UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (date of earliest event reported): January 31, 2014

 
AMERICAN MIDSTREAM PARTNERS, LP
(Exact name of registrant as specified in its charter)

 

Delaware	 	001-35257	 	27-0855785	
(State or other jurisdiction
of incorporation)	 	(Commission
File No.)	 	(IRS Employer
Identification No.)	

1614 15th Street, Suite 300
Denver, Colorado	 	 
80202	
(Address of principal executive offices)	 	(Zip Code)	
 
(720) 457-6060
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

o	Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))	

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

 
Item 1.01  Entry into a Material Definitive Agreement.
 
On January 31, 2014 in connection with the completion of the PVA Asset Acquisition described below, a subsidiary of American Midstream Partners, LP (the “Partnership”) entered into a Construction and Field Gathering Agreement (the “Construction and Field Gathering Agreement”) with a subsidiary of PVA, pursuant to which it is obligated, at its cost and expense, to construct, operate, and maintain additional gathering pipelines for connection to certain current and future PVA properties (excluding the PVA Assets) within an approximate 65,000 acre dedication area. While the Partnership cannot guarantee with any certainty the future costs associated with such construction, operation, and maintenance, it currently expects that the aggregate capital expenditures over the next five years associated with this expansion construction will be $60-70 million, including approximately $30 million to be incurred in 2014. The Partnership expects to initially fund these costs with borrowings under its credit facility. In exchange for the obligation to construct these gathering assets, Lavaca LLC will gather all of PVA’s operated, non-dedicated gas production within the approximate 65,000 acre dedication area for a period of 25 years from closing. Should the Partnership be unable to finance the long-term capital expenditures associated with this construction, the commencement of operation of the pipelines may be delayed, which would adversely affect the revenues received from PVA.  The foregoing description of the Construction and Field Gathering Agreement set forth herein is summary in nature and is qualified in its entirety by reference to the full text of the Construction and Field Gathering Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.  The Partnership intends to submit a Confidential Treatment Request to the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, requesting that it be permitted to omit certain portions of the Construction and Field Gathering Agreement.
 
Item 2.01 Completion of Acquisition or Disposition of Assets.
 
Completion of PVA Acquisition
 
On January 29, 2014, the Partnership completed the acquisition of HPIP Lavaca, LLC, a Delaware limited liability company (“Lavaca LLC”), for an aggregate purchase price of $1,000.  The seller of Lavaca LLC, ArcLight Energy Partners Fund V, L.P., is an affiliate of ArcLight Capital Partners, LLC, which is an affiliate of High Point Infrastructure Partners, LLC (“HPIP”), which is the majority owner of the Partnership’s General Partner.  The only asset of Lavaca LLC was a Purchase and Sale Agreement (the “PVA Asset Purchase Agreement”) to acquire certain natural gas gathering assets, gas lift assets and related real property interests from a subsidiary of Penn Virginia Corporation (NYSE: PVA) (“PVA”) and certain other parties, which was entered into by Lavaca LLC on December 13, 2013, for a purchase price of approximately $100 million, plus purchase price adjustments for certain capital costs and expenses incurred by PVA between October 1, 2013 and the closing date (the “PVA Asset Acquisition”).
 
On January 31, 2014, the Partnership completed the PVA Asset Acquisition pursuant to the PVA Asset Purchase Agreement and acquired approximately 120 miles of high- and low-pressure pipelines ranging from 4 to 8 inches in diameter with over 9,000 horsepower of leased compression, and associated facilities located in the Eagle Ford shale in Gonzales and Lavaca Counties, Texas.  The consideration for the PVA Asset Acquisition was financed with the net proceeds of the Partnership’s recent equity offering and the issuance of 1,168,225 Series B PIK Units (the “Series B PIK Units”) representing series B limited partnership interests in the Partnership.
 
The Series B PIK Units were issued to American Midstream GP, LLC (the “General Partner”), the Partnership’s general partner, on January 31, 2014 in a private placement in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder (the “Series B Issuance”).  The Series B PIK Units will convert into common units of the Partnership on a one-for-one basis on the second anniversary of the initial issuance of the Series B PIK Units.  The conflicts committee of the general partner’s Board of Directors approved the Series B Issuance and the transactions contemplated thereby.
 
Item 3.02 Unregistered Sales of Equity Securities.
 
Series B Issuance
 
The information regarding the Series B Issuance set forth in Item 2.01 is incorporated in its entirety herein by reference.  In addition and in connection with the Series B Issuance, on January 31, 2014, the Partnership, HPIP, and the general partner entered into the First Amendment to the Series B Purchase Agreement (the “Unit Purchase Amendment”), which provided for the general partner to be the purchaser of 100% of the Series B PIK Units.  The foregoing description of the Unit Purchase Amendment set forth herein is summary in nature and is qualified in its
 
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entirety by reference to the full text of the Unit Purchase Amendment, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
 
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
 
Amendment of Limited Partnership Agreement in Connection with Series B Issuance
 
Effective as of January 31, 2014, the Partnership entered into the Second Amendment (the “LP Amendment”) to the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP (“Fourth Amended and Restated Partnership Agreement”) to provide for the issuance of the Series B PIK Units described above.  The LP Amendment establishes the terms of the Series B PIK Units and provides that each Series B PIK Unit will have the right to share in distributions from the Partnership on a pro rata basis with holders of the Partnership’s Common Units. All or any portion of each distribution payable in respect of the Series B PIK Units (the “Series B PIK Unit Distribution”) may, at the Partnership’s election, be paid in additional Series B PIK Units, as further described in the LP Amendment. To the extent any portion of the Series B PIK Unit Distribution is paid in Series B PIK Units for any quarter, the distribution to the holders of incentive distribution rights shall be reduced by that portion of the distribution that is attributable to the payment of those Series B PIK Units, as further described in the LP Amendment. In addition, the LP Amendment increased to six (from three) the number of registrations that the Partnership shall be required to effect upon demand by the General Partner or any of its affiliates, subject to the terms and conditions contained in the Partnership’s Fourth Amended and Restated Agreement of Limited Partnership. The Series B PIK Units have the same voting rights as if they were outstanding Common Units and will be entitled to vote as a separate class on any matters that materially adversely affect the rights or preferences of the Series B PIK Units in relation to other classes of partnership interests or as required by law.
 
The description of the LP Amendment contained in this Item 5.03 is not complete and is qualified in its entirety by reference to the full text of the LP Amendment, which is filed as Exhibit 3.1 hereto and incorporated by reference herein.
 
Item 7.01 Regulation FD Disclosure.
 
On February 3, 2014, the Partnership issued a press release announcing the closing of the PVA Asset Acquisition described in Item 2.01 of this Current Report on Form 8-K. A copy of the press release is furnished as Exhibit 99.1 hereto. In accordance with General Instruction B.2 of Form 8-K, this press release is deemed to be “furnished” and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or Exhibit be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
 
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Item 8.01  Other Events.
 
Exhibit 99.2 hereto replaces in its entirety the section entitled “Our Cash Distribution Policy” that appears in the Partnership’s Registration Statement on Form S-3 (333-183818) as filed with the Securities and Exchange Commission on November 22, 2013, as previously amended by Exhibit 99.1 to the Form 8-K filed by the Partnership on January 22, 2014.
 
Exhibit 99.3 hereto replaces in its entirety the section entitled “The Partnership Agreement” that appears in the Partnership’s Registration Statement on Form S-3 (333-183818) as filed with the Securities and Exchange Commission on November 22, 2013.

Item 9.01	 	Financial Statements and Exhibits.	
 
(d) Exhibits.

Exhibit Number	 	Description	
 	 	 	
3.1	 	Amendment Number 2 to the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP, dated January 31, 2014	
10.1*	 	Construction and Field Gathering Agreement by and among HPIP Lacaca, LLC and Penn Virginia Oil & Gas, L.P. dated January 31, 2014	
10.2	 	First Amendment to Series B Purchase Agreement, dated January 31, 2014	
99.1	 	Press Release, dated February 3, 2014	
99.2	 	Cash Distribution Policy	
99.3	 	The Partnership Agreement	

*  Confidential Treatment has been requested with respect to portions of the exhibit. Such portions have been redacted and filed separately with the SEC.
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	AMERICAN MIDSTREAM PARTNERS, LP	
 	 	 	
 	By:	AMERICAN MIDSTREAM GP, LLC 
its General Partner	
 	 	 	
 	By:	/s/ Daniel C. Campbell	
 	Name:	Daniel C. Campbell	
 	Title:	Senior Vice President and Chief Financial Officer	
 
February 4, 2014
 
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EXHIBITS INDEX

Exhibit Number	 	Description	
 	 	 	
3.1	 	Amendment Number 2 to the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP, dated January 31, 2014	
10.1*	 	Construction and Field Gathering Agreement by and among HPIP Lacaca, LLC and Penn Virginia Oil & Gas, L.P. dated January 31, 2014	
10.2	 	First Amendment to Series B Purchase Agreement, dated January 31, 2014	
99.1	 	Press Release, dated February 3, 2014	
99.2	 	Cash Distribution Policy	
99.3	 	The Partnership Agreement	

*  Confidential Treatment has been requested with respect to portions of the exhibit. Such portions have been redacted and filed separately with the SEC.
 
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Exhibit 3.1
 
AMENDMENT NO. 2 TO
FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF
AMERICAN MIDSTREAM PARTNERS, LP
 
This Amendment No. 2 (this “ Amendment ”) to the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP (the “ Partnership ”), dated as of August 9, 2013, as amended by that certain Amendment No. 1 to the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP, adopted effective as of October 28, 2013 (together, the “ Partnership Agreement ”), is hereby adopted effective as of January 31, 2014 by American Midstream GP, LLC, a Delaware limited liability company (the “ General Partner ”), as general partner of the Partnership, pursuant to the authority granted to it in Section 5.6 and Section 13.1 of the Partnership Agreement.  Capitalized terms used but not defined herein have the meaning given such terms in the Partnership Agreement.
 
WHEREAS , Section 5.6(a)  of the Partnership Agreement provides that the Partnership may issue additional Partnership Interests for any partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the General Partner shall determine, all without the approval of any Limited Partners; and
 
WHEREAS , Section 13.1(d)(i)  of the Partnership Agreement provides that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect in any material respect the Limited Partners considered as a whole or any particular class of Partnership Interests as compared to other classes of Partnership Interests; and
 
WHEREAS , Section 13.1(g)  of the Partnership Agreement provides that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement in connection with a change that the General Partner determines to be necessary or appropriate in connection with the creation, authorization or issuance of any class or series of Partnership Interests and options, rights, warrants, appreciation rights, tracking and phantom interests or other economic interests in the Partnership relating to Partnership Interests pursuant to Section 5.6   of the Partnership Agreement; and
 
WHEREAS , Section 5.12(b)(v)(B)  of the Partnership Agreement provides that Partnership shall be able to amend Section 5.12 of the Partnership Agreement without the approval by the Record Holders of Outstanding Series A Preferred Units so long as the amendment does not adversely affect the holders of the Series A Preferred Units in any material respect and does not affect the holders of the Series A Preferred Units disproportionately in relation to the holders of Common Units, and that the Partnership may, without the consent or approval of the Record Holders of Outstanding Series A Preferred Units, create (by reclassification or otherwise) and issue Junior Interests (including by amending the provisions of any existing class of Partnership Interests to make such class of Partnership Interests a class of Junior Interests) in an unlimited amount; and

 
WHEREAS , the board of directors of the General Partner has determined that the standards specified in Section 13.1(d)(i) , Section 13.1(g)  and/or Section 5.12(b)(v)(A)  are satisfied with respect to the amendments to be made by this Amendment; and
 
WHEREAS , HPIP Lavaca, LLC, a Delaware limited liability company (“ Lavaca ”), as buyer, entered into that certain Purchase and Sale Agreement with Penn Virginia Oil & Gas, L.P., Ted Collins, Jr. and Plein Sud Holdings, LLC, as sellers, dated as of December 13, 2013 (the “ PV Purchase Agreement ”); and
 
WHEREAS , the Partnership acquired Lavaca pursuant to that certain Limited Liability Company Unit Purchase and Sale Agreement, dated as of January 22, 2014; and
 
WHEREAS , to fund the purchase under the PV Purchase Agreement by and through Lavaca, the Partnership intends to issue a certain number of Common Units and a certain number of Limited Partner Interests to be designated as Series B Units having the terms set forth herein; and
 
WHEREAS , the Partnership has entered into a Series B Unit Purchase Agreement, dated as of January 22, 2014, with the purchasers named therein (the “ Series B Unit Purchase Agreement ”), for the acquisition by such purchasers of Series B Units; and
 
WHEREAS , the General Partner deems it in the best interest of the Partnership to effect this Amendment in order to (i) specify the rights and obligations of the Partnership Interests designated as “Series B Units,” (ii) provide for the economic uniformity of the Series B Units and other Units that may be issued in connection with the Series B Units and (iii) provide for such other matters as are provided herein.
 
NOW THEREFORE , the General Partner does hereby amend the Partnership Agreement as follows:
 
A. Amendment . The Partnership Agreement is hereby amended as follows:
 
1.                                       Section 1.1 is hereby amended to add or restate, as applicable, the following definitions:
 
“ Common Unit ” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners, and having the rights and obligations specified with respect to Common Units in this Agreement.  The term “Common Unit” does not refer to, or include, any Incentive Distribution Rights, any Series A Preferred Unit prior to the conversion of such Series A Preferred Unit into a Common Unit pursuant to the terms thereof, or, except as otherwise provided in this Agreement, any Series B Unit prior to the conversion of such Series B Unit into a Common Unit pursuant to the terms thereof.
 
“ Initial Unit Price ” means (a) with respect to the Common Units, the IPO Price, (b) with respect to the Series B Units (including each Series B PIK Unit), the Series B Issue Price, or (c) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially issued by the Partnership, as determined by the General Partner, in each case

 
adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of Units.
 
“ Investor ” means, collectively, HPIP and each of its Affiliates from time to time that is the registered holder of any Series A Preferred Units or any Series B Units.
 
“ Junior Interests ” means any class or series of Partnership Interests that, with respect to distributions on such Partnership Interests and distributions upon liquidation of the Partnership, ranks junior to the Series A Preferred Units, including but not limited to Common Units and Series B Units.
 
“ Limited Partner Interest ” means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by Common Units, Series A Preferred Units, Series B Units, Incentive Distribution Rights or other Partnership Interests or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement; provided , however , that when the term “Limited Partner Interest” is used herein in the context of any vote or other approval, including Article XIII and Article XIV , such term shall not, solely for such purpose, include any Incentive Distribution Right except as may be required by law or contemplated by Section 11.2 .
 
“ Outstanding ” means, with respect to Partnership Interests, all Partnership Interests that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination; provided, however , that if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of the Outstanding Partnership Interests of any class then Outstanding, all Partnership Interests owned by such Person or Group shall not be voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Units so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv)  (such Units shall not, however, be treated as a separate class of Partnership Interests for purposes of this Agreement or the Delaware Act); provided, further , that the foregoing limitation shall not apply to (i) any Person or Group who acquired 20% or more of the Outstanding Partnership Interests of any class then Outstanding directly from the General Partner or its Affiliates (other than the Partnership), (ii) any Person or Group who acquired 20% or more of the Outstanding Partnership Interests of any class then Outstanding directly or indirectly from a Person or Group described in clause (i) provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) any Person or Group who acquired 20% or more of any Partnership Interests issued by the Partnership with the prior approval of the Board of Directors. For the avoidance of doubt, (1) the Board of Directors has approved the issuance of the Series A Preferred Units to the Investor pursuant to the Contribution Agreement in accordance with clause (iii) of the immediately preceding sentence, and any Series A PIK Preferred Units and Conversion Units issued to the Investor shall be deemed to be approved by the Board of Directors in accordance with clause (iii) of the immediately preceding sentence and the foregoing limitations of the immediately preceding sentence shall not apply to the Investor with respect to their ownership (beneficially or of record) of the Series A Preferred Units, Series A PIK Preferred Units and

 
Conversion Units, and (2) the Board of Directors has approved the issuance of the Series B Units to the Investor pursuant to the Series B Unit Purchase Agreement in accordance with clause (iii) of the immediately preceding sentence, and any Series B Units, Series B PIK Units and Series B Conversion Units issued to the Investor shall be deemed to be approved by the Board of Directors in accordance with clause (iii) of the immediately preceding sentence and the foregoing limitations of the immediately preceding sentence shall not apply to the Investor with respect to their ownership (beneficially or of record) of the Series B Units, Series B PIK Units and Series B Conversion Units.
 
“ Percentage Interest ” means as of any date of determination (a) as to the General Partner Interest (calculated based upon a number of Notional General Partner Units), and as to any Unitholder with respect to Units, the product obtained by multiplying (i) 100% less the percentage applicable to clause (b) below by (ii) the quotient obtained by dividing (A) the number of Notional General Partner Units held by the General Partner or the number of Units held by such Unitholder (or, in the case of Series A Preferred Units, the number of Conversion Units issuable upon conversion of such Series A Preferred Units held by such Unitholder or Assignee if such Series A Preferred Units were then converted in accordance with Section 5.12(b)(viii) , or, in the case of Series B Units, the number of Series B Conversion Units issuable upon conversion of such Series B Units held by such Unitholder or Assignee if such Series B Units were then converted in accordance with Section 5.13(c) ), as the case may be, by (B) the total number of Outstanding Units and Notional General Partner Units, and (b) as to the holders of other Partnership Interests issued by the Partnership in accordance with Section 5.6 , the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right shall at all times be zero.
 
“ Post-Initial Issuance Series B Unit ” means a Series B Unit that is a Series B PIK Unit or a Series B Conversion Unit.
 
“ Record Date ” means the date established by the General Partner or otherwise in accordance with this Agreement for determining (i) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners, (ii) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer, (iii) the identity of the Record Holders of Series A Preferred Units entitled to convert such Units, or (iv) the identity of the Record Holders of Series B Units entitled to convert such Units.
 
“ Remaining Net Positive Adjustments ” means as of the end of any taxable period, (i) with respect to the Unitholders holding Common Units, Series A Preferred Units, or Series B Units, the excess of (A) the Net Positive Adjustments of the Unitholders holding Common Units, Series A Preferred Units, or Series B Units as of the end of such period over (B) the sum of those Partners’ Share of Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as holder of the Notional General Partner Units), the excess of (A) the Net Positive Adjustments of the General Partner as of the end of such period over (B) the sum of the General Partner’s Share of Additional Book Basis Derivative Items with respect to the Notional General Partner Units for each prior taxable period, and (iii) with respect to the holders of Incentive Distribution Rights, the excess of (A) the Net Positive Adjustments of the

 
holders of Incentive Distribution Rights as of the end of such period over (B) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.
 
“ Series B Conversion Date ” means the date that is the second anniversary of the initial issuance of Series B Units pursuant to the Series B Unit Purchase Agreement.
 
“ Series B Conversion Unit ” means a Common Unit issued upon conversion of a Series B Unit pursuant to Section 5.13(c) .
 
“ Series B Issue Price ” means the price at which a Series B Unit is purchased from the Partnership.  Each Series B Unit issued pursuant to the Series B Unit Purchase Agreement shall be treated as having a Series B Issue Price equal to the price per Common Unit, net of underwriting discounts and commissions, received by the Partnership in connection with an underwritten public offering to be completed on or around January 29, 2014. Each Series B PIK Unit shall have a Series B Issue Price equal to the Series B PIK Distribution Amount attributed to such Series B PIK Unit.
 
“ Series B PIK Distribution Amount ” has the meaning assigned to such term in Section 5.13(d)(i) .
 
“ Series B PIK Payment Date ” has the meaning assigned to such term in Section 5.13(d)(iii) .
 
“ Series B PIK Unit ” means a Series B Unit issued by the Partnership in lieu of cash distributions in respect of the Series B Units pursuant to Section 5.13(d) .
 
“ Series B Unit ” means a Partnership Interest issued pursuant to Section 5.13 and representing a Limited Partner’s interest in the Partnership having the rights and obligations specified with respect to the Series B Units in this Agreement.
 
“ Series B Unit Distribution ” has the meaning assigned to such term in Section 5.13(d)(i) .
 
“ Series B Unit Purchase Agreement ” means the Unit Purchase Agreement providing for the issuance of Series B Units, dated as of January 22, 2014, with the purchasers named therein.
 
“ Share of Additional Book Basis Derivative Items ” means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period, (i) with respect to the Unitholders holding Common Units, Series A Preferred Units or Series B Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the General Partner (as holder of the Notional General Partner Units), the amount that bears the same ratio to such Additional Book Basis Derivative Items as the General Partner’s Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with respect to the Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive Distribution

 
Rights as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.
 
“ Unit ” means a Partnership Interest that is designated as a “Unit” and shall include Common Units, Series A Preferred Units, and Series B Units but shall not include (i) Notional General Partner Units (or the General Partner Interest represented thereby) or (ii) Incentive Distribution Rights.
 
“ Unit Majority ” means at least a majority of the Outstanding Common Units and Series B Units, voting together as a single class.
 
2.                                       Effective as of February 10, 2014, the last sentence of Section 2.3 is hereby amended and restated as follows:
 
The address of the General Partner shall be 1400 16 th  Street, Suite 310, Denver, Colorado 80202, or such other place as the General Partner may from time to time designate by notice to the Limited Partners.
 
3.                                       Section 4.1 is hereby amended and restated as follows:
 
Notwithstanding anything otherwise to the contrary herein, unless the General Partner shall determine otherwise in respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates; provided, however , with respect to the issuance of any Series A Preferred Units or Series B Units, the Partnership shall issue such Certificates in accordance with Section 5.12(b)(vii)  and Section 5.13(f) , respectively.  Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the Board, President or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the General Partner. No Certificate for a class of Partnership Interests shall be valid for any purpose until it has been countersigned by the Transfer Agent for such class of Partnership Interests; provided, however , that if the General Partner elects to cause the Partnership to issue Partnership Interests of such class in global form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests have been duly registered in accordance with the directions of the Partnership.
 
