(8) Certain Provisions of the Partnership Agreement

(a) Issuance of ENLK Common Units

In November 2014, ENLK entered into an Equity Distribution Agreement (the “2014 EDA”) with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Jefferies LLC, Raymond James & Associates, Inc. and RBC Capital Markets, LLC to sell up to $350.0 million in aggregate gross sales of ENLK’s common units from time to time through an “at the market” equity offering program.

For the year ended December 31, 2016, ENLK sold an aggregate of 10.0 million common units, generating proceeds of $167.5 million (net of $1.7 million of commissions).

In August 2017, ENLK ceased trading under the 2014 EDA and entered into the 2017 EDA.

For the year ended December 31, 2017, ENLK sold an aggregate of 6.2 million common units under the 2014 EDA and the 2017 EDA, generating proceeds of $106.9 million (net of $1.1 million of commissions and $0.2 million of registration fees). ENLK used the net proceeds for general partnership purposes.

For the year ended December 31, 2018, ENLK sold an aggregate of 2.6 million common units under the 2017 EDA, generating proceeds of $46.1 million (net of $0.5 million of commissions paid to the Sales Agents). We used the net proceeds for general partnership purposes. In connection with the announcement of the Merger, ENLK suspended solicitation and offers under the 2017 EDA. Following the consummation of the Merger, the 2017 EDA was terminated.

(b) ENLK Class C Common Units

As of December 31, 2015, there were 7,075,433 ENLK Class C Common Units issued and outstanding. The Class C Common Units were substantially similar in all respects to ENLK’s common units, except that distributions paid on the Class C Common Units could be paid in cash or in additional Class C Common Units issued in kind, as determined by the General Partner in its sole discretion. Distributions on the Class C Common Units for the three months ended December 31, 2015 and March 31, 2016 were paid-in-kind through the issuance of 209,044 and 233,107 Class C Common Units on February 11, 2016 and May 12, 2016, respectively. All of the outstanding Class C Common Units were converted into common units on a one-for-one basis on May 13, 2016.

In January 2016, ENLK issued an aggregate of 50,000,000 Series B Preferred Units representing ENLK limited partner interests to Enfield in a private placement for a cash purchase price of $15.00 per Series B Preferred Unit (the “Issue Price”), resulting in net proceeds of approximately $724.1 million after fees and deductions. Proceeds from the private placement were used to partially fund ENLK’s portion of the purchase price payable in connection with the acquisition of our EOGP assets. Affiliates of Goldman Sachs and affiliates of TPG own interests in the general partner of Enfield. Prior to the close of the Merger on January 25, 2019, the Series B Preferred Units were convertible into ENLK common units on a one-for-one basis, subject to certain adjustments, (a) in full, at ENLK’s option, if the volume weighted average price of a common unit over the 30-trading day period ending two trading days prior to the conversion date (the “Conversion VWAP”) was greater than 150% of the Issue Price or (b) in full or in part, at Enfield’s option. In addition, upon certain events involving a change of control of the General Partner or the Managing Member, all of the Series B Preferred Units would have automatically converted into a number of ENLK common units equal to the greater of (i) the number of ENLK common units into which the Series B Preferred Units would then convert and (ii) the number of Series B Preferred Units to be converted multiplied by an amount equal to (x) 140% of the Issue Price divided by (y) the Conversion VWAP.

The Series B Preferred Units will continue to be issued and outstanding following the Merger, except that certain terms of the Series B Preferred Units have been modified pursuant to an amended partnership agreement of ENLK. Subsequent to the modification, Series B Preferred Units will be exchangeable for ENLC common units in an amount equal to the number of outstanding Series B Preferred Units outstanding multiplied by the exchange ratio of 1.15, subject to certain adjustments (the “Series B Exchange Ratio”). The exchange is subject to ENLK’s option to pay cash instead of issuing additional ENLC common units, and can occur in whole or in part at Enfield’s option at any time, or in whole at our option, provided the daily volume-weighted average closing price of the ENLC common units (the “ENLC VWAP”) exchange for the 30 trading days ending two trading days prior to the exchange is greater than 150% of the Issue Price divided by the conversion ratio of 1.15.

