as to a specified Person: (a) in the case of a corporation, the outstanding securities thereof entitled to vote on the election of directors; (b) in the case of a limited partnership, the general partnership interests therein; (c) in the case of a limited liability company, partnership or venture, the securities or interests therein entitled to manage or elect the managers or other governing body of such Person; (d) in the case of a trust or estate, the interest therein entitled to appoint or elect the trustee or similar governing body thereof; and (e) in the case of any other Person, the interest therein entitled to elect the governing body of such Person or otherwise exercise the power to direct or cause the direction of the management and policies of such Person.

“Voting Support” by a Partner with respect to a given action means that such Partner will (a) appear at any equity holder meeting of the Partnership or the General Partner to consider such action or otherwise cause its applicable Equity Securities owned by such Partner (or any of its Affiliates) as of the relevant time to be counted as present for purposes of calculating a quorum for such purpose, and respond to any other request by the Partnership or the General Partner for written consent, if any, with respect to such action, (b) vote, or cause to be voted, all of its applicable Equity Securities (i) in favor of the approval of such action, and (ii) against any action or agreement that would reasonably be expected to interfere with, delay or attempt to discourage the consummation of such action, and (c) cause the directors appointed by it to the Board of Directors of the General Partner to appear at any meeting of the Board of Directors to consider such action and direct such directors to vote (i) in favor of the approval of such action, and (ii) against any action or agreement that would reasonably be expected to interfere with, delay or attempt to discourage the consummation of such action.

“Waived ROFR Transfer Period” has the meaning set forth in Section 3.16(b)(iii).

1.2. Construction. Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine, and neuter. All references to Articles and Sections refer to articles and sections of this Agreement unless otherwise specified, and all references to Exhibits and Schedules are to exhibits and schedules attached hereto, each of which is made a part hereof for all purposes. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision will be applicable whether such action is taken directly or indirectly by such Person, including actions taken by or on behalf of any Affiliate of such Person. All accounting terms used herein and not otherwise defined herein will have the meanings accorded them in accordance with GAAP and, except as expressly provided herein, all accounting determinations will be made in accordance with such accounting principles in effect from time to time.

ARTICLE II

ORGANIZATION

2.1. Continuation of the Partnership. The Partnership was organized as a Delaware limited partnership by the filing of the Certificate of Limited Partnership of the Partnership (the “Certificate”) in the office of the Secretary of State pursuant to the Act on June 9, 2014. The Partners desire to continue the Partnership for the purposes and upon the terms and conditions hereinafter set forth. Except as provided herein, the rights, duties and liabilities of each Partner shall be as provided in the Act.

2.2. Name. The name of the Partnership is Southcross Holdings LP. Partnership business will be conducted in such name or such other names that comply with applicable law as the General Partner may select from time to time.

2.3. Registered Office; Registered Agent. The registered office of the Partnership in the State of Delaware will be the initial registered office designated in the Certificate or such other office (which need not be a place of business of the Partnership) as the General Partner may designate from time to time in the manner provided by law. The registered agent of the Partnership in the State of Delaware will be the initial registered agent designated in the Certificate, or such other Person or Persons as the General Partner may designate from time to time in the manner provided by law.

2.4. Principal Office. The principal office of the Partnership will initially be at such location as the General Partner may designate from time to time, which need not be in the State of Delaware. The Partnership may have such other offices as the General Partner may determine appropriate.

2.5. Purpose; Powers. The Partnership is organized for the purposes of (a) engaging, directly or through its Subsidiaries, in Midstream Activities in the continental United States and (b) engaging, directly or through its Subsidiaries, in any other business or activity that now or hereafter may be necessary, incidental, proper, advisable or convenient in furtherance of or otherwise relating to the foregoing purpose as determined by the General Partner in its discretion. The Partnership will have all powers permitted to be exercised by a limited partnership organized in the State of Delaware.

2.6. Fiscal Year. The fiscal year of the Partnership (the “Fiscal Year”) for financial statement purposes will end on December 31st unless otherwise determined by the General Partner. The tax year of the Partnership (the “Tax Year”) for income tax purposes will end on December 31st unless otherwise required under the Code.

2.7. Foreign Qualification Governmental Filings. Prior to the Partnership’s conducting business in any jurisdiction other than the State of Delaware, the General Partner will cause the Partnership to comply, to the extent procedures are available, with all requirements necessary to qualify the Partnership as a foreign limited partnership in such jurisdiction. Each Officer is authorized, on behalf of the Partnership, to execute, acknowledge, swear to and deliver all certificates and other instruments as may be necessary or appropriate in connection with such

qualifications. Further, each Partner will execute, acknowledge, swear to and deliver all certificates and other instruments that are necessary or appropriate to qualify, or, as appropriate, to continue or terminate such qualification of, the Partnership as a foreign limited partnership in all such jurisdictions in which the Partnership may conduct business.

2.8. Term. The Partnership commenced on the date the Certificate was filed with the Secretary of State of the State of Delaware, and will continue in existence until terminated pursuant to this Agreement.

ARTICLE III

PARTNERS; DISPOSITIONS OF INTERESTS

3.1. Partners. As of the Effective Date, the undersigned Partners are the sole Partners of the Partnership. The names, addresses, initial Capital Contributions and number and class of Units of each Partner are set forth on Exhibit A attached hereto and incorporated herein. The General Partner is hereby authorized to amend Exhibit A to reflect the admission of additional Partners, the withdrawal of a Partner, the change of address of a Partner, the Capital Contribution of a Partner, the number and classes of Units of a Partner, and other information called for by Exhibit A. Such completion, correction or amendment may be made from time to time as and when the General Partner considers it appropriate.

3.2. Liability of Partners.

(a) Except as this Agreement may otherwise provide or applicable law may otherwise require, (i) the debts, obligations and liabilities of the Partnership, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Partnership, and (ii) no Limited Partner shall be obligated personally for any such debt, obligation or liability of the Partnership solely by reason of being a Limited Partner of the Partnership.

(b) A Limited Partner, in its capacity as such, shall have no liability in excess of (i) the amount of its Capital Contribution, if any, (ii) its share of any assets and undistributed profits of the Partnership and (iii) the amount of any distributions wrongfully distributed to it to the extent set forth in the Act.

3.3. Restrictions on Management by Limited Partners. No Limited Partner, in its capacity as such, shall have the right or power to take part in the control of the Partnership or its business or affairs or the right or power to act for or bind the Partnership in any way. Where the action of a Limited Partner is required by this Agreement or applicable law, a Limited Partner may act by written consent.

3.4. Restrictions on the Transfer of Interests.

(a) General.

(i) Until the expiration of the Lock-Up Period, neither Southcross nor BBTS (or any of their Permitted Transferees) shall be permitted to Transfer any Units (other than to a Permitted Transferee) without the prior written consent of the other;

provided BBTS may effect a distribution of all (and not less than all) of its Units pursuant to a BBTS Distribution at any time after the Effective Date. From the expiration of the Lock-Up Period until the third anniversary of the Effective Date, neither Southcross nor BBTS (or any of their Permitted Transferees) shall be permitted to Transfer more than 50% of the Units held by such Partner as of the Effective Date (other than to a Permitted Transferee) without the prior written consent of the other; provided BBTS may effect a distribution of all (and not less than all) of its Units pursuant to a BBTS Distribution at any time after the Effective Date. After the expiration of the third anniversary of the Effective Date, any Limited Partner may Transfer all or any portion of its Units, subject to the provisions of this Article III.

(ii) The Partnership and the Partners all agree and acknowledge that any Transfer by any holder of Units (or any Permitted Transferee of a holder of Units) of any Units shall be deemed to be a Transfer of such Partner’s entire Interest related to such Units for all purposes of this Agreement and the restrictions on Transfer set forth in this Article III shall apply; provided, however, that any Indirect Parent Transfer shall be subject to the provisions of Section 3.10. No Interest may be Transferred by a Limited Partner separate and apart from its Units, and any attempted Transfer by a holder of Units (or Permitted Transferee of a holder of Units) of any Units other than in accordance with this Article III is void ab initio and will not be recognized by the Partnership.

(b) Conditions to Transfer. Notwithstanding any other provision of this Agreement, no Transfer of a Unit may be effected by any holder of a Unit unless: (i) such Transfer is in compliance with the Securities Act and all applicable state securities laws, and, if requested by the General Partner, such Transferring Partner has delivered an opinion of such Partner’s counsel to the Partnership, in form and substance reasonably satisfactory to the Partnership, to the effect that such Transfer is either exempt from the requirements of the Securities Act and the applicable securities laws of any state or that such registration requirements have been complied with, (ii) such Transfer would not cause the Partnership to be treated as an association or “publicly traded partnership” taxable as a corporation and would not make the Partnership ineligible for “safe harbor” treatment under Code Section 7704 and the Treasury Regulations promulgated thereunder of this Agreement), (iii) such Transfer would not cause a termination of SXE for federal income tax purposes (provided that this Section 3.2(b)(iii) shall not apply to a BBTS’ distribution of all (and not less than all) of its Units pursuant to a BBTS Distribution if such distribution is made within three months after the Effective Date), and (iv) such Transfer would not cause the Partnership or any Partner to become subject to regulation under either the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended. No Transferee of Units shall become a Partner without the approval of the General Partner, which approval may not be unreasonably withheld, conditioned or delayed. Any Person admitted as a Partner of the Partnership pursuant to a Transfer made in accordance with the terms set forth above must agree to be bound by the terms of this Agreement by executing and delivering to the General Partner a joinder to this Agreement in the form attached hereto as Exhibit C (a “Joinder”). The General Partner will determine in its sole discretion whether the foregoing conditions have been satisfied and may, in its sole discretion, determine to waive any such conditions to the extent permitted by applicable law.

(c) General Partner. The General Partner may not Transfer any Units held by it or its general partner interest in the Partnership without the written consent of each Class A Limited Partner. No Partner who owns LLC Units may Transfer any such LLC Units except in the event that such Partner Transfers any Units, such Partner shall be required to Transfer to such Transferee, and such Transferee shall as a condition to such Transfer be required to accept, a pro rata percentage of such Transferor’s LLC Units; and likewise, any Partner who Transfers LLC Units shall also be required to Transfer a pro rata percentage of the Units held by such Partner based on the number of LLC Units being Transferred by such Partner relative to the total number of LLC Units held by such Partner.

(d) Affiliate Transfers; Liquidity Event. Without complying with Section 3.7 or Section 3.8, (i) BBTS may Transfer Units to any wholly-owned Subsidiary of BlackBrush TexStar or pursuant to a BBTS Distribution, (ii) Southcross may Transfer any Units to any Affiliate of Southcross, (iii) after a BBTS Distribution TW may Transfer any Units to any Affiliate of TW Controlled by any member of the TW Group, and EIG may Transfer any Units to any Affiliate of EIG Controlled by any member of the EIG Group, and any other Partner may Transfer any Units to any Affiliate of such Partner Controlled by the same Ultimate Parent (any such Transferee, a “Permitted Transferee”); provided any such Permitted Transferee shall comply with Section 3.4(b) of this Agreement and execute and deliver to the General Partner a Joinder and (ii) any holder of Units may Transfer any Units held by it pursuant to a Liquidity Event.

3.5. Additional Partners. Upon the approval of the General Partner (provided the General Partner hereby approves the admission of each of the TW Aggregator and EIG as a Class A Limited Partner upon the distribution to such Person of Class A Units pursuant to a BBTS Distribution), additional Persons may be admitted to the Partnership as Partners (on and subject to the conditions of Section 3.4(b) in the case of Transferees of Units) and Units may be created and issued to such Persons as determined by the General Partner on such terms and conditions as the General Partner may determine at the time of admission, subject to the rights of the Limited Partners to participate in such issuance pursuant to Section 4.1. Subject to Section 6.2, the terms of admission may provide for the creation of different classes or series of Units having different rights, powers and duties. As a condition to being admitted as a Partner of the Partnership, any Person must agree to be bound by the terms of this Agreement by executing and delivering to the General Partner a Joinder, and must make the representations and warranties set forth on Exhibit E as of the date of such Person’s admission to the Partnership. Any Person admitted to the Partnership as a Partner following the Transfer of Units from a Partner shall succeed to all of the rights, duties and obligations of its Transferor under this Agreement; provided that any such Transfer by a Partner shall not relieve such Partner of its duties and obligations under this Agreement for periods prior to such Transfer.

3.6. Liability to Third Parties. No Partner or Officer will have any personal liability for any obligations or liabilities of the Partnership, whether such liabilities arise in contract, tort or otherwise, except to the extent that any such liabilities or obligations are expressly assumed in writing by such Partner or Officer.

3.7. Tag Along Rights.

(a) Tag-Along Sale. If at any time following the expiration of the Lock-Up Period and prior to a Qualified IPO of the Partnership (or any successor thereto) any holder of Class A Units or holders of Class A Units (the “Tag-Along Seller”) elect to Transfer to any Person or Persons other than a Permitted Transferee (collectively, a “Tag-Along Transferee”), in a transaction or series of related transactions (including by way of a purchase agreement, tender offer, merger or other business combination transaction or otherwise) in any twelve (12) month period a number of Class A Units in excess of 35% of the Tag-Along Seller’s Class A Units (a “Tag-Along Sale”), then each of the other holders of Class A Units may, subject to the other provisions of this Section 3.7, require such Tag-Along Seller to include in the Tag-Along Sale a number of its Class A Units (such number not to exceed a number of Class A Units in excess of such Partner’s Class A Units multiplied by the Tag-Along Sale Percentage) on the terms set forth in this Section 3.7, subject to proportionate reduction in the event that the Tag-Along Transferee is unwilling to acquire all of the Class A Units offered to it.

(b) Terms of Sale. In connection with a Tag-Along Sale, the Tag-Along Seller shall provide each other holder of Class A Units with written notice thereof at least twenty (20) Business Days prior to the date on which the Tag-Along Seller expects to consummate the Tag-Along Sale (the “Tag-Along Notice”). The Tag-Along Notice shall contain (i) the name and address of the Tag-Along Transferee, (ii) the proposed amount and form of consideration and terms and conditions of payment offered by the Tag-Along Transferee, (iii) the number of Class A Units of the Tag-Along Seller being transferred and the Tag-Along Sale Percentage and (iv) all other material terms of the proposed transaction, including without limitation the expected closing date of the transaction. In the event that the terms and/or conditions set forth in the Tag-Along Notice are thereafter amended in any respect, the Tag-Along Seller shall give written notice (an “Amended Tag-Along Notice”) of the amended terms and conditions of the proposed Transfer to each other holder of Class A Units. Any Person electing to participate in the Tag-Along Sale shall provide the Tag-Along Seller with written notice thereof (which notice shall set forth the number of Class A Units of such Person that such Person desires to include in such Tag-Along Sale (such number not to exceed a number of Class A Units in excess of such Partner’s Class A Units multiplied by the Tag-Along Sale Percentage)) within ten (10) Business Days prior to the date on which the Tag-Along Seller expects to consummate the Tag-Along Sale (or if an Amended Tag-Along Notice is delivered, within 10 days after the delivery of such Amended Tag-Along Notice (and the closing shall not occur prior to the expiration of 10 days after such Amended Tag-Along Notice has been delivered to each holder of Class A Units)). Each Partner electing to Transfer its Class A Units shall execute such documents, as are executed by the Tag-Along Seller with respect to the Tag-Along Sale, provided that (i) any such Person shall not be required to make any representations or warranties in connection with such Transfer other than representations and warranties as to (A) such Person’s ownership of its Class A Units to be transferred free and clear of Liens, (B) such Person’s power and authority to effect such Transfer, and (C) such matters pertaining to compliance with securities laws as the transferee may reasonably require, and (ii) any indemnification or other obligations assumed or incurred in connection with a Tag-Along Sale shall be allocated among all Persons Transferring Class A Units (collectively, the “Tag Transferring Persons”) in the same proportion as the consideration payable to each such Tag Transferring Person in each case other than with respect to representations made individually by the indemnifying Person (e.g., representations as to title or

authority of such Person). In no event shall (i) the consideration to be received by Tag Transferring Persons in connection with a Tag-Along Sale consist of any form of non-cash consideration other than freely tradable publicly traded securities or (ii) the amount of any indemnity obligation of any Tag Transferring Person exceed the amount of cash and the Fair Market Value of any non-cash consideration received by such Tag Transferring Person in such Tag-Along Sale, except in the case of fraud by such Tag Transferring Person.