4.                                       Section 4.8(e)  is hereby amended and restated as follows:
 
(e) Any transfer of a Conversion Unit and any transfer of a Series B Conversion Unit shall be subject to the restrictions imposed by Section 6.10 .
 
5.                                       Section 5.5(a)  is hereby amended and restated as follows:
 
(a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner) owning a Partnership Interest a separate Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv).  Such Capital Account shall be increased by (i) the amount of all Capital

 
Contributions made to the Partnership with respect to such Partnership Interest and (ii) all items of Partnership income and gain (including income and gain exempt from tax) computed in accordance with Section 5.5(b)  and allocated with respect to such Partnership Interest pursuant to Section 6.1 , and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property (other than Series A PIK Preferred Units and Series B PIK Units) made with respect to such Partnership Interest and (y) all items of Partnership deduction and loss computed in accordance with Section 5.5(b)  and allocated with respect to such Partnership Interest pursuant to Section 6.1 .  For the avoidance of doubt, the Series A Preferred Units and Series B Units will be treated as a partnership interest in the Partnership that is “convertible equity” within the meaning of Treasury Regulation Section 1.721-2(g)(3), and, therefore, each holder of a Series A Preferred Unit or Series B Unit will be treated as a partner in the Partnership, other than with respect to the conversion feature of the Series A Preferred Unit or Series B Unit.  The initial Capital Account balance in respect of each Series A Preferred Unit issued on the Series A Issuance Date shall be the Series A Issue Price, and the initial Capital Account balance in respect of each Series A PIK Preferred Unit shall be zero.  After an issuance of Series A PIK Preferred Units pursuant to Section 5.12(b)(ii) , the Capital Accounts of all Series A Preferred Units that are Outstanding prior to such issuance shall be divided equally among all Series A Preferred Units that are Outstanding after such issuance.  The Capital Account balance of each holder of Series A Preferred Units in respect of its Series A Preferred Units shall not be increased or decreased as a result of the accrual and accumulation of an unpaid distribution pursuant to Section 5.12(b)(ii)(A)  or Section 5.12(b)(ii)(B)  in respect of such Series A Preferred Units except as otherwise provided in this Agreement.  The initial Capital Account balance in respect of each Series B Unit (including each Series B PIK Unit) shall be the Series B Issue Price.
 
6.                                       Section 5.5(c)  is hereby amended to add a new Section 5.5(c)(iv)  as follows:
 
(iv) Immediately prior to the transfer of a Post-Initial Issuance Series B Unit by a holder thereof (other than a transfer to an Affiliate unless the General Partner elects to have this Section 5.5(c)(iv)  apply), the aggregate Capital Account maintained for such Person with respect to its Post-Initial Issuance Series B Units will (A) first, be allocated to the Post-Initial Issuance Series B Units to be transferred in an amount equal to the product of (x) the number of such Post-Initial Issuance Series B Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit that is not a Post-Initial Issuance Series B Unit, and (B) second, any remaining positive balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any Post-Initial Issuance Series B Units and if the remaining balance would be negative, items of Partnership income and gain shall be specially allocated to such transferor Partner in an amount and manner sufficient to eliminate the deficit in its Capital Account as quickly as possible.  Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the retained Post-Initial Issuance Series B Units, if any, will have a balance equal to the amount allocated under clause (B) above, and the transferee’s Capital Account established with respect to the transferred Post-Initial Issuance Series B Units will have a balance equal to the amount allocated under clause (A) above.

 
7.                                       Section 5.5(d)(i)  is hereby amended and restated as follows:
 
(i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on (A) an issuance of additional Partnership Interests for cash or other property (other than an issuance of Series A PIK Preferred Units or Series B PIK Units), (B) the issuance of additional Partnership Interests for the provision of services, (C) the issuance by the Partnership of a “noncompensatory option” within the meaning of Treasury Regulations Sections 1.721-2(f) and 1.761-3(b)(2) which is not treated as a partnership interest pursuant to Treasury Regulations Section 1.761-3(a) (other than an issuance of Series A PIK Preferred Units pursuant to Section 5.12(b)(ii)  or an issuance of Series B PIK Units pursuant to Section 5.13(d) ), or (D) the conversion of a General Partner’s Combined Interest to Common Units pursuant to Section 11.3(b) , the Capital Account of each Partner and the Carrying Value of each Partnership property shall be adjusted immediately prior to such event to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property for an amount equal to its fair market value immediately prior to such event and had been allocated pursuant to Section 6.1(c)  and Section 6.1(d)  in the same manner as any item of gain or loss actually recognized following an event giving rise to the dissolution of the Partnership would have been allocated; provided, however , that in the event of an issuance of Partnership Interests for a de minimis amount of cash or Contributed Property, or in the event of an issuance of a de minimis amount of Partnership Interests as consideration for the provision of services, the General Partner may determine that such adjustments are unnecessary for the proper administration of the Partnership.  The General Partner shall adjust such Carrying Values in respect of the contributions that are made on the Closing Date.  In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets immediately prior to such event shall be determined by the General Partner using such reasonable method of valuation as it may adopt (taking into account Section 7701(g) of the Code); provided, however , that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time and must make such adjustments to such valuation as required by Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2).  The General Partner shall allocate such aggregate value among the assets of the Partnership in such manner as it determines in its discretion to be reasonable.
 
8.                                       Section 5.5(d)(iii)  is hereby amended and restated as follows:
 
(iii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(s), immediately after the conversion of a Series A Preferred Unit or Series B Unit into Common Units in accordance with Section 5.12(b)(viii)  or Section 5.13(c) , as applicable, the Capital Account of each Partner and the Carrying Value of each Partnership property shall be adjusted to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property for an amount equal to its fair market value immediately after such conversion and (A) first, all Unrealized Gain (if the Capital Account of each such Conversion Unit or Series B Conversion Unit, as applicable, is less than the Per Unit Capital Amount for a then Outstanding IPO Common Unit) or Unrealized Loss (if the Capital Account of each such Conversion Unit or Series B Conversion Unit, as applicable, is greater than the Per Unit Capital Amount for a then Outstanding IPO Common Unit) had been allocated Pro Rata to each Partner holding Conversion Units or Series B Conversion Units received upon such conversion until the Capital Account of

 
each such Conversion Unit or Series B Conversion Unit, as applicable, is equal to the Per Unit Capital Amount for a then Outstanding IPO Common Unit; and (B) second, any remaining Unrealized Gain or Unrealized Loss had been allocated to the Partners at such time pursuant to Section 6.1(c)  and Section 6.1(d) .  In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets immediately after the conversion of a Series A Preferred Unit or Series B Unit shall be determined by the General Partner using such reasonable method of valuation as it may adopt (taking into account Section 7701(g) of the Code); provided, however , that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time and must make such adjustments to such valuation as required by Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2).  The General Partner shall allocate such aggregate value among the assets of the Partnership in such manner as it determines in its discretion to be reasonable.  If, after making the allocations of Unrealized Gain and Unrealized Loss as set forth above in this Section 5.5(d)(iii) , the Capital Account of each Partner with respect to each Conversion Unit or Series B Conversion Unit, as applicable, received upon such conversion of the Series A Preferred Unit or Series B Unit, as applicable, is less than the Per Unit Capital Amount for a then Outstanding IPO Common Unit, then Capital Account balances shall be reallocated between the Partners holding Common Units (other than Conversion Units and Series B Conversion Units) and Partners holding Conversion Units or Series B Conversion Units, as applicable, so as to cause the Capital Account of each Partner holding a Conversion Unit or Series B Conversion Unit, as applicable, to equal, on a per Unit basis with respect to each such Conversion Unit or Series B Conversion Unit, the Per Unit Capital Amount for a then Outstanding IPO Common Unit.
 
9.                                       Section 5.9(a)  is hereby amended and restated as follows:
 
(a) Subject to Section 5.9(d) , Section 6.6 and Section 6.9 (dealing with adjustments of distribution levels), the Partnership may make a Pro Rata distribution of Partnership Interests to all Record Holders or may effect a subdivision or combination of Partnership Interests so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per-Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units (including the number of Common Units into which Series A Preferred Units or Series B Units may convert) are proportionately adjusted.
 
10.                                Section 5.9 is hereby amended to add a new Section 5.9(f)  as follows:
 
(f) For the avoidance of doubt, upon any Pro Rata distribution of Partnership Interests to all Record Holders of Common Units or any subdivision or combination (or reclassification into a greater or smaller number) of Common Units, the Partnership will proportionately adjust the number of Series B Units as follows: (i) if the Partnership issues Partnership Interests as a distribution on its Common Units or subdivides the Common Units (or reclassifies them into a greater number of Common Units), then the Series B Units shall be subdivided into a number of Series B Units equal to the result of multiplying the number of Series B Units by a fraction, (A) the numerator of which shall be the sum of the number of Common Units outstanding immediately prior to such distribution or subdivision plus the total number of Partnership Interests constituting such distribution or newly created by such subdivision, and (B) the

 
denominator of which shall be the number of Common Units outstanding immediately prior to such distribution or subdivision, and (ii) if the Partnership combines the Common Units (or reclassifies them into a smaller number of Common Units), then the Series B Units shall be combined into a number of Series B Units equal to the result of multiplying the number of Series B Units by a fraction, (A) the numerator of which shall be the sum of the number of Common Units outstanding immediately following such combination, and (B) the denominator of which shall be the number of Common Units outstanding immediately prior to such combination.
 
11.                                Section 5.12(b)(v)(A)  is hereby amended and restated as follows:
 
(A) Except as provided in Section 5.12(b)(v)(B) below , the Outstanding Series A Preferred Units shall have voting rights that are identical to the voting rights of the Common Units and shall vote with the Common Units as a single class, so that each Outstanding Series A Preferred Unit will be entitled to one vote for each Common Unit into which such Series A Preferred Unit is then convertible on each matter with respect to which each Common Unit is entitled to vote. Each reference in this Agreement to a vote of Record Holders of Common Units shall be deemed to be a reference to the holders of Common Units, Series B Units and Series A Preferred Units on an “as if” converted basis, and the definition of “ Unit Majority ” shall correspondingly be construed to mean at least a majority of the Common Units, the Series B Units and the Series A Preferred Units, on an “as if” converted basis, voting together as a single class during any period in which any Series A Preferred Units are Outstanding.
 
12.                                Article V is hereby amended to add a new Section 5.13 as follows:
 
Section 5.13 Establishment of Series B Units .
 
(a)  General.  The Partnership hereby designates and creates a series of Units to be designated as “ Series B Units ” and consisting of a total of 1,168,225 Series B Units, plus any additional Series B Units issued in kind as a distribution pursuant to Section 5.13(d) , having the same rights, preferences and privileges, and subject to the same duties and obligations, as the Common Units, except as set forth in this Section 5.13 .
 
(b)  Rights on Liquidation of the Partnership .  The holders of the Series B Units shall have rights upon dissolution and liquidation of the Partnership, including the right to share in any liquidating distributions pursuant to Section 12.4 , in accordance with Article XII of this Agreement.
 
(c)  Conversion of Series B Units .
 
(i) Immediately before the close of business on the Series B Conversion Date, the Series B Units shall automatically convert into Common Units on a one-for-one basis.
 
(ii) Upon conversion, the rights of a holder of converted Series B Units as holder of Series B Units shall cease with respect to such converted Series B Units, including any rights under this Agreement with respect to holders of Series B Units, and such Person shall continue to be a Limited Partner and have the rights of a holder of Common Units under this Agreement.  Upon the Series B Conversion Date, all Series B Units shall be

 
deemed to be transferred to, and cancelled by, the Partnership in exchange for the Common Units into which the Series B Units converted.
 
(iii) The Partnership shall pay any documentary, stamp or similar issue or transfer taxes or duties relating to the issuance or delivery of Common Units upon conversion of the Series B Units.  However, the holder shall pay any tax or duty which may be payable relating to any transfer involving the issuance or delivery of Common Units in a name other than the holder’s name.  The Transfer Agent may refuse to deliver the Certificate representing Common Units being issued in a name other than the holder’s name until the Transfer Agent receives a sum sufficient to pay any tax or duties which will be due because the shares are to be issued in a name other than the holder’s name.  Nothing herein shall preclude any tax withholding required by law or regulation.
 
(iv)                               (A) The Partnership shall keep free from preemptive rights a sufficient number of Common Units to permit the conversion of all outstanding Series B Units into Common Units to the extent provided in, and in accordance with, this Section 5.13(c) .
 
(B) All Common Units delivered upon conversion of the Series B Units shall be newly issued, shall be duly authorized and validly issued, and shall be free from preemptive rights and free of any lien or adverse claim.
 
(C) The Partnership shall comply with all applicable securities laws regulating the offer and delivery of any Common Units upon conversion of Series B Units and, if the Common Units are then listed or quoted on the New York Stock Exchange, or any other National Securities Exchange or other market, shall list or cause to have quoted and keep listed and quoted the Common Units issuable upon conversion of the Series B Units to the extent permitted or required by the rules of such exchange or market.
 
(D) Notwithstanding anything herein to the contrary, nothing herein shall give to any holder of Series B Units any rights as a creditor in respect of its right to conversion.
 
(d)  Distributions and Allocations .
 
(i) Each Series B Unit shall have the right to share in distributions and allocations pursuant to Section 6.1 , Section 6.4 and Section 6.5 on a Pro Rata basis with the other Common Units.  For the avoidance of doubt, each reference in this Agreement to an allocation or distribution to Unitholders holding Common Units shall be deemed to be a reference to the Unitholders holding Common Units or Series B Units.  All or any portion of each distribution payable in respect of the Series B Units (the “ Series B Unit Distribution ”) may, at the election of the Partnership, be paid in Series B PIK Units (any amount of such Series B Unit Distributions so paid in Series B PIK Units, the “ Series B PIK Distribution Amount ”).  The number of Series B PIK Units to be issued in connection with a Series B PIK Distribution Amount shall be the quotient of (A) the Series B PIK Distribution Amount divided by (B) the Series B Issue Price of the Series B Units originally issued pursuant to the Series B Unit Purchase Agreement; provided that

 
instead of issuing any fractional Series B PIK Units, the Partnership shall round the number of Series B PIK Units issued down to the next lower whole Series B PIK Unit and pay cash in lieu of such fractional units, or at the Partnership’s option, the Partnership may round the number of Series B PIK Units issued up to the next higher whole Series B PIK Unit.
 
(ii) Notwithstanding anything in this Section 5.13(d)  to the contrary, with respect to Series B Units that are converted into Common Units, the holder thereof shall not be entitled to a Series B Unit Distribution and a Common Unit distribution with respect to the same period, but shall be entitled only to the distribution to be paid based upon the class of Units held as of the close of business on the applicable Record Date.
 
(iii) When any Series B PIK Units are payable to a holder of Series B Units pursuant to this Section 5.13 , the Partnership shall issue the Series B PIK Units to such holder no later than the date the corresponding distributions are made pursuant to Section 6.4(b)  or Section 6.5 , as applicable (the date of issuance of such Series B PIK Units, the “ Series B PIK Payment Date ”).  On the Series B PIK Payment Date, the Partnership shall issue to such holder of Series B Units a Certificate or Certificates for the number of Series B PIK Units to which such holder of Series B Units shall be entitled.
 
(iv) For purposes of maintaining Capital Accounts, if the Partnership distributes one or more Series B PIK Units to a holder of Series B Units, (A) the Partnership shall be treated as distributing cash to such holder of Series B Units equal to the Series B PIK Distribution Amount, and (B) the holder of Series B Units shall be deemed to have recontributed to the Partnership in exchange for such newly issued Series B PIK Units an amount of cash equal to the Series B PIK Distribution Amount less the amount of any cash distributed by the Partnership in lieu of fractional Series B PIK Units, as applicable.
 
(v) If the Partnership distributes one or more Series B PIK Units to a holder of Series B Units in accordance with the foregoing and Section 6.4(b)(iii)(C) , the distribution to the holders of the Incentive Distribution Rights pursuant to Section 6.4(b)(iii)(B)  that would have been made pursuant to Section 6.4(b)(iii)(B)  in the absence of this Section5.13(d)(v) shall be reduced by the product of (A) the distribution to the holders of the Incentive Distribution Rights that would have been made pursuant to Section 6.4(b)(iii)(B)  in the absence of this Section 5.13(d)(v)  multiplied by (B) the quotient of (x) the Percentage Interests of the Series B Units divided by (y) the Percentage Interests of the Common Units and Series B Units.
 
(e)  Voting.  The Series B Units will have such voting rights pursuant to the Agreement as such Series B Units would have if they were Common Units that were then outstanding and shall vote together with the Common Units as a single class, except that the Series B Units shall be entitled to vote as a separate class on any matter on which Unitholders are entitled to vote that adversely affects the rights or preferences of the Series B Units in relation to other classes of Partnership Interests in any material respect or as required by law.  The approval of a majority of the Series B Units shall be required to approve any matter for which the holders of the Series B Units are entitled to vote as a separate class.  For the avoidance of doubt, each reference in this Agreement to the vote of, approval by, or notice to be given to, Unitholders holding Common

 
Units shall be deemed to be a reference to the vote of, approval by, or notice to be given to, Unitholders of Common Units and Series B Units and each reference to the vote of, approval by, or notice to be given to, a majority of the Outstanding Common Units shall be deemed to be a reference to the vote of, approval by, or notice to be given to, a majority of the Common Units and Series B Units, both as Outstanding at such time.
 
(f)  Certificates .
 
(i) The Series B Units shall be evidenced by Certificates in such form as the General Partner may approve and, subject to the satisfaction of any applicable legal, regulatory and contractual requirements, may be assigned or transferred in a manner identical to the assignment and transfer of other Units; unless and until the General Partner determines to assign the responsibility to another Person, the Partnership will act as the registrar and transfer agent for the Series B Units.  The Certificates evidencing Series B Units shall be separately identified and shall not bear the same CUSIP number as the Certificates evidencing Common Units or Series A Preferred Units.
 
(ii) The certificate(s) representing the Series B Units shall be imprinted with a legend in substantially the following form:
 
“NEITHER THE OFFER NOR SALE OF THESE SECURITIES HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE PARTNERSHIP HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT.  THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE FOURTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP, DATED AS OF AUGUST 9, 2013, AS AMENDED, A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICES.”
 
13.                                Section 6.1(d)(x)(B)  is hereby amended and restated as follows:
 
(B) With respect to an event triggering an adjustment to the Carrying Value of Partnership property pursuant to Section 5.5(d)  during any taxable period of the Partnership ending upon, or after, the issuance of IDR Reset Common Units pursuant to Section 5.11 or of Post-Initial Issuance Series B Units, any Unrealized Gains and Unrealized Losses shall be allocated among the Partners in a manner that to the nearest extent possible results in the Capital Accounts maintained with respect to all IDR Reset Common Units and Post-Initial Issuance Series B Units equaling the product of (i) the Aggregate Quantity of IDR Reset Common Units and the total Post-Initial Issuance Series B Units Outstanding and (ii) the Per Unit Capital Amount for an IPO Common Unit that is Outstanding.

 
14.                                Section 6.1(d)(x)  is hereby amended to add a new Section 6.1(d)(x)(E)  as follows:
 
(E) At the election of the General Partner, after application of Section 5.5(d)(iii) , with respect to any taxable period ending upon, or after, the conversion of the Series B Units into Common Units, all or a portion of the remaining items of Partnership gross income or gain for such taxable period shall be allocated to each Partner holding Series B Conversion Units in the proportion of the number of Series B Conversion Units held by such Partner to the total number of Series B Conversion Units then outstanding, until each such Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such Series B Conversion Units to an amount that, after taking into account the other allocations of income, gain, loss and deduction to be made with respect to such taxable period, will equal to the product of (i) the number of Series B Conversion Units held by such Partner and (ii) the Per Unit Capital Amount for a Common Unit that is not a Post-Initial Issuance Series B Unit.  The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Series B Conversion Units and the Capital Accounts underlying Common Units that are not Series B Conversion Units.
 
15.                                Section 6.10 is hereby amended and restated as follows:
 
6.10                         Special Provisions Relating to Series A Preferred Unitholders and Series B Unitholders .
 
(a) Subject to transfer restrictions in Section 4.8 of this Agreement, a Unitholder holding a Conversion Unit shall provide notice to the Partnership of any Transfer of the Conversion Unit by the earlier of (i) thirty (30) days following such Transfer and (ii) the last Business Day of the calendar year during which such transfer occurred, unless (x) the transfer is to an Affiliate of such Unitholder or (y) by virtue of the application of Section 5.5(d)(iii) , the Partnership has previously determined, based on the advice of counsel, that the Conversion Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics of an IPO Common Unit.  In connection with the condition imposed by this Section 6.10 , the Partnership shall take whatever steps are required to provide economic uniformity to the Conversion Unit in preparation for a Transfer of such Unit; provided, however , that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units or Series B Units (for this purpose the allocations of income, gain, loss and deductions, and the making of any guaranteed payments or any reallocation of Capital Account balances among the Partners in accordance with Section 5.5(d)(iii)  hereof and Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(4) with respect to Series A Preferred Units or Conversion Units will be deemed not to have a material adverse effect on the Unitholders holding Common Units or Series B Units).
 
(b) Subject to transfer restrictions in Section 4.8 of this Agreement, a Unitholder holding a Series B Conversion Unit shall provide notice to the Partnership of any Transfer of the Series B Conversion Unit by the earlier of (i) thirty (30) days following such Transfer and (ii) the last Business Day of the calendar year during which such Transfer occurred, unless (x) the Transfer is to an Affiliate of such Unitholder or (y) by virtue of the application of Section 5.5(d)(iii)  and Section 6.1(d)(x) , the Partnership has previously determined, based on the advice of counsel, that the Series B Conversion Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics of an IPO Common Unit.  In connection with the condition

 
imposed by this Section 6.10 , the Partnership shall take whatever steps are required to provide economic uniformity to the Series B Conversion Unit in preparation for a Transfer of such Unit, including those provided under Section 5.5(c)(iv) ; provided, however , that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units or Series A Preferred Units (for this purpose the allocations of income, gain, loss and deductions, and the making of any guaranteed payments or any reallocation of Capital Account balances among the Partners in accordance with Section 5.5(d)(iii)  hereof and Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(4) with respect to Series B Units or Series B Conversion Units will be deemed not to have a material adverse effect on the Unitholders holding Common Units or Series A Preferred Units).
 