For each of the calendar quarters between March 31, 2016 through June 30, 2017, Enfield received a quarterly distribution equal to an annual rate of 8.5% on the Issue Price payable in-kind in the form of additional Series B Preferred Units. Beginning with the quarter ended September 30, 2017, Series B Preferred Unit distributions are payable quarterly in cash at an amount equal to $0.28125 per Series B Preferred Unit (the “Cash Distribution Component”) plus an in-kind distribution equal to the greater of (A) 0.0025 Series B Preferred Units per Series B Preferred Unit and (B) an amount equal to (i) the excess, if any, of the distribution that would have been payable had the Series B Preferred Units converted into common units over the Cash Distribution Component, divided by (ii) the issue price of $15.00.

Beginning with the quarter ending March 31, 2019, the holder of the Series B Preferred Units will be entitled to quarterly cash distributions and distributions in-kind of additional Series B Preferred Units as described below. The quarterly in-kind distribution (the “Series B PIK Distribution”) will equal the greater of (A) 0.0025 Series B Preferred Units per Series B Preferred Unit and (B) the number of Series B Preferred Units equal to the quotient of (x) the excess (if any) of (1) the distribution that would have been payable by ENLC had the Series B Preferred Units been exchanged for ENLC common units but applying a one-to-one exchange ratio (subject to certain adjustments) instead of the Series B Exchange Ratio, over (2) the Cash Distribution Component, divided by (y) the Issue Price. The quarterly cash distribution will consist of the Cash Distribution Component plus an amount in cash that will be determined based on a comparison of the value (applying the Issue Price) of (i) the Series B PIK Distribution and (ii) the Series B Preferred Units that would have been distributed in the Series B PIK Distribution if such calculation applied the Series B Exchange Ratio instead of the one-to-one ratio (subject to certain adjustments).

A summary of the distribution activity relating to the Series B Preferred Units for the years ended December 31, 2018, 2017, and 2016 is provided below:



Declaration period	Distribution paid as additional Series B Preferred Units	Cash distribution (in millions)		Date paid/payable
2018
First Quarter of 2018	416,657	$	16.2	May 14, 2018
Second Quarter of 2018	419,678	$	16.3	August 13, 2018
Third Quarter of 2018	422,720	$	16.4	November 13, 2018
Fourth Quarter of 2018	425,785	$	16.5	February 13, 2019

2017
First Quarter of 2017	1,154,147	$	—	May 12, 2017
Second Quarter of 2017	1,178,672	$	—	August 11, 2017
Third Quarter of 2017	410,681	$	15.9	November 13, 2017
Fourth Quarter of 2017	413,658	$	16.1	February 13, 2018

2016
First Quarter of 2016	992,445	$	—	May 12, 2016
Second Quarter of 2016	1,083,589	$	—	August 11, 2016
Third Quarter of 2016	1,106,616	$	—	November 10, 2016
Fourth Quarter of 2016	1,130,131	$	—	February 13, 2017

(d) ENLK Series C Preferred Units

In September 2017, ENLK issued 400,000 Series C Preferred Units representing ENLK limited partner interests at a price to the public of $1,000 per unit. ENLK used the net proceeds of $394.0 million for capital expenditures, general partnership purposes, and to repay borrowings under the ENLK Credit Facility. The Series C Preferred Units represent perpetual equity interests in ENLK and, unlike ENLK indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As to the payment of distributions and amounts payable on a liquidation event, the Series C Preferred Units rank senior to ENLK’s common units and to each other class of limited partner interests or other equity securities established after the issue date of the Series C Preferred Units that is not expressly made senior or on parity with the Series C Preferred Units. The Series C Preferred Units rank junior to the Series B Preferred Units with respect to the payment of distributions, and junior to the Series B Preferred Units and all current and future indebtedness with respect to amounts payable upon a liquidation event.

At any time on or after December 15, 2022, ENLK may redeem, at ENLK’s option, in whole or in part, the Series C Preferred Units at a redemption price in cash equal to $1,000 per Series C Preferred Unit plus an amount equal to all accumulated and unpaid distributions, whether or not declared. ENLK may undertake multiple partial redemptions. In addition, at any time within 120 days after the conclusion of any review or appeal process instituted by ENLK following certain rating agency events, ENLK may redeem, at ENLK’s option, the Series C Preferred Units in whole at a redemption price in cash per unit equal to $1,020 plus an amount equal to all accumulated and unpaid distributions, whether or not declared.