(c) An election of any holder of Class A Units delivered in accordance with Section 3.7(b) to participate in a Tag-Along Sale shall be irrevocable, and such holder of Class A Units shall be bound and obligated to participate in the Tag-Along Sale in accordance with such election; provided, however, that if any proportionate reduction of the number of Class A Units to be included in a Tag-Along Sale as contemplated by Section 3.7(a) would cause a Tag Transferring Person to have a number of Class A Units following such Tag-Along Sale such that such Person would cease to be a Designating Party or retain a Veto Interest, such Tag Transferring Person shall have the right to revoke its election to participate in such Tag-Along Sale.

(d) Each holder of Class A Units who does not deliver notice of its election to participate in the Tag-Along Sale within ten (10) Business Days prior to the date on which the Tag-Along Seller expects to consummate the Tag-Along Sale (or if an Amended Tag-Along Notice is delivered, within 10 days after the delivery of such Amended Tag-Along Notice) shall be deemed to have waived such holder’s rights under this Section 3.7 with respect to such Tag-Along Sale.

(e) For purposes of determining the amount of the Total Consideration to be delivered for the Class A Units included in a Tag-Along Sale to be paid to each holder of Class A Units, each Transferring Tag Person shall receive its proportionate percentage of such (and each type of) Total Consideration based on the number of Class A Units such holder is Transferring in such Tag-Along Sale relative to the total number of Class A Units being Transferred in such Tag-Along Sale.

(f) Each holder of Class A Units selling any Class A Units pursuant to any Tag-Along Sale in which less than all of the outstanding Class A Units are sold shall, prior to consummating such sale, notify the General Partner of which Class A Units are being sold by such holder (including any Capital Contributions and distributions previously made in respect of such Class A Units) pursuant to such Tag-Along Sale, and the Transferee of such Class A Units shall succeed to the portion of the Capital Account and characteristics associated with such Class A Units.

(g) Any Person who sells or purchases, as applicable, Units pursuant to this Section 3.7 shall also be required to sell or purchase, as applicable, a pro rata percentage of the LLC Units held by any Transferring Person based on the number of Units being Transferred by such Transferring Person relative to the total number of Units held by such Transferring Person.

3.8. Right of First Offer.

(a) Purchase Offer. If at any time following the expiration of the Lock-Up Period and prior to a Qualified IPO of the Partnership (or any successor thereto) (other than in the case of a Transfer which is expressly permitted under this Agreement) any holder of Class A Units (a “Seller”) desires to sell or otherwise dispose of all or any portion of its Units, the Seller shall deliver a Purchase Offer (as herein defined) to each Designating Party (the “Offerees”) and the Partnership. A “Purchase Offer” is an offer to sell all or a portion of the Units (the “ROFO Securities”) held by the Seller which (i) is in writing, (ii) sets forth a purchase price all in cash, payable at closing or over a fixed period of time and (iii) includes any other material terms and conditions of the offer.

(b) Exercise. During the 45-day period following the receipt of the Purchase Offer by the Partnership and the Offerees (the “Offer Period”), each Offeree shall have the right, at its option and at any time prior to the expiration of the Offer Period, to purchase up to its pro rata portion (which shall be determined for each Offeree by dividing (i) the Class A Sharing Percentage of such Offeree by (ii) the aggregate Class A Sharing Percentage held by all Offerees) of the ROFO Securities covered by the Purchase Offer on the price and terms as set forth in the Purchase Offer, which option may be exercised by delivering written notice of exercise thereof (a “Notice of Exercise”) to the Seller within the Offer Period and by tendering performance at the principal offices of the Partnership, within thirty (30) days after the delivery of the Notice of Exercise (the “Closing Period”). The Offerees may include with their Notice of Exercise any additional representations or warranties or indemnity obligations they desire the Seller to provide, which the Seller may accept or reject in whole or in part, and if the Seller rejects any such proposal in writing such Offeree may withdraw the Notice of Exercise by written notice to the Seller delivered within five days after receipt of the Seller’s rejection. In the event that any Offeree fails to exercise its right to purchase its full pro rata portion of the ROFO Securities of the Seller being offered, the Seller shall deliver a written notice (the “Remaining Securities Notice”) to each Offeree that timely delivered a Notice of Exercise and elected to purchase its full pro rata portion of the ROFO Securities offering to sell to such Offerees such portion of the ROFO Securities (the “Remaining ROFO Securities”) that were not subject to a Notice of Exercise (or with respect to which a Notice of Exercise was withdrawn in accordance with this Section 3.8(b)), which option may be exercised by such Offerees by delivering written notice of exercise thereof (an “Additional Notice of Exercise”) within five Business Days following the end of the Offer Period (the “Extended Offer Period”). Such Remaining ROFO Securities shall be allocated among such Offerees in any manner mutually acceptable to such Offerees or, if such Offerees are unable to agree, in proportion to their respective, relative Class A Sharing Percentages as of the date on which the Remaining Securities Notice is delivered (which shall be determined for each Offeree by dividing (i) the Class A Sharing Percentage of such exercising Offeree by (ii) the aggregate Class A Sharing Percentage held by all such Offerees electing to participate in the purchase of the Remaining ROFO Securities).

(c) Closing. If Seller has complied with the procedures set forth in this Section 3.8 and a Notice of Exercise and/or Additional Notice of Exercise is not delivered to Seller prior to the end of the Offer Period or Extended Offer Period, as applicable, or a Notice of Exercise and/or Additional Notice of Exercise is timely delivered (and not withdrawn as permitted by Section 3.8(b)) but all the ROFO Securities of the Seller that are the subject of the

Purchase Offer are not purchased by the Offerees prior to the end of the Closing Period, then the Seller may sell all (but not less than all) of its Units within one hundred twenty days (120) after expiration of the Offer Period or Extended Offer Period, as applicable, if a Notice of Exercise and/or Additional Notice of Exercise is delivered (and not withdrawn as permitted by Section 3.8(b)) but the purchase failed to timely occur, one hundred twenty (120) days after the expiration of the Closing Period, as applicable, to any Person (a “Third Party Purchaser”) for a price equal to or greater than the price specified in the Purchase Offer, with financing terms no more favorable in any material respect to the Third Party Purchaser than those set forth in the Purchase Offer and on other terms and conditions that, as a whole, are not materially more favorable to the Third Party Purchaser than the terms and conditions set forth in the Purchase Offer (provided that (i) modifications or additions to representations and warranties made by Seller and indemnity obligations of Seller agreed to with the Third Party Purchaser shall not be deemed to be materially more favorable to the Third Party Purchaser unless such representations, warranties or indemnity obligations were requested by Offerees and rejected by the Seller or such representations, warranties or indemnity obligations reasonably could be expected to result in a liability of the Seller to the Third Party Purchaser in an amount that would cause the consideration received by the Seller to be less than the amount set forth in the Purchase Offer and (ii) the placing into escrow of any consideration to satisfy any purchase price adjustments or indemnity obligation of the Seller shall not be deemed more favorable to the Third Party Purchaser as long as the total consideration payable without regard to such adjustments or indemnification is equal to or greater than the price stated in the Purchase Offer). If the Seller shall fail to complete a transaction with a Third Party Purchaser for all of the ROFO Securities within such one hundred twenty day (120) period, the Seller shall again be subject to and required to comply with all the provisions of this Section 3.8.

(d) Any Person who sells or purchases, as applicable, Units pursuant to this Section 3.8 also shall be required to sell or purchase, as applicable, a pro rata percentage of the LLC Units held by any Transferring Person based on the number of Units being Transferred by such Transferring Person relative to the total number of Units held by such Transferring Person.

3.9. Limitation of Rights. Unless and until a Transferee of Units is admitted as a Partner pursuant to Section 3.5, such Transferee shall not have any rights of a Partner other than (subject to Section 3.4) the right to receive distributions and allocations in accordance with Article V with respect to its Units, but shall be subject to the obligations of a Partner and a holder of Units under, and shall be bound by the provisions of Sections 3.4, 3.8, 3.10, 3.13, 7.4, 7.5, 11.2, 11.3, 11.4. 11.6, 11.7, 11.8, 11.9 and 11.12 as though such Transferee were a Partner and shall be entitled to the rights as a holder of Units under Section 3.7 and Section 3.12.

3.10. Indirect Transfers.

(a) If any holder of Units or any Parent of a holder of Units proposes to effect a transaction or series of transactions that would result in a Change in Control of such holder of Units or any such Parent (such transaction, an “Indirect Parent Transfer”), then such holder of Units (the “Subject Company”) or its Parent shall give written notice to the other Class A Limited Partners (“IPT Notice”) at least thirty (30) days prior to the consummation of such Indirect Parent Transfer (or such shorter period as is agreed by the relevant parties), stating the desire of such holder of Units or such Parent to effect such Indirect Parent Transfer, the identity

of the other party to such transaction (the “Offeror”), the interest to be transferred, and all other material terms and conditions of such transaction, including a description of purchase price allocation. Upon an Indirect Parent Transfer:

(i) first, each Class A Limited Partner receiving the IPT Notice (each, an “IPT Notice Recipient”), or, if an IPT Notice is not delivered in violation of this Section 3.10(a) and an Indirect Parent Transfer otherwise occurs with respect to a holder of Class A Units, then any other Class A Limited Partner, upon obtaining actual knowledge of such Indirect Parent Transfer, shall have the right to (x) at the option of BBTS, if Southcross (or any Permitted Transferee of Southcross) is the Subject Company (prior to the BBTS Distribution) or (y) at the option of Southcross, if BBTS (or any Permitted Transferee of BBTS) is the Subject Company (prior to the BBTS Distribution), purchase all, but not less than all, of the Units held by the Subject Company for an amount equal to the implied value per Unit allocated to such Units by the Offeror, or if no such allocation is made by the Offeror, the fair market value of such Units (the “IPT Transaction Value”) (provided if any other IPT Notice Recipient or Class A Limited Partner also exercises its right to purchase, each exercising IPT Notice Recipient and each exercising Class A Limited Partner will have the right to purchase its pro rata portion of the Units being sold in the proportion that the Class A Units held by such IPT Notice Recipient or such Class A Limited Partner bears to the Class A Units held by all exercising IPT Notice Recipients and all exercising Class A Limited Partners, for an amount equal to the IPT Transaction Value of such Units); or

(ii) if no Class A Limited Partner exercises the rights under clause (i) above, then each Class A Limited Partner, each at its own option, may sell to the Subject Company, and the Subject Company shall have the obligation to purchase, all, but not less than all, of the Units held by each exercising IPT Notice Recipient and each exercising Class A Limited Partner for the IPT Transaction Value of such Units; provided if the Units to be sold pursuant to this clause (ii) have different economic characteristics (under Section 5.1(b) and/or Section 5.1(c)) than the Units held by the Subject Company, the IPT Transaction Value shall be the fair market value of the Units to be sold determined in accordance with Section 3.10(c). Such right may be exercised by written notice to the Subject Company given within thirty (30) days of receipt of the IPT Notice, or, if an IPT Notice is not delivered in violation of this Section 3.10(a) or an Indirect Parent Transfer otherwise occurs with respect to a holder of Class A Units, then such right may be exercised by any Class A Limited Partner by providing written notice to the Subject Company within one hundred twenty (120) days after obtaining actual knowledge of such Indirect Parent Transfer (any such notice, and “IPT Exercise Notice”). The failure of an IPT Notice Recipient or any other Class A Limited Partner to notify the Subject Company within such time period provided above of any election under this Section 3.10(a) shall be deemed an election by the IPT Notice Recipient or such other Class A Limited Partner not to exercise its right to acquire or sell Units pursuant to this Section 3.10 in connection with such Indirect Parent Transfer.

(b) Notwithstanding the foregoing, if an Indirect Parent Transfer occurs on or prior to the expiration of the Lock-Up Period, for purposes of Section 3.10(a)(i), (i) the IPT Transaction Value shall be deemed to be 80% of the IPT Transaction Value of such Units for

purposes of Section 3.10(a)(i) and (ii) the IPT Transaction Value shall be deemed to be 120% of the IPT Transaction Value of such Units for purposes of Section 3.10(a)(ii), it being the intent of the Partners that a Change in Control of any holder of Class A Units or any Parent of a holder of Units not occur on or prior to the expiration of the Lock-Up Period.

(c) For purposes of this Section 3.10, the “fair market value” of any Units shall be the fair market value of such Units (giving effect to any Set-Off Distributions associated therewith as contemplated by Section 3.14(b)), each as agreed to by the Subject Company and the other Limited Partners electing to purchase or sell such Units (such other Limited Partners, collectively, the “Exercising Partner”) that collectively hold a majority of the Units held by all Exercising Partners (the “Primary Exercising Partner”) or, each Exercising Partner electing to sell its Units (as to such Exercising Partner’s Units), as applicable, or,

(i) if the Subject Company and the Primary Exercising Partner or Exercising Partner, as applicable, fail to agree within thirty (30) days after the Exercising Partner has delivered written notice to the Subject Company in accordance with Section 3.10(d), the fair market value of such Units as determined by an Independent Appraiser with no material engagement with the Subject Company or the Exercising Partner or their Affiliates within three years prior to such engagement selected by the Primary Exercising Partner. Any such investment bank so appointed, shall be deemed the “Initial Appraiser” which determination by such Initial Appraiser shall be made based on the proceeds such Units would receive if an amount equal to the Class A Unit Fair Market Value was distributed by the Partnership pursuant to Section 5.1 (giving effect to all prior distributions pursuant to Section 5.1 and Section 5.2) and without reduction based upon any lack of control, minority ownership, marketability or other similar discounts; and

(ii) If the Subject Company objects to the fair market value determination made by the Initial Appraiser, then the Subject Company may, within thirty (30) days after receipt of the Initial Appraiser’s determination of fair market value, select an Independent Appraiser with no material engagement with the Subject Company or the Exercising Partner or their Affiliates within three years prior to such engagement (the “Second Appraiser”). The Initial Appraiser and the Second Appraiser shall thereupon select a third Independent Appraiser which has not had any material engagement with the Subject Company or the Exercising Partner or their Affiliates within three years prior to such engagement (the “Neutral Appraiser”). The Subject Company and the Exercising Partner shall execute such engagement and indemnity agreements as the Neutral Appraiser shall require as a condition to engagement and each shall be responsible for all fees and expenses of the Independent Appraiser selected by it and for its one-half of all fees and expenses of the Neutral Appraiser. The Subject Company and the Exercising Partner shall, and shall cause its respective Affiliates to, make available to the other and the investment banks such information as is reasonably necessary to reach a fair market value determination. Each of the Initial Appraiser, Second Appraiser, and Neutral Appraiser shall independently determine its proposed fair market value of the Units, which determination by such Initial Appraiser shall be made based on the proceeds such Units would receive if an amount equal to the Class A Unit Fair Market Value was distributed by the Partnership pursuant to Section 5.1 (giving effect to all prior

distributions pursuant to Section 5.1 and Section 5.2) and without reduction based upon any lack of control, minority ownership, marketability or other similar discounts and “fair market value” shall thereupon mean the average of the two such proposed fair market values that are nearest to one another. If the Subject Company fails to select the Second Appraiser within the 30 day period provided above, such Subject Company shall be deemed to have waived such objection and the fair market determination by the Initial Appraiser shall be deemed final.

(d) Notwithstanding anything in this Section 3.10, within 15 days after receipt of an IPT Exercise Notice by a Subject Company such Subject Company may deliver written notice (a “Cure Notice”) to the Person who delivered such IPT Exercise Notice that the Indirect Parent Transfer was inadvertent and such Subject Company may, during the 30 days immediately following delivery of a Cure Notice (the “Cure Period”), effect such actions to cause the Change in Control giving rise to the Indirect Parent Transfer to cease to exist such that there shall no longer exist a Change in Control of such Subject Company, and the time periods for actions to occur after delivery of an IPT Exercise Notice (other than the Cure Period) shall be tolled during such Cure Period. If the Subject Company successfully takes such action within such Cure Period to cause the Change in Control giving rise to such Indirect Parent Transfer to cease to exist such that there shall no longer exist a Change in Control of the Subject Company upon the expiration of such Cure Period, then this Section 3.10 shall no longer apply with respect to such previous Indirect Parent Transfer.

(e) Notwithstanding anything in this Section 3.10, (i) a Change in Control of the Ultimate Parent of Southcross shall not constitute a Change in Control of Southcross or any Permitted Transferee of Southcross, (ii) a Change in Control of the Ultimate Parent of BBTS shall not constitute a Change in Control of BBTS or any Permitted Transferee of BBTS, for purposes of this Section 3.10 and (iii) from and after a BBTS Distribution, a Change in Control of the Ultimate Parent of any EIG shall not constitute a Change in Control of any member of the EIG Group or any Permitted Transferee of any member of the EIG Group, and a Change in Control of the Ultimate Parent of TW shall not constitute a Change in Control of any member of the TW Group or any Permitted Transferee of any member of the TW Group for purposes of this Section 3.10.

(f) Any Person who purchases Units pursuant to this Section 3.10 also shall purchase all of the LLC Units held by any Transferring Person.

3.11. Liquidity Event.

(a) If the General Partner approves a Liquidity Event (an “Approved Exit”), each Partner shall provide Voting Support with respect to such Approved Exit and raise no objections against such Approved Exit and, to the extent necessary to effect the consummation of such Approved Exit, vote for and consent to such Approved Exit; provided, however, that any such vote, consent or approval by a Partner shall not constitute a waiver or otherwise affect any rights or obligations of any Partner under this Section 3.11 or Section 3.13 of this Agreement or Section 7.13 of the GP Agreement with respect to such Approved Exit or any rights of a Partner with respect to or arising as a result of such Approved Exit under any agreement to which such Partner is a party. If the Approved Exit is structured as a (i) merger, consolidation or sale of

assets, each Partner shall waive any dissenters’ rights, appraisal rights or similar rights in connection with such merger, consolidation or sale of assets or (ii) sale of Units, each Partner shall agree to sell all of its Units or rights to acquire Units on the terms and conditions approved by the General Partner. Each Partner shall take all necessary or desirable actions in connection with the consummation of the Approved Exit as reasonably requested by the General Partner.

(b) In any Approved Exit, the consideration received by the Partnership shall be allocated and distributed to each Class A Limited Partner pro rata in accordance with their respective Class A Sharing Percentages subject to and in accordance with Section 5.1.

(c) Partners shall bear their pro rata share (based upon their Class A Sharing Percentage) of the costs of any sale of Units pursuant to an Approved Exit to the extent such costs are incurred for the benefit of all Partners and are not otherwise paid by the Partnership or the acquiring party. For purposes of this Section 3.11, costs incurred by Partners in exercising reasonable efforts to take all actions in connection with the consummation of an Approved Exit in accordance with this Section 3.11 shall be deemed to be for the benefit of all Partners. Costs incurred by Partners solely on their own behalf will not be considered costs of the transaction hereunder.

(d) If the General Partner determines that the Liquidity Event shall be a Public Offering:

(i) each holder of Units agrees that it will, and will cause its Affiliates to, and the Partnership shall:

(A) if the underwriters in any Public Offering request that all Partners hold their Units for a period of time following the Public Offering, do so and enter into a customary lock-up agreement;

(C) if determined by the General Partner to be reasonably necessary or appropriate in connection with a Public Offering, do all things reasonably necessary or advisable to effect any recapitalization, reorganization, conversion, contribution and/or exchange of Units into other equity interests and related reorganization of the Partnership and its Subsidiaries; provided that any such recapitalization, reorganization, conversion, contribution and/or exchange does not change the relative rights, obligations and preferences of the Partners with respect to their ownership of Units (or its successor), except in accordance with Section 3.11(b);

(D) consent to certain additional restrictions on the transfer of Units or other equity interests in the Partnership (or its successor) which the General Partner determines may be required in order to permit compliance with the Securities Act or other applicable law;

(E) use commercially reasonable efforts to accommodate any such other reasonable actions required by the United States Securities and Exchange Commission or similar governmental authority to effect the Public Offering; and

(F) make modifications to this Agreement (or any other agreement then governing the rights and obligations of the Partners with respect to the Partnership or any of its Subsidiaries or any successor to the Partnership or any of its Subsidiaries) as are customary and appropriate for companies that conduct a Public Offering, such modifications to be in form and substance reasonably satisfactory to Board of Directors.

(ii) The Partnership shall be responsible for its own costs, fees and expenses in connection with a Public Offering and shall reimburse the Partners and their Affiliates for the reasonable out-of-pocket costs, fees and expenses (excluding underwriting discounts, selling commissions and similar fees) incurred by them in connection with a Public Offering, including the reasonable costs, fees and expenses of one outside counsel for any Class A Limited Partner with a Class A Sharing Percentage of greater than ten percent (10%) immediately prior to the occurrence of the Liquidity Event.

(iii) Each of the Designating Parties shall be granted customary demand and piggyback registration rights, pursuant to a Registration Rights Agreement effective from and after the Public Offering, as well as the right to include their Units (or any securities for which such Units are exchanged or into which such Units are converted) in the Public Offering on a pro rata basis (based on the relative percentages of securities of this type to be included in the Public Offering held by the Partners immediately prior to the Public Offering); provided that if the managing underwriter or the placement agent advises the Partnership or the General Partner that the inclusion of securities of the Partners requested to be included for sale in a secondary offering in connection with the Public Offering would materially and adversely affect the price, distribution or timing of the offering, then the Partnership shall have the right to exclude all or any portion of such securities of the Partnership from sale in connection with the Public Offering, with such exclusions applied to the Partners’ pro rata share (based on the relative percentages of securities to be included in the Public Offering held by the Partners immediately prior to the Public Offering). Each Designating Party may assign its rights under this Section 3.11(d)(iii) upon any Transfer of its Interest (provided any demand registration rights may only be granted to a Transferee who holds greater than a 10% Class A Sharing Percentage after giving effect to such Transfer).

(iv) Without limiting Section 7.13(d)(i)(D) of the GP Agreement, without the prior written consent of the underwriters managing any Qualified IPO, for a

period beginning seven days immediately preceding, and ending on the 180th day following, the effective date of the registration statement used in connection with such offering, no holder of Interests except pursuant to an effective registration statement as part of such Qualified IPO, shall (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer, directly or indirectly, any Interests, or any securities convertible into or exercisable or exchangeable for Interests or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Interests, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of such Interests or such other securities, in cash or otherwise; provided, however, that the foregoing restrictions shall not apply to (x) transactions relating to such Interests or securities acquired in open market transactions after the completion of the Qualified IPO, (y) Transfers required in accordance with the terms of this Agreement or the GP Agreement or (z) conversions of such Interests or securities into other classes of Interests or securities without change of holder.

3.12. Certain Events Not Deemed Transfers. In no event shall Section 3.8 or Section 3.9 hereof be applicable in connection with any exchange, reclassification, or other conversion of Partnership Interests into any cash, securities, or other property pursuant to a merger or consolidation of the Partnership with, or any sale or Transfer by the Partnership of all or substantially all its assets to, any Person, including without limitation a Liquidity Event.

3.13. Determination of Fair Market Value.

(a) The General Partner will provide written notice to each holder of Units of any determination of Fair Market Value within 10 days of any such determination (“FMV Notice”).

(b) If any holder of Units disagrees with any such determination by the General Partner, such holder of Units shall deliver to the General Partner a written notice of objection (a “FMV Objection”) within ten (10) days after delivery of the FMV Notice. Upon receipt of a FMV Objection, the General Partner and the objecting holder will negotiate in good faith to agree on such Fair Market Value. If such agreement is not reached between the General Partner and the objecting holder (provided if there is more than one objecting holder, the agreement of the Primary Objecting Holder shall control and be binding on all objecting holders) within 5 days after the delivery of the FMV Objection, such Fair Market Value shall be determined by an Independent Appraiser jointly selected by the General Partner and the objecting holder holding the greatest number of Class A Units (the “Primary Objecting Holder”); provided that in determining which holder shall be the Primary Objecting Holder, any holder (including its Affiliates) having the right to designate Directors that approved the relevant determination of Fair Market Value on behalf of the General Partner shall not be eligible to act as the Primary Objecting Holder. If the parties are unable to agree on an Independent Appraiser within 15 days after delivery of the FMV Objection, within seven days after the end of such 15 day period, each of the General Partner and the Primary Objecting Holder shall submit the names of three Independent Appraisers, and each party shall be entitled to strike one name from the other party’s list of firms, and the Independent Appraiser shall be selected by lot from the

remaining firms. Such Independent Appraiser shall submit to the General Partner and the Primary Objecting Holder a written report within 30 days of its engagement setting forth such determination. The fees and expenses of any Independent Appraiser shall be borne by the Partnership. The determination of any Independent Appraiser as to Fair Market Value shall be final and binding upon the General Partner and all Partners and all holders of Units. No holder of Units shall have any right to object to any determination of Fair Market Value made in accordance with clause (i) of the definition of Fair Market Value.

(c) Any Independent Appraiser selected to make a determination of Fair Market Value of any Equity Securities issued by any Person in the Partnership Group shall value such Equity Securities on the enterprise value of the applicable Person in the Partnership Group, without any discount for lack of control, minority or lack of liquidity.

(d) If any FMV Objection Notice is delivered, the event dependent on such determination of Fair Market Value shall be deferred until the determination of Fair Market Value pursuant to this Section 3.13.

3.14. Transferability of Set-Off Distribution Rights.

(a) Except as set forth in Section 3.14(b), no Partner shall be permitted to Transfer any rights or entitlement to Set-Off Distributions.

(b) In connection with any Transfer of Units pursuant to Article III by a holder of Units entitled to receive any distribution pursuant to any Set-Off Distribution at the time of such Transfer, such holder may (except to the extent the allocation pursuant to Section 3.15, if applicable, results in a full recoupment of the Set-Off Distribution amount to which such holder of Units is entitled), at the election of such holder of Units, either (i) retain such holder’s entitlement to such Set-Off Distribution (after giving effect to Section 3.15, if applicable) or (ii) include in such Transfer of Units a pro rata percentage of such holder’s entitlement to such Set-Off Distribution based on the number of Units being Transferred by such holder of Units relative to the total number of Units held by such holder.

3.15. MAC Cure Amounts; Redirected Distribution Amounts. Notwithstanding any other provision of this Article III, upon any Transfer of Units pursuant to Section 3.7 (including in connection with a Transfer under Section 3.8) or Section 3.11 by a holder of Units subject to a reduction for a Set-Off Distribution:

(a) the Total Consideration allocated among all holders participating in such Transfer transaction pursuant to Section 3.7(e) or Section 3.11(b) shall be further allocated among such holders as if such Total Consideration was distributed pursuant to Section 5.1 as if such holders were the only holders of Units entitled to such distribution, mutatis mutandis (and subject to the proviso that if the holder of Class A Units entitled to such Set-Off Distribution is not a participant in such Transfer transaction then the appropriate portion of the amount of the Total Consideration allocated to the holder of Units subject to reduction for such Set-Off Distribution shall be allocated to such holder entitled to such Set-Off Distribution), and to the extent such allocation allocates amounts to the holder entitled to the Set-Off Distribution under Section 5.1(b) or Section 5.1(c), such Set-Off Distributions to the extent so allocated shall be deemed satisfied; and

(b) in the case of a Transfer pursuant to Section 3.7, a holder of Units subject to a reduction for a Set-Off Distribution may participate in such Transfer only if the Total Consideration is sufficient to fully satisfy the Set-Off Distribution obligations in accordance with Section 3.15(a) or (if such Total Consideration is not sufficient to do so) such holder otherwise provides to the Person(s) entitled to such Set-Off Distributions additional cash proceeds sufficient to fully satisfy such Set-Off Distribution obligations.

3.16. Exchange of Class A Units for SXE Equity Securities.

(a) Subject to any restrictions contained in any credit facility of any Person in the Partnership Group as of such time, upon the earlier of (i) approval by the General Partner pursuant to Section 6.2(a)(viii) or (ii) the request of any Designating Party at any time 2,007 days after the Effective Date, the Partnership shall institute a process pursuant to which all (but not less than all) of the Class A Units and LLC Units held by such requesting Designating Party may be exchanged for Equity Securities of SXE. Any such requesting Designating Party (“Requesting Partner”) shall:

(i) be granted customary demand, shelf and piggyback registration rights with respect to such Equity Securities effective from and after the date of such exchange pursuant to a Registration Rights Agreement (and the Partners will provide Voting Support so that such Designating Party shall have such registration rights); and

(ii) pay to each non-requesting Designating Party (a “Non-Requesting Partner”) the amount of such Non-Requesting Partner’s Exchange Tax Loss resulting from such distribution within 10 days after the determination of the Final Exchange Tax Loss.

(A) As promptly as practicable, but in no event later than 90 days after the date Equity Securities of SXE are exchanged pursuant to this Section 3.16(a), a Non-Requesting Partner shall deliver to the Requesting Partner a statement of calculation of such Non-Requesting Partner’s Exchange Tax Loss and such supporting documentation as is reasonably necessary to support the Exchange Tax Loss shown therein (the “Proposed Exchange Tax Loss Statement”). To the extent reasonably requested by a Non-Requesting Partner, the Partnership shall give personnel, accountants and representatives of a Non-Requesting Partner reasonable access to the books, records and properties of the Partnership and its Subsidiaries for purposes of preparing the Proposed Exchange Tax Loss Statement and will cause appropriate personnel of the Partnership to assist the Non-Requesting Partner and its personnel, accountants and representatives, with no charge to Non-Requesting Partner for such assistance, in the preparation of the Proposed Exchange Tax Loss Statement.

(B) The Proposed Exchange Tax Loss Statement of a Non-Requesting Partner shall become final and binding on the Non-Requesting Partner and Requesting Partner as to the Non-Requesting Partner’s Exchange Tax Loss 30 days following the date the Proposed Exchange Tax Loss Statement is received by the Requesting Partner, except to the extent that prior to the expiration of such 30-day period the Requesting Partner shall deliver to the Non-Requesting Partner written notice (“Exchange Tax Dispute Notice”), as hereinafter described, of its disagreement with the contents of the Proposed Exchange Tax Loss Statement. Such Exchange Tax Dispute Notice shall be in writing and set forth all of the Requesting Partner’s disagreements with respect to any portion of the Exchange Tax Loss Statement, together with Non-Requesting Partner’s proposed changes thereto, and shall include an explanation in reasonable detail of, and such supporting documentation as is reasonably necessary to support, such changes. Any disagreements with or changes to the Proposed Exchange Tax Loss Statement not included in such Exchange Tax Dispute Notice shall be waived by the Requesting Partner.

(C) If the Requesting Partner has timely delivered an Exchange Tax Dispute Notice to Non-Requesting Partner in the manner required above, then, upon written agreement between the Requesting Partner and Non-Requesting Partner resolving all disagreements with the contents of the Proposed Exchange Tax Loss Statement set forth in the Exchange Tax Dispute Notice, the Proposed Exchange Tax Loss Statement (including any revisions thereto as are so agreed) will become final and binding on the Parties as to the Exchange Tax Loss of the Non-Requesting Partner.

(D) If the Proposed Exchange Tax Loss Statement has not become final and binding 60 days following the date the Proposed Exchange Tax Loss Statement is delivered to the Requesting Partner, then the Requesting Partner and Non-Requesting Partner shall submit any unresolved disagreements of the Requesting Partner set forth in the Exchange Tax Dispute Notice to the Audit Firm for a final and binding determination and the Requesting Partner and Non-Requesting Partner shall execute such engagement, indemnity and other agreements as such Audit Firm may reasonably require in connection with or as a condition to such engagement. The Requesting Partner and Non-Requesting Partner shall cooperate diligently with any reasonable request of the Audit Firm and furnish to the Audit Firm such workpapers and other documents and information relating to such objections as the Audit Firm may reasonably request and are available to such partners or its Affiliates (or its independent public accountants) and will be afforded the opportunity to present to the Audit Firm any material relating to the determination of the matters in dispute and to discuss such determination with the Audit Firm prior to any written notice of determination hereunder being delivered by the Audit Firm. The Audit Firm’s engagement shall be limited to the

resolution of designated items set forth in the Proposed Exchange Tax Loss Statement that were identified in such Exchange Tax Dispute Notice delivered by the Requesting Partner to Non-Requesting Partner in accordance with this Section 3.16(a) and that remain in dispute upon the engagement of the Audit Firm, which resolution shall be in accordance with this Agreement. The decision of the Audit Firm shall be set forth in a written statement delivered to Non-Requesting Partner and the Requesting Partner and shall be final and binding on the such parties, absent fraud or manifest error. Judgment may be entered on the decision of the Audit Firm in any court of competent jurisdiction.

(E) The Proposed Exchange Tax Loss Statement, in the form agreed to by the Non-Requesting Partner and the Requesting Partner as final, in the form deemed final in accordance with Sections 3.16(a)(ii)(B) or (C) or as revised, if necessary, to reflect the final determination by the Audit Firm, as applicable, shall be deemed the “Exchange Tax Loss Statement,” and the Exchange Tax Loss as determined in accordance therewith is referred to herein as the “Final Exchange Tax Loss.” The fees and expenses of the Audit Firm shall be borne between the Non-Requesting Partner and the Requesting Partner in the same manner and based on the same principles provided in Section 2.7(h) of the Contribution Agreement.

(F) None of the Designating Parties, the Partnership, or any Partner shall take any positions in any applicable tax return inconsistent with the final Exchange Tax Loss Statement and the Final Exchange Tax Loss, other than as required by a “final determination” as defined in Code Section 1313.

(b) If a Designating Party (for itself and its Permitted Transferees) provides notice to the Partnership requesting an exchange pursuant to Section 3.16(a) (an “Exchanging Partner”), each other Designating Party shall have a right of first refusal relating to such Exchanging Partner’s Interests and concurrently with any notice pursuant to Section 3.16(a), the Exchanging Partner shall give written notice to such Designating Parties (the “ROFR Notice”) stating its intention to exchange such Designating Party’s Interests (together with the associated LLC Units required to be Transferred therewith, the “ROFR Interests”) at the fair market value of such Exchanging Partner’s Interest as determined by the conflicts committee of the SXE GP board of directors (without regard to any lack of liquidity or minority discount) (the “Exchange FMV”) or to sell such ROFR Interests to the other Designating Parties for immediately available funds at a price equal to the Exchange FMV.

(i) The ROFR Notice shall constitute the Exchanging Partner’s offer to Transfer the ROFR Interests to the other Designating Parties, which offer shall be irrevocable for a period of 45 Days (the “ROFR Notice Period”). By delivering the ROFR Notice, the Exchanging Partner represents and warrants to the Partnership and each Designating Party that (x) the Exchanging Partner has full right, title and interest in and to the ROFR Interests, (y) the Exchanging Partner has all the necessary power and

authority and has taken all necessary action to sell such ROFR Interests as contemplated by this Section 3.16(b), and (z) the ROFR Interests are free and clear of any and all Liens other than those arising as a result of or under the terms of this Agreement.

(ii) Upon receipt of the ROFR Notice, each other Designating Party shall have until the end of the ROFR Notice Period to offer to purchase all (but not less than all) of the ROFR Interests by delivering a written notice (a “ROFR Offer Notice”) to the Exchanging Partner and the General Partner stating that it offers to purchase such ROFR Interests on the terms specified in the ROFR Notice and pursuant to the procedures in Section 3.8, mutatis mutandis. If the ROFR Purchasing Designating Party(ies) have not agreed to purchase all of the ROFR Interests by the end of the ROFR Notice Period, then the Designating Parties shall be deemed to have forfeited any right to purchase the ROFR Interests based on the ROFR Notice.

(iii) If no Designating Party delivers a ROFR Offer Notice in accordance with this Section 3.16(b), the Exchanging Partner may, following the expiration of the ROFR Notice Period (which period may be extended for a reasonable time to the extent reasonably necessary to obtain any required government approvals) (the “Waived ROFR Transfer Period”), Transfer of all of the ROFR Interests to SXE (or any successor thereto) in exchange for Equity Securities at the Fair Market Value.

(iv) The Exchanging Partner and the other Designating Parties agree that the terms and conditions of any Transfer of the ROFR Interests in accordance with this Section 3.16(b) will be memorialized in, and governed by, a written purchase and sale agreement between the Exchanging Partner and the purchasing Designating Parties (the “ROFR Interest PSA”) with customary terms and provisions for such a transaction, and the Exchanging Partner and the purchasing Designating Parties further covenant and agree to enter into such ROFR Interest PSA as a condition precedent to any Disposition in accordance with this Section 3.16(b). At the closing of any Transfer pursuant to this Section 3.16(b), the Exchanging Partner shall deliver to the purchasing Designating Party(ies) a certificate or certificates (if such ROFR Interest are certificated) representing the ROFR Interests to be Transferred, accompanied by transfer powers and all necessary transfer taxes paid and stamps affixed, if necessary, against receipt of the purchase price therefor from such ROFR Purchasing Designating Party(ies) by certified check or by wire transfer of immediately available funds.

ARTICLE IV

CAPITAL CONTRIBUTIONS

4.1. Interests.

(a) General. Each Partner’s Interest in the Partnership will be represented by its Capital Account and by Units issued by the Partnership to such Partner. Such Units shall be issued by the Partnership upon the Effective Date and as set forth in Section 4.1(b) and additional Units may be issued at such additional times and from time to time as may be determined by the General Partner. The General Partner may, subject to Section 3.5 and this Section 4.1(a), create additional series or classes of Units through subdivision or by issuance of Units of such class or series.

(b) Classes of Units. A class of Units designated as “Class A Units” is hereby created.

(i) On the Effective Date, Southcross shall contribute the Southcross ED Contribution pursuant to the Contribution Agreement, and Southcross shall receive solely in exchange therefor the number of Class A Units set forth opposite Southcross’ name on Exhibit A.

(ii) On the Effective Date, BBTS shall contribute the BBTS ED Contribution pursuant to the Contribution Agreement, and BBTS shall receive solely in exchange therefor the number of Class A Units set forth opposite BBTS’ name on Exhibit A.

(d) Additional Capital Contributions by Partners.

(i) The General Partner may from time to time call additional capital from the Class A Limited Partners if the General Partner determines that the Partnership is in need of additional capital including, without limitation, in order to fund any GP Obligations or Tax Distributions. No Class A Limited Partners shall be obligated to make any additional Capital Contributions to the Partnership, but each Class A Limited Partner shall have the right to participate in such Capital Contributions in accordance with this Section 4.1(d)(i). To call additional capital from the Class A Limited Partners, the General Partner shall give written notice (a “Capital Call Notice”) to each Class A Limited Partner stating the total amount of capital that the General Partner has determined to call from all Class A Limited Partners (the “Total Capital Contribution”), the purpose or purposes for which such Total Capital Contribution will be used and the pro rata portion of the Total Capital Contribution that each Class A Limited Partner is permitted to make (which pro rata portion will be based on each Partner’s Class A Sharing Percentage). Upon receipt of a Capital Call Notice, each Class A Limited Partner shall have 5 Business Days to notify the General Partner in writing whether it will make an additional Capital Contribution to the Partnership up to the pro rata amount of the Total Capital Contribution specified for such Partner in the Capital Call Notice. If any Class A Limited Partner fails to timely notify the General Partner of its election or elects not to make any of its pro rata portion of the Total Capital Contribution (for clarity, a Class A Limited Partner shall have the right to elect to fund less than its full pro rata share of any Capital Contribution), then such Class A Limited Partner shall not be entitled to participate in such Capital Contribution and the General Partner shall give written notice (an “Unfunded Notice”) to each Class A Limited Partner that elected to make their full pro rata portion of the Total Capital Contribution (the “Fully Participating Partners”) of the portion of the Total Capital Contribution that is not being funded by the non-Fully Participating Partners and each Fully Participating Partner’s pro rata allocation of such unfunded amounts (which shall be allocated between such Fully

Participating Partners based on their relative Class A Sharing Percentages, unless otherwise agreed by the Fully Participating Partners). Upon receipt of an Unfunded Notice, each Fully Participating Partner shall have 5 Business Days to notify the General Partner in writing whether it will make all or part of its share of such unfunded Total Capital Contribution. Any Class A Limited Partner that fails to timely notify the General Partner of its election or elects not to fund any portion of its allocable share of the unfunded Total Capital Contribution shall be deemed to have elected not to participate in the unfunded portion of the Capital Contribution that is offered to such Partner.

(ii) Upon receiving all applicable elections as provided in Section 4.1(d)(i) or upon the expiration of the time period for election set forth in Section 4.1(d)(i), the General Partner shall set the time and place for closing the additional Capital Contribution by notifying each Class A Limited Partner electing to participate in such additional Capital Contribution of the same (which closing shall occur no earlier than 15 days after the date on which the notice required by this Section 4.1(d)(ii) is delivered to each Class A Limited Partner). If any Class A Limited Partner fails to fund any additional Capital Contribution within such 15-day period, the Fully Participating Partners shall have the right to fund their pro rata portion of such unfunded amounts (which shall be allocated among such Fully Participating Partners based on their relative Class A Sharing Percentages unless otherwise agreed by the Fully Participating Partners within an additional 15 days after such failure, it being understood and agreed that this shall constitute a subsequent closing of such additional Capital Contribution. Upon the closing of any such additional Capital Contribution and in consideration of such additional Capital Contribution made by any Class A Limited Partner pursuant to this Section 4.1(d), there shall be issued to such Class A Limited Partner a number of Class A Units equal to the quotient of (A) the amount of such Capital Contribution, divided by (B) the then applicable Class A Unit Price. With respect to any portion of any additional Capital Contribution that is allocable to a GP Obligation, the General Partner shall cause the Partnership to promptly transfer the full amount of such portion to the General Partner by wire transfer of immediately available funds.

(iii) The General Partner shall not be required to make any Capital Contributions to the Partnership, and, except as set forth in this Section 4.1(d), no Partner shall be permitted to make additional Capital Contributions to the Partnership without the approval of the General Partner, and no Partner shall be required to make additional Capital Contributions to the Partnership without the written consent of such Partner.

4.2. Return of Contribution. Except as provided in this Agreement, a Partner is not entitled to the return of any part of its Capital Contributions. No Partner shall be entitled to interest on its unrepaid Capital Contribution or on the balance reflected in such Partner’s Capital Account. Any unrepaid Capital Contribution is not a liability of the Partnership or of the other Partners. A Partner is not required to contribute or to lend any cash or property to the Partnership to enable the Partnership to return the other Partners’ Capital Contributions.

4.3. Withdrawal of Capital. No Partner has the right to withdraw any part of its Capital Contribution from the Partnership or receive the return of any part of its Interest in the Partnership prior to its liquidation and termination pursuant to Article X hereof.

4.4. Capital Accounts. The Partnership will create a Capital Account for each Partner owning any Units and such Capital Account shall be maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv) and as set forth in this Agreement.

4.5. MAC Coverage Contributions. If upon the occurrence of any MAC Default the Subject Losses resulting from which have not been paid by the Initial Partner (or its Permitted Transferee) with the indemnity obligation with regard to such Subject Losses (a “MAC Defaulting Partner”) by the applicable CP Deadline, the other Initial Partner (or its Permitted Transferee) (a “MAC Contributing Partner”) may deliver to the Partnership cash funds in an amount, up to the amount of the applicable Subject Loss(es), necessary to cause the effect of such MAC Default to no longer constitute a MAC Default (a “MAC Cure Amount”) and such MAC Cure Amount shall not be treated as a Capital Contribution (or have any effect on Class A Sharing Percentages) but shall be treated as a loan by such MAC Contributing Partner to Partnership on behalf of the MAC Defaulting Partner, subject to repayment in accordance with (and solely as provided in) Section 5.1(b).

ARTICLE V

DISTRIBUTIONS AND ALLOCATIONS

5.1. Distributions.

(a) Distributions of Available Cash. Subject to Section 5.2, all Available Cash shall be retained by the Partnership unless otherwise agreed by the General Partner or transferred to the General Partner in order to fund any GP Obligation. Subject to Section 5.2, Available Cash and, to the extent permitted under the express terms and conditions of this Agreement, non-cash property shall be distributed to the Partners solely at such times and in such amounts as the General Partner shall declare; provided, however, no distributions pursuant to this Section 5.1 shall be made until such time as BBTS shall have received in repayment of the BBTS Adjustment Amount the BBTS Adjustment Amount Payout. Subject to the foregoing and Section 5.1(b), Section 5.1(c) and Section 5.2, Available Cash and, if applicable, other property declared by the General Partner to be available for distribution under this Section 5.1 shall be distributed to the holders of Class A Units, in accordance with the respective Class A Sharing Percentages as of such distribution date.

(b) Subject to Section 3.15, at any time there exists any MAC Cure Amount for which a distribution in full has not been made in accordance with this Section 5.1(b), any distributions otherwise payable pursuant to Section 5.1(a) to the MAC Defaulting Partner, or any Transferees of its Interests, shall be redirected and distributed to the other Initial Limited Partner (or its Transferees in proportion to the Interest Transferred to such Transferee(s)) as repayment of their loans to the Partnership as described in Section 4.5 until the aggregate amount of the distributions so redirected to the such other Initial Limited Partner (or its Transferees) is equal to sum of (i) the MAC Cure Amount plus (ii) an amount equal to 15% per annum annual return thereon, compounded quarterly (any such redirected amounts distributed to such other Initial Limited Partner (or its Transferees), the “Set-Off MAC Distributions”). Notwithstanding the actual distribution of any Set-Off MAC Distributions to any Partner (or its Transferees) any Set-Off MAC Distributions so distributed to such other Initial Limited Partner (or its Transferees)

shall be treated for purposes of this Agreement as having been distributed to the MAC Defaulting Partner (or its Transferees) that would have received such Set-Off MAC Distributions but for the application of this Section 5.1(b).

(c) Subject to Section 3.15, after giving effect to Section 5.1(b), at any time there exists any Redirected Distribution Amount for which a distribution in full has not been made in accordance with this Section 5.1(c), any distributions otherwise payable pursuant to Section 5.1(a) to the Redirected Partner to which such Redirected Distribution Amount relates, or any Transferees of its Interests, shall be redirected and distributed to the other Initial Limited Partner (or its Transferees in proportion to the Interest Transferred to such Transferee(s)) as reimbursement of amounts owed to such Partner until the aggregate amount of the distributions so redirected to the such other Initial Limited Partner (or its Transferees) is equal to sum of (i) the Redirected Distribution Amount multiplied by the other Initial Limited Partner’s Initial Sharing Ratio plus (ii) an amount equal to 7% per annum annual return thereon, compounded quarterly (any such redirected amounts distributed to such other Initial Limited Partner (or its Transferees), a “Set-Off RDA Distributions”). Notwithstanding the actual distribution of any Set-Off RDA Distributions to any Partner (or its Transferees), any Set-Off RDA Distributions so distributed to such other Limited Partner (or its Transferees) shall be treated for purposes of this Agreement as having been distributed to the Redirected Partner (or its Transferees) such Redirected Distribution Amount that would have received such Set-Off RDA Distributions but for the application of this Section 5.1(c).

(d) Distributions in Error. Any distributions pursuant to this Section 5.1 made in error or in violation of Section 17-607(a) of the Act, will, upon demand by the General Partner, be returned to the Partnership.

(e) Cash and Non-Cash Distributions.

(i) Subject to Section 5.1(e)(ii), if any distribution consists of both cash and non-cash property, then the cash and non-cash property shall be distributed on a pro rata basis such that the total amount of property distributed on account of each Unit shall contain the same percentage of cash and the same percentage of non-cash property (based on the Fair Market Value of such non-cash property), and, to the extent the non-cash Distributable Property shall consist of more than one item of non-cash property, the General Partner shall, to the extent practicable, allocate to each Unit receiving a distribution the same percentage (as a percentage of the total value of cash and non-cash property distributed) of each item or type of non-cash property.

(ii) If any distribution consists of both cash and non-cash property and such distribution is allocated among more than one class of Units, then the cash and non-cash property shall be distributed on a pro rata basis such that the total amount of property distributed to each class of Units receiving a distribution shall contain the same percentage of cash and the same percentage of non-cash property (based on the Fair Market Value of such non-cash property), and, to the extent the non-cash Distributable Property shall consist of more than one item of non-cash property, the General Partner shall, to the extent practicable, allocate to each class of Units receiving a distribution the same percentage (as a percentage of the total value of cash and non-cash property distributed) of each item or type of non-cash property.

(f) SXE Equity Securities. Subject to any restrictions contained in any credit facility of any Person in the Partnership Group as of such time, upon the earlier of (i) approval by the General Partner pursuant to Section 6.2(b)(xi) or (ii) the request of any Designating Party after the expiration of the Lock-Up Period, the Partnership shall use good faith efforts to distribute to the Class A Limited Partners all Equity Securities of SXE held by the Partnership, subject to the other provisions of this Section 5.1 (including Section 5.1(a)). The Partners will provide Voting Support so that each Class A Limited Partner shall be granted customary demand, shelf and piggyback registration rights with respect to such Equity Securities effective from and after the date of such distribution pursuant to a Registration Rights Agreement. A Class A Limited Partner may assign its rights under this Section 5.1(f) upon any Transfer of such Equity Securities.

5.2. Tax Distributions.

(a) Subject to the availability of sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Partnership or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available), the Partnership shall distribute to each Partner with respect to each taxable quarter of the Partnership an amount of cash sufficient to permit such Partner to satisfy its tax liabilities arising from allocations of income, gain, loss, deduction and credit and guaranteed payments (if any) deemed received by such Partner pursuant to Code Section 707(c) (other than guaranteed payments in respect of services performed by such Partner) (a “Tax Distribution”), in each case, to the extent attributable to such Partner’s Interest in the Partnership in any taxable quarter for which such an allocation is made, determined using the same principles as described in Section 5.2(b) (as applicable), but for the taxable quarter in question and adjusted for prior taxable quarters of the tax year and losses and deductions of the Partnership realized in prior tax years to the extent such losses and deductions have not been offset by income or gain of the Partnership realized in subsequent taxable periods. In the event the Partnership does not have sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Partnership or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available) to make Tax Distributions as and when required by the terms of this Agreement, the Partnership and the General Partner shall each use their commercially reasonable efforts to obtain funds necessary to make such Tax Distributions as promptly as possible.

(b) The Tax Distribution payable to the Partners shall be pro rata based on the Partners’ Class A Sharing Percentages; provided, however, that the Tax Distribution to each Partner shall be equal at least to its “Tax Amount.” As used herein, “Tax Amount” means the product of (x) the General Partner’s reasonable estimation of the taxable income, gain, loss, deduction, credit, and guaranteed payments (to the extent described in Section 5.2(a) above) allocated to such Partner for such Allocation Period, multiplied by (y) the highest marginal

effective rate of U.S. federal, state and local income tax (including for this purpose any tax under Code Section 1411 or similar provisions of law) applicable to an individual or corporation (whichever has the higher rate) resident in New York, New York, taking account of any difference in rates applicable to ordinary income, capital gains and “qualified dividends,” as such term is defined in Code Section 1(h) and any allowable deductions in respect of such state and local taxes in computing such Partner’s liability for U.S. federal income taxes, and such other assumptions as the General Partner shall reasonably determine. For the avoidance of doubt, in determining the Tax Amount for any Partner, there shall be taken into account any items allocated to such Partner pursuant to Code Section 704(c) (including any amounts allocable pursuant to the “remedial allocation method” described in Treasury Regulation Section 1.704-3(d), if applicable, and any items taken into account by such Partner (or its direct or indirect owner) pursuant to the provisions of Code Section 613A(c)(7)(D) and the Treasury Regulations promulgated thereunder).

For the avoidance of doubt, in determining the Tax Amount for any Partner, there shall be taken into account any items allocated to such Partner pursuant to Code Section 704(c) (including any amounts allocable pursuant to the “remedial allocation method” described in Treasury Regulation Section 1.704-3(d), if applicable), and any items taken into account by such Partner (or its direct or indirect owner) pursuant to the provisions of Code Section 613A(c)(7)(D) and the Treasury Regulations promulgated thereunder).

(c) Notwithstanding anything in this Section 5.2 to the contrary, for any taxable quarter, if the Partnership does not have sufficient funds (without taking into account any reserves for capital expenditures or other liabilities that have not been incurred by the Partnership or any of its Subsidiaries, other than reserves reasonably anticipated to satisfy operating expenses for the 45 days following such date of determination for which sources of funding (including available debt facilities) are not then available) available to provide all Partners with the full amount of their Tax Distributions, then Tax Distributions shall be made to the Partners pro rata in proportion to the amount of their respective Tax Distributions.

(d) A final accounting for Tax Distributions shall be made for each Allocation Period after the Partnership’s actual taxable income has been determined, and any shortfall in the amount of Tax Distributions a Partner received for such taxable year based on such final determination shall promptly be distributed to such Partner, and any excess in the amount of Tax Distributions a Partner received for such taxable year shall be applied against the subsequent Tax Distributions due to such Partner; provided, however, for any Allocation Period, if the Partnership does not have funds sufficient to distribute to each Partner the amount of such Partner’s shortfall, then such available funds shall be distributed in a manner and priority analogous to the manner and priority described in Section 5.2(c) (regarding insufficient funds with respect to a given taxable quarter). For any Allocation Period, if any shortfall remains for any Partner after giving effect to the preceding sentence, the amount of such shortfall shall be added to the Tax Distributions payable to such Partner in succeeding Allocation Periods until the time such shortfall is paid. In addition, in the event of any audit adjustment by a taxing authority which affects the amount of taxable income allocated or required to be allocated to the Partners in any year, or in the event the Partnership files an amended return which has such effect, the aggregate amount of Tax Distributions that should have been made with respect to such year shall be recalculated by giving effect to such audit adjustment or changes reflected in the

amended return, as applicable (treating any interest or penalties incurred by any of the Partners in connection therewith as an addition to the assumed tax liability of such Partners), and any excess or shortfall in the resulting amount of Tax Distributions shall be treated in accordance with the preceding two (2) sentences.

(e) Tax Distributions shall be considered advanced distributions made pursuant to the applicable provisions of Section 5.1 and shall reduce such future distributions (including distributions under Section 10.2).

5.3. Allocations.

(a) Profits and Losses.

(i) General Application. For each Allocation Period, after giving effect to Section 5.3(b), the rules set forth below in this Section 5.3(a) shall apply for the purpose of determining each Partner’s allocable share of the items of income, gain, loss and expense of the Partnership comprising Profits or Losses of the Partnership for such Allocation Period.

(ii) Hypothetical Liquidation. The items of income, expense, gain and loss of the Partnership comprising Profits or Losses for an Allocation Period shall be allocated among the Persons who were Partners during such Allocation Period in a manner that shall, as nearly as possible, cause the Capital Account balance of each Partner at the end of such Fiscal Year to equal the excess (which may be negative) of:

(A) the amount of the hypothetical distribution (if any) that such Partner would receive if, on the last day of the Fiscal Year, (x) all Partnership assets were sold for cash equal to their respective Gross Asset Values, taking into account any adjustments thereto for such Fiscal Year, (y) all Partnership liabilities were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability or any Partner Nonrecourse Debt with respect to such Partner, to the Gross Asset Values of the assets securing such liability), and (z) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to Section 10.2 hereof; over

(B) the sum of (x) the amount, if any, without duplication, that such Partner would be obligated to contribute to the capital of the Partnership, (y) such Partner’s share of Partnership Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(g), and (z) such Partner’s share of Partner Minimum Gain determined pursuant to Treasury Regulations Section 1.704 2(i)(5), all computed as of the hypothetical sale described in Section 5.3(a)(ii)(A) hereof;

(b) Regulatory Allocations. Notwithstanding the foregoing provisions of Section 5.3(a), the following special allocations will be made in the following order of priority:

(i) Minimum Gain Chargeback. If there is a net decrease in Partnership Minimum Gain during an Allocation Period, then each Partner will be

allocated items of Partnership income and gain for such Allocation Period (and, if necessary, for subsequent Allocation Periods) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 5.3(b)(i) is intended to comply with the minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(f) and will be interpreted consistently therewith.

(ii) Partner Minimum Gain Chargeback. If there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Allocation Period, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), will be specially allocated items of Partnership income and gain for such Allocation Period (and, if necessary, subsequent Allocation Periods) in an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in a manner consistent with the provisions of Treasury Regulations Section 1.704-2(i)(4). This Section 5.3(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(i)(4) and will be interpreted consistently therewith.

(iii) Qualified Income Offset. If any Partner unexpectedly receives an adjustment, allocation, or distribution of the type contemplated by Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income, gain and Simulated Gain will be allocated to all such Partners (in proportion to the amounts of their respective deficit Adjusted Capital Accounts) in an amount and manner sufficient to eliminate the deficit balance in the Adjusted Capital Account of such Partner as quickly as possible, provided that an allocation pursuant to this Section 5.3(b)(iii) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account deficit after all other allocations provided for in this Section 5.3 have been tentatively made as if this Section 5.3(b)(iii) were not in this Agreement. It is intended that this Section 5.3(b)(iii) qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

(iv) Gross Income Allocation. In the event any Partner has a deficit Capital Account at the end of any Allocation Period which is in excess of the sum of (x) the amount such Partner is obligated to restore pursuant to any provision of this Agreement and (y) the amount such Partner is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 5.3(b)(iv) shall be made only if and to the extent that such Partner would have a deficit Capital Account balance in excess of such sum after all other allocations provided for in this Section 5.3 have been made as if Section 5.3(b)(iii) hereof and this Section 5.3(b)(iv) were not in this Agreement.

(v) Limitation on Allocation of Net Loss. If the allocation of Losses, Simulated Depletion or Simulated Losses to a Partner as provided in Section 5.3(a)

hereof would create or increase an Adjusted Capital Account deficit, there will be allocated to such Partner only that amount of Losses, Simulated Depletion or Simulated Losses as will not create or increase an Adjusted Capital Account deficit. The Losses, Simulated Depletion or Simulated Losses that would, absent the application of the preceding sentence, otherwise be allocated to such Partner will be allocated to the other Partners in accordance with their relative proportion of Units, subject to the limitations of this Section 5.3(b)(v).

(vi) Certain Additional Adjustments. To the extent that an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss will be specially allocated to the Partners in accordance with their Interests in the Partnership in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution was made in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(vii) Nonrecourse Deductions. Nonrecourse Deductions for each Allocation Period of the Partnership will be allocated to the holders of Class A Units in proportion to their respective Class A Sharing Percentages.

(viii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions will be allocated each Allocation Period to the Partner that bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable.

(ix) Simulated Depletion, Simulated Loss. Simulated Depletion for each Depletable Property, and Simulated Loss upon disposition of Depletable Property, shall be allocated among the Partners in proportion to their shares of Simulated Basis in such property.

(i) Except as provided in Section 5.3(c)(ii), Section 5.3(c)(iii), and Section 5.3(d) hereof, for income tax purposes under the Code and the Treasury Regulations, each Partnership item of income, gain, loss, deduction and credit will be allocated between the Partners as its correlative item of “book” income, gain, loss, deduction or credit is allocated pursuant to this Article V.

(ii) Tax items with respect to Partnership assets that are contributed to the Partnership with a Gross Asset Value that varies from its basis in the hands of the contributing Partner immediately preceding the date of contribution will be allocated between the Partners for income tax purposes pursuant to Treasury Regulations promulgated under Code Section 704(c) so as to take into account such variation. The

Partnership will account for such variation under any method approved under Code Section 704(c) and the applicable Treasury Regulations and, the Parties agree that, unless and until a different method is selected pursuant to the provisions of this Agreement, the Partnership shall use the remedial method pursuant to Treasury Regulations Section 1.704-3(d) If the Gross Asset Value of any Partnership asset is adjusted pursuant to the definition of “Gross Asset Value” herein, subsequent allocations of income, gain, loss, deduction and credit with respect to such Partnership asset will take account of any variation between the adjusted basis of such Partnership asset for federal income tax purposes and its Gross Asset Value in a manner consistent with Code Section 704(c) and the Treasury Regulations promulgated thereunder under any method approved under Code Section 704(c) and the applicable Treasury Regulations as chosen by the General Partner. Allocations pursuant to this Section 5.3(c)(ii) are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Partner’s Capital Account or share of net Profits, net Losses and any other items or distributions pursuant to any provision of this Agreement.

(iii)

(A) If the Partnership recognizes Depreciation Recapture with respect to the sale of any Partnership asset, (i) the portion of the gain on such sale which is allocated to a Partner pursuant to Section 5.3(a) and Section 5.3(b) shall be treated as consisting of a portion of the Partnership’s Depreciation Recapture on the sale and a portion of the balance of the Partnership’s remaining gain on such sale under principles consistent with Treasury Regulations Section 1.1245-1 and (ii) if, for U.S. federal income tax purposes, the Partnership recognizes both “unrecaptured section 1250 gain” (as defined in Code Section 1(h)) and gain treated as ordinary income under Code Section 1250(a) with respect to such sale, the amount treated as Depreciation Recapture under Section 6.3(d)(iii) hereof shall be comprised of a proportionate share of both such types of gain.

(B) For purposes of this Section 5.3(c)(iii), “Depreciation Recapture” means the portion of any gain from the disposition of an asset of the Partnership which, for U.S. federal income tax purposes, (i) is treated as ordinary income under Code Section 1245, (ii) is treated as ordinary income under Code Section 1250 or (iii) is “unrecaptured section 1250 gain” as such term is defined in Code Section 1(h).

(d) Income Tax Allocations with respect to Depletable Properties.

contributed to or acquired by the Partnership (and any additions to such federal income tax basis resulting from expenditures required to be capitalized in such basis shall be allocated among the Partners in a manner designed to cause the Partners’ proportionate shares of such adjusted federal income tax basis to be in accordance with their Class A Sharing Percentages as determined at the time of any such additions), and shall be reallocated among the Partners in accordance with the Partners’ Class A Sharing Percentages as determined immediately following the occurrence of an event giving rise to an adjustment to the Gross Asset Values of the Partnership’s Depletable Properties pursuant to clause (b) of the definition of Gross Asset Value.

(ii) For purposes of the separate computation of gain or loss by each Partner on the taxable disposition of Depletable Property, the amount realized from such disposition shall be allocated (A) first, to the Partners in an amount equal to the Simulated Basis in such Depletable Property in proportion to their allocable shares thereof and (B) second, any remaining amount realized shall be allocated consistent with the allocation of Simulated Gains.

(iii) The allocations described in clauses (i) and (ii) of this Section 5.3(d) are intended to be applied in accordance with the Partners’ “interests in partnership capital” under Code Section 613A(c)(7)(D); provided that the Partners understand and agree that the General Partner may, in good faith, authorize special allocations of federal income tax basis, income, gain, deduction or loss, as computed for federal income tax purposes, in order to eliminate differences between Simulated Basis and adjusted federal income tax basis with respect to Depletable Properties, in such manner as determined consistent with the principles outlined in Section 5.3(c)(ii). The provisions of this Section 5.3(d) and the other provisions of this Agreement relating to allocations under Code Section 613A(c)(7)(D) are intended to comply with Treasury Regulation Section 1.704-1(b)(4)(v) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

(iv) Each Partner shall separately keep records of its share of the adjusted tax basis in each Depletable Property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the disposition of such property by the Partnership. Upon the request of the Partnership, each Partner shall advise the Partnership of its adjusted tax basis in each Depletable Property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Partnership may rely on such information and, if it is not provided by the Partner, may make such reasonable assumptions as it shall determine with respect thereto. The General Partner shall cause the Partnership to provide each Partner with information reasonably requested by such Partner to comply with this Section 5.3(d)(iv) and other tax reporting obligations.

(e) Other Provisions.

(i) For any Allocation Period or other period during which any part of any Interest in the Partnership is Transferred between the Partners or to another Person

(other than by pledge of, or grant of a security interest in, such Interest), the portion of the Profits, Losses and other items of income, gain, loss, deduction and credit that are allocable with respect to such part of an Interest in the Partnership will be apportioned between the Transferor and the Transferee under any method allowed pursuant to Code Section 706 and the applicable Treasury Regulations as determined by the General Partner, although an interim closing of the books method shall be used if the Transferor agrees to reimburse the Partnership for reasonable costs incurred.

(ii) In the event that the Code or any Treasury Regulations require allocations of items of income, gain, loss, deduction or credit different from those set forth in this Article V, the General Partner is hereby authorized to adjust or amend the allocations to the extent necessary to satisfy the Code and any Treasury Regulations, and no such new allocation will give rise to any claim or cause of action by any Partner.

(iii) For purposes of determining the Partners’ proportional share of the Partnership’s “excess nonrecourse liabilities” within the meaning of Treasury Regulations Section 1.752-3(a)(3), the Partners’ interests in profits will be equal to their respective Class A Sharing Percentages.

(iv) Credits. All tax credits shall be allocated among the Partners as determined by the General Partner, consistent with applicable law.

(f) Valuation; Revaluation. Except as otherwise specifically provided in this Agreement, valuations will be made by the General Partner or by independent third parties appointed by the General Partner and deemed qualified by the General Partner to render an opinion as to the value of the Partnership’s assets, using such methods and considering such information relating to the investments, assets and liabilities of the Partnership as the General Partner or independent third party, as the case may be, may determine in the discretion of the General Partner.

5.4. Withholding. The Partnership may withhold distributions or portions thereof if it is required to do so by any applicable rule, regulation, or law, and each Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Partner any amount of federal, state, local or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Partner pursuant to this Agreement. Any amounts withheld pursuant to this Section 5.4 or withheld by a third party from payments made to the Partnership or any of its Subsidiaries on account of a particular Partner will be treated as having been distributed to such Partner. To the extent that the cumulative amount of such withholding for any period exceeds the distributions to which such Partner is entitled for such period, the amount of such excess, if not immediately repaid by such Partner to the Partnership, will be considered a loan from the Partnership to such Partner, with interest accruing at two percent (2%) plus the Interest Rate. Such loan may, at the option of the General Partner, be satisfied (a) out of distributions to which such Partner would otherwise be subsequently entitled, or (b) by the immediate payment in cash to the Partnership of such excess amount. The General Partner on behalf of the Partnership, may take any other action it determines to be necessary or appropriate in connection with any obligation or possible obligation to impose withholding pursuant to any tax law or to pay any tax with respect to a

Partner. Each Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Partner’s Units to secure such Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 5.4. Each Partner will take such actions as the Partnership may request in order to perfect or enforce the security interest created hereunder.

ARTICLE VI

MANAGEMENT

6.1. Management. Except as otherwise provided in this Agreement or by applicable law, the power and authority to manage, direct and control the Partnership will be vested in the General Partner. The General Partner will have full, complete and exclusive authority to manage, direct and control the business, affairs and properties of the Partnership, and to perform any and all other acts or activities customary or incident to the management of the Partnership’s activities, without the necessity of the approval by the Limited Partners except as expressly provided herein. Except for the General Partner, no Partner may claim or exercise any authority to act, or to enter into any contract or agreement, on behalf of the Partnership. The Limited Partners agree that all determinations, decisions and actions made or taken by the General Partner shall be conclusive and absolutely binding upon the Partnership, the Limited Partners and their respective successors, personal representatives and permitted assigns. Persons dealing with the Partnership are entitled to rely conclusively upon the power and authority of the General Partner as herein set forth.

6.2. Super Majority Decisions; Major Decisions. Notwithstanding anything contained in this Agreement, and without limiting any requirement in this Agreement that any action require approval of the General Partner,

(a) the following matters shall require the approving vote of the General Partner, including any requisite Board of Directors approval as required under Section 7.11(c)(i) of the GP Agreement as a Super Majority Decision:

(i) any amalgamation, reconstruction, liquidation, dissolution, or similar proceedings with respect to any Person in the Partnership Group;

(ii) the repurchase of Interests of any Partner, other than on a pro-rata basis among and as agreed by all Limited Partners;

(iii) any transaction or series of related transactions between any Person in the Partnership Group, on the one hand, and any Partner or any Affiliate thereof, on the other hand (for clarity, approval under this Section 6.2(a)(iii) shall be required for any amendments, amendments and restatements, supplements or modifications to any of the transactions covered by this Section 6.2(a)(iii), other than the approval of any Drop Down Transaction to any Person in the SXE Group approved in accordance with Section 6.1(c)(iv) or the Contribution Agreement or the Management Services Agreement;

(iv) any amendment to the organizational documents of any Person in the Partnership Group (other than as required to implement any action that may be approved as a Major Decision or as otherwise expressly permitted pursuant to this Agreement);

(v) the formation of Subsidiary of the Partnership authorized to engage in any business activities other than as described in Section 2.5 or any change in nature of the business of any Person in the Partnership Group from any purpose other than as described in Section 2.5;

(vi) the adoption or change of tax elections (including those under Code Section 704(c)), tax accounting methods or tax reporting positions of any Person in the Partnership Group, except as required by applicable tax law but including elections described in Section 8.2(a) and Section 8.4;

(vii) the making of any distribution by the Partnership, other than in accordance with Section 5.1 and Section 5.2;

(viii) any exchange by any Person in the Partnership Group of any Class A Units owned by a Designating Party for Equity Securities of SXE or any successor thereto, other than any such exchange requested by a Designating Party in accordance with Section 3.16; provided no such exchange may be approved pursuant to this Section 6.2(a)(viii) prior to the expiration of the Lock-Up Period without the consent of all Class A Limited Partners; and

(ix) exercising rights of any Person in the Partnership Group in such Person’s capacity as a member, manager or partner (general or limited) of SXE or any of their other respective Subsidiaries or any joint venture with respect to any action requiring approval of the General Partner pursuant to this Section 6.2(a).

(b) Prior to the fifth anniversary of the Effective Date (or such shorter period specified in clause (i), clause (vi) or clause (x) below), the following matters shall require the approving vote of the General Partner, including any requisite Board of Directors approval as required under Section 7.11(c)(ii) of the GP Agreement as a Super Majority Decision:

(i) during the Lock-Up Period, any merger, consolidation, reorganization, recapitalization or similar transaction involving any Person in the Partnership Group or any of their respective Subsidiaries (other than a transaction that is a Liquidity Event);

(ii) the appointment, termination or removal of any officer of any Person in the Partnership Group;

(iii) the approval or modification of compensation payable by any Person in the Partnership Group to any individual or amending any employee compensation benefit or incentive plan of any Person in the Partnership Group;

(iv) the issuance by any Person in the Partnership Group of debentures, bonds or any other debt securities (A) that would result in total indebtedness of the Partnership Group, on a consolidated basis exceeding 3.5 times EBITDA on a twelve-month

trailing basis or (B) that are convertible into or exchangeable or exercisable for any Equity Securities of any Person in the Partnership Group at less than Fair Market Value;

(v) any voluntary act of Bankruptcy by any Person in the Partnership Group;

(vi) any Liquidity Event prior to 1,277 days after the Effective Date, other than the approval of a Qualified IPO effected after the Lock-Up Period approved in accordance with Section 6.2(c)(iii) or Section 6.2(c)(xi);

(vii) approval of any capital project (i.e., new projects or facilities; expansion of facilities/compression) by any Person in the Partnership Group in excess of $50 million that is not included in the Initial Budget, other than projects required to comply with applicable law;

(viii) any disposition of assets by any Person in the Partnership Group with a fair market value in excess of $50 million;

(ix) any disposition by any Person in the Partnership Group of any Equity Security of SXE GP or any successor, other than as part of a Qualified IPO;

(x) during the Lock-Up Period, the approval of a distribution of any Equity Securities of SXE (or any successor thereto) owned by any Person in the Partnership Group; and

(xi) exercising rights of any Person in the Partnership Group in such Person’s capacity as a member, manager or partner (general or limited) of SXE or any of their other respective Subsidiaries or any joint venture with respect to any action requiring approval of the General Partner pursuant to this Section 6.2(b).

(c) Without limiting any approval as required under Section 6.2(b), the following matters shall require the approving vote of the General Partner, including any requisite Board of Directors approval as required under Section 7.11(d) of the GP Agreement as a Majority Decision:

(i) making capital calls or issuing any Equity Securities in any Person in the Partnership Group;

(ii) the issuance by any Person in the Partnership Group of any debentures, bonds or any other debt securities (including any security convertible into or exchangeable for any other security);

(iii) any Liquidity Event (however, the General Partner shall first use good faith efforts to effect a Qualified IPO prior to approving any other Liquidity Event (unless any such other Liquidity Event is approved in accordance with Section 6.2(b)(vi) or is directed by a Designating Party at any time after the fifth anniversary of the Effective Date pursuant to Section 7.13(a) of the GP Agreement));

(iv) any Drop Down transaction;

(v) after the Lock-Up Period, the approval of any merger, consolidation, recapitalization or similar transactions by any Person in the Partnership Group (other than a transaction that is a Liquidity Event);

(vi) the approval by any Person in the Partnership Group of any Annual Budget and any approval by any Person in the Partnership Group of expenditures in excess of those reflected in the then current Annual Budget (subject to any permitted variances as agreed upon by the Designating Parties);

(vii) the approval of any entry by any Person in the Partnership Group into or amendment or waiver of any rights of any Person in the Partnership Group under any partnership or joint venture with any other Person;

(viii) the approval of any contract to be entered into by any Person in the Partnership Group after the Effective Date (A) with a term of more than 12 months (other than any contract that may be terminated by such Person on not more than 90 days’ notice without penalty), (B) involving expected payments by any Person in the Partnership Group of more than $5 million in the aggregate (other than payments for obligations as set forth in an Annual Budget), and (C) any non-ministerial amendment to any such contract;

(ix) any voluntary encumbrance of any properties or assets of any Person in the Partnership Group to secure any debt and/or other obligations;

(x) any disposition by any Person in the Partnership Group of assets, other than with respect to the disposition of worthless or obsolete assets or any disposition of assets for which approval is required pursuant to Section 6.2(b)(viii);

(xi) the approval by any Person in the Partnership Group of a Qualified IPO after the Lock-Up Period;

(xii) the approval of a distribution by any Person in the Partnership Group of any Equity Securities of SXE or any successor thereto owned by any Person in the Partnership Group effected after the Lock-Up Period; provided, however, no such General Partner approval shall be required if such distribution is requested by a Designating Party in accordance with Section 5.1(f);

(xiii) subject to Section 3.13, determining the Fair Market Value for purposes of this Agreement, including Fair Market Value of any Equity Securities issued by any Person in the Partnership Group; and

(xiv) Subject to Section 6.2(a)(ix) and Section 6.2(b)(xi), exercising rights of any Person in the Partnership Group in such Person’s capacity as a member, manager or partner (general or limited) of SXE or any of their other respective Subsidiaries or any joint venture with respect to any action requiring approval of the General Partner pursuant to this Section 6.2(c).

6.3. Officers. The General Partner may, from time to time, designate one or more Persons to be officers of the Partnership (each, an “Officer”), with such titles as the General Partner may assign to such Persons. No Officer need be a Partner or a resident of the State of Delaware. Officers so designated will have such authority and perform such duties as the General Partner may, from time to time, delegate to them and, unless otherwise specified by the General Partner, will have the authority and responsibilities generally held by officers of a Delaware corporation holding the same titles. Any number of offices may be held by the same Person. The salaries or other compensation, if any, of the Officers and agents of the Partnership will be fixed from time to time by the General Partner, except as provided pursuant to Section 6.2(c). Any Officer may resign as such at any time. Such resignation will be made in writing and will take effect at the time specified therein, or if no time be specified, at the time of its receipt by the General Partner. Any Officer may be removed as such, either with or without cause, by the General Partner, in its sole discretion. Any vacancy occurring in any office of the Partnership may be filled by the General Partner. The Officers of the Partnership, and their respective titles, as of the Effective Date are set forth on Exhibit B hereto.

6.4. Annual Budget. The Officers shall be responsible for managing the day to day operations of the Partnership, subject to such limitations and directions as are provided by the General Partner. The Officers will annually prepare and submit to the General Partner the Annual Budget which the General Partner shall revise and otherwise modify in its sole discretion. Any material changes to the Annual Budget shall be made at the direction of, or with the approval by, the General Partner, in each case at the sole discretion of the General Partner. The General Partner shall have the right to revise any then-applicable Annual Budget at any time, in its sole discretion. In furtherance of the foregoing:

(a) The Annual Budget for the period from the date of this Agreement through December 31, 2014 shall be approved in accordance with Section 6.2(c) (such approved Annual Budget, the “Initial Budget”).

(b) The Board of Directors shall review each Annual Budget, including the Initial Budget, at least quarterly (or more frequently as determined by the Board of Directors, including upon any proposed project not currently in the Annual Budget requiring capital expenditures of $5 million during the capital year to which such Annual Budget relates) and the Annual Budget shall be amended or modified to reflect any amendments or modifications thereto approved or directed by the General Partner and as so modified or amended shall thereafter constitute the Annual Budget for the remainder of the calendar year to which such Annual Budget relates.

(c) The Officers shall prepare or cause to be prepared and presented to the Board of Directors not later than December 1 of each calendar year (beginning December 1, 2014 (for calendar year 2015)) a draft Annual Budget for the next succeeding calendar year (the “Proposed Budget”) setting forth the anticipated revenues and expenses (including capital expenditures) of the Partnership for such calendar year in a format consistent with the Initial Budget, and which will include:

(i) a projected monthly income statements, balance sheets and cash flow statements on a consolidated basis for the calendar year covered by such Proposed Budget and a projected monthly income statement and capital expenditures for each major capital project;

(ii) estimates of the expenditures covered by the proposed Annual Budget by budget category, in reasonable detail to identify the nature, scope and duration of the activity in question;

(iii) estimates of the schedule pursuant to which capital costs and expenses included in the Annual Budget are anticipated to be incurred by the Partnership;

(iv) any other information reasonably requested in writing by the General Partner;

(v) estimates of revenues and estimated returns on invested capital;

(vi) progress on capital projects included in prior Annual Budgets, including any shortfalls or overages; and

(vii) any costs and expenses estimated to be expended due to health, safety, security and environmental issues or any regulatory issues.

(d) Expenditures in an Annual Budget may extend over more than one calendar year because such expenditures represent activities or operations that require commitments in excess of one calendar year. Once such expenditures have been approved by the General Partner as part of an Annual Budget or included by the General Partner as part of an Annual Budget, unless the General Partner determines otherwise, such expenditures shall not be required to be resubmitted for approval on an annual or other periodic basis, but instead all such items, until completed, automatically shall be included in future Annual Budgets (subject to limits and amounts as previously approved) as items which have already been approved.

(e) If the General Partner does not approve a Proposed Budget for a calendar year on or prior to the December 20 preceding January 1 of the calendar year to which such Proposed Budget relates, the Officers shall use good faith efforts to prepare or to cause to be prepared a revised Proposed Budget for approval by the General Partner; provided, however, that the General Partner shall have the right to revise the Proposed Budget and to approve the Proposed Budget that it has revised, in each case in its sole discretion. Each Proposed Budget approved hereunder by the General Partner in accordance with Section 6.4 shall be deemed an “Annual Budget.”

(f) To the extent that any Proposed Budget is not approved by the General Partner in accordance with Section 6.4 by the January 1 of the calendar year to which such Proposed Budget relates, then, until a Proposed Budget for such calendar year is approved by the General Partner, the most recent Annual Budget for the prior year shall continue as the Annual Budget for such calendar year; provided, however, that (i) such existing Annual Budget will automatically be adjusted for such Fiscal Year to properly account for actual changes in non-discretionary changes such as taxes, insurance premiums, utility charges, debt service and maintenance and repair costs (including capital expenditures for maintenance and repair costs) and (ii) the budgeted amount of capital expenditures for the General Partner and the Partnership

Group (other than capital expenditures for maintenance and repair costs) shall be (A) for the first such Fiscal Year, 80% of the amount budgeted for capital expenditures in such existing Annual Budget and (B) for any Fiscal Year thereafter, until an Annual Budget is approved by the General Partner, zero.

(g) The Partnership shall not incur capital expenditures in excess of amounts set forth in the Annual Budget without prior approval of the General Partner, provided that the Partnership may expend without General Partner approval up to 10% in excess of the authorized amount for any category of capital expenditures during a calendar year (excluding any amounts included in the Annual Budget as line items for contingencies and overruns), such excess expenditures not to exceed in the aggregate 10% of the aggregate of the amount for capital expenditures set forth in the Annual Budget for such calendar year. Any variances from the Annual Budget for capital expenditures other than variances for capital expenditures within and not in excess of the 10% variance permitted herein year shall require the approval of the General Partner, and if so approved, each such variance shall be added to the Annual Budget for such calendar year which, as so amended, shall thereafter be the Annual Budget for such calendar year. The ten percent (10%) variance permitted herein shall be calculated with respect to the original amounts set forth in the Annual Budget or, once amended, the amended amount, provided that no expenditures incurred pursuant to Section 6.4(h) shall be deemed to be included in for purposes of calculating the ten percent (10%) permitted variance pursuant to this Section 6.4(g), nor shall any such expenditures be considered to be amounts expended in excess of the authorized amount of any Annual Budget for purposes of calculating the ten percent (10%) permitted variance.

(h) Notwithstanding anything to the contrary in this Agreement, the Partnership is expressly authorized to make Emergency Expenditures and incur liabilities without prior authorization or approval when necessary or advisable, in the judgment of the senior executive Officer, subject to Prudent Industry Practices, to deal with emergencies, including explosions, fires, spills, or any other similar event, which may endanger property, lives, or the environment. The senior executive Officer shall as soon as practicable report to the General Partner the nature of any such emergency which arises, the measures he intends to take in respect of such emergency and the estimated related expenditures.

6.5. Limitation of Liability; Indemnification.

(a) Neither the General Partner, any Director, any Organizing Person, any Officer or any officer the General Partner or their respective Affiliates shall be liable in damages to the Partnership or any Partner by reason of, or arising from or relating to the operations, business or affairs of, or any action taken or failure to act on behalf of, the Partnership or the General Partner, except to the extent that any of the foregoing is determined by a final, non-appealable order of a court of competent jurisdiction to have been caused by a willful breach of the terms of this Agreement or the gross negligence or willful misconduct or bad faith of such persons.

(b) To the maximum extent permitted by applicable law, but subject to the provisions of this Section 6.5, all Indemnitees will not be liable for, and will be indemnified and held harmless by the Partnership against, any and all claims, actions, demands, losses, damages,

liabilities, costs, or expenses, including attorney’s fees, court costs, and costs of investigation, actually and reasonably incurred by any such Indemnitee (collectively, “Damages”), arising from proceedings in which such Indemnitee may be involved, as a party or otherwise, by reason of its being a Director, General Partner, Officer or officer the General Partner, or by reason of its involvement in the management of the affairs of the Partnership or the General Partner, whether or not it continues to be such at the time any such Damage is paid or incurred, except to the extent that any of the foregoing is determined by a final, non-appealable order of a court of competent jurisdiction to have been caused by a willful breach of the terms of this Agreement or the gross negligence or willful misconduct or bad faith of such persons. IT IS THE EXPRESS INTENT OF THE PARTNERSHIP THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY DAMAGE THAT HAS RESULTED FROM OR IS ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT, OR CONCURRENT ORDINARY NEGLIGENCE OF THE INDEMNITEE.

(c) To the maximum extent permitted by applicable law, expenses incurred by an Indemnitee in defending any proceeding (except a proceeding by or in the right of the Partnership or any of the Partners against such Indemnitee), will be paid by the Partnership in advance of the final disposition of the proceeding, upon receipt of a written undertaking by or on behalf of such Indemnitee to repay such amount if such Indemnitee is determined pursuant to this Section 6.5 or adjudicated to be ineligible for indemnification, which undertaking will be an unlimited general obligation of the Indemnitee but need not be secured unless so determined by the General Partner.

(d) The indemnification provided by this Section 6.5 will inure to the benefit of the heirs and personal representatives of each Indemnitee.

(e) Any indemnification pursuant to this Section 6.5 will be made only out of the assets of the Partnership and will in no event cause any Partner to incur any personal liability nor shall it result in any liability of the Partners to any third party.

(f) The rights of indemnification provided in this Section 6.5 are in addition to any rights to which an Indemnitee may otherwise be entitled by contract (including, without limitation, advancement of expenses) or as a matter of law. The Partnership hereby acknowledges that the Indemnitees may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Partners and certain of their Affiliates (collectively, the “Partner Indemnitors”). The Partnership hereby agrees that (i) the Partnership is the Indemnitor of first resort (i.e., its obligations to the Indemnitees under Sections 6.5(b) and Section 6.5(c) are primary and any obligation of the Partner Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnitees are secondary), (ii) the Partnership shall be required to advance the full amount of expenses incurred by the Indemnitees and shall be liable for the full amount of all Damages paid in settlement to the extent legally permitted and as required by the terms of Sections 6.5(b) and Section 6.5(c) (or any other agreement between the Partnership and the Indemnitees), without regard to any rights the Indemnitees may have against the Partner Indemnitors, and (iii) the Partnership irrevocably waives, relinquishes and releases the Partner Indemnitors from any and all claims against the Partner Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Partnership further agrees that no advancement or payment by the Partner

Indemnitors on behalf of an Indemnitee with respect to any claim for which the Indemnitee has sought indemnification from the Partnership pursuant to Sections 6.5(b) and Section 6.5(c) shall affect the foregoing and the Partner Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitees against the Partnership. The Partnership agrees that the Partner Indemnitors who are not Partners are express third party beneficiaries of the terms of this Section 6.5.

6.6. Directors’ and Officers’ Insurance. The Partnership will purchase and maintain key man insurance for the Officers and Director and Officer liability insurance in the amount approved by the General Partner on behalf of any Person who is or was a Director, Partner, Officer or officer of its Subsidiaries against any liability asserted against him or incurred by him in any capacity identified in Section 6.5 or arising out of his status as an Indemnitee, whether or not the Partnership would have the power to indemnify him against that liability under Section 6.5.

6.7. Limitation of Duties; Waiver of Fiduciary Duties.

(a) To the fullest extent permitted by applicable law, the Partnership waives all fiduciary duties and all liability of any Partner (in their capacity as a Partner but not in their capacity as Officers of the Partnership, if applicable) for breaches of fiduciary duties; provided, however, that such waiver does not extend to liability for any action or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.

(b) In furtherance of and without limiting Section 6.7(a), (i) the legal doctrines of “corporate opportunity,” “business opportunity” and similar doctrines will not be applied to any ventures or activities of the General Partner, the Limited Partners or their respective Affiliates, (ii) none of General Partner, the Limited Partners or their respective Affiliates will have any obligation to the Partnership or its other Partners with respect to any opportunity to expand the Partnership’s business, whether geographically, or otherwise, (iii) the Partnership and each Partner hereby renounces any interest or expectancy in any business opportunity, transaction or other matter in which any Limited Partner (or its Affiliates) participates or desires or seeks to participate (each, a “Business Opportunity”), (iv) no Limited Partner (or its Affiliates) shall have any obligation to communicate or offer any Business Opportunity to the Partnership or any other Partner, and each may pursue for itself or direct, sell, assign or transfer to any other Person any such Business Opportunity and (v) the General Partner, the Limited Partners and their respective officers, directors, partners, members, managers, stockholders and Affiliates shall be entitled to and may have business interests and activities that are in direct competition with the Partnership or a Partner or that are enhanced by the activities of the Partnership, and neither the Partnership nor any Partner shall have any rights by virtue of this Agreement in any business venture of the General Partner or any Limited Partner.

(c) Notwithstanding the foregoing, nothing in this Section 6.7 shall, or is intended to, limit the duties and obligations of Limited Partners who are Officers of the Partnership in their capacity as Officers of the Partnership or otherwise limit the rights, duties and obligations of any Partner or Director expressly set forth in this Agreement.

ARTICLE VII

RIGHTS OF PARTNERS; CONFIDENTIALITY

7.1. Access to Information. In addition to the other rights specifically set forth in this Agreement, each Partner will have access to all information to which a Partner is entitled to have access pursuant to the Act. The Partnership shall permit each Access Partner to send representatives to visit and inspect any of the properties of the Partnership, including its books of account and other records (and make copies of and take extracts from such books and records), and to discuss all aspects of the Partnership’s business, affairs, finances, and accounts with the Partnership’s officers and its independent public accountants, all at such reasonable times during the Partnership’s usual business hours and as often as any such Partner may reasonably request.

7.2. Financial Reports. The Partnership shall furnish all of the following to each Access Partner:

(a) Within thirty-five (35) days after the end of each month, (1) an operating report with key operating metrics reasonably requested by any Access Partner, (2) an unaudited consolidated balance sheet and unaudited related statement of income and statement of cash flows for such month prepared on a consistent internal basis (without footnotes) and other disclosures that would be required for a presentation in accordance with generally accepted accounting principles as applied in the United States (“GAAP”), together with a comparison of such statements to the Annual Budget for such periods and (3) a written report by the Partnership’s management describing the results of operations of the Partnership, including any applicable qualitative analysis comparing the Partnership’s performance with prior periods, for such month;

(b) Within forty-five (45) days after the end of each quarter: (1) an unaudited consolidated balance sheet as of the end of such quarter and unaudited related income statement and statement of cash flows for such quarter including any footnotes thereto (if any) prepared in accordance with GAAP, consistently applied, together with a comparison of such statements to the Annual Budget for such periods; and (2) a written report by the Partnership’s management describing the results of operations of the Partnership, including any applicable qualitative analysis comparing the Partnership’s performance with prior periods, for such quarter;

(c) Within one hundred twenty (120) days after the end of each Fiscal Year: (1) an audited consolidated balance sheet as of the end of such Fiscal Year and the related consolidated income statement, statement of Partners’ equity and statement of cash flows for such Fiscal Year prepared in accordance with GAAP and a signed audit letter from the Partnership’s auditors; and (2) a copy of the reports from the Partnership’s auditors pursuant to Statements of Auditing Standards 112 and 114 for such Fiscal Year;

(d) Promptly after the occurrence of any event that has, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, results of operations, condition, assets, liabilities, employees, prospects, financial condition or capitalization of the Partnership, notice of such event together with a summary describing the nature of the event and its impact on the Partnership; and

(e) Any other information that any Access Partner may reasonably request.

7.3. Audits. So long as long as any Access Partner is a Partner and, together with its Affiliates, holds a Class A Sharing Percentage that is equal to or greater than ten percent (10%), such Access Partner shall have the right to conduct, or cause to be conducted, audits of the books and records of the Partnership and to consult with and advise management of the Partnership, upon reasonable notice at reasonable times from time to time, on all matters relating to the operation of the Partnership. The expenses of such audits shall be borne by the Partnership. No other Partner in its capacity as a Partner will have the right to conduct, or cause to be conducted, an audit of the books and records of the Partnership.

7.4. Confidentiality.

(a) Each Partner agrees that the provisions of this Agreement, all understandings, agreements and other arrangements between and among the Partners, and all other non-public information received from or otherwise relating to the Partnership or its business will be confidential, and will not be disclosed or otherwise released to any other Person (other than another party hereto), without the written consent of the General Partner, unless such disclosure or release is otherwise permitted pursuant to the terms of a separate agreement between the Partnership (or one of its Subsidiaries), on the one hand, and such Partner, on the other. The obligations of the Partners hereunder will not apply to the extent that the disclosure of information otherwise determined to be confidential is required by applicable law; provided, that prior to disclosing such confidential information, to the extent practicable a Partner must notify the Partnership thereof, which notice will include the basis upon which such Partner believes the information is required to be disclosed.

(b) Notwithstanding Section 7.4(a) or Section 7.5, each of Southcross and BBTS (and after a BBTS Distribution, EIG and TW) may provide information regarding the General Partner, the Partnership, their Subsidiaries, this Agreement, and the assets, operations and financial information and business plans regarding the General Partner, the Partnership and their Subsidiaries to (i) their respective legal, financial and accounting advisors, (ii) their respective members, partners, managers, and officers and the members, partners, managers, and officers of their Affiliates who control them and (iii) potential purchasers or participants, directly or indirectly thru such person or an Affiliate of such Person, of Units, provided any such potential purchaser or participant executes a confidentiality agreement with the General Partner in form and substance reasonably satisfactory to the directors of the General Partner that are appointed by the members of the General Partner other than the Partner requesting to share such information (which consent shall not be unreasonably withheld, conditioned or delayed).

7.5. Press Releases. Neither the Partnership, any Partner or its Affiliates, shall issue, or authorize to be issued, any press release, interview, article or other media release (including an internet posting, web blog or other electronic publication) that makes reference to this Agreement or the transactions contemplated herein or any Partner, in each case without the consent of each Partner; provided, however, that any Partner or its Affiliates shall be permitted, in any tombstone or similar document and in any media format, to reference the General Partner and the Partnership and their Subsidiaries and provide a general description of the nature of the transaction.

7.6. Reimbursement of Expenses. The Partnership shall reimburse Southcross and BBTS for their expenses, including the fees and expenses of counsel, but excluding any brokerage, advisor or similar transaction fees, incurred in connection with the formation of, and their initial investment in, the Partnership. The Partnership shall reimburse any Director appointed by a Designating Party for his reasonable expenses incurred in the performance of his duties as a Director.

ARTICLE VIII

TAXES

8.1. Tax Returns. The General Partner will cause to be prepared and filed all necessary federal, state and local income tax returns for the Partnership and the General Partner will select a nationally recognized accounting firm to prepare the Partnership’s federal and state income tax returns. Each Partner will furnish to the General Partner all pertinent information in its possession relating to Partnership operations that is necessary to enable the Partnership’s income tax returns to be prepared and filed. The Partnership shall furnish to each Partner an estimated IRS Form K-1 and any similar state or local tax forms with respect to such Partner no later than the March 1 (or if the “remedial allocation method” is elected pursuant to Section 5.3(c)(ii) as soon as such forms are reasonably available) following each Tax Year and a final IRS Form K-1 and state and local tax forms with respect to such Partner no later than the March 15^th(or if the “remedial allocation method” is elected pursuant to Section 5.3(c)(ii) as soon as such forms are reasonably available) following each Tax Year. The Partnership will furnish to each Class A Limited Partner copies of all returns that are actually filed, promptly after their filing. All costs associated with the General Partner’s obligations under this Section 8.1 shall be borne by the Partnership. The General Partner agrees to exercise commercially reasonable efforts to cause the distributions described in Section 2.5(h) of the Contribution Agreement to satisfy Treasury Regulations Section 1.707-5(b)(2)(ii)(A), including to the extent reasonably possible not commingling the proceeds of the Credit Facility (as defined in the Contribution Agreement) that will fund such distributions with other funds of the Partnership.

8.2. Tax Elections.

(a) Elections by Partnership. The Partnership will make the following elections in the appropriate manner:

(i) to adopt the Tax Year of the Partnership set forth in Section 2.6;

(ii) to adopt the accrual method of accounting; and

(iii) to elect to amortize the start-up expenses of the Partnership under Code Section 195 ratably over a period of 180 months as permitted by Code Section 709(b).

(b) Elections by Partners. If any Partner makes any tax election that requires the Partnership to furnish information to such Partner to enable such Partner to compute its own tax liability, or requires the Partnership to file any tax return or report with any tax authority, in

either case that would not be required in the absence of such election made by such Partner, the General Partner may, as a condition to furnishing such information or filing of such return or report, require such Partner to pay to the Partnership any incremental expenses incurred in connection therewith.

8.3. Tax Characterization of the Partnership. It is the intent of the Partners that the Partnership be treated as a partnership for federal income tax purposes and, to the extent permitted by applicable law, for state and local franchise and income tax purposes. Except in connection with a conversion of the Partnership as part of an Approved Exit as contemplated by Section 3.11, neither the Partnership nor any Partner may make an election for the Partnership to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state or local law or to be treated as a corporation, and no provision of this Agreement will be construed to sanction or approve such an election.

8.4. Tax Matters Partner. Subject to the following sentence, the General Partner is hereby designated as the tax matters partner within the meaning of Code Section 6231(a)(7) (“Tax Matters Partner”). If for any Tax Year the General Partner is determined to be ineligible to act as the Tax Matters Partner, then (i) the Partners (and any Person who was a Partner at any time during such Tax Year) shall use commercially reasonable efforts to take such action as is required to permit the General Partner to be eligible to act as the Tax Matters Partner for such Tax Year and all other Tax Years, and (ii) if despite such efforts, the General Partner is not permitted to act as Tax Matters Partner for such Tax Year, then BlackBrush TexStar (before the BBTS Distribution) or EIG (after the BBTS Distribution) shall be designated as the Tax Matters Partner for such Tax Year. The Tax Matters Partner shall not take any material action as Tax Matters Partner without the consent of the Designating Parties (such consent not to be unreasonably conditioned, withheld or delayed). The Tax Matters Partner shall have all of the rights, authority and power, and shall be subject to all of the obligations, of a tax matters partner to the extent provided in the Code and the Regulations. If any state or local tax law provides for a tax matters partner or person having similar rights, powers, authority or obligations, the Tax Matters Partner shall also serve in such capacity. In all other cases, the General Partner shall represent the Partnership in all tax matters to the extent allowed by law. Expenses incurred by the General Partner or EIG as the Tax Matters Partner or in a similar capacity as set forth in this Section 8.4 shall be borne by the Partnership. Such expenses shall include fees of attorneys and other tax professionals, accountants, appraisers and experts, filing fees and reasonable out-of-pocket costs. Any decisions made by the Tax Matters Partner, including whether or not to settle or contest any tax matter, whether or not to extend the period of limitations for the assessment or collection of any tax and the choice of forum for such contest, shall be made in the Tax Matters Partner’s discretion, subject to the proviso contained in the second sentence of this Section 8.4. Notwithstanding anything to the contrary in this Section 8.4, (1) the Tax Matters Partner shall not bind any Partner to a settlement agreement without the written consent of such Partner or enter into any extension of the period of limitations for making assessments with respect to the Partnership or any Partner without the prior consent of the Partners that would be bound by such extension, and (2) each Limited Partner shall be designated a notice partner under Code Section 6231 and shall have the rights of a notice partner granted pursuant to Code Sections 6221 through 6233.

8.5. Tax Information. Each Partner shall provide the Partnership with any information related to such Partner necessary to (i) allow the Partnership to comply with any tax reporting, tax withholding or tax payment obligations of the Partnership or (ii) establish the Partnership’s legal entitlement to an exemption from, or reduction of, withholding tax, including U.S. federal withholding tax under Code Sections 1471 and 1472.

ARTICLE IX

BOOKS, RECORDS, AND BANK ACCOUNTS

9.1. Maintenance of Books and Records. The books of account for the Partnership and other records of the Partnership will be located at the principal office of the Partnership or such other place as the General Partner may deem appropriate, and will be maintained on an accrual basis in accordance with the terms of this Agreement, except that the Capital Accounts of the Partners will be maintained in accordance with Section 4.4.

9.2. Bank Accounts. The General Partner will cause the Partnership to establish and maintain one or more separate bank or investment accounts for Partnership funds in the Partnership name with such financial institutions and firms as the General Partner may select and with such signatories thereon as the General Partner may designate.

ARTICLE X

DISSOLUTION, LIQUIDATION, TERMINATION AND CONVERSION

10.1. Dissolution. The Partnership will dissolve and its affairs will be wound up upon the first to occur of either of the following (each, a “Liquidation Event”):

(a) the approval of such dissolution by the General Partner pursuant to Section 7.11(c)(i) of the GP Agreement; or

(b) the occurrence of any other event causing dissolution of the Partnership under the Act;

provided, however, that, upon dissolution pursuant to clause (b) of this Section 10.1, any or all of the remaining Partners may elect to continue the business of the Partnership within ninety (90) days of the occurrence of the event causing such dissolution. The death, resignation, withdrawal, Bankruptcy, insolvency or expulsion of any Partner will not dissolve the Partnership.

10.2. Liquidation and Termination. On dissolution of the Partnership, the General Partner may appoint one or more Persons as liquidator(s). The liquidator will proceed diligently to wind up the affairs of the Partnership and make final distributions as provided herein. The costs of liquidation will be borne as a Partnership expense. Until final distribution, the liquidator will continue to operate the Partnership properties with all of the power and authority of the Partners. The steps to be accomplished by the liquidator are as follows:

(a) as promptly as possible after dissolution and again after final liquidation, the liquidator will cause a proper accounting to be made by a recognized firm of certified public

accountants of the Partnership’s assets, liabilities, and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable;

(b) the liquidator will pay from Partnership funds all of the debts and liabilities of the Partnership (including, without limitation, all expenses incurred in liquidation) or otherwise make adequate provision therefor (including, without limitation, the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidator may reasonably determine); and

(i) the liquidator may sell any or all Partnership property, and any resulting gain or loss from each sale will be computed and allocated to the Partners pursuant to Section 5.3;

(ii) with respect to all Partnership property that has not been sold, the Fair Market Value of that property will be determined and the Capital Accounts of the Partners will be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in that property that has not been reflected in the Capital Accounts previously would be allocated among the Partners if there were a taxable Transfer of that property for the Fair Market Value of that property on the date of distribution;

(iii) thereafter, Partnership property will be distributed among the Partners in accordance with Section 5.1(a). All distributions made pursuant to this Section 10.2(c)(iii) will be made by the end of such taxable year (or, if later, within ninety (90) days after the date of such liquidation).

(d) All distributions in kind to the Partners will be made subject to the liability of each distributee for its allocable share of costs, expenses and liabilities theretofore incurred or for which the Partnership has committed prior to the date of termination and those costs, expenses and liabilities will be allocated to the distributee pursuant to this Section 10.2.

10.3. Cancellation of Filing. On completion of the distribution of Partnership assets as provided herein, the Partnership will be terminated, and the General Partner (or such other Person or Persons as may be required) will cause the cancellation of any other filings made as provided in Section 2.7 and will take such other actions as may be necessary to terminate the Partnership.

ARTICLE XI

GENERAL PROVISIONS

11.1. Offset. Whenever the Partnership is to pay any sum to any Partner, any amounts such Partner owes the Partnership may be deducted from that sum before payment.

11.2. Notices. All notices, requests or consents provided for or permitted to be given under this Agreement will be in writing (except as otherwise provided in Section 11.14) and will

be given (a) by depositing such writing in the United States mail, addressed to the recipient, postage paid and certified with return receipt requested, (b) by depositing such writing with a reputable overnight courier for next day delivery, (c) by delivering such writing to the recipient in person, by courier or (d) by facsimile transmission. A notice, request or consent given under this Agreement will be effective on receipt by the Person to receive it. All notices, requests and consents to be sent to a Partner will be sent to or made at the addresses given for that Partner on the list attached hereto as Exhibit A or such other address as that Partner may specify by notice to the other Partners. Any notice, request or consent to the Partnership also will be given to each Partner.

11.3. Entire Agreement; Supersedure. This Agreement, together with its Exhibits and the agreements entered into in connection herewith, constitutes the entire agreement of the Partners relating to the Partnership and supersedes all prior contracts or agreements with respect to the Partnership, whether oral or written. Notwithstanding any other provision of this Agreement, the Partnership may enter into agreements or other writings with any Partner in respect of the Units of such Partner, and the rights of the Partnership and obligations of such Partner set forth in any such agreement or writing may establish rights in favor of the Partnership or limit the rights of such Partner notwithstanding any other provision of this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Partners and their respective successors, personal representatives and permitted assigns, any rights or remedies under or by reason of this Agreement.

11.4. Effect of Waiver or Consent. A waiver or consent, express or implied, to or of any breach or default by any Person in the performance by that Person of its obligations with respect to the Partnership will not constitute a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect to the Partnership. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default with respect to the Partnership, irrespective of how long such failure continues, will not constitute a waiver by that Person of its rights with respect to that default until the applicable limitations period has expired.

11.5. Amendment or Modification. Except as otherwise provided herein, this Agreement may be amended or modified from time to time only by a written instrument that is adopted by the General Partner; provided, however, that in no event shall this Agreement be amended, supplemented, or otherwise modified (a) to require any Partner to make a Capital Contribution to the Partnership without that Partner’s prior written consent, (b) in a manner that would adversely affect any Partner’s rights under Article III, Sections 4.1(d), 4.2, 4.4, 4.5, 5.1(a), 5.1(b), 5.1(c), 5.2, 5.3, 6.2, 6.5, 6.7, 10.1, 10.2(c)(ii), 10.2(c)(iii), 11.7, 11.8, 11.9, 11.16 or this Section 11.5, without such Partner’s prior written consent or (c) in any manner not previously described in subclauses (a) or (b) that would adversely affect any Partner’s rights under this Agreement in a disproportionate or discriminatory manner (as compared to any other Partner), without such Partner’s prior written consent. Notwithstanding anything herein to the contrary, no Partner approval is required for any amendment made by the General Partner to Exhibit A in accordance with Section 3.1.

11.6. Binding Effect. Subject to the restrictions on Transfer set forth in this Agreement, this Agreement will be binding on and inure to the benefit of the Partners and their respective heirs, legal representatives, trustees, successors, and assigns.

11.7. Governing Law; Severability. This Agreement is governed by and will be construed in accordance with the laws of the State of Delaware, excluding any conflict-of-laws rule or principle (whether under the laws of Delaware or any other jurisdiction) that might refer the governance or the construction of this Agreement to the law of another jurisdiction. If any provision of this Agreement or its application to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected thereby, and such provision will be enforced to the greatest extent permitted by law.

11.8. Consent to Jurisdiction; Waiver of Jury Trial. THE PARTNERSHIP AND THE PARTIES HERETO VOLUNTARILY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA IN DALLAS COUNTY, TEXAS, OVER ANY DISPUTE BETWEEN OR AMONG THE PARTIES OR THE PARTNERSHIP AND THE PARTIES ARISING OUT OF THIS AGREEMENT, IN EACH CASE OTHER THAN A DISPUTE SUBJECT TO SECTION 11.9, AND THE PARTNERSHIP AND EACH PARTY IRREVOCABLY AGREES THAT ALL SUCH CLAIMS IN RESPECT OF SUCH DISPUTE SHALL BE HEARD AND DETERMINED IN SUCH COURTS. THE PARTNERSHIP AND THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH DISPUTE ARISING OUT OF THIS AGREEMENT BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. THE PARTNERSHIP AND EACH PARTY AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT.

11.9. Dispute Resolution.

faith to settle any Dispute by mutual discussions within thirty (30) days after the date that one party gives notice to the other parties of such a Dispute. If the Dispute is not resolved within such thirty (30) day period, any party may refer the Dispute to arbitration and the Dispute shall be finally settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect (the “Rules”), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall be held in Dallas, Texas, and presided over by three arbitrators. The party giving notice of the Dispute shall appoint one arbitrator, and the other parties to the Dispute shall appoint one arbitrator. The two appointed arbitrators shall together appoint a third arbitrator. If the appointed arbitrators fail to appoint the third arbitrator within thirty (30) days after their appointment, then the third arbitrator shall be selected in accordance with the Rules. The parties to such Dispute and the Partnership shall execute such engagement and indemnity agreements as the arbitrators shall require. Notwithstanding this agreement to arbitrate Disputes, any party to a Dispute may apply to a court sitting on Dallas, Texas, for temporary restraining orders, temporary injunctive relief or other interim measures pending arbitration. No court other than a court sitting in Dallas, Texas, shall have authority or jurisdiction to enter temporary restraining orders, temporary injunctive relief or other interim orders pending arbitration, and no party to a Dispute shall make any application for interim orders to any court other than a court sitting in Dallas, Texas. The arbitrators shall award costs, attorneys’ fees and expert witness fees to the prevailing party or parties. The arbitrators may not award indirect, consequential, special or punitive damages, and recovery of any such damages in any Dispute is hereby waived. The award rendered by the arbitrators shall be final and binding, subject only to grounds and procedures for vacating or modifying the award under the Federal Arbitration Act, 9 U.S.C. §§ 1 et. seq.

(c) This agreement to arbitrate shall be binding upon the successors, assignees and any trustee or receiver of any party.

11.10. Further Assurances. In connection with this Agreement and the transactions contemplated thereby, each Partner will execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and such transactions.

11.11. Waiver of Certain Rights. To the maximum extent permitted by applicable law, each Partner irrevocably waives any right it might have to maintain any action for dissolution of the Partnership, or to maintain any action for partition of the property of the Partnership.

11.12. Title to Partnership Property. All assets shall be deemed to be owned by the Partnership as an entity, and no Partner, individually, shall have any ownership of such property.

11.13. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signatories had signed the same document. All counterparts will be construed together and constitute the same instrument.

11.14. Electronic Transmissions. Each of the parties hereto agrees that (a) any consent or signed document transmitted by electronic transmission shall be treated in all manner and respects as an original written document, (b) any such consent or document shall be considered to have the same binding and legal effect as an original document and (c) at the request of any party hereto, any such consent or document shall be re-delivered or re-executed, as appropriate, by the relevant party or parties in its original form. Each of the parties further agrees that they will not raise the transmission of a consent or document by electronic transmission as a defense in any proceeding or action in which the validity of such consent or document is at issue and hereby forever waives such defense. For purposes of this Agreement, the term “electronic transmission” means any form of communication not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

11.15. Aggregation of Interests. For the purposes of determining any rights, benefits or entitlements under this Agreement that are based, in whole or in part, on ownership of Units, a Partner shall be entitled to aggregate all Interests owned by such Partner and its Affiliates in determining the aggregate ownership of Units hereunder.

11.16. BBTS Adjustment Amount.

(a) The Partners acknowledge that BBTS funded certain capital expenditures and other obligations of TexStar and its Subsidiaries prior to the Effective Date and BBTS shall be entitled to the payment from the Partnership of the BBTS Adjustment Amount plus a 7% per annum return thereon (compounded quarterly) (together, the “BBTS Adjustment Amount Payout”) prior to any distribution by the Partnership to the other Limited Partners pursuant to Section 5.1.

(b) The BBTS Adjustment Amount and BBTS Adjustment Amount Payout are not intended to be treated as equity or equity related payments of the Partnership for U.S. federal and applicable state, local and foreign income tax purposes. Additionally, for U.S. federal (and applicable state, local and foreign) income tax purposes, to the extent permitted by applicable law:

(i) The Partnership and each Partner agree to treat any BBTS Adjustment Amount Payout as being on account of Qualified Reimbursement Amounts (as defined in the Contribution Agreement) as a reimbursement of capital expenditures by the Partnership to BBTS.

(ii) The Partnership and each Partner agree to treat payments of the BBTS Adjustment Amount Payout (other than those described in Section 11.16(b)(i)

above), up to the amount of cash and current accounts receivable included in the calculation of “Current Assets” (as defined in the Contribution Agreement) in the calculation of the amount of the Preferred Equity (as described in the Contribution Agreement), as a return by the Partnership of assets inadvertently contributed by BBTS to the Partnership. As such, the amounts described in this Section 11.16(b)(ii) shall not be treated as consideration paid by the Partnership to BBTS in exchange for its contribution of assets pursuant to the Contribution Agreement.

(c) None of the Partnership or any Partner shall take a position for U.S. federal (or applicable state, local or foreign) income tax purposes in contravention of this Section 11.16 absent a “final determination” (as described in Code Section 1313).

(d) The Partnership shall not issue any additional Equity Interests (or other rights entitling the holder thereof to any distributions from the Partnership) prior to payment to BBTS of the BBTS Adjustment Amount Payout except to the extent the proceeds received by the Partnership on account of such Equity Interest (or other rights) are sufficient, and are used by the Partnership, to pay to BBTS the BBTS Adjustment Amount Payout.

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned Partners have executed this Agreement effective as of the Effective Date.


GENERAL PARTNER:

SOUTHCROSS HOLDINGS GP LLC

By:		/s/ Phillip M. Mezey
Name:		Phillip M. Mezey
Title:		Chief Executive Officer


CLASS A LIMITED PARTNERS:

BBTS BORROWER LP

By:		BBTS Borrower GP LLC,
		Its general partner

By:		/s/ Phillip M. Mezey
Name:		Phillip M. Mezey
Title:		Co-Chief Executive Officer and Chief Operating Officer


SOUTHCROSS ENERGY LLC

By:		/s/ J. Michael Anderson
Name:		J. Michael Anderson
Title:		Senior Vice President and Chief Financial Officer

D-2

EX-99.7 5 d772644dex997.htm EX-7 EX-7

Exhibit 7

JOINT FILING AGREEMENT

We, the undersigned, hereby express our agreement that the attached Schedule 13D is, and any further amendments thereto signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. This agreement may be terminated with respect to the obligations to jointly file future amendments to such statement on Schedule 13D as to any of the undersigned upon such person giving written notice thereof to each of the other persons signatory hereto, at the principal office thereof.

Date: August 14, 2014


SOUTHCROSS ENERGY LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

CHARLESBANK CAPITAL PARTNERS, LLC, a Massachusetts limited liability company

By:		/s/ Tami Nason
		Tami Nason
		General Counsel and Chief Compliance Officer

SOUTHCROSS HOLDINGS GP LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS LP, a Delaware limited partnership

BY: SOUTHCROSS HOLDINGS GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS GUARANTOR GP LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer


SOUTHCROSS HOLDINGS GUARANTOR LP, a Delaware limited partnership

BY: SOUTHCROSS HOLDINGS GUARANTOR GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS BORROWER GP LLC, a Delaware limited liability company

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer

SOUTHCROSS HOLDINGS BORROWER LP, a Delaware limited partnership

BY: SOUTHCROSS HOLDINGS BORROWER GP LLC, Its General Partner

By:		/s/ David W. Biegler
		David W. Biegler
		Chairman and Chief Executive Officer