(c) Notwithstanding anything to the contrary set forth in this Agreement, the holders of the Series A Preferred Units (a) shall (i) possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to Article III and Article VII and (ii) have a Capital Account as a Partner pursuant to Section 5.5 and all other provisions related thereto and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, except as provided in Section 5.12 or (ii) be entitled to any distributions other than as provided in Section 5.12 and Article VI .  Notwithstanding anything to the contrary set forth in this Agreement, the holders of the Series B Units (a) shall (i) possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to Article III and Article VII and (ii) have a Capital Account as a Partner pursuant to Section 5.5 and all other provisions related thereto and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, except as provided in Section 5.13 or (ii) be entitled to any distributions other than as provided in Section 5.13 , Article VI and Article XII .
 
16.                                The first proviso of Section 7.12(a)  is hereby amended and restated as follows:
 
provided, however , that the Partnership shall not be required to effect more than six registrations pursuant to this Section 7.12(a) ;
 
B. Agreement in Effect . Except as hereby amended, the Partnership Agreement shall remain unchanged and unmodified and in full force and effect.
 
C. Applicable Law . This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to principles of conflicts of laws.
 
D. Severability . Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal.

 
IN WITNESS WHEREOF , the undersigned have executed this Amendment as of the effective date written above.

 	GENERAL PARTNER:	
 	AMERICAN MIDSTREAM GP, LLC	

 	By:	/s/ William Mathews	
 	 	 	
 	Name:	William Mathews	
 	 	 	
 	Title:	Vice President, General Counsel & Secretary	

Exhibit 10.1
 
Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information marked “[***]” in this Exhibit has been filed with the Securities and Exchange Commission together with such request for confidential treatment.
 
Execution Copy

 	

CONSTRUCTION AND FIELD GATHERING AGREEMENT
 
by and between
 
HPIP LAVACA, LLC
 
(“Gatherer”)
 
and
 
PENN VIRGINIA OIL & GAS, L.P.
 
(“Shipper”)
 
Dated January 31, 2014

 	

 
TABLE OF CONTENTS

 	 	Page	
 	 	 	
ARTICLE I	DEFINITIONS	1	
ARTICLE II	DEDICATION AND COMMITMENT	7	
ARTICLE III	CONSTRUCTION AND OWNERSHIP OF THE GATHERING SYSTEM; CONSTRUCTION SCHEDULE	8	
ARTICLE IV	QUANTITY, NOMINATION AND IMBALANCE PROCEDURES	10	
ARTICLE V	GAS PROCESSING RIGHTS	11	
ARTICLE VI	CONTROL OF GAS AND PRESSURE	11	
ARTICLE VII	MEASUREMENT AND TESTING	12	
ARTICLE VIII	QUALITY	12	
ARTICLE IX	FEES	12	
ARTICLE X	TERM	13	
ARTICLE XI	STATEMENTS AND PAYMENTS	13	
ARTICLE XII	REGULATION	14	
ARTICLE XIII	TAXES AND ROYALTIES	14	
ARTICLE XIV	REPRESENTATIONS AND WARRANTIES	14	
ARTICLE XV	EASEMENTS	15	
ARTICLE XVI	INDEMNITY	16	
ARTICLE XVII	NOTICES AND STATEMENTS	17	
ARTICLE XVIII	FORCE MAJEURE	18	
ARTICLE XIX	CONFIDENTIAL INFORMATION	18	
ARTICLE XX	SALE OF GATHERING SYSTEM	19	
ARTICLE XXI	MISCELLANEOUS	19	

EXHIBITS	 	
 	 	
EXHIBIT A	DEDICATION AREA	
EXHIBIT B	DELIVERY POINTS	
EXHIBIT C	CONNECTION POINTS	
EXHIBIT D	NOMINATION PROCEDURES	
EXHIBIT E	MEASUREMENT AND TESTING	
EXHIBIT F	REQUIRED INSURANCE	

 
CONSTRUCTION AND FIELD GATHERING AGREEMENT
 
THIS CONSTRUCTION AND FIELD GATHERING AGREEMENT (this “ Agreement ”) is made and entered into this 31st day of January, 2014 (the “ Effective Date ”) by and between HPIP Lavaca, LLC, a Delaware limited liability company (“ Gatherer ”), and Penn Virginia Oil & Gas, L.P., a Texas limited partnership (“ Shipper ”).  Gatherer and Shipper may hereinafter be referred to singularly as a “ Party ” and, together, as the “ Parties .”
 
W I T N E S S E T H:
 
WHEREAS, Gatherer and Shipper are contemporaneously herewith entering into that certain Purchase and Sale Agreement whereby Shipper has agreed to sell to Gatherer, and Gatherer has agreed to purchase from Shipper, certain of Shipper’s field gathering assets located in Gonzales and Lavaca Counties, Texas;
 
WHEREAS, Shipper and ETC Texas Pipeline, Ltd. (“ ETC ”) are parties to certain agreements whereby ETC has agreed to provide Shipper certain gathering and processing services;
 
WHEREAS, Gatherer desires to construct, own and operate certain gas gathering lines to gather the natural gas of Shipper within the Dedication Area (as defined in Article I) and to deliver such natural gas to the Delivery Points (as defined in Article I) or redeliver such natural gas to Shipper for use in Shipper’s Gas Lift Operations (as defined in Article I); and
 
WHEREAS, Shipper desires to have its natural gas within the Dedication Area gathered by Gatherer and delivered to the Delivery Points or redelivered to Shipper for use in Shipper’s Gas Lift Operations;
 
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions herein contained, and intending to be legally bound hereby, the Parties, for themselves and for their successors and assigns, do hereby mutually covenant and agree as follows:
 
ARTICLE I
DEFINITIONS
 
For the purposes of this Agreement, the following terms are defined as follows:
 
“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person.  For purposes of this definition, “ control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person.
 
“ AMID ” has the meaning set forth in Article XX.
 
“ Applicable Law ” means, with respect to any Person, all laws, statutes, codes, acts, treaties, ordinances, orders, judgments, writs, decrees, injunctions, rules, regulations, governmental approvals, licenses and permits, directives and requirements of all Governmental Authorities, including all official interpretations thereof by any such Governmental Authorities, as in effect at any time or from time to time and, in each case, applicable to or binding upon such Person and, in the case of Gatherer, Gatherer’s ownership, use and operation of the Gathering System.
 
“ BTU ” means the amount of energy required to raise the temperature of one pound of pure water

 
one degree Fahrenheit (1 ° F) from fifty-nine degrees Fahrenheit (59 ° F) to sixty degrees Fahrenheit (60 ° F).
 
“ Change in Law ” means any change to any Applicable Law in effect on the Effective Date.
 
“ Claim ” means any demand, claim, action, suit, legal proceeding (whether at law or in equity) or arbitration.
 
“ Completion Date ” has the meaning given such term in Section 3.5.
 
“ Confidential Information ” means (i) the terms and conditions of this Agreement, (ii) the terms and conditions of Shipper’s gathering and processing agreements with ETC and/or its Affiliates and (iii) all information and data (including all copies thereof) that is furnished or submitted by any Party or its Affiliates, whether oral, written or electronic, to the other Party or its Affiliates in connection with the operation of the Gathering System or the services rendered by Gatherer hereunder, including customer, pricing and nomination information and the terms and conditions of any contracts to which such furnishing Party is a party.  Notwithstanding the foregoing, the term “Confidential Information” shall not include any information that a claiming Party proves:
 
(a)           is in the public domain at the time of its disclosure, other than as a result of a breach of this Agreement;
 
(b)           was in the possession of any Party or any of its Affiliates prior to being furnished such information; or
 
(c)           has been independently acquired or developed by a Party or any of its Affiliates without breaching this Agreement.
 
“ Connection Notice ” has the meaning given such term in Section 3.3(d).
 
“ Connection Points ” means (a) each interconnection point identified on Exhibit C attached hereto and (b) each additional interconnection point installed pursuant to Article III.
 
“ Construction Notice ” has the meaning given such term in Section 3.3(a).
 
“ Construction Plan ” has the meaning given such term in Section 3.2.
 
“ Day ” means a period of twenty-four (24) consecutive hours beginning at 9:00 a.m., Central Time, on each calendar day and ending at 9:00 a.m., Central Time, on the next succeeding calendar day or such other time period that any market and/or pipeline downstream of the Gathering System uses as the definition of “Day” for its operations if such time period is inconsistent with the preceding time period.
 
“ Dedication Area ” means the Initial Dedication Area and the New Lines Dedication Area.
 
“ Delivery Failure ” has the meaning given such term in Section 3.5.
 
“ Delivery Points ” means those delivery points identified on Exhibit B attached hereto or such other point(s) of interconnection as may be mutually agreed by Gatherer and Shipper.
 
“ Drip ” means liquids, including water and liquid hydrocarbons, whether or not of commercial value, which are separated from Gas in the Gathering System as a result of standard gathering system operations, including the compression of gas and pigging of pipelines.
 
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“ [***] ” means [***].
 
“ [***] ” means [***].
 
“ Easements ” has the meaning given such term in Section 3.8.
 
“ Effective Date ” has the meaning given such term in the introductory paragraph hereto.
 
“ Emissions ” means any gaseous, liquid, solid or other substance emitted by the Gathering System, including carbon dioxide (“CO 2 ”), sulfur dioxide (“SO 2 ”), nitrogen oxides (“NO x ”), mercury (“Hg”), volatile organic compounds (“VOC”) and volatile organic material (“VOM”).
 
“ ETC ” has the meaning given such term in the Recitals hereto.
 
“ Excluded Wells ” means any wells located in the New Lines Dedication Area which are connected to the Poly Line prior to the Operating Date or which have been drilled and completed prior to the Operating Date.
 
“ Expected Production Date ” has the meaning given such term in Section 3.3(a).
 
“ Fees ” means the fees payable to Gatherer hereunder as described in Article IX.
 
“ Force Majeure ” means any circumstance beyond the reasonable control of the Person experiencing such inability to perform, whether of the kind enumerated herein or not, including acts of God, strikes, lockouts or other industrial disturbances, curtailments or shutdowns, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, storms, floods, washouts, arrests and restraints of governments and people, civil disturbances, fires, explosions, breakage or accidents to machinery or lines of pipe, modification or maintenance of machinery or lines of pipe, freezing of lines of pipe, inability to obtain at reasonable cost servitudes, right-of-way grants, permits, governmental approvals or licenses and inability to obtain at reasonable cost materials or supplies for constructing or maintaining facilities, and which by the exercise of due diligence such Person is unable to prevent or overcome; provided, however , that “Force Majeure” shall not include any circumstance beyond the reasonable control of such Person where the circumstance is a direct result of the willful misconduct of such Person.
 
“ Gas ” means gas in its natural state, and all elements and compounds and mixtures thereof, as produced from oil or gas wells, whether from the same strata from which oil is produced, or from other strata, as well as gas vaporized from oil after production.
 
“ Gas Lift Operations ” means the artificial lift technique of raising oil out of a well through the injection of Gas in the annulus of the well.
 
“ Gas Lift Point ” means the outlet flange of each gas lift meter located at a Connection Point.
 
“ Gatherer ” has the meaning given such term in the introductory paragraph hereto.
 
“ Gatherer Indemnitees ” has the meaning given such term in Section 16.1.
 
“ Gathering L&U ” means the total Lost Gas and Shrinkage on the Gathering System during each Month.  Shipper’s proportionate share of Gathering L&U shall be stated in MMBtus and shall be equal to (x) Shipper’s proportionate share of Lost Gas plus (y) Shipper’s proportionate share of Shrinkage.
 
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“ Gathering System ” means the Gathering System Segments collectively.
 
“ Gathering System Segment ” means the Gas gathering pipelines and other related facilities and equipment located in the Dedication Area necessary to gather and transport Gas from a Receipt Point to any existing portion of the Gathering System and to redeliver Gas to Shipper at the Gas Lift Point associated with such Receipt Point.  For purposes of clarity, (i) “Gathering System Segment” shall not include the Poly Line and (ii) “Gathering System Segment” shall not include the New Gathering Lines until the Operating Date.
 
“ Governmental Authority ” means any government, court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States or any state, county, city, tribal or other political subdivision or similar governing entity, and including any governmental, quasi-governmental or non-governmental body administering, regulating or having general oversight over Gas, electricity, power or other markets.
 
“ Gross Heating Value ” means the number of BTUs produced by the combustion, at a constant pressure, of the amount of the Gas which would occupy a volume of one (1) cubic foot at a temperature of sixty degrees (60 o ) Fahrenheit, under a pressure of fourteen and sixty-five hundredths (14.65) psia, with air of the same temperature and pressure as the Gas, when the products of combustion are cooled to the initial temperature of the Gas and air and when the water formed by combustion is condensed to the liquid state.
 
“ Initial Dedication Area ” means that area located in portions of Gonzales, Lavaca and Fayette Counties, Texas as depicted on map attached hereto as Exhibit A.
 
“ Initial Production Date ” means the date of first production of Gas from a well pad connected to an additional Connection Point described in a Construction Notice.
 
“ Interests ” means all interests that Shipper (or any of its Affiliates) now or hereinafter owns, controls, acquires or has the right to market (as such marketing rights may change from time to time) in natural gas reserves of all formations in, under or attributable to the Dedication Area, together with any pool, communitized area or unit, and all interests in any wells, whether now existing or drilled hereafter, on or completed within the Dedication Area, or within any such pool, communitized area or unit, even though such interests may be incorrectly or incompletely stated, all as the same shall be enlarged by the discharge of any burdens or by the removal of any charges or encumbrances to which any of same maybe subject as of the Effective Date, and any and all replacements, renewals and extensions or amendments of any of the same; provided, however , that “Interests” shall not include (a) any Excluded Wells or (b) any interest of Shipper or any of its Affiliates that must be offered to a working interest partner pursuant to any applicable agreement with such partner in effect on the Effective Date.
 
“ Losses ” means any and all judgments, losses, liabilities, amounts paid in settlement, damages, fines, penalties, deficiencies, costs and expenses (including pre- and post-judgment interest, court costs, reasonable fees of attorneys, accountants and other experts or other reasonable expenses related to any Claim).
 
“ Lost Gas ” means the decrease in Gross Heating Value (expressed in MMBtus) which results from lost and unaccounted for Gas on the Gathering System.  Shipper’s proportionate share of Lost Gas shall be stated in MMBtus and shall be determined in accordance with Gatherer’s standard allocation procedures on a proportional basis; provided, however, that, Shipper’s average proportionate share of Lost Gas for each 12 Month period ending on an anniversary of the Effective Date (an “ Annual Period ”) shall not exceed three and one-half percent (3.5%) of the Gas tendered by Shipper at the Receipt Points during
 
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such 12 Month period; provided , further , that Gatherer shall use commercially reasonable efforts to minimize Lost Gas.
 
Lost Gas shall be calculated as an amount equal to the sum of all System Receipts minus the sum of all System Deliveries stated in MMBtus.  System Receipts shall consist of all Gas delivered to at all receipt points (including the Receipt Points) on the Gathering System.  System Deliveries shall consist of all Gas delivered to all delivery points on the Gathering System (including the Delivery Points), all Gas delivered to producers connected to the Gathering System (including Shipper) to support Gas Lift Operations, Gas flared on the Gathering System, fuel used in the operation of the Gathering System and Drip collected on the Gathering System.  The percentage of Lost Gas shall be calculated as the sum of all System Receipts minus all System Deliveries divided by the sum of all System Receipts.
 
Each Month, Gatherer shall report to Shipper the total Lost Gas on the Gathering System and Shipper’s proportionate share of Lost Gas.  At the end of each Annual Period, if Shipper’s average proportionate share of Lost Gas for such Annual Period exceeds three and one-half (3.5%), then Gatherer shall pay Shipper an amount equal to the amount of Lost Gas for such Annual Period in excess of 3.5% multiplied by the average of the index prices as reported in Inside FERC’s Gas Market Report first issue published during each of the Months in such Annual Period, under the heading “Prices of Spot Gas Delivered to Pipelines (per MMBTU) using the Houston Ship Channel Index.”
 
“ Mcf ” means one thousand (1,000) cubic feet of Gas measured at a base temperature of sixty degrees (60 o ) Fahrenheit and at a base pressure of fourteen and sixty-five hundredths (14.65) psia.
 
“ Minimum Fees ” has the meaning given such term in Section 9.2.
 
“ MMBtu ” means one million (1,000,000) BTUs.
 
“ Month ” means the period commencing at 9:00 a.m., Central Time, on the first day of a calendar month and ending at 9:00 a.m., Central Time, on the first day of the next succeeding calendar month or such other time period that any market and/or pipeline downstream of the Gathering System uses as the definition of “Month” for its operations if such time period is inconsistent with the preceding time period.
 
“ New Gathering Lines ” means the new low pressure gathering pipelines and high pressure gathering pipelines and other related facilities and equipment, which will be constructed by Gatherer pursuant to Article III and which are necessary to gather and transport Gas from wells located in the New Lines Dedication Area to the Delivery Points.
 
“ New Lines Dedication Area ” means that area located in portions of Gonzales, Lavaca and Fayette Counties, Texas as depicted on the map attached hereto as Exhibit A.
 
“ NGLs ” means natural gas liquids.
 
“ Non-Operated Interest ” has the meaning given such term in Section 2.2(a).
 
“ Operating Date ” has the meaning given such term in Section 3.2.
 
“ Party ” and “ Parties ” have the meanings given such terms in the introductory paragraph hereto.
 
“ Permissible Interruptions ” has the meaning given such term in Section 4.5.
 
“ Person ” means any natural person, limited liability company, corporation, general or limited partnership, group, union, association, trust or Governmental Authority.
 
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“ Poly Line ” means the gathering pipelines and other related facilities and equipment which were acquired by Shipper in April 2013 and which currently gather and transport Gas from Shipper’s wells located in the New Lines Dedication Area.
 
“ Prime Rate ” means the per annum rate of interest announced as the “prime rate” for commercial loans posted from time to time by Wells Fargo Bank, N.A. or its successor or other bank on which the Parties agree.
 
“ Prior Dedicated Interest ” has the meaning given such term in Section 2.2(b).
 
“ Projected Volumes ” has the meaning given such term in Section 3.3(a).
 
“ Psia ” means pounds per square inch absolute.
 
“ Psig ” means pounds per square inch gauge.
 
“ Reasonable and Prudent Operator ” has the meaning set forth in Article XX.
 
“ Receipt Points ” means the inlet flange of each Gathering System receipt meter located at a Connection Point.
 
“ Required Date ” has the meaning given such term in Section 3.3(d).
 
“ Reservations ” has the meaning given such term in Section 6.5.
 
“ Shipper ” has the meaning given such term in the introductory paragraph hereto.
 
“ Shipper Indemnitees ” has the meaning given such term in Section 16.2.
 
“ [***] ” means [***].
 
“ Shipper’s Allocated Gas ” means Shipper’s proportionate share of the Gas measured at the Delivery Points during any Month, determined by multiplying the total MMBtus measured at all delivery points from the Gathering System, including the Delivery Points, during such Month by a fraction, the numerator of which is the total MMBtus measured at the Receipt Points during such Month and the denominator of which is the total MMBtus measured at all receipt points into the Gathering System, including the Receipt Points, during such Month.
 
“ Shipper’s Delivery Facilities ” has the meaning given such term in Section 6.1.
 
“ Shipper’s Gas ” means all Gas that Shipper owns and/or controls within the Dedication Area.
 
“ Shrinkage ” means the decrease in Gross Heating Value (expressed in MMBtus) which results from the collection or removal of Drip from Gas prior to the applicable Delivery Point.  Shipper’s proportionate share of Shrinkage shall be stated in MMBtus and shall be determined in accordance with Gatherer’s standard allocation procedures on a proportional basis.
 
“ Specifications ” has the meaning given such term in Section 8.2.
 
“ Tax ” means any tax or fee imposed by any Governmental Authority.
 
“ Term ” has the meaning given such term in Article X.
 
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“ Thermally Equivalent Sales Volume ” means a volume of Gas having a Gross Heating Value equal to (x) the Gross Heating Value of Shipper’s Gas received by Gatherer at the Receipt Points, minus (y) the Gross Heating Value of Shipper’s Gas redelivered to Shipper at the Gas Lift Points, minus (z) Shipper’s proportionate share of Gathering L&U.
 
ARTICLE II
DEDICATION AND COMMITMENT
 
2.1          Subject to Section 2.2, Shipper hereby dedicates and commits to the gathering and delivery services to be provided by Gatherer hereunder all of the Interests.
 
2.2          Shipper’s dedication and commitment of the Interests shall be subject to the Reservations as well as the following limitations:
 
(a)           Any Interest which is, at any time during the Term, operated by an operator other than Shipper (a “ Non-Operated Interest ”) shall not be subject to the dedication and commitment provided for in Section 2.1.
 
(b)           If Shipper acquires, after the Effective Date, any Interest which is subject to a prior dedication (a “ Prior Dedicated Interest ”), then such Prior Dedicated Interest shall not be subject to the dedication and commitment provided for in Section 2.1; provided, however, that, if any Prior Dedicated Interest is released from such prior dedication during the Term, then such Prior Dedicated Interest shall, effective upon such release, become subject to the dedication and commitment provided for in Section 2.1.
 
(c)           Any Interest which is located in the New Lines Dedication Area shall not be subject to the dedication and commitment provided for in Section 2.1 until the Operating Date.
 
2.3          Commencing on the Effective Date, Shipper shall deliver all of Shipper’s Gas produced from wells located in the Initial Dedication Area to Gatherer at the Receipt Points.
 
2.4          Commencing on the Effective Date, Gatherer shall provide gathering and compression services for and accept and receive the volume of Gas (measured in Mcfs) tendered by Shipper each Day at the Receipt Points and use commercially reasonable efforts to (a) deliver a Thermally Equivalent Sales Volume to the Delivery Points and (b) redeliver to Shipper at the Gas Lift Points a sufficient amount of Gas for Shipper to conduct its Gas Lift Operations.  Subject to Section 4.4, Shipper acknowledges that Shipper’s Gas may be commingled with other Gas streams and that, due to normal operational factors, Gatherer may not physically deliver Shipper’s Gas to the Delivery Points.  [***].
 
2.5          Commencing on the Initial Production Date, Shipper shall deliver all of Shipper’s Gas to Gatherer at the Receipt Points connected to the Connection Point described in the applicable Construction Notice.
 
2.6          Commencing on the Initial Production Date, Gatherer shall provide gathering and compression services for and accept and receive the volume of Gas (measured in Mcfs) tendered by Shipper each Day at the Receipt Points connected to the Connection Point described in the applicable Construction Notice and to use commercially reasonable efforts to (a) deliver a Thermally Equivalent Sales Volume to the Delivery Points and (b) redeliver to Shipper at the Gas Lift Points a sufficient amount of Gas for Shipper to conduct its Gas Lift Operations.
 
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ARTICLE III
CONSTRUCTION AND OWNERSHIP OF THE GATHERING SYSTEM;
CONSTRUCTION SCHEDULE
 
3.1                                Gatherer shall, at its sole cost and expense, design, acquire right-of-way for, obtain all permits from Governmental Authorities for, procure materials for, construct, operate and maintain the Gathering System, including the New Gathering Lines.
 
3.2                                By not later than January 15, 2014, Gatherer shall prepare and deliver to Shipper a detailed construction plan (a “ Construction Plan ”) for the completion of the New Gathering Lines and shall review the design for constructing the New Gathering Lines with Shipper.  Subject to Force Majeure, Gatherer shall complete construction of the New Gathering Lines so that they are operational by not later than May 31, 2014 (such completion date, the “ Operating Date ”).
 
3.3                                Gatherer shall expand or extend, add or remove components and operate the Gathering System as necessary to connect Shipper’s wells within the Dedication Area as follows:
 
(a)                                  If Shipper desires for Gatherer to install an additional Connection Point within the Dedication Area, Shipper shall notify Gatherer of such desire (a “ Construction Notice ”) at least 120 Days prior to the date on which the first well on the first well pad to be connected to such additional Connection Point is expected to be spud.  Each Construction Notice delivered by Shipper shall describe in reasonable detail (i) the expected date of first production of Gas from the first well pad to be connected to such additional Connection Point (the “ Expected Production Date ”), (ii) the desired location for such additional Connection Point, (iii) Shipper’s good faith projection of the daily volumes of Gas to be gathered during the initial two (2) years of production from the first well pad to be connected to such additional Connection Point (“ Projected Volumes ”), (iv) the pressure of Gas to be delivered at such additional Connection Point and (v) the anticipated compositional analysis of the Gas to be produced from the first well pad to be connected to such additional Connection Point.  Notwithstanding the foregoing, Gatherer shall not have any obligation to install an additional Connection Point if Shipper’s desired location for such additional Connection Point is within 640 acres of an existing Connection Point; provided, however, that notwithstanding the foregoing, unless otherwise consented to by Shipper in writing, Gatherer shall be required to install at least one (1) Connection Point within each of Shipper’s lease units.
 
(b)                                  Within 30 Days following the receipt of a Construction Notice, Gatherer shall prepare and deliver to Shipper a detailed Construction Plan for the installation of the additional Connection Point requested by such Construction Notice and the completion of the related Gathering System Segment (including the installation of any additional Receipt Points and Gas Lift Points) and shall review with Shipper the design for constructing and/or modifying and operating such Gathering System Segment.
 
(c)                                   Gatherer shall complete the construction and/or modification of the additional Connection Point described in such Construction Notice and the related Gathering System Segment (including the installation of any additional Receipt Points and Gas Lift Points) so that such Gathering System Segment is operational by not later than the Expected Production Date, subject to Force Majeure.
 
(d)                                  If Shipper desires for Gatherer to install an additional Receipt Point or Gas Lift Point at a Connection Point, which such additional Receipt Point or Gas Lift Point shall be installed immediately adjacent to the existing Receipt Points or Gas Lift Points at such Connection Point, Shipper shall notify Gatherer of such desire (a “ Connection Notice ”) at least
 
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30 Days prior to the anticipated date first production of Gas from the well to be connected to such additional Receipt Point or the anticipated date of commencement of Gas Lift Operations, as applicable (the “ Required Date ”).  Gatherer shall promptly install and connect the Receipts Points and Gas Lift Points requested in the applicable Connection Notice as promptly as practicable, but in any event, no later than the Required Date, subject to Force Majeure.
 
3.4                                Gatherer shall design and construct the New Gathering Lines and each Gathering System Segment substantially as described in the applicable Construction Plan, as agreed by Gatherer and Shipper.  All pipelines to be constructed pursuant to a Construction Plan (whether as part of the New Gathering Lines or as part of a Gathering System Segment) shall be constructed of steel and shall have a minimum of one (1) future side valve per 5000 feet of length in addition to the applicable Receipt Point connection.  The high pressure lines are to be built as 1440 psi working pressure lines (2160 psi tested) with full opening 600 series valves with RF flanges (1440 psi working pressure) on the future side valves.  The low pressure lines are to be built as 740 psi working pressure lines (1110 psi tested) with full opening 300 series valves with RF flanges (740 psi working pressure) on the future side valves.  Each Construction Plan shall be reasonably satisfactory to Shipper.  Gatherer shall construct the New Gathering Lines and each Gathering System Segment with due diligence at its sole cost and expense.  Gatherer shall either provide a written report or schedule a conference call with Shipper regarding construction progress on a weekly basis while the New Gathering Lines and each Gathering System Segment are being constructed.  Gatherer and Shipper shall work together to ensure completion of the New Gathering Lines and each Gathering System Segment in a timely manner.
 
3.5                                Gatherer shall notify Shipper of the date on which each Gathering System Segment constructed or modified by Gatherer hereunder has been completed and is operational (the “ Completion Date ”).  Except as otherwise set forth herein, by not later than 120 Days after the later of the Completion Date or the Expected Production Date, Shipper shall (a) commence and thereafter continue on an uninterrupted basis (except for interruptions caused by Force Majeure, Permissible Interruptions or Gatherer) delivery of Shipper’s Gas into such Gathering System Segment from the first well pad connected to the additional Connection Point described in the applicable Construction Notice and (b) commence to pay all Fees required to be paid hereunder in connection with the gathering of such Gas.  If Shipper does not commence such delivery within such 120-Day period, or thereafter ceases such delivery (in either case, a “ Delivery Failure ”), then Shipper shall, commencing on the first Day after such Delivery Failure, and continuing until Shipper has commenced or recommenced such delivery, pay all Fees that would be have been required to be paid hereunder if all of the Projected Volumes described in the applicable Construction Notice were, in fact, delivered.
 
3.6                                In the event that Shipper makes any payment of Fees on account of a Delivery Failure pursuant to Section 3.5, all Projected Volumes used in the calculation of such payment shall be deemed to have been actually delivered for the purpose of satisfying the Minimum Fees.
 
3.7                                Gatherer and Shipper shall collaborate to ensure that each Gathering System Segment is configured in such a manner as to have reasonable ingress and egress to access roads and wells within the Dedication Area.  With respect to any access roads constructed or to be constructed within the Dedication Area by a Party, such Party shall grant the other Party access to and use thereof.  Each Party shall be responsible, and shall reimburse the other Party, for any damage caused by such Party to the other Party’s roads within the Dedication Area, ordinary wear and tear excepted.
 
3.8                                In the event that Gatherer requires additional easements, rights-of-way, surface leases and/or easement rights under oil and gas leases (collectively, “ Easements ”), as applicable, in connection with the construction and/or modification of the New Gathering Lines or any Gathering System Segment, Gatherer shall include such requirements in the applicable Construction Plan delivered to Shipper.  Upon approval
 
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of the applicable Construction Plan, the Parties shall cooperate and Shipper shall use commercially reasonable efforts to promptly acquire the Easements described in such Construction Plan; provided , however , that Shipper shall not acquire any such Easement if, in Gatherer’s reasonable discretion, such acquisition is uneconomic; provided , further , that, if such acquisition is deemed uneconomic, the Parties shall cooperate to determine reasonable alternatives including, but not limited to, modifications to the Construction Plan or agreed upon cost sharing.  Upon such acquisition by Shipper, (a) Shipper shall promptly assign to Gatherer an interest in such Easements insofar as such Easements relate to the New Gathering Lines or Gathering System Segment described in the applicable Construction Plan and (b) Gatherer shall promptly pay to Shipper an amount equal to 100% of Shipper’s total costs and expenses incurred in connection with the acquisition of such Easements.
 
3.9                                Ownership and operation of the Gathering System shall be solely vested in Gatherer, and Shipper shall have no rights to the same.  Gatherer shall operate the Gathering System in accordance with the terms of this Agreement and in accordance with prevailing industry standards.
 
ARTICLE IV
QUANTITY, NOMINATION AND IMBALANCE PROCEDURES
 
4.1                                During the Term, Gatherer shall take and receive 100% of Shipper’s Gas produced from wells located in the Dedication Area (other than Excluded Wells), subject to the Reservations and the limitations described in Section 2.2.
 
4.2                                Shipper shall provide nominations to Gatherer with respect to the quantity of Shipper’s Gas to be delivered at each Delivery Point, which nominations shall be made in accordance with the nomination procedures described on Exhibit D attached hereto.
 
4.3                                Shipper shall provide to Gatherer, by not later than the 25 th  Day of each Month, a written estimate of the amount of Gas Shipper expects to use for its Gas Lift Operations during the following Month.  Shipper shall also notify Gatherer in writing, from time to time, of the date on which Shipper requires that Gatherer open any meter(s) necessary for Gas Lift Operations.  Promptly upon receipt of such notice, Gatherer shall open such meter(s) and such meter(s) shall remain open until Shipper notifies Gatherer in writing to close such meter(s).  Shipper will employ gas lift as the principal means of artificial lift for new wells completed between 2014 and 2018 in the Dedication Area.
 
4.4                                Gatherer shall not allow any third party Gas to be commingled with Shipper’s Gas on any Gathering System Segment unless such third party Gas has a Gross Heating Value of not less than 1,100.
 
4.5                                Notwithstanding anything herein to the contrary and without liability hereunder, Gatherer may interrupt or reduce its receipt, gathering and delivery of Shipper’s Gas for reasons of Force Majeure, maintenance, construction, other causes beyond Gatherer’s reasonable control that restrict or curtail capacity in the Gathering System or the failure or inability of the operator of the Delivery Points to receive Gas thereat (collectively, “ Permissible Interruptions ”).  Gatherer shall (a) provide to Shipper reasonably prompt notice of any such event, specifying the anticipated duration thereof, (b) proceed with due diligence to restore service as promptly as practical under the circumstances and (c) take so much of Shipper’s Gas as may be physically gathered on the Gathering System given such event as a first priority and in preference to all other volumes of Gas that Gatherer may otherwise receive into the Gathering System.
 
4.6                                Shipper shall be solely responsible for any and all Gas imbalances it may have with the pipelines downstream of the Gathering System and Gatherer shall have no liability whatsoever, financial or otherwise, for any such Gas imbalances.  Gatherer shall work in good faith in conjunction with Shipper in administering and resolving any imbalance statements that may be issued by the downstream pipelines.
 
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4.7                                The Parties shall meet by not later than two months after the Effective Date, and then at least every three months thereafter, to discuss Shipper’s Projected Volumes for the next six fiscal quarters.
 
ARTICLE V
GAS PROCESSING RIGHTS
 
Shipper retains the right to process Shipper’s Gas for NGLs and other valuable components.  Gatherer acknowledges that ETC currently has the right to process Shipper’s Gas for NGLs and other valuable components.  Accordingly, Gatherer shall not process or allow others to process the Gas delivered by Shipper hereunder between the Receipt Points and the Delivery Points and shall not otherwise remove NGLs or other valuable components from Shipper’s Gas delivered hereunder.
 
ARTICLE VI
CONTROL OF GAS AND PRESSURE
 
6.1                                Shipper, at its sole cost and expense, shall own, construct, equip, maintain and operate, or contract for, all lines and other necessary facilities to deliver Shipper’s Gas to Gatherer at the Receipt Points at the operating pressure prevailing from time to time at the Receipt Points (“ Shipper’s Delivery Facilities ”); provided, however, that Shipper shall not be required to deliver Shipper’s Gas at the Receipt Points at a pressure greater than 150 psig.
 
6.2                                To help keep the Gathering System free of Drip and solids that could impede the free flow of Gas, Gatherer may install Drip stations, slug catchers and other equipment on the Gathering System.  Gatherer shall be responsible for the disposal of the Drip and solids so collected. [***].
 
6.3                                As between Gatherer and Shipper, Shipper shall be in control and possession of the Gas (and all components thereof) gathered and delivered hereunder and responsible for any Losses incurred by any Person in connection with the Gas (a) until the Gas shall have been delivered to Gatherer at the Receipt Points hereunder and (b) after the Gas has been redelivered by Gatherer for the account of Shipper at the Delivery Points or the Gas Lift Points.
 
6.4                                As between Gatherer and Shipper, Gatherer shall be in control and possession of the Gas (and all components thereof) gathered and delivered hereunder and responsible for any Losses incurred by any Person in connection with the Gas (a) after the Gas shall have been delivered to Gatherer at the Receipt Points and (b) until the Gas is redelivered for the account of Shipper at the Delivery Points or the Gas Lift Points.
 
6.5                                Notwithstanding anything stated to the contrary herein, Shipper reserves the following rights (the Reservations ”):
 
(a)                                  The right to operate the Interests free from control by Gatherer and in such a manner as Shipper, in Shipper’s sole discretion, may deem advisable, including without limitation, the right, but never the obligation, to drill new wells, to repair and rework old wells, to renew or extend in whole or in part any leases and to abandon any well or surrender any lease in whole or in part.
 
(b)                                  The right to use Gas, as a reasonably prudent operator, prior to delivery to Gatherer for the following purposes:
 
(1)                                  For fuel used above ground in the development and operation of the Interests, including for compression, drilling, normal pumping, heater or treater operations and other miscellaneous uses incidental to the operation of the Interests;
 
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(2)                                  For delivery to the “lessors” of any leases that Gas which such lessors are entitled to receive in kind from the Interests under the terms of such leases; and
 
(3)                                  For fuel used in the operation of Shipper’s Delivery Facilities, including in connection with the use of refrigeration or JT plants.
 
(c)                                   The right to pool or unitize any leases (or any portion thereof) with other lands and leases.  In the event of pooling or unitization, this Agreement shall cover Shipper’s Interest in the pool or unit and the Gas attributable thereto.
 
ARTICLE VII
MEASUREMENT AND TESTING
 
For purposes of this Agreement, (a) measurement of all volumes of Gas and determination of the BTU content of all Gas shall be undertaken on an “as delivered basis” and (b) determination of the compositional analysis of the liquid hydrocarbon content of all Gas shall be undertaken in accordance with the procedures and requirements described on Exhibit E attached hereto.  Each Month, Gatherer shall provide Shipper with all Receipt Point, Gas Lift Point and Delivery Point Gas volumes in a computer file that may be uploaded by Shipper.  At least once every six (6) Months, Gatherer shall determine the compositional analysis of the liquid hydrocarbon content of all Gas received at a particular Receipt Point and provide such compositional analysis to Shipper.
 
ARTICLE VIII
QUALITY
 
8.1                                The Gas delivered by Shipper hereunder (as measured at the actual temperature and pressure of the Gathering System at the Receipt Points) shall be commercially free of solids, dust, paraffin and paraffin forming constituents, gum and gum-forming constituents, free water and other solid and/or liquid matter which may interfere with the delivery thereof or become separated from the Gas during transmission thereof (except liquid hydrocarbons contained in Drip).
 
8.2                                The Gas delivered by Shipper hereunder (as measured at the actual temperature and pressure of the Gathering System at the Receipt Points) shall, in the aggregate, conform to the specifications, as may be amended or enforced from time to time, of ETC or other downstream pipelines receiving Shipper’s Gas (the “ Specifications ”).
 
8.3                                Should Gas delivered by Shipper fail at any time to conform to any and/or all of the Specifications, Gatherer may (without prior notice to Shipper) immediately suspend receipt of any off-specification Gas; provided, however, that Gatherer shall give notice to Shipper as promptly as is reasonably possible after Gatherer obtains knowledge of such nonconformance to allow Shipper to correct such condition(s).  Gatherer shall not be obligated to accept Shipper’s Gas for delivery unless and until Shipper’s Gas conforms to the Specifications.
 
8.4                                The receipt by Gatherer of Shipper’s Gas which fails to meet any one of the Specifications shall not be held to be a waiver of Gatherer’s right to refuse future delivery of Shipper’s Gas or relieve Shipper of any indemnity obligation under Article XVI.
 
ARTICLE IX
FEES
 
9.1                                As consideration of the services rendered by Gatherer under this Agreement, Shipper shall pay to Gatherer the following fees (the “ Fees ”):
 
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(a)                                  A Gas Gathering Fee equal to [***] per MMBtu on all of Shipper’s Gas delivered at the Delivery Points; and
 
(b)                                  A Gas Compression Fee (including dehydration services on the Low Pressure Lines) on all Gas (i) delivered at the Delivery Points or (ii) redelivered to Shipper at the Gas Lift Points in the following amounts during the following times:
 
[***]
 
9.2                                The aggregate amount of Gas Gathering Fees and Gas Compression Fees paid by Shipper, Ted Collins, Jr. and Plein Sud Holdings, LLC to Gatherer on account of Gas delivered to the Delivery Points [***] shall not be less than the following (the “ Minimum Fees ”):

[***]	 	
 
The Minimum Fees payable with respect to [***] shall be decreased by that amount if any, by which the Fees paid [***] exceeded the Minimum Fee due with respect to [***].
 
9.3                                By not later than [***], Shipper shall pay to Gatherer that amount, if any, by which the Minimum Fee due with respect to the [***] exceeded the Fees actually paid [***].
 
ARTICLE X
TERM
 
The term of this Agreement shall commence on the Effective Date and shall terminate on the twenty-fifth (25 th ) anniversary of the Effective Date (the “ Term ”); provided, however, that if Gatherer has received no Gas from Shipper for any period of 12 consecutive months, Gatherer may terminate this Agreement upon written notice to Shipper.
 
ARTICLE XI
STATEMENTS AND PAYMENTS
 
11.1                         On or before the 25 th  day of each Month, Gatherer shall render to Shipper a statement showing, for the immediately preceding Month, the volume and composition of Gas received from Shipper at each Receipt Point and delivered to Shipper at each Delivery Point or redelivered to Shipper at each Gas Lift Point.  In such statement, Gatherer shall include:  (a) a calculation of the Fees determined in accordance with Article IX and (b) [***].  All amounts due hereunder and remaining unpaid when due shall bear interest at the Prime Rate plus two percent per annum until paid, except amounts disputed in good faith.
 
11.2                         Either Party or its agent shall have the right, at reasonable times during business hours and at its sole cost and expense, to examine the books and records of the other to the extent necessary to audit and verify the accuracy of any statement made pursuant to this Agreement.
 
11.3                         In the event an error is discovered in any such statement, such error shall be adjusted without interest or penalty as soon as reasonably possible, but in any event, within two (2) months from the date that such error is discovered; provided however, that any such statement is hereby deemed final as to both Parties unless disputed in writing within two (2) years from the date of such statement.
 
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ARTICLE XII
REGULATION
 
12.1        This Agreement shall be governed by and shall be construed in accordance with the laws of the State of Texas.  This Agreement and each provision hereof shall be subject to all Applicable Laws.  Should either of the Parties, by force of any such Applicable Law, at any time during the term of this Agreement be ordered or required to do any act inconsistent with the provisions hereof, then for that period during which the requirements of such Applicable Law are applicable to this Agreement, this Agreement shall be deemed modified to conform with the requirement of such Applicable Law; provided, however, that nothing herein shall alter, modify or otherwise affect the respective rights of the Parties to cancel or terminate this Agreement under the terms and conditions hereof.  Further, either Party shall have the right to contest the validity of any such Applicable Law and neither acquiescence thereto nor compliance therewith for any period of time, nor any other provision contained herein, shall be construed as a waiver of such right.
 
12.2        As a principal condition to, and in consideration for, the execution of this Agreement by Gatherer, Shipper represents and warrants that none of the Gas delivered hereunder has been dedicated to or delivered in interstate commerce.  In the event that Shipper breaches its representation and warranty contained in this Section 12.2, Gatherer, in addition to all other remedies at law or in equity, shall have the right, upon delivery of written notice to Shipper, to refuse receipt of the Gas which has caused a breach of such representation and warranty.  Gatherer’s election to refuse receipt of any Gas pursuant to this Section 12.2 shall not release Shipper from any obligation to indemnify Gatherer for such breach under Article XVI.
 
ARTICLE XIII
TAXES AND ROYALTIES
 
13.1        Shipper shall be obligated to pay all Taxes levied, assessed or collected with respect to production Shipper’s Gas or the delivery thereof to the Receipt Points, including any Tax levied, assessed or collected as a result of any Change in Law.  In addition, Shipper shall be obligated to pay all Taxes levied, assessed or collected with respect to the services rendered hereunder to the extent that any such Tax is levied, assessed or collected as a result of any Change in Law.  To the extent any such Taxes are not assessed directly with respect to Shipper’s Gas or the services rendered hereunder, Gatherer shall calculate and assess any such Taxes on a pro rata basis (calculated on a per BTU basis based on the volume of Gas on the Gathering System at the time such calculation is made).  Notwithstanding the foregoing, any Tax that may be based on the gross revenues, operating income or net income of Gatherer shall be borne by Gatherer.
 
13.2        Shipper shall timely pay all Taxes described in Section 13.1.  In the event that Shipper fails to timely pay any such Taxes, Gatherer may, upon two (2) days’ notice, pay them and deduct the amount so paid from any sums owned by Gatherer to Shipper hereunder.
 
13.3        In addition to the Taxes described in Section 13.1, Shipper shall be responsible for the payment of all royalties, overriding royalties, production payments, fees, charges or other payments attributable to Shipper’s Gas (including any such royalties, overriding royalties, production payments, fees, charges or payments with respect to liquefiable hydrocarbons or other constituents contained therein or removed therefrom).
 
ARTICLE XIV
REPRESENTATIONS AND WARRANTIES
 
14.1        Each Party hereby represents and warrants to the other Party that:
 
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(a)           Such Party is a limited partnership or limited liability company, as applicable, duly formed, validly existing and in good standing under the laws of the State of Texas (in the case of Shipper) or the State of Delaware (in the case of Gatherer), with full limited partnership or limited liability company, as applicable, power, right and authority to own and lease the assets and properties it currently owns and leases, and to carry on its business as such business is currently being conducted.
 
(b)           Such Party has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by such Party of this Agreement and the performance by each Party of its obligations hereunder have been duly and validly authorized by all necessary limited partnership or limited liability company, as applicable, proceedings on the part of such Party.  This Agreement has been duly and validly executed and delivered by such Party and constitutes the legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally or by general equitable principles regardless of whether considered in a proceeding at law or in equity.
 
(c)           The execution and delivery by such Party of this Agreement does not, and the performance by such Party of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the organizational documents of such Party, (ii) violate or result in a default (or give rise to any right of termination, cancellation or acceleration) under any contract or agreement to which such Party is a party, or require any notice under any contract or agreement to which such Party is a party or by which it is bound, (iii) violate or breach any Applicable Law or (iv) require the consent, approval or authorization of, filing with or notice to any Person, which, if not obtained, would prevent such Party from performing its obligations hereunder.
 
14.2        In addition to its representations and warranty in Section 12.2, Shipper represents and warrants, for itself, its successors and assigns, to Gatherer that Shipper has good title to (or otherwise has the right to deliver) the Gas delivered hereunder and the Gas delivered hereunder is free and clear of any and all liens and encumbrances.
 
14.3        Gatherer represents and warrants, for itself, its successors and assigns, to Shipper that from the time of receipt at the Receipt Points to the time of delivery at the Delivery Points the Gas delivered hereunder shall be free and clear of any and all liens and encumbrances.
 
ARTICLE XV
EASEMENTS
 
To the extent that it may contractually or lawfully do so under its Easements, each Party hereby grants, assigns and transfers to the other Party or its designee an easement across the granting Party’s Easements, together with the right of ingress and egress, for the purpose of installing, using, inspecting, repairing, operating, replacing and/or removing pipe, meters, lines and other equipment used or useful in the performance of this Agreement.  It is intended that any personal property of the Parties or their designees placed in or upon any of such real property shall remain the personal property of the respective Party or its designee, subject to removal by it within a reasonable time after the expiration or termination of this Agreement.
 
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ARTICLE XVI
INDEMNITY
 
16.1        Shipper hereby agrees to indemnify, protect, defend and hold harmless Gatherer, its Affiliates and each of its and their respective officers, directors, employees, agents, partners, representatives, subcontractors, consultants and advisors (collectively, “ Gatherer Indemnitees ”) from and against any and all Losses arising out of or resulting from (a) Shipper’s Gas, except to the extent such Losses arise in connection with any action or failure to act by Gatherer while such Gas is in the possession and control of Gatherer, (b) the breach of any representation or warranty of Shipper contained in this Agreement, (c) the breach of any other agreement, covenant or obligation of Shipper in this Agreement and (d) Shipper’s business operations, including all noise, odors, Emissions, pollution or other contamination whatsoever occurring in connection with such operations.
 
16.2        Gatherer hereby agrees to indemnify, protect, defend and hold harmless Shipper, its Affiliates and each of its and their respective officers, directors, employees, agents, partners, representatives, subcontractors, consultants and advisors (collectively, “ Shipper Indemnitees ”) from and against any and all Losses arising out of or resulting from (a) Shipper’s Gas if such Losses arise in connection with any action or failure to act of Gatherer while such Gas is in the possession and control of Gatherer, (b) the breach of any representation or warranty of Gatherer contained in in this Agreement, (c) the breach of any other agreement, covenant or obligation of Gatherer in this Agreement and (d) Gatherer’s business operations, including all noise, odors, Emissions, pollution or other contamination whatsoever occurring in connection with such operations.
 
16.3        GATHERER HEREBY RELEASES SHIPPER FROM ANY LIABILITY FOR, AND HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS EACH SHIPPER INDEMNITEE FROM AND AGAINST, ALL LOSSES, WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE NEGLIGENCE OF ANY SHIPPER INDEMNITEE, ARISING IN CONNECTION HEREWITH IN FAVOR OF ANY EMPLOYEE OR CONSULTANT OF ANY GATHERER INDEMNITEE ON ACCOUNT OF BODILY INJURY, DEATH OR DAMAGE TO PROPERTY OF SUCH EMPLOYEE OR CONSULTANT.
 
16.4        SHIPPER HEREBY RELEASES GATHERER FROM ANY LIABILITY FOR, AND HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS EACH GATHERER INDEMNITEE, FROM AND AGAINST, ALL LOSSES, WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE NEGLIGENCE OF ANY GATHERER INDEMNITEE, ARISING IN CONNECTION HEREWITH IN FAVOR OF ANY EMPLOYEE OR CONSULTANT OF ANY SHIPPER INDEMNITEE ON ACCOUNT OF BODILY INJURY, DEATH OR DAMAGE TO PROPERTY OF SUCH EMPLOYEE OR CONSULTANT.
 
16.5        All indemnity obligations and liabilities assumed by the Parties under terms of this Agreement shall be without limit, and shall survive until the second (2 nd ) anniversary of the termination of this Agreement.
 
16.6        Each Party shall procure and maintain during the entire Term, at its own expense, with an insurance company or companies authorized to do business in the State of Texas or through a self-insurance program, insurance coverages of the kind and in the specified minimum amounts set forth on Exhibit F attached hereto.
 
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ARTICLE XVII
NOTICES AND STATEMENTS
 
17.1        All notices, statements, payments and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been effectively given when deposited in the United States mail or with an overnight courier service, or when sent via email or facsimile, as the case may be, addressed to:
 
Notices :

If to Gatherer :	 	If to Shipper :	
 	 	 	
HPIP Lavaca, LLC
1400 16 th  Street, Suite 310
Denver, CO 80202
Attn: William B. Mathews
Email: bmathews@americanmidstream.com
Facsimile: (720) 457-6040	 	Penn Virginia Oil & Gas, L.P.
840 Gessner, Suite 800
Houston, TX 77024
Attn: Vice President, Oil and Gas Marketing
Email: jill.zivley@pennvirginia.com
Facsimile: (713) 722-6601	
 	 	 	
 	 	With a copy to :	
 	 	 	
 	 	Penn Virginia Corporation
Four Radnor Corporate Center, Suite 200
100 Matsonford Road
Radnor, PA 19087-4564
Attn: General Counsel
Email: nancy.snyder@pennvirginia.com
Facsimile: (610) 687-3688	
 
Statements :

Penn Virginia Oil & Gas, L.P.
840 Gessner, Suite 800
Houston, TX 77024
Attn: Vice President, Oil and Gas Marketing
Email: jill.zivley@pennvirginia.com
Facsimile: (713) 722-6601	 	
 
Payments :

HPIP Lavaca, LLC
ABA: 111000753
Acct: 1881708794
Name:       HPIP Lavaca Llc Commercial Checking	 	
 
17.2        Notices of change of address of either Party shall be given in writing to the other in the manner aforesaid and shall be observed in the giving of all future notices, statements or other communications required or permitted to be given hereunder.
 
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ARTICLE XVIII
FORCE MAJEURE
 
18.1        Upon occurrence of an event of Force Majeure, Shipper’s or Gatherer’s obligation to perform, wholly or in part, any commitment or undertaking set forth in this Agreement, other than the obligation to make payments of amounts due hereunder, shall be suspended to the extent and for the period of such Force Majeure condition; provided, however, that the Party whose obligations are so affected shall promptly give written notice to the other Party describing the event of Force Majeure in reasonable detail.
 
18.2        Should there be an event of Force Majeure affecting performance hereunder, such events shall be remedied with all reasonable dispatch to ensure resumption of normal performance.
 
18.3        Notwithstanding Section 18.2, settlement of strikes and lockouts shall be entirely within the discretion of the Party affected, and the requirement in Section 18.2 that any event of Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the third parties directly or indirectly involved in such strikes or lockouts when such course is inadvisable in the discretion of the Party having such difficulty.
 
ARTICLE XIX
CONFIDENTIAL INFORMATION
 
19.1        Except as permitted by Section 19.2, (i) each Party shall keep confidential all Confidential Information and shall not disclose any Confidential Information to any Person, including any of its Affiliates, and (ii) each Party shall use the Confidential Information only in connection with the operation of the Gathering System.
 
19.2        Notwithstanding Section 19.1, but subject to the other provisions of this Article XIX, a Party may make the following disclosures and uses of Confidential Information:
 
(a)           disclosures required for such Party to perform its duties under this Agreement;
 
(b)           disclosures to an Affiliate of such Party, including the representatives of such Affiliate, if such Affiliate has a “need to know” such Confidential Information in furtherance of the operation of the Gathering System and has agreed to abide by the terms of this Article XIX;
 
(c)           disclosures to a Person that is not a Party or an Affiliate of a Party, if such Person has been retained by Gatherer to provide services in connection with the operation of the Gathering System and has agreed to abide by the terms of this Article XIX;
 
(d)           disclosures to a bona-fide potential direct or indirect purchaser of the Gathering System and the advisors or representatives of such potential purchaser, if such potential purchaser has agreed to abide by the terms of this Article XIX;
 
(e)           disclosures to working interest or joint venture partners with respect to leases or wells in the Dedication Area;
 
(f)            disclosures required by Applicable Law or the rules of any national securities exchange or automated quotation system;
 
(g)           disclosures to financial institutions requiring such disclosure as a condition precedent to making or renewing a loan or in connection with any covenant made in connection with such loan(s) or any existing loan of such Party or its Affiliates; and
 
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(h)           disclosures to the legal advisors, financial advisors or independent certified public accountants for such Party or its Affiliates.
 
19.3        Each Party shall take such precautionary measures as may be required to ensure (and such Party shall be responsible for) compliance with this Article XIX by any of its representatives and other Persons to which it may disclose Confidential Information in accordance with this Article XIX.
 
19.4        The Parties agree that no adequate remedy at law exists for a breach or threatened breach of any of the provisions of this Article XIX, the continuation of which, if not remedied, shall cause the non-breaching Party to suffer irreparable harm.  Accordingly, the Parties agree that each Party shall be entitled, in addition to other remedies that may be available to such Party, to immediate injunctive relief from any breach of any of the provisions of this Article XIX and to specific performance of its rights hereunder, as well as to any other remedies available at law or in equity.
 
19.5        The obligations of the Parties under this Article XIX shall terminate on the second anniversary of the termination of this Agreement.
 
ARTICLE XX
SALE OF GATHERING SYSTEM
 
Gatherer may not sell, assign or transfer any of its rights or obligations under this Agreement, or any of its right, title and interests in or to the Gatherer System, without the prior written consent of Shipper.  Notwithstanding the foregoing, Gatherer may, without Shipper’s consent, sell, assign or transfer all, but not less than all, of the Gathering System, and the associated rights and obligations under this Agreement, to (i) American Midstream Partners, L.P. (“ AMID ”), or an entity wholly owned by AMID, or (ii) a Reputable and Prudent Operator.  As used herein, a “ Reputable and Prudent Operator ” shall mean any entity that:  (i) is a pipeline operator which, in Shipper’s reasonable opinion, is experienced in operating gathering and pipelines systems similar to the Gathering System; (ii) has not filed a voluntary bankruptcy proceeding or been declared a bankrupt involuntarily; (iii) has not been blocked by any Governmental Authority from holding any permits, licenses or approvals necessary to operate the Gathering System as contemplated by this Agreement; (iv) has a health, safety and environmental compliance record reasonably satisfactory to Shipper; and (v) has a net worth of $100 million or more on a consolidated basis.
 
ARTICLE XXI
MISCELLANEOUS
 
21.1        All Article, Section and Exhibit references used in this Agreement are to Articles, Sections and Exhibits to this Agreement unless otherwise specified.  The Exhibits attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes.
 
21.2        If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).  Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa.  The words “includes” or “including” shall mean “includes without limitation” or “including without limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular Section or Article in which such words appear and any reference to an Applicable Law shall include any amendment thereof or any successor thereto and any rules and regulations promulgated thereunder.  Currency amounts referenced herein are in U.S. Dollars.
 
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21.3        This Agreement may be executed in as many counterparts as deemed necessary.  When so executed, the aggregate counterparts shall constitute one Agreement and shall have the same effect as if both Parties signing counterparts had executed the same instrument.
 
21.4        This Agreement may not be amended or modified except pursuant to a written instrument signed by both of the Parties.  Either Party may waive on its own behalf compliance by the other Party with any term or provision hereof; provided , however , that any such waiver shall be in writing and shall not bind the non-waiving Party.  The waiver by either Party of a breach of any term or provision shall not be construed as a waiver of any subsequent breach of the same or any other provision.
 
21.5        This Agreement is binding upon and shall inure to the benefit of the successors and permitted assigns of the Parties.
 
21.6        The Parties agree and confirm that this Agreement was prepared jointly by both Parties and not by any one Party to the exclusion of the other.
 
21.7        Except as provided in Article XVI, this Agreement is not intended to confer upon any Person not a party hereto any rights or remedies hereunder, and no Person other than the Parties is entitled to rely on or enforce any provision hereof.
 
21.8        This Agreement (including the Exhibits attached hereto) contain the entire agreement between the Parties with respect to the subject matter hereof, and there are no prior agreements, understandings, representations or warranties between the Parties, other than those set forth or referred to herein or therein.
 
21.9        NO PARTY SHALL UNDER ANY CIRCUMSTANCES BE LIABLE FOR SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, WHETHER BY STATUTE, IN TORT OR BY CONTRACT OR OTHERWISE, EXCEPT WHERE SUCH DAMAGES WERE CAUSED BY THE WILLFUL MISCONDUCT OR FRAUD OF SUCH PARTY.  THE PROVISIONS OF THIS SECTION 21.9 SHALL BE ENFORCEABLE ONLY TO THE EXTENT ALLOWED BY, AND SHALL BE SUBJECT TO, ANY APPLICABLE REQUIREMENTS AND PROCEDURES SET FORTH IN, APPLICABLE LAW.
 
21.10      In the event of litigation arising with respect to this Agreement, either Party may offer into evidence an electronic image of the signed Agreement, any amendment hereto or any correspondence exchanged in connection herewith and shall not be required to maintain or produce an original paper copy of any such document.  Any such electronic copy shall be deemed an original and may be admitted into evidence for all purposes, notwithstanding the “best evidence” rule or any other rule of evidence that would prohibit or restrict its admissibility.
 
[ Signature Page Follows ]
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year hereinabove first written.

 	HPIP LAVACA, LLC	 	

 	By:	 /s/ Daniel C. Campbell	
 	 	Name:	Daniel C. Campbell	
 	 	Title:	Senior Vice President and	
 	 	Chief Financial Officer	

 

 	PENN VIRGINIA OIL & GAS, L.P.	
 	 	 	
 	By:	Penn Virginia Oil & Gas GP LLC,	
 	 	its general partner	

 

 	By:	 /s/ Nancy M. Snyder	
 	 	Name:	Nancy M. Snyder	
 	 	Title:	Executive Vice President and	
 	 	 	Chief Administrative Officer	
 
Signature Page to Construction and Field Gathering Agreement

 
EXHIBIT A
 
DEDICATION AREA
 
[MAP TO COME]
 
A-1 

 
EXHIBIT B
 
DELIVERY POINTS
 
The initial Delivery Points will be the following connections with ETC’s pipelines:

1)	Bozka CDP	Meter #0969005	
2)	Gardner CDP	Meter #0969009	
3)	Cannonade Ranch #1H	Meter #0969014	
4)	Cannonade Ranch South CDP	Meter #0969015	
5)	Rock Creek Ranch CDP	Meter #0969016	
6)	PVA Shiner CDP	Meter #0969059	
7)	Wellhausen CDP	Meter #0969076	
 
Additional Delivery Points may be established upon the mutual agreement of Shipper and Gatherer.
 
B-1 

 
EXHIBIT C
 
CONNECTION POINTS
 
The initial Connection Points will be as follows:

Arledge Ranch #1H Well	Kleihege #1H Well	
Barraza #1H Well	Kosmo #1H, Porter #1H Wells	
Blonde #1H, Bock #1H Wells	Kusak #1H Well	
Bozka #1H Well (Direct Connect to ETC)	Leal #1H Well	
Cannonade Ranch #1H Well (Direct Connect to ETC)	Martinsen #1H Well	
Cannonade Ranch #2 Well	Matias #1H Well	
Cannonade Ranch #3H Well	McCreary #1H Well	
Cannonade Ranch #50H Well	Miller #1H Well	
Cannonade Ranch #17H, #18H, #19H Wells	Munson Ranch #1H, #3H Wells	
D. Foreman #1H Well	Munson Ranch #2H Well	
Dickson Allen #1H, Hawn Holt #7H Wells	Munson Ranch #4H, #8H Wells	
Dickson Allen #2H, Hawn Holt #8H Wells	Munson Ranch #5H, #7H Wells	
Douglas Raab #1H Well	Munson Ranch #6H, #9H Wells	
Dubose #1H Well	Netardus #1H Well	
Dubose #2H Well	Neuse #1H Well	
Effenberger #1H Well	Othold #1H Well	
Effenberger #4H, #5H Wells	Pavlicek #1H, #2H, #5H Wells	
Effenberger-Schacherl #4H Well	Pilsner Hunter #2H, #3H Wells	
Fojtik#1H Well	Pilsner Hunter #4H, #5H Wells	
Freytag #1H Well	R. Washington #1H Well	
Gardner #1H Well	R.L. Schaefer #1H, #2H, #3H Wells	
Gardner #2H Well	Raab #1H Well	
Garza-Kodack #1H Well	RCR Hinton #1H, #2H, #3H Wells	
Hawn Dickson #1H Well	Rhino Hunter #6H, #7H Wells	
Hawn Holt #1H, #4H Wells	Rock Creek Ranch #1H, #2H, #3H, #4H Wells	
Hawn Holt #2H, #6H Wells	Rock Creek Ranch #5H, #6H, #7H, #8H Wells	
Hawn Holt #3H, #5 Wells	Rock Creek Ranch #9H, #10H Wells	
Hawn Holt #9H Well	Rock Creek Ranch #11H Well	
Hawn Holt #10H Well	Schacherl #1H Well	
Hawn Holt #11H Well	Schacherl #2H Well	
Hawn Holt #12H Well	Schacherl-Vana #1H Well	
Hawn Holt #13H- Well	Smith #1H Well	
Hawn Holt #15H Well	Sralla #1H Well	
Hefe Hunter #1H, Pilsner Hunter #1H Wells	Technik #1H Well	
Henning #1H Well	Targac #1H Well	
Henning #2H Well	Vana #1H Well	
Hinze #1H Well	Vana #3H, #4H Well	
Hunt-Hill #1H JV, #2H JV Wells	Washington #1H (Not in service)	
Joseph Simper #1H Well	Wellhausen #1H Well	
 	Zebra Hunter #3H, #2H Wells	
 
Additional Connection Points may be established in accordance with Article III.
 
C-1 

 
EXHIBIT D
 
NOMINATION PROCEDURES
 
Shipper will submit monthly nomination quantities stated in MMBtus for each Month not later than the 25 th  Day of the prior Month.  All nominations shall be made to American Midstream’s electronic bulletin board, unless otherwise mutually agreed.  Nominations must designate the Receipt Points and Delivery Points to be used and the estimated monthly quantities to be received at each Receipt Point and delivered at each Delivery Point.
 
Once nominated by Shipper for the Month, Shipper may change the nomination quantity at any Receipt Point or Delivery Point by submitting a revised nomination quantity no later than 11:30 a.m., Central Time, on the business day prior to the Day such revised quantity is to be effective.
 
D-1 

 
EXHIBIT E
 
MEASUREMENT AND TESTING
 
1.                                       Gas shall be measured by electronic flow recording and computing devices (unless mutually agreed) installed, maintained and operated by Gatherer or its designee and computations made in accordance with accepted industry practice.  Such devices shall be within appropriate differential and static pressure range for existing operating conditions.  Chart integration and volume computations shall be made as accurately as possible and within the accuracy prescribed by the manufacturer of the recording and computing equipment used.
 
2.                                       The unit of volume for purposes of measurement shall be one (1) cubic foot of gas at a temperature base of sixty degrees Fahrenheit (60 ° F) and at a pressure base of fourteen and sixty-five hundredths (14.65) psia.  Corrections shall be made for deviations from Boyle’s Law and the Ideal Gas Laws.
 
3.                                       Temperature shall be determined by a recording thermometer or, in the absence of such working device, the temperature of the Gas shall be assumed to be sixty degrees Fahrenheit (60 ° F) until a working thermometer is installed.  Specific Gravity shall be determined by taking samples of the Gas at such times as determined by Gatherer, but at least semi-annually.  The atmospheric pressure shall be the atmospheric pressure determined and used by the ultimate downstream pipeline.  Gross Heating Value of the Gas shall be determined by compositional analysis of samples of the Gas taken at the Receipt Points at least semi-annually or at more frequent times as may be determined by Gatherer.  The Gross Heating Value shall be converted to a temperature base of sixty degrees Fahrenheit (60 ° F), a pressure base of fourteen and sixty-five hundredths (14.65) psia and adjusted for compressibility.
 
4.                                       Shipper may install, maintain and operate, at its own expense, pressure regulators and check measuring equipment, provided that such equipment shall not interfere with the operation of Gatherer’s equipment.  Shipper may access electronic readings remotely and may download electronic readings to its SCADA system.
 
5.                                       The accuracy of Gatherer’s measuring equipment shall be verified by Gatherer or its designee at reasonable intervals as determined by Buyer, but not less often than once every six (6) months.  Upon request by Shipper, notice of the date and time of the testing of such equipment or for the quality of the Gas shall be given by Gatherer to Shipper sufficiently in advance to permit convenient arrangement for Shipper’s representative to be present.  If after proper notice, Shipper fails to have a representative present, the results of the test shall nevertheless be considered accurate.  All tests shall be made at Gatherer’s expense, except that Shipper shall bear the expense of tests made at its request if any inaccuracy is found to be two percent (2%) or less.
 
6.                                       If at any time the measuring or testing equipment is found to be out of service or registering inaccurately in any percentage, it shall be adjusted at once to read accurately within the limits prescribed by the manufacturer.  If such equipment shall be found to be out of service or inaccurate by an amount exceeding two percent (2%) at a reading corresponding to the average hourly rate of flow for the period since the preceding test, then any previous recordings of such. equipment shall be corrected to zero (0) error for any period which is definitely known or agreed upon.  The quantity of Gas delivered during that period shall be determined by the first of the following methods which is available:
 
E-1 

 
i)                                using the data recorded by any check measuring equipment if installed and registering accurately;
 
ii)                             by correcting the error if the percentage of the error is ascertainable by calibration, test or mathematical calculation; or
 
iii)                          by estimating the quantity or quality delivered based on deliveries under similar conditions during a period when the equipment was registering accurately.
 
No correction shall be made for recorded inaccuracies of two percent (2%) or less.
 
7.                                       Gatherer and Shipper shall have the right to inspect equipment installed or furnished by the other and the charts and other measurement or testing data of the other at all times during regular business hours but the reading, calibration and adjustment of such equipment shall be done only by the Party with the responsibility for operating such equipment.  Gatherer shall preserve all test data, charts and other similar records for a period of at least two (2) years.
 
E-2 

 
EXHIBIT F
 
REQUIRED INSURANCE
 
[ATTACHMENT TO COME]
 
F-1 

Exhibit 10.2
 
FIRST AMENDMENT
TO
SERIES B UNIT PURCHASE AGREEMENT
 
This FIRST AMENDMENT TO SERIES B UNIT PURCHASE AGREEMENT, dated as of January 31, 2014 (this “ Agreement ”), is entered into by and among American Midstream Partners, LP, a Delaware limited partnership (“ AMID ”), American Midstream GP, LLC, a Delaware general partnership (“ American Midstream GP ”), and High Point Infrastructure Partners, LLC, a Delaware limited liability company (“ HPIP ,” and along with American Midstream GP, the “ Purchasers ”).  Any capitalized term used and not defined herein shall have the meaning assigned to such term in that certain Series B Unit Purchase Agreement, by and among AMID and the Purchasers, dated January 22, 2014 (the “ Purchase Agreement ”).
 
WHEREAS, pursuant to the Purchase Agreement, AMID agreed to issue and sell to the Purchasers, and the Purchasers agreed to purchase from AMID, their respective percentage of Purchased Units as set forth in Schedule A to the Purchase Agreement; and
 
WHEREAS, AMID and the Purchasers desire to amend the Purchase Agreement so that American Midstream GP will purchase 100% of the Purchased Units and HPIP will purchase none of the Purchased Units.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, AMID and the Purchasers hereby agree as follows:
 
1. Schedule A .  Schedule A of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Purchaser	 	Percentage of Purchased
Units	 	Contact Information	
American Midstream GP, LLC	 	100	 	1614 15 th  Street, Suite 300
Denver, Colorado 80202
Attention: William B. Mathews
Telephone: (720) 457-6075
Facsimile: (720) 457-6040	
 
2. Effectuation . The amendment contemplated by this Agreement shall be deemed effective immediately upon the execution of this Agreement by the parties hereto. There are no conditions precedent or subsequent to the effectiveness of this Agreement.
 
3. Effect on Agreement . Except as specifically modified herein, the Purchase Agreement shall continue to be in full force and effect. The execution and delivery of this Agreement shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any party thereto. From and after the date hereof, all references in the Purchase Agreement to the “Agreement” shall mean the Purchase Agreement as modified by this Agreement.

 
4. Execution in Counterparts . This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
 
5. Severability . If any provision in the Agreement is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Agreement shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of the Agreement, and the remaining provisions shall remain in full force and effect.
 
6. Further Assurances . Each party to this Agreement shall execute and deliver such documents and shall take such actions as may be reasonably necessary or desirable to effect the transactions described in this Agreement.
 
7. Governing Law . This Agreement will be construed in accordance with and governed by the laws of the State of New York.
 
[Signature pages follow.]

 
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.

 	American Midstream Partners, L.P.	
 	 	 	
 	By: American Midstream GP, LLC	
 	Its General Partner	
 	 	 	
 	By	/s/ Daniel C. Campbell	
 	Name:	Daniel C. Campbell	
 	Title:	Senior Vice President and Chief Financial Officer	

 	American Midstream GP, LLC	
 	 	 	
 	By	/s/ Daniel C. Campbell	
 	Name:	Daniel C. Campbell	
 	Title:	Senior Vice President and Chief Financial Officer	

 	High Point Infrastructure Partners, LLC	
 	 	 	
 	By	/s/ Daniel R. Revers	
 	Name:	Daniel R. Revers	
 	Title:	President	
 
Signature Page to First Amendment to Unit Purchase Agreement

Exhibit 99.1
 
American Midstream Closes Acquisition of
 
Eagle Ford Natural Gas Gathering System
 
DENVER, CO — February 3, 2014 - American Midstream Partners, LP (AMID) (the “Partnership”) today announced that it completed the acquisition of an approximate 120-mile natural gas gathering and redelivery system located in the oil window of the Eagle Ford shale from a subsidiary of Penn Virginia Corporation (PVA).
 
The acquisition was announced on January 22, 2014 and includes a long-term, fee-based gathering agreement, whereby Penn Virginia dedicated for 25 years all current and future natural gas production from the areas served by the system. The system is currently flowing more than 40 million cubic feet per day between sales volumes and gas lift, with a significant ramp in volumes expected throughout 2014 and thereafter. Production gathered by the system is compressed and delivered to a third party for processing or redelivered to Penn Virginia for gas lift. Penn Virginia is operating six to seven rigs on the system with nearly 900 remaining drilling locations in the acreage dedicated to American Midstream, and volumes are expected to triple from current operating levels by mid-2015.
 
The acquisition is expected to be accretive to American Midstream’s expected distribution level for 2014, and creates a competitive position in a strategic shale play with fee-based contracts that are not directly subject to commodity price volatility.
 
As a result of the acquisition, management intends to recommend to the board of directors an increase in the Partnership’s quarterly distribution of approximately two percent beginning with the distribution for the third quarter 2014, in addition to management’s intent to recommend to the board an approximate two percent increase for the first quarter 2014 distribution associated with the recently closed Blackwater acquisition.
 
About American Midstream Partners, LP
 
Denver-based American Midstream Partners is a growth-oriented limited partnership formed to own, operate, develop and acquire a diversified portfolio of midstream energy assets. The Partnership provides midstream services in the Gulf Coast and Southeast regions of the United States. For more information about American Midstream Partners, visit www.AmericanMidstream.com.

 
Forward-Looking Statements
 
This press release includes forward-looking statements. These statements relate to, among other things, projections of operational volumetrics and improvements, growth projects, cash flows and capital expenditures. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “potential,” and similar terms and phrases to identify forward-looking statements in this press release.   Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Acquisitions present risks such as:   integration, maintenance of customer relationships, and assumption of new liabilities. Our operations and future growth involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors which are described in greater detail in our filings with the SEC. Please see our Risk Factor disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2012 filed on April 16, 2013 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 13, 2013. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.

Exhibit 99.2
 
OUR CASH DISTRIBUTION POLICY
 
Distributions of Available Cash
 
General
 
Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash to unitholders of record on the applicable record date. After payment of series A quarterly distributions (as defined below), any series A arrearage (as defined below) and, beginning with the coupon conversion quarter (as defined below), any interest thereon (“series A interest”), the common units and series B units will have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to $0.4125 per unit, which amount is defined in our partnership agreement as the minimum quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units or series B units from prior quarters, before any distributions of available cash from operating surplus may be made in respect of incentive distribution rights.  All or any portion of each distribution payable in respect of the series B units (the “series B unit distribution”) may, at our election, be paid in series B units (each series B unit that may be issued by us in lieu of a cash distribution being referred to herein as a “series B PIK unit”) as further described in our partnership agreement.
 
Definition of Available Cash
 
Available cash generally means, for any quarter, all cash and cash equivalents on hand at the end of that quarter:
 
·                   less the amount of cash reserves established by our general partner at the date of determination of available cash for that quarter to:
 
·                   provide for the proper conduct of our business (including reserves for our future capital expenditures, anticipated future credit needs and refunds of collected rates reasonably likely to be refunded as a result of a settlement or hearing related to FERC rate proceedings or rate proceedings under applicable law subsequent to that quarter);
 
·                   comply with applicable law, any of our debt instruments or other agreements; or
 
·                   provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that our general partner may not establish cash reserves for common units unless it determines that the establishment of reserves will not prevent us from distributing the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter and the next four quarters);
 
·                   plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter.
 
The purpose and effect of the last bullet point above is to allow our general partner, if it so decides, to use cash from working capital borrowings made after the end of the quarter but on or before the date of determination of available cash for that quarter to pay distributions to unitholders. Under our partnership agreement, working capital borrowings are generally borrowings that are made under a credit facility, commercial paper facility or similar financing arrangement, and in all cases are used solely for working capital purposes or to pay distributions to partners, and with the intent of the borrower to repay such borrowings within 12 months with funds other than from additional working capital borrowings. The proceeds of working capital borrowings increase operating surplus and repayments of working capital borrowings are generally operating expenditures (as described below) and thus reduce operating surplus when repayments are made. However, if working capital borrowings, which increase operating surplus, are not repaid during the 12-month period following the borrowing, they will be deemed repaid at the end of such period, thus decreasing operating surplus at such time. When such working capital borrowings are in fact repaid, they will not be treated as a further reduction in operating surplus because operating surplus will have been previously reduced by the deemed repayment.

 
Minimum Quarterly Distribution
 
The minimum quarterly distribution, as defined in our partnership agreement, is $0.4125 per common unit per quarter, or $1.65 on an annualized basis. Our most recent quarterly distribution on November 14, 2013 in respect of the quarter ended September 30, 2013 was $0.4525 per common unit, or $1.81 per common unit on an annualized basis after payment of the series A quarterly distribution, any series A arrearage (as defined below), and any series A interest, the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to our general partner. However, there is no guarantee that we will pay the minimum quarterly distribution on our units in any quarter. Even if our cash distribution policy is not modified or revoked, the amount of distributions paid under our policy and the decision to make any distribution is determined by our general partner, taking into consideration the terms of our partnership agreement.
 
Operating Surplus and Capital Surplus
 
General
 
All cash distributed to unitholders is characterized as either being paid from “operating surplus” or “capital surplus.” We treat distributions of available cash from operating surplus differently than distributions of available cash from capital surplus.
 
Operating Surplus
 
We define operating surplus as:
 
·                   $11.5 million (as described below); plus
 
·                   all of our cash receipts since the closing of our initial public offering, excluding cash from interim capital transactions (as defined below); plus
 
·                   working capital borrowings made after the end of a quarter but on or before the date of determination of operating surplus for that quarter; plus
 
·                   cash distributions paid on equity issued to finance all or a portion of the construction, acquisition, development or improvement of a capital improvement or replacement of a capital asset (such as equipment or facilities) in respect of the period beginning on the date that we enter into a binding obligation to commence the construction, acquisition, development or improvement of a capital improvement or replacement of a capital asset and ending on the earlier to occur of the date the capital improvement or capital asset commences commercial service and the date that it is abandoned or disposed of; plus
 
·                   cash distributions paid on equity issued to pay the construction-period interest on debt incurred, or to pay construction-period distributions on equity issued, to finance the capital improvements or capital assets referred to above; less
 
·                   all of our operating expenditures (as defined below) since the closing of our initial public offering; less
 
·                   the amount of cash reserves established by our general partner to provide funds for future operating expenditures; less
 
·                   all working capital borrowings not repaid within 12 months after having been incurred, or repaid within such 12-month period with the proceeds of additional working capital borrowings; less
 
·                   any cash loss realized on disposition of an investment capital expenditure.
 
As described above, operating surplus does not reflect actual cash on hand that is available for distribution to our unitholders and is not limited to cash generated by operations. For example, it includes a provision that will enable us, if we choose, to distribute as operating surplus up to $11.5 million of cash we receive from non-operating sources such as asset sales, issuances of securities and long-term borrowings that would otherwise be distributed as capital surplus.

 
We define interim capital transactions as (i) borrowings, refinancings or refundings of indebtedness (other than working capital borrowings and items purchased on open account or for a deferred purchase price in the ordinary course of business) and sales of debt securities, (ii) sales of equity securities, (iii) sales or other dispositions of assets, other than sales or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business and sales or other dispositions of assets as part of normal asset retirements or replacements, (iv) the termination of commodity hedge contracts or interest rate hedge contracts prior to the termination date specified therein (provided that cash receipts from any such termination will be included in operating surplus in equal quarterly installments over the remaining scheduled life of the contract), (v) capital contributions received and (vi) corporate reorganizations or restructurings.
 
We define operating expenditures as all of our cash expenditures, including, but not limited to, taxes, reimbursements of expenses of our general partner and its affiliates, interest payments, payments made in the ordinary course of business under interest rate hedge contracts and commodity hedge contracts (provided that payments made in connection with the termination of any interest rate hedge contract or commodity hedge contract prior to the expiration of its stipulated settlement or termination date will be included in operating expenditures in equal quarterly installments over the remaining scheduled life of such interest rate hedge contract or commodity hedge contract), estimated maintenance capital expenditures (as discussed in further detail below), director and officer compensation, repayment of working capital borrowings and non-pro rata repurchases of our units; provided, however , that operating expenditures will not include:
 
·                   repayments of working capital borrowings where such borrowings have previously been deemed to have been repaid (as described above);
 
·                   payments (including prepayments and prepayment penalties) of principal of and premium on indebtedness other than working capital borrowings;
 
·                   expansion capital expenditures;
 
·                   actual maintenance capital expenditures;
 
·                   investment capital expenditures;
 
·                   payment of transaction expenses (including, but not limited to, taxes) relating to interim capital transactions;
 
·                   distributions to our partners;
 
·                   non-pro rata purchases of any class of our units made with the proceeds of an interim capital transaction; or
 
·                   any other payments made in connection with our initial public offering that are described in “Use of Proceeds.”
 
Capital Surplus
 
Capital surplus is defined in our partnership agreement as any distribution of available cash in excess of our cumulative operating surplus. Accordingly, except as described above, capital surplus would generally be generated by:
 
·                   borrowings other than working capital borrowings;
 
·                   sales of our equity and debt securities; and
 
·                   sales or other dispositions of assets, other than inventory, accounts receivable and other assets sold in the ordinary course of business or as part of ordinary course retirement or replacement of assets.
 
Characterization of Cash Distributions
 
Our partnership agreement requires that we treat all available cash distributed as coming from operating surplus until the sum of all available cash distributed since the closing of our initial public offering equals the operating surplus from the closing of our initial public offering through the end of the quarter immediately preceding that distribution. Our partnership agreement requires that we treat any amount distributed in excess of operating surplus, regardless of its source, as capital surplus. We do not anticipate that we will make any distributions from capital surplus.

 
Capital Expenditures
 
Maintenance capital expenditures are cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets, for the acquisition of existing, or the construction or development of new, capital assets or for any integrity management program) made to maintain our long-term operating income or operating capacity. We expect that a primary component of maintenance capital expenditures will include expenditures for routine equipment and pipeline maintenance or replacement due to obsolescence. Maintenance capital expenditures will also include interest (and related fees) on debt incurred and distributions on equity issued (including incremental distributions on incentive distribution rights) to finance all or any portion of the construction or development of a replacement asset that is paid in respect of the period that begins when we enter into a binding obligation to commence constructing or developing a replacement asset and ending on the earlier to occur of the date that any such replacement asset commences commercial service and the date that it is abandoned or disposed of.
 
Because our maintenance capital expenditures can be irregular, the amount of our actual maintenance capital expenditures may differ substantially from period to period, which could cause similar fluctuations in the amounts of operating surplus, adjusted operating surplus and cash available for distribution to our unitholders if we subtracted actual maintenance capital expenditures from operating surplus.
 
Our partnership agreement requires that an estimate of the average quarterly maintenance capital expenditures be subtracted from operating surplus each quarter as opposed to the actual amounts spent. The amount of estimated maintenance capital expenditures deducted from operating surplus for those periods will be determined by the board of directors of our general partner at least once a year, subject to approval by the Conflicts Committee. The estimate will be made annually and whenever an event occurs that is likely to result in a material adjustment to the amount of our maintenance capital expenditures on a long-term basis. For purposes of calculating operating surplus, any adjustment to this estimate will be prospective only.
 
The use of estimated maintenance capital expenditures in calculating operating surplus will have the following effects:
 
·                   it will reduce the risk that maintenance capital expenditures in any one quarter will be large enough to render operating surplus less than the minimum quarterly distribution to be paid on all the common units for the quarter and subsequent quarters;
 
·                   it will increase our ability to distribute as operating surplus cash we receive from non-operating sources; and
 
·                   it will be more difficult for us to raise our distribution above the minimum quarterly distribution and pay incentive distributions on the incentive distribution rights held by our general partner.
 
Estimated maintenance capital expenditures reduce operating surplus, but expansion capital expenditures, investment capital expenditures and actual maintenance capital expenditures do not.
 
Expansion capital expenditures are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term. Expansion capital expenditures include interest payments (and related fees) on debt incurred and distributions on equity issued to finance the construction, acquisition or development of an improvement to our capital assets and paid in respect of the period beginning on the date that we enter into a binding obligation to commence construction, acquisition or development of the capital improvement and ending on the earlier to occur of the date that such capital improvement commences commercial service and the date that such capital improvement is abandoned or disposed of. Examples of expansion capital expenditures include the acquisition of equipment, or the construction, development or acquisition of additional pipeline or treating capacity or new compression capacity.
 
Capital expenditures that are made in part for expansion capital purposes and in part for other purposes will be allocated between expansion capital expenditures and expenditures for other purposes by our general partner (with the concurrence of the Conflicts Committee).

 
Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital expenditures. Investment capital expenditures largely will consist of capital expenditures made for investment purposes. Examples of investment capital expenditures include traditional capital expenditures for investment purposes, such as purchases of securities, as well as other capital expenditures that might be made in lieu of such traditional investment capital expenditures, such as the acquisition of a capital asset for investment purposes or development of facilities that are in excess of the maintenance of our existing operating capacity or operating income, but that are not expected to expand, for more than the short term, our operating capacity or operating income.
 
Adjusted operating surplus is intended to reflect the cash generated from operations during a particular period and therefore excludes net drawdowns of reserves of cash established in prior periods. Adjusted operating surplus for a period consists of:
 
·                   operating surplus generated with respect to that period (excluding any amounts attributable to the item described in the first bullet point under the caption “—Operating Surplus and Capital Surplus—Operating Surplus” above); less
 
·                   any net increase in working capital borrowings with respect to that period; less
 
·                   any net decrease in cash reserves for operating expenditures with respect to that period not relating to an operating expenditure made with respect to that period; plus
 
·                   any net decrease in working capital borrowings with respect to that period; plus
 
·                   any net decrease made in subsequent periods to cash reserves for operating expenditures initially established with respect to that period to the extent such decrease results in a reduction in adjusted operating surplus in subsequent periods; plus
 
·                   any net increase in cash reserves for operating expenditures with respect to that period required by any debt instrument for the repayment of principal, interest or premium.
 
Removal of General Partner
 
If the unitholders remove our general partner other than for cause and no units held by our general partner and its affiliates are voted in favor of such removal:
 
·                   any existing arrearages in payment of the minimum quarterly distribution on the common units will be extinguished; and
 
·                   our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests.
 
Series A Preferred Units
 
Distributions
 
Series A preferred units will have the right to receive cumulative distributions, prior to any other distributions made in respect of any other partnership interests (the “series A quarterly distribution”) in the amounts described herein. For the quarter ending June 30, 2013, and for each quarter thereafter through and including the quarter ending immediately prior to the coupon conversion quarter (as defined below), the series A quarterly distribution on each outstanding series A preferred unit was and shall be (i) a number of series A PIK preferred units (as defined below) equal to the series A PIK payment amount (as defined below) and (ii) $0.25 in cash. With respect to the coupon conversion quarter and all quarters thereafter, the series A quarterly distributions shall be paid entirely in cash at the series A distribution rate (as defined below). If all or any portion of a series A quarterly distribution is to be paid in cash, then the aggregate amount of such cash to be so distributed in respect of the series A preferred units outstanding shall be paid out of available cash prior to making any distribution to our general partner, common unitholders, or series B unitholders. To the extent that any portion of a series A quarterly distribution to be paid in cash with respect to any quarter exceeds the amount of available cash for such quarter, an amount of cash equal to the available cash for such quarter will be paid to the series A unitholders pro rata and the balance of

 
such series A quarterly distribution shall be unpaid and shall constitute an arrearage (“the series A arrearage”) and accrue interest.
 
We define coupon conversion quarter as the earlier of (1) the quarter beginning October 1, 2014 and (2) the date on which a series A unitholder delivers written notice to us stating that such series A unitholder elects to convert series A preferred units into common units.
 
We define series A PIK preferred units as additional series A preferred units issued in kind as a distribution to holders of series A preferred units.
 
We define the series A PIK payment amount as a number of series A PIK preferred units equal to (i) $0.25 divided by (ii) the series A issue price, as it may be adjusted from time to time pursuant to our partnership agreement.
 
We define series A distribution rate as an amount per quarter per series A preferred unit payable in arrears equal to the greater of (i) 0.023571428 multiplied by the series A issue price, as it may be adjusted from time to time pursuant to our partnership agreement, and (ii) the amount of distributions in cash for such quarter that would have been payable with respect to a series A preferred unit if such unit had converted at the beginning of the quarter in respect of which such distributions are being paid into the number of common units into which such series A preferred unit is convertible pursuant to section 5.12(b)(viii) of our partnership agreement.
 
Series B Units
 
In connection with the closing of the Sale and Purchase Agreement by and among Penn Virginia Oil & Gas, L.P., Ted Collins, Jr. and Plein Sud Holdings, LLC, as sellers, and HPIP Lavaca LLC (to be renamed American Midstream Lavaca, LLC), as buyer, dated as of December 13, 2013, we have issued newly-designated series B units in a private placement. In connection with the series B issuance, we entered into an amendment to our partnership agreement.  The amendment provides that each series B unit will have the right to share in distributions from us on a pro rata basis with holders of our common units.  A series B unit distribution may, at our election, be paid in series B PIK units as further described in our partnership agreement, as amended. To the extent any portion of the series B unit distribution is paid in series B PIK units for any quarter, the distribution to the holders of incentive distribution rights shall be reduced by that portion of the distribution that is attributable to the payment of series B PIK units, as further described in our partnership agreement, as amended.  The series B units will convert into common units on a one-for-one basis on the second anniversary of the initial issuance of series B units.
 
Distributions of Available Cash from Operating Surplus Following Series A Quarterly Distributions
 
We will make distributions of available cash from operating surplus for any quarter, after making the series A quarterly distribution, and any series A arrearage and series A interest, in the following manner:
 
·                   first , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until we distribute for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter;
 
·                   second , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until we distribute for each outstanding common unit an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for any prior quarters; and
 
·                   thereafter , in the manner described in “—General Partner Interest and Incentive Distribution Rights” below.
 
The preceding discussion is based on the assumptions that our general partner maintains its 1.326% general partner interest, that we issue series B units, that we do not issue additional classes of equity securities, and that we do not pay distributions in respect of the series B units in series B PIK units.
 
General Partner Interest and Incentive Distribution Rights
 
Our partnership agreement provides that, after making the series A quarterly distributions, and any series A arrearage and series A interest, our general partner initially is entitled, with respect to its general partner interest, to 1.326% of all distributions that we make prior to our liquidation. Our general partner has the right, but not the obligation, to contribute a proportionate amount of capital to us in order to maintain its 1.326% general partner interest if we issue additional units. Our general partner’s 1.326% interest, and the percentage of our cash distributions to which it is entitled

 
from such 1.326% interest, will be proportionately reduced if we issue additional units in the future and our general partner does not contribute a proportionate amount of capital to us in order to maintain its 1.326% general partner interest. Our partnership agreement does not require that our general partner fund its capital contribution with cash. It may instead fund its capital contribution by the contribution to us of common units or other property.
 
Incentive distribution rights represent the right to receive 48.0% of quarterly distributions of available cash from operating surplus after the series A quarterly distribution, and any series A arrearage and series A interest, the minimum quarterly distribution and associated pro rata amounts to series B units, and any arrearages in payment of the minimum quarterly distribution and associated pro rata amounts to series B units have been distributed. To the extent any portion of a series B unit distribution is paid in series B PIK units for any quarter, the distribution to the holders of incentive distribution rights shall be reduced by that portion of the distribution that is attributable to the payment of series B PIK units, as further described in our partnership agreement. High Point Infrastructure Partners, LLC (HPIP), the owner of 90% of the limited liability company interests in our general partner, holds 85.02% of our incentive distribution rights, and 14.98% of our incentive distribution rights are held by our general partner.
 
The following discussion assumes that our general partner maintains its 1.326% general partner interest and that there are no arrearages on common units.
 
If for any quarter:
 
·                   we have distributed available cash from operating surplus on outstanding series A preferred units in an amount equal to the series A quarterly distribution;
 
·                   we have distributed available cash from operating surplus on outstanding series A preferred units in an amount necessary to eliminate any series A arrearage and series A interest;
 
·                   we have distributed available cash from operating surplus to the common unitholders and series B unitholders pro rata, until the common units have received an amount equal to the minimum quarterly distribution; and
 
·                   we have distributed available cash from operating surplus on outstanding common units and series B units pro rata, until the common units have received an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;
 
then, we will distribute any additional available cash from operating surplus for that quarter among the unitholders and our general partner in the following manner:
 
·                   50.674% to the common unitholders and series B unitholders, pro rata, 1.326% to our general partner, and 48.0% to holders of our incentive distribution rights.
 
The preceding discussion is based on the assumption that our general partner maintains its 1.326% general partner interest, that we issue series B units, that we do not issue additional classes of equity securities, and that we do not pay distributions in respect of the series B units in series B PIK units.
 
Percentage Allocations of Available Cash from Operating Surplus
 
The following table illustrates the percentage allocations of available cash from operating surplus after payment of the series A quarterly distribution, and any series A arrearage and series A interest, between the unitholders, our general partner, and the holders of our incentive distribution rights based on the minimum quarterly distribution amount as of the date of this Current Report on Form 8-K. The amounts set forth under “Marginal Percentage Interest in Distributions After Payment of the Series A Preferred Distribution” are the percentage interests of our general partner, incentive distribution right holders, series A preferred unitholders, common unitholders and series B unitholders in any available cash from operating surplus we distribute in respect of the corresponding amount in the column “Total Quarterly Distribution Per Unit Amount.” The percentage interests shown for our general partner, incentive distribution right holders, series A preferred unitholders, common unitholders and series B unitholders for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution. The percentage interests set forth below for our general partner include its 1.326% general partner interest and assume that our general partner has contributed any additional capital necessary to maintain its 1.326% general partner interest. This table further assumes that (i) there are no arrearages on common units, (ii) there has been no conversion of the series A preferred units, and (iii) distributions are made prior to the coupon conversion quarter. The percentage interests do not reflect the effect of any series A PIK payments after those made with regard to the quarter ended September 30, 2013.

 

 	 	 	 	Marginal Percentage
Interest in Distributions After Payment of the
Series A Preferred Distribution	 	
 	 	Total Quarterly
Distribution
Per Unit Amount	 	Common and
Series B
Unitholders	 	Series A
Preferred
Unitholder(1)	 	General
Partner	 	Incentive
Distribution
Right Holders	 	
Minimum Quarterly Distribution	 	$0.4125	 	98.674	%	—	 	1.326	%	—	 	
Thereafter	 	Above $0.4125	 	50.674	%	—	 	1.326	%	48.000	%	

(1)                                  Series A preferred units are, as of the date of this Current Report on Form 8-K, held by HPIP. This table assumes payment of the $0.25 series A quarterly distribution is not included in the calculation of the marginal percentage interest in distributions.
 
Right to Reset Incentive Distribution Levels
 
The holders of a majority in interest of the incentive distribution rights have the right under our partnership agreement, without approval of our unitholders, to reset at a higher level the minimum quarterly distribution at any time when the general partner concurs that the partnership has made a distribution on common units exceeding 150% of the minimum quarterly distribution for each of the four consecutive fiscal quarters immediately preceding such time and the amount of each such distribution does not exceed the adjusted operating surplus for such quarter. The reset minimum quarterly distribution amount will be higher than the minimum quarterly distribution amount prior to the reset such that holders of our incentive distribution rights will not receive any incentive distributions until cash distributions per unit following this event increase as described below. We anticipate that holders of our incentive distribution rights would exercise this reset right in order to facilitate acquisitions or internal growth projects that would otherwise not be sufficiently accretive to cash distributions per common unit, taking into account the existing levels of incentive distribution payments being made.
 
In connection with the resetting of the minimum quarterly distribution amount and the corresponding relinquishment by the holders of our incentive distribution rights based on the minimum quarterly distribution prior to the reset, the holders of our incentive distribution rights will be entitled to receive a number of newly issued common units based on a predetermined formula described below that takes into account the “cash parity” value of the average cash distributions received by holders of our incentive distribution rights for the two quarters immediately preceding the reset event as compared to the average cash distributions per common unit during that two-quarter period. Our general partner will be issued the number of general partner units necessary to maintain our general partner’s interest in us immediately prior to the reset election.
 
The number of common units that holders of our incentive distribution rights would be entitled to receive from us in connection with a resetting of the minimum quarterly distribution amount then in effect would be equal to the quotient determined by dividing (x) the average aggregate amount of cash distributions received by the holders of our incentive distribution rights in respect of their incentive distribution rights during the two consecutive fiscal quarters ended immediately prior to the date of such reset election by (y) the average of the amount of cash distributed per common unit during each of these two quarters.
 
Following a reset election, the minimum quarterly distribution amount will be reset to an amount equal to the average cash distribution amount per common unit for the two fiscal quarters immediately preceding the reset election (which amount we refer to as the “reset minimum quarterly distribution”) such that we would distribute all of our available cash from operating surplus for each quarter thereafter as follows:
 
·                   first , to the holders of series A preferred units, the series A quarterly distribution, and any series A arrearage and series A interest;
 
·                   second , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until we distribute for each outstanding common unit an amount equal to the reset minimum quarterly distribution for that quarter;
 
·                   third , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until we distribute for each outstanding common unit an amount equal to any arrearages in payment of the reset minimum quarterly distribution for the quarter;

 
·                   thereafter , 50.674% to the common unitholders and series B unitholders, pro rata, 1.326% to our general partner, and 48.0% to the holders of our incentive distribution rights.
 
The preceding discussion is based on the assumption that our general partner maintains its 1.326% general partner interest, that we issue series B units, that we do not issue additional classes of equity securities, and that we do not pay distributions in respect of the series B units in series B PIK units.
 
The following table illustrates the percentage allocation of available cash from operating surplus after payment of the series A quarterly distribution, and any series A arrearage and series A interest, between the unitholders, our general partner and holders of our incentive distribution rights based on the minimum quarterly distribution amount as of the date of this Current Report on Form 8-K (i) pursuant to the cash distribution provisions of our partnership agreement currently in effect, as well as (ii) following a hypothetical reset of the minimum quarterly distribution based on the assumption that the average quarterly cash distribution amount per common unit during the two fiscal quarters immediately preceding the reset election was $0.65. This table assumes that (i) there are no arrearages on common units, (ii) there has been no conversion of the series A preferred units, and (iii) any distributions are made prior to the coupon conversion quarter. The percentage interests do not reflect the effect of any series A PIK payments after those made with regard to the quarter ended September 30, 2013.

 	 	 	 	Marginal Percentage
Interest in Distributions After Payment of the
Series A Preferred Distribution	 	Quarterly	 	
 	 	Total Quarterly
Distribution
Per Unit Amount	 	Common and
Series B
Unitholders	 	Series A
Preferred
Unitholder(1)	 	General
Partner	 	Incentive
Distribution
Right Holders	 	Distributions per
Unit Following
Hypothetical Reset	 	
Minimum Quarterly Distribution	 	$0.4125	 	98.674	%	—	 	1.326	%	—	 	$0.65	 	
Thereafter	 	Above $0.4125	 	50.674	%	—	 	1.326	%	48.000	%	Above $0.65	 	

(1)                                  Series A preferred units are, as of the date of this Current Report on Form 8-K, held by HPIP. This table assumes payment of the $0.25 series A quarterly distribution is not included in the calculation of the marginal percentage interest in distributions.
 
The following table illustrates the total amount of available cash from operating surplus after payment of the series A quarterly distribution, and any series A arrearage and series A interest, that would be distributed to the unitholders, our general partner, and holders of our incentive distribution rights, based on an average of the amounts distributed each quarter for the two quarters immediately prior to the reset. The table assumes that immediately prior to the reset there would be 10,821,293 common units outstanding, 1,168,225 series B units outstanding, 5,278,562 series A preferred units outstanding, our general partner has maintained its 1.326% general partner interest, and the average distribution to each common unit would be $0.65 for the two quarters prior to the reset. It further assumes that (i) there are no arrearages on common units, (ii) there has been no conversion of the series A preferred units, and (iii) any distributions are made prior to the coupon conversion quarter. The percentage interests do not reflect the effect of any series A PIK payments after those made with regard to the quarter ended September 30, 2013.

 	 	Quarterly
Distribution
Per Unit
Prior to Reset	 	Cash
Distributions
to Common
and Series B
Unitholders
Prior to Reset	 	Cash
Distributions
to Series A
Preferred
Unitholders
Prior to Reset	 	Cash
Distribution to
General Partner
in Respect of
General Partner
Interest
Prior to Reset	 	Cash
Distributions
in Respect
of Incentive
Distribution
Rights
Prior to Reset	 	Total
Distributions
Prior to Reset	 	
Minimum Quarterly Distribution	 	Up to $0.4125	 	$	4,945,676	 	$	—	 	$	66,483	 	$	—	 	$	5,012,159	 	
Thereafter	 	Above $0.4125	 	2,847,511	 	—	 	74,537	 	2,697,274	 	5,619,322	 	
 	 	 	 	$	7,793,187	 	$	—	 	$	141,020	 	$	2,697,274	 	$	10,631,481	 	

(1)                                  Series A preferred units are, as of the date of this Current Report on Form 8-K, held by HPIP. This table does not include payment of the $0.25 series A quarterly distribution.
 
The following table illustrates the total amount of available cash from operating surplus after payment of the series A quarterly distribution, and any series A arrearage and series A interest, that would be distributed to the unitholders, our general partner, and holders of our incentive distribution rights, with respect to the quarter in which the reset occurs. The

 
table reflects that, as a result of the reset, there would be 14,970,946 common units outstanding, 1,168,225 series B units outstanding, 5,278,562 series A preferred units outstanding, our general partner’s 1.326% interest has been maintained, and the average distribution to each common unit would be $0.65. The number of common units to be issued to holders of our incentive distribution rights upon the reset was calculated by dividing (i) the average of the amounts received by the holders of our incentive distribution rights in respect of their incentive distribution rights for the two quarters prior to the reset as shown in the table above, or $2,697,274, by (ii) the average available cash distributed on each common unit for the two quarters prior to the reset as shown in the table above, or $0.65. This table assumes that (i) there are no arrearages on common units and (ii) there has been no conversion of the series A preferred units. The percentage interests do not reflect the effect of any series A PIK payments after those made with regard to the quarter ended September 30, 2013.

 	 	Quarterly
Distribution
Per Unit
After Reset	 	Cash
Distributions
to Common
and Series B
Unitholders
Other than
Common
Units
issued to
Holders of
Incentive
Distribution
Rights
After Reset(1)	 	Cash
Distribution
in Respect
of General
Partner
Interest
After Reset	 	Cash
Distributions
to Series A
Preferred
Unitholders
After Reset(2)	 	Cash
Distributions
in Respect of
Incentive
Distribution
Rights
After Reset	 	Cash
Distributions
on Common
Units Issued
to Holders
of Incentive
Distribution
Rights in
Connection
with Reset	 	Total
Distributions
After Reset	 	
Minimum Quarterly Distribution	 	Up to $0.65	 	$	7,793,187	 	$	141,020	 	$	—	 	$	—	 	$	2,697,274	 	$	10,631,481	 	
Thereafter	 	Above $0.65	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	 	 	$	7,793,187	 	$	141,020	 	$	—	 	$	—	 	$	2,697,274	 	$	10,631,481	 	

(1)                                  Series A preferred units are, as of the date of this Current Report on Form 8-K, held by HPIP. This table does not include payment of the $0.25 series A quarterly distribution.
 
(2)                                  Starting with the quarter beginning October 1, 2014, each series A preferred unit shares in distributions in an amount equal to the greater of (i) 0.023571428 multiplied by $17.50 (adjusted as provided in our partnership agreement), and (ii) the amount of distributions in cash for such quarter that would have been payable with respect to the series A preferred unit if such series A preferred unit had converted at the beginning of the quarter in respect of which such distributions are being paid into the number of common units into which such series A preferred unit is convertible. If the series A preferred unit has converted to common units during, after or prior to that quarter, the common units into which such series A preferred unit converted would increase the amount distributable on the common units.
 
Holders of a majority in interest of our incentive distribution rights will be entitled to cause the minimum quarterly distribution amount to be reset on more than one occasion, provided that they may not make a reset election except at a time when we have made cash distributions to the holders of the common units in amounts exceeding 150% of the minimum quarterly distributions for the immediately preceding four consecutive fiscal quarters and the amount of each such distribution does not exceed the adjusted operating surplus for such quarter.
 
Distributions from Capital Surplus
 
How Distributions from Capital Surplus Will Be Made
 
We will make distributions of available cash from capital surplus, if any, in the following manner:
 
·                   first , to the holders of series A preferred units, the series A quarterly distribution, and any series A arrearage and series A interest;
 
·                   second , 98.674% to all unitholders, pro rata, and 1.326% to our general partner, until the minimum quarterly distribution has been reduced to zero, under a formula based on the ratio of the distribution to the fair market value of the common units immediately prior to the announcement of the distribution;

 
·                   third , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until we distribute for each outstanding common unit, an amount of available cash from capital surplus equal to any unpaid arrearages in payment of the minimum quarterly distribution on the common units; and
 
·                   thereafter , as if they were from operating surplus.
 
The preceding discussion is based on the assumptions that our general partner maintains its 1.326% general partner interest, that we issue series B units, that we do not issue additional classes of equity securities, and that we do not pay distributions in respect of the series B units in series B PIK units.
 
Because distributions of capital surplus will reduce the minimum quarterly distribution after any of these distributions are made, it may be easier for our general partner to receive incentive distributions.
 
Adjustment to the Minimum Quarterly Distribution
 
In addition to adjusting the minimum quarterly distribution to reflect a distribution of capital surplus, if we combine our units into fewer units or subdivide our units into a greater number of units, we will proportionately adjust the minimum quarterly distribution and the number of general partner units comprising the general partner interest.
 
For example, if a two-for-one split of the common units should occur, the minimum quarterly distribution would be reduced to 50% of its initial level. We will not make any adjustment by reason of the issuance of additional units for cash or property.
 
In addition, if legislation is enacted or if existing law is modified or interpreted by a governmental authority, so that we become taxable as a corporation or otherwise subject to taxation as an entity for federal, state or local income tax purposes, our partnership agreement specifies that the minimum quarterly distribution for each quarter may be reduced by multiplying the applicable minimum quarterly distribution by a fraction, the numerator of which is available cash for that quarter and the denominator of which is the sum of available cash for that quarter plus our general partner’s estimate of our aggregate liability for the quarter for such income taxes payable by reason of such legislation or interpretation. To the extent that the actual tax liability differs from the estimated tax liability for any quarter, the difference will be accounted for in subsequent quarters.
 
Distributions of Cash Upon Liquidation
 
General
 
If we dissolve in accordance with our partnership agreement, we will sell or otherwise dispose of our assets in a process called liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. Next, we will distribute proceeds to the holder of series A preferred units, prior and in preference to any distribution of assets to our general partner, common unitholders, and series B unitholders, the positive value in such series A unitholder’s capital account in respect of its series A preferred units. We will distribute any remaining proceeds to the common unitholders, series B unitholders, and our general partner, in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.
 
Manner of Adjustments for Gain
 
The manner of the adjustment for gain is set forth in our partnership agreement. We will generally allocate any gain to our partners in the following manner:
 
·                   first , to our general partner to the extent of the negative balance in its capital account, if any;
 
·                   second , to the holders of series A preferred units, pro rata, until the capital account in respect of each outstanding series A preferred unit is equal to the series A liquidation value of such series A preferred unit, as defined in our partnership agreement;
 
·                   third , 98.674% to the common unitholders and series B unitholders, pro rata, and 1.326% to our general partner, until the capital account for each common unit and series B unit is equal to the sum of: (1) the unrecovered initial unit price (i.e., the initial public offering price less any distributions of capital surplus per unit); (2) the

 
amount of the minimum quarterly distribution for the quarter during which our liquidation occurs with respect to such common unit for such quarter and associated pro rata amounts to the series B units, reduced by any distribution of the minimum quarterly distribution with respect to such common unit or associated pro rata amounts with respect to the series B unit for such quarter; and (3) any unpaid arrearages in payment of the minimum quarterly distribution and associated pro rata amounts to the series B units;
 
·                   thereafter , 50.674% to all unitholders (including holders of series A preferred units), pro rata, 1.326% to our general partner and 48% to the holders of our incentive distribution rights.
 
The percentages set forth above are based on the assumption that our general partner has not transferred its incentive distribution rights, that we issue series B units, that we do not issue additional classes of equity securities, and that we do not pay distributions in respect of the series B units in series B PIK units.
 
Manner of Adjustments for Losses
 
We will generally allocate any loss to our general partner and unitholders in the following manner:
 
·                   first , 98.674% to the holders of common units and series B units in proportion to the positive balances in their capital accounts and 1.326% to our general partner, until the capital accounts of the common unitholders have been reduced to zero;
 
·                   second , 98.674% to all unitholders (including holders of series A preferred units), pro rata, and 1.326% to our general partner, provided that such loss shall not be allocated in this manner to the extent such allocation would cause any unitholder to have a deficit balance in its adjusted capital account;
 
·                   third , to the holders of series A preferred units, pro rata, until the capital accounts of the series A preferred unitholders have been reduced to zero; and
 
·                   thereafter , 100.0% to our general partner.
 
Adjustments to Capital Accounts
 
Our partnership agreement requires that we make adjustments to capital accounts upon the issuance of additional units. In this regard, our partnership agreement specifies that we allocate any unrealized and, for tax purposes, unrecognized gain resulting from the adjustments to the unitholders and the general partner in the same manner as we allocate gain upon liquidation. In the event that we make positive adjustments to the capital accounts upon the issuance of additional units, our partnership agreement requires that we generally allocate any later negative adjustments to the capital accounts resulting from the issuance of additional units or upon our liquidation in a manner which results, to the extent possible, in the partners’ capital account balances equaling the amount which they would have been if no earlier positive adjustments to the capital accounts had been made. In contrast to the allocations of gain, and except as provided above, we generally will allocate any unrealized and unrecognized loss resulting from the adjustments to capital accounts upon the issuance of additional units to the unitholders and our general partner based on their respective percentage ownership of us.

Exhibit 99.3
 
THE PARTNERSHIP AGREEMENT
 
The following is a summary of the material provisions of our partnership agreement. Our partnership agreement is incorporated by reference into the registration statement of which this prospectus forms a part. We will provide prospective investors with a copy of our partnership agreement upon request at no charge.
 
We summarize the following provisions of our partnership agreement elsewhere in this prospectus:
 
·                   with regard to distributions of available cash, please read “Our Cash Distribution Policy;”
 
·                   with regard to the transfer of common units, please read “Description of the Common Units—Transfer of Common Units;” and
 
·                   with regard to allocations of taxable income and taxable loss, please read “Material U.S. Federal Income Tax Consequences.”
 
Organization and Duration
 
We were organized in August 2009 and have a perpetual existence.
 
Purpose
 
Our purpose under our partnership agreement is limited to any business activities that are approved by our general partner and in any event that lawfully may be conducted by a limited partnership organized under Delaware law; provided that our general partner may not cause us to engage, directly or indirectly, in any business activity that our general partner determines would cause us to be treated as an association taxable as a corporation or otherwise taxable as an entity for federal income tax purposes.
 
Although our general partner has the power to cause us, our operating company and its subsidiaries to engage in activities other than the business of gathering, compressing, treating and transporting natural gas, our general partner has no current plans to do so and may decline to do so free of any fiduciary duty or obligation whatsoever to us or the limited partners, including any duty to act in good faith or in the best interests of us or the limited partners. Our general partner is generally authorized to perform all acts it determines to be necessary or appropriate to carry out our purposes and to conduct our business.
 
Cash Distributions
 
Our partnership agreement specifies the manner in which we will make cash distributions to holders of our common units, series A preferred units, series B units, incentive distribution rights and other partnership securities as well as to our general partner in respect of its general partner interest and incentive distribution rights. For a description of these cash distribution provisions, please read “Our Cash Distribution Policy.”
 
Capital Contributions
 
Unitholders are not obligated to make additional capital contributions, except as described below under “—Limited Liability.”
 
For a discussion of our general partner’s right to contribute capital to maintain its 1.326% general partner interest if we issue additional units, please read “—Issuance of Additional Securities.”
 
Voting Rights
 
The following is a summary of the unitholder vote required for approval of the matters specified below. Matters that require the approval of a “unit majority” require the approval of a majority of the outstanding common units and, to the extent there are any outstanding, the series A preferred units and series B units, voting together with

 
the common units as a single class on an “as if” converted basis. Except as provided in our partnership agreement, the outstanding series A preferred units and series B units shall have voting rights identical to the voting rights of the common units and shall vote with the common units as a single class, so that each outstanding series A preferred unit or series B unit will be entitled to one vote for each common unit into which such series A preferred unit or series B unit is then convertible on each matter with respect to which each common unit is entitled to vote. In addition, (i) the affirmative vote of a majority of the outstanding series A preferred units, voting separately as a class on a basis of one vote per series A preferred unit, shall be necessary to approve any matter, or to take any action (including entry into a merger, consolidation or business combination), that adversely affects any of the rights, preferences and privileges of the series A preferred units or amends or modifies any terms of the series A preferred units, subject to certain limitations and exceptions as set forth in the partnership agreement and (ii) the affirmative vote of a majority of the outstanding series B units, voting separately as a class on a basis of one vote per series B unit, shall be necessary to approve any matter, or to take any action (including entry into a merger, consolidation or business combination), that adversely affects any of the rights, preferences and privileges of the series B units or amends or modifies any terms of the series B units, subject to certain limitations and exceptions as set forth in the partnership agreement.
 
In voting their common units, series A preferred units and series B units, our general partner and its affiliates will have no fiduciary duty or obligation whatsoever to us or our limited partners, including any duty to act in good faith or in the best interests of us and our limited partners.

Issuance of additional units	 	No approval right.	
 	 	 	
Amendment of our partnership agreement	 	Certain amendments may be made by our general partner without the approval of the unitholders. Other amendments generally require the approval of a unit majority. Please read “—Amendment of Our Partnership Agreement.”	
 	 	 	
Merger of our partnership or the sale of all or substantially all of our assets	 	Unit majority in certain circumstances. Please read “—Merger, Sale or Other Disposition of Assets.”	
 	 	 	
Dissolution of our partnership	 	Unit majority. Please read “—Termination and Dissolution.”	
 	 	 	
Continuation of our business upon dissolution	 	Unit majority. Please read “—Termination and Dissolution.”	
 	 	 	
Withdrawal of our general partner	 	Under most circumstances, the approval of a majority of the common units, excluding common units, series A preferred units, and series B units held by our general partner and its affiliates, is required for the withdrawal of our general partner prior to June 30, 2021 in a manner that would cause a dissolution of our partnership. Please read “—Withdrawal or Removal of Our General Partner.”	
 	 	 	
Removal of our general partner	 	Not less than 66 2 / 3 % of the outstanding units, voting as a single class, including units held by our general partner and its affiliates, and prior to August 9, 2018, so long as the holders of incentive distribution rights as of the date of our partnership agreement, together with their affiliates, continue to own a majority of the incentive distribution rights, the holders of a majority of the incentive distribution rights. Please read “—Withdrawal or Removal of Our General Partner.”	

 

Transfer of our general partner interest	 	Our general partner may transfer all, but not less than all, of its general partner interest in us without a vote of our unitholders to an affiliate or another person in connection with its merger, consolidation or conversion with or into, or sale of all or substantially all of its assets to, such person. The approval of a majority of the outstanding common units, series A preferred units, and series B units, excluding common units, series A preferred units, and series B units held by our general partner and its affiliates, is required in other circumstances for a transfer of the general partner interest to a third party prior to June 30, 2020. Please read “—Transfer of General Partner Interest.”	
 	 	 	
Transfer of incentive distribution rights	 	No approval right. Please read “—Transfer of Preferred Units and Incentive Distribution Rights.”	
 	 	 	
Transfer of ownership interests in our general partner	 	No approval required at any time. Please read “—Transfer of Ownership Interests in Our General Partner.”	
 
Limited Liability
 
Assuming that a limited partner does not participate in the control of our business within the meaning of the Delaware Act and that it otherwise acts in conformity with the provisions of our partnership agreement, its liability under the Delaware Act will be limited, subject to possible exceptions, to the amount of capital it is obligated to contribute to us for its common units plus its share of any undistributed profits and assets. If it were determined, however, that the right of, or exercise of the right by, the limited partners as a group:
 
·                   to remove or replace our general partner;
 
·                   to approve some amendments to our partnership agreement; or
 
·                   to take other action under our partnership agreement;
 
constituted “participation in the control” of our business for the purposes of the Delaware Act, then the limited partners could be held personally liable for our obligations under the laws of Delaware, to the same extent as our general partner. This liability would extend to persons who transact business with us who reasonably believe that a limited partner is a general partner. Neither our partnership agreement nor the Delaware Act specifically provides for legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our general partner. While this does not mean that a limited partner could not seek legal recourse, we know of no precedent for such a claim in Delaware case law.
 
Under the Delaware Act, a limited partnership may not make a distribution to a partner if, after the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specific property of the partnership, would exceed the fair value of the assets of the limited partnership. For the purpose of determining the fair value of the assets of a limited partnership, the Delaware Act provides that the fair value of property subject to liability for which recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds the nonrecourse liability. Under the Delaware Act, upon the winding up of a limited partnership, assets are distributed first to creditors in respect of the liabilities of the limited partnership (other than liabilities for which reasonable provision has been made by the partnership and liabilities for distributions to partners and former partners), second (unless the partnership agreement provides otherwise) to partners and former partners in satisfaction of liabilities for distributions under the Delaware Act, and finally (unless the partnership agreement provides otherwise) to partners, first for the return of their contributions and second respecting their partnership interests, in the proportions in which the partners share distributions. The Delaware Act provides that a limited partner who receives a distribution and knew at the time of the distribution that the distribution was in violation of the Delaware Act including, but not limited to, a distribution paid in connection with a winding up of the Partnership in violation of the Delaware Act, shall be liable to the limited partnership for the amount of the

 
distribution for three years. Under the Delaware Act, a substituted limited partner of a limited partnership is liable for the obligations of its assignor to make contributions to the partnership, except that such person is not obligated for liabilities unknown to it at the time it became a limited partner and that could not be ascertained from the partnership agreement.
 
Our subsidiaries conduct business primarily in five states and we may have subsidiaries that conduct business in other states in the future. Maintenance of our limited liability as a member of our operating company may require compliance with legal requirements in the jurisdictions in which our operating company conducts business, including qualifying our subsidiaries to do business there.
 
Limitations on the liability of members or limited partners for the obligations of a limited liability company or limited partnership have not been clearly established in many jurisdictions. If, by virtue of our ownership interest in our operating company or otherwise, it were determined that we were conducting business in any state without compliance with the applicable limited partnership or limited liability company statute, or that the right or exercise of the right by the limited partners as a group to remove or replace our general partner, to approve some amendments to our partnership agreement, or to take other action under our partnership agreement constituted “participation in the control” of our business for purposes of the statutes of any relevant jurisdiction, then the limited partners could be held personally liable for our obligations under the law of that jurisdiction to the same extent as our general partner under the circumstances. We will operate in a manner that our general partner considers reasonable and necessary or appropriate to preserve the limited liability of the limited partners.
 
Issuance of Additional Securities
 
Our partnership agreement authorizes us to issue an unlimited number of additional partnership securities for the consideration and on the terms and conditions determined by our general partner without the approval of our limited partners; provided, however, that we may not issue additional series A preferred units or any securities that have substantially the same or superior rights and obligations as the series A preferred units without the affirmative vote of a majority of the series A preferred units, voting separately as a class on one vote per series A preferred unit basis.
 
It is possible that we will fund acquisitions through the issuance of additional common units, subordinated units or other partnership securities. Holders of any additional common units we issue will be entitled to share equally with the then-existing holders of common units and series B units in our distributions of available cash. In addition, the issuance of additional common units or other partnership securities may dilute the value of the interests of the then- existing holders of common units in our net assets.
 
In accordance with Delaware law and the provisions of our partnership agreement, we may also issue additional subordinated units or other partnership securities that, as determined by our general partner, may have rights to distributions or special voting rights to which the common units are not entitled. In addition, our partnership agreement does not prohibit our subsidiaries from issuing equity securities, which may effectively rank senior to the common units.
 
Upon issuance of additional partnership securities, our general partner will be entitled, but not required, to make additional capital contributions to the extent necessary to maintain its 1.326% general partner interest in us. Our general partner’s 1.326% interest in us will be reduced if we issue additional units in the future and our general partner does not contribute a proportionate amount of capital to us to maintain its 1.326% general partner interest. Moreover, our general partner will have the right, which it may from time to time assign in whole or in part to any of its affiliates, to purchase common units, subordinated units or other partnership securities whenever, and on the same terms that, we issue those securities to persons other than our general partner and its affiliates, to the extent necessary to maintain the percentage interest of the general partner and its affiliates, including such interest represented by common and subordinated units, that existed immediately prior to each issuance. The holders of common units will not have preemptive rights under our partnership agreement to acquire additional common units or other partnership securities.

 
Amendment of Our Partnership Agreement
 
General
 
Amendments to our partnership agreement may be proposed only by our general partner. However, our general partner will have no duty or obligation to propose any amendment and may decline to do so free of any fiduciary duty or obligation whatsoever to us or our limited partners, including any duty to act in good faith or in the best interests of us or our limited partners. In order to adopt a proposed amendment, other than the amendments discussed below, our general partner must seek written approval of the holders of the number of units required to approve the amendment or call a meeting of the limited partners to consider and vote upon the proposed amendment. Except as described below, an amendment must be approved by a unit majority. In addition, any amendment that (i) adversely affects any of the rights, preferences and privileges of the series A preferred units, or amends or modifies any of the terms of the series A preferred units, must be approved by the affirmative vote of a majority of the series A preferred units, voting separately as a class based on one vote per series A preferred unit or (ii) adversely affects any of the rights, preferences and privileges of the series B units, or amends or modifies any of the terms of the series B units, must be approved by the affirmative vote of a majority of the series B units, voting separately as a class based on one vote per series B unit.
 
Prohibited Amendments
 
No amendment may be made that would:
 
·                   enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of the type or class of limited partner interests so affected; or
 
·                   enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable by us to our general partner or any of its affiliates without the consent of our general partner, which consent may be given or withheld at its option.
 
The provision of our partnership agreement preventing the amendments having the effects described in the clauses above can be amended upon the approval of the holders of at least 90.0% of the outstanding units, voting as a single class (including units owned by our general partner and its affiliates). As of December 31, 2013, affiliates of our general partner owned approximately 47.3% of the outstanding common and series A preferred units, on an as converted to common units basis.
 
No Unitholder Approval
 
Our general partner may generally make amendments to our partnership agreement without the approval of any limited partner to reflect:
 
·                   a change in our name, the location of our principal place of business, our registered agent or our registered office;
 
·                   the admission, substitution, withdrawal or removal of partners in accordance with our partnership agreement;
 
·                   a change that our general partner determines to be necessary or appropriate for us to qualify or to continue our qualification as a limited partnership or a partnership in which the limited partners have limited liability under the laws of any state or to ensure that neither we, our operating company, nor its subsidiaries will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes;
 
·                   a change in our fiscal year or taxable period and related changes;

 
·                   an amendment that is necessary, in the opinion of our counsel, to prevent us or our general partner or its directors, officers, agents, or trustees from in any manner being subjected to the provisions of the Investment Company Act of 1940, the Investment Advisors Act of 1940 or “plan asset” regulations adopted under the Employee Retirement Income Security Act of 1974, or ERISA, whether or not substantially similar to plan asset regulations currently applied or proposed;
 
·                   any amendment expressly permitted in our partnership agreement to be made by our general partner acting alone;
 
·                   an amendment effected, necessitated, or contemplated by a merger agreement that has been approved under the terms of our partnership agreement;
 
·                   any amendment that our general partner determines to be necessary or appropriate for the formation by us of, or our investment in, any corporation, partnership, joint venture, limited liability company or other entity, as otherwise permitted by our partnership agreement;
 
·                   mergers with, conveyances to or conversions into another limited liability entity that is newly formed and has no assets, liabilities or operations at the time of the merger, conveyance or conversion other than those it receives by way of the merger, conveyance or conversion; or
 
·                   any other amendments substantially similar to any of the matters described above.
 
In addition, our general partner may make amendments to our partnership agreement without the approval of any limited partner if our general partner determines that those amendments:
 
·                   do not adversely affect in any material respect the limited partners considered as a whole or any particular class of partnership interests as compared to other classes of partnership interests;
 
·                   are necessary or appropriate to satisfy any requirements, conditions, or guidelines contained in any opinion, directive, order, ruling, or regulation of any federal or state agency or judicial authority or contained in any federal or state statute;
 
·                   are necessary or appropriate to facilitate the trading of units or to comply with any rule, regulation, guideline, or requirement of any securities exchange on which the units are or will be listed for trading;
 
·                   are necessary or appropriate for any action taken by our general partner relating to splits or combinations of units under the provisions of our partnership agreement; or
 
·                   are required to effect the intent expressed in this prospectus or the intent of the provisions of our partnership agreement or are otherwise contemplated by our partnership agreement.
 
Opinion of Counsel and Limited Partner Approval
 
Our general partner will not be required to obtain an opinion of counsel that an amendment will not result in a loss of limited liability to the limited partners or result in our being treated as an entity for federal income tax purposes in connection with any of the amendments described above under “—No Unitholder Approval.” No other amendments to our partnership agreement will become effective without the approval of holders of at least 90.0% of the outstanding units voting as a single class unless we first obtain an opinion of counsel to the effect that the amendment will not affect the limited liability under applicable law of any of our limited partners.
 
In addition to the above restrictions, any amendment that would have a material adverse effect on the rights or preferences of any type or class of outstanding units in relation to other classes of units will require the approval of at least a majority of the type or class of units so affected. Any amendment that reduces the voting percentage required to take any action must be approved by the affirmative vote of limited partners whose aggregate outstanding units constitute not less than the voting requirement sought to be reduced.

 
Merger, Sale or Other Disposition of Assets
 
A merger, consolidation or conversion of us requires the prior consent of our general partner. However, our general partner will have no duty or obligation to consent to any merger, consolidation or conversion and may decline to do so free of any fiduciary duty or obligation whatsoever to us or the limited partners, including any duty to act in good faith or in the best interest of us or our limited partners.
 
In addition, our partnership agreement generally prohibits our general partner, without the prior approvals of both (i) the holders of a unit majority and (ii) a majority of the series A preferred units, voting separately as a class on one vote per series A preferred unit basis from causing us to, among other things, sell, exchange or otherwise dispose of all or substantially all of our and our subsidiaries’ assets in a single transaction or a series of related transactions, including by way of merger, consolidation, other combination or sale of ownership interests of our subsidiaries.
 
Our general partner may, however, convert or merge the partnership into a new limited liability entity without the prior approval of our unitholders if the sole purpose of such merger or conversion is to effect a change in legal form of the partnership, our general partner has received an opinion of counsel regarding limited liability and tax matters, and the general partner determines that the governing instruments of the new entity provide the limited partners and the general partner with substantially the same rights and obligations as the partnership agreement. Additionally, our general partner may consummate any merger or consolidation without the prior approval of our unitholders if we are the surviving entity in the transaction, our general partner has received an opinion of counsel regarding limited liability and tax matters, the transaction would not result in a material amendment to the partnership agreement (other than an amendment that the general partner could adopt without the consent of the limited partners), each of our units will be an identical unit of our partnership following the transaction and the partnership securities to be issued do not exceed 20.0% of our outstanding partnership securities immediately prior to the transaction. Our general partner may also mortgage, pledge, hypothecate, or grant a security interest in all or substantially all of our and our subsidiaries’ assets without the approval of our unitholders approval. Our general partner may also sell all or substantially all of our and our subsidiaries’ assets under a foreclosure or other realization upon those encumbrances without the approval of our unitholders.
 
Our unitholders are not entitled to dissenters’ rights of appraisal under our partnership agreement or applicable Delaware law in the event of a merger, consolidation or conversion, a sale of substantially all of our assets or any other similar transaction or event.
 
Termination and Dissolution
 
We will continue as a limited partnership until dissolved under our partnership agreement. We will dissolve upon:
 
·                   the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general partner other than by reason of a transfer of its general partner interest in accordance with our partnership agreement or withdrawal or removal following the approval and admission of a successor general partner;
 
·                   the election of our general partner to dissolve us, if approved by the holders of units representing a unit majority;
 
·                   the entry of a decree of judicial dissolution of our partnership; or
 
·                   there being no limited partners, unless we are continued without dissolution in accordance with the Delaware Act.
 
Upon a dissolution under the first clause above, the holders of a unit majority may also elect, within specific time limitations, to continue our business on the same terms and conditions described in our partnership

 
agreement and appoint as a successor general partner an entity approved by the holders of units representing a unit majority, subject to our receipt of an opinion of counsel to the effect that:
 
·                   the action would not result in the loss of limited liability of any limited partner; and
 
·                   neither we nor any of our subsidiaries would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of that right to continue (to the extent not already so treated or taxed).
 
Liquidation and Distribution of Proceeds
 
Upon our dissolution, unless we are continued as a limited partnership, the liquidator authorized to wind up our affairs will, acting with all of the powers of our general partner that are necessary or appropriate, liquidate our assets and apply the proceeds of the liquidation as described in “Provisions of Our Partnership Agreement Relating to Cash Distributions—Distributions of Cash Upon Liquidation.” The liquidator may defer liquidation or distribution of our assets for a reasonable period of time if it determines that an immediate sale or distribution would be impractical or would cause undue loss to our partners. The liquidator may distribute our assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the partners.
 
Withdrawal or Removal of Our General Partner
 
Except as described below, our general partner has agreed not to withdraw voluntarily as our general partner prior to June 30, 2021 without obtaining the approval of the holders of at least a majority of the outstanding common units, series A preferred units, and series B units voting as a single class and excluding common units, series A preferred units, and series B units held by the general partner and its affiliates, and furnishing an opinion of counsel regarding limited liability and tax matters. On or after June 30, 2021, our general partner may withdraw as general partner without first obtaining approval of any unitholder by giving at least 90 days’ advance notice, and that withdrawal will not constitute a violation of our partnership agreement. Notwithstanding the information above, our general partner may withdraw without unitholder approval upon 90 days’ notice to the limited partners if at least 50.0% of the outstanding common units are held or controlled by one person and its affiliates, other than our general partner and its affiliates. In addition, our partnership agreement permits our general partner in some instances to sell or otherwise transfer all of its general partner interest and incentive distribution rights in us without the approval of the unitholders. Please read “—Transfer of General Partner Interest” and “—Transfer of Preferred Units and Incentive Distribution Rights.”
 
In addition, our general partner will be deemed to have withdrawn upon the occurrence of certain events specified in the partnership agreement, including:
 
·                   the general partner transfers all of its general partnership interest to another party pursuant to the terms of the partnership agreement;
 
·                   the general partner makes a general assignment for benefit of creditors, files a voluntary bankruptcy petition, files a petition or answer seeking for itself a liquidation, dissolution or similar relief under any law, or seeks, consents or acquiseces in the appointment of a trustee, receiver or liquidator of the general partner or any substantial part of its properties; or
 
·                   the general partner is dissolved, terminated, wound-up or otherwise ceases its legal existence.
 
Upon withdrawal of our general partner under any circumstances, other than as a result of a transfer by our general partner of all or a part of its general partner interest in us, the holders of a unit majority may select a successor to that withdrawing general partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability and tax matters cannot be obtained, we will be dissolved, wound up and liquidated, unless within a specified period of time after that withdrawal, the holders of a unit majority agree in writing to continue our business and to appoint a successor general partner. Please read “—Termination and Dissolution.”

 
Our general partner may not be removed unless that removal is approved by either (a) the vote of