Distributions on the Series C Preferred Units accrue and are cumulative from the date of original issue and payable semi-annually in arrears on the 15th day of June and December of each year through and including December 15, 2022 and, thereafter, quarterly in arrears on the 15th day of March, June, September, and December of each year, in each case, if and when declared by the General Partner out of legally available funds for such purpose. The initial distribution rate for the Series C Preferred Units from and including the date of original issue to, but not including, December 15, 2022 is 6.0% per annum. On and after December 15, 2022, distributions on the Series C Preferred Units will accumulate for each distribution period at a percentage of the $1,000 liquidation preference per unit equal to an annual floating rate of the three-month LIBOR plus a spread of 4.11%. For the years ended December 31, 2018 and 2017, ENLK made distributions of $24.0 million and $5.6 million to holders of Series C Preferred Units, respectively.

Following the Merger, the Series C Preferred Units remained issued and outstanding with the terms set forth above.

(e) ENLK Common Unit Distributions

Prior to the Merger, unless restricted by the terms of the ENLK Credit Facility and/or the indentures governing ENLK’s senior unsecured notes, ENLK was required to make distributions of 100% of available cash, as defined in the partnership agreement, within 45 days following the end of each quarter. Distributions were made to the General Partner in accordance with its then current percentage interest with the remainder to the common unitholders, subject to the payment of incentive distributions as described below to the extent that certain target levels of cash distributions were achieved. The General Partner was not entitled to its incentive distributions with respect to the Class C Common Units issued in kind. In addition, the general partner was not entitled to its incentive distributions with respect to (i) distributions on the Series B Preferred Units until such units convert into common units or (ii) the Series C Preferred Units.

Prior to the Merger, the General Partner owned the general partner interest in ENLK and all incentive distribution rights in ENLK. The General Partner was entitled to receive incentive distributions if the amount ENLK distributed with respect to any quarter exceeded levels specified in its partnership agreement. Under the quarterly incentive distribution provisions, the General Partner was entitled to 13.0% of amounts ENLK distributed in excess of $0.25 per unit, 23.0% of the amounts ENLK distributed in excess of $0.3125 per unit, and 48.0% of amounts ENLK distributed in excess of $0.375 per unit. At the close of the Merger, The General Partner’s incentive distribution rights in ENLK were eliminated. See “Note 19—Subsequent Events” for more information regarding the Merger and related transactions.

A summary of ENLK’s distribution activity relating to the common units for the years ended December 31, 2018, 2017, and 2016 is provided below:



Declaration period	Distribution/unit		Date paid/payable
2018
First Quarter of 2018	$	0.390	May 14, 2018
Second Quarter of 2018	$	0.390	August 13, 2018
Third Quarter of 2018	$	0.390	November 13, 2018
Fourth Quarter of 2018	$	0.390	February 13, 2019

2017
First Quarter of 2017	$	0.390	May 12, 2017
Second Quarter of 2017	$	0.390	August 11, 2017
Third Quarter of 2017	$	0.390	November 13, 2017
Fourth Quarter of 2017	$	0.390	February 13, 2018

2016
First Quarter of 2016	$	0.390	May 12, 2016
Second Quarter of 2016	$	0.390	August 11, 2016
Third Quarter of 2016	$	0.390	November 11, 2016
Fourth Quarter of 2016	$	0.390	February 13, 2017

(f) Allocation of Partnership Income

Prior to the closing of the Merger and for the years ended December 31, 2018, 2017, and 2016, net income was allocated to the General Partner in an amount equal to its incentive distribution rights as described in section “(e) ENLK Common Unit Distributions” above. The General Partner’s share of net income consisted of incentive distribution rights to the extent earned, a deduction for unit-based compensation attributable to ENLC’s restricted units, and the percentage interest of ENLK’s net income (loss) adjusted for ENLC’s unit-based compensation specifically allocated to the General Partner. The net income (loss) allocated to the General Partner is as follows (in millions):



	Year Ended December 31,
	2018			2017			2016
Income allocation for incentive distributions	$	59.5		$	58.9		$	56.8
Unit-based compensation attributable to ENLC’s restricted units	(20.3		)	(21.0		)	(14.7		)
General partner share of net income (loss)	(0.6		)	0.4			(2.6		)
General partner interest in net income	$	38.6		$	38.3		$	39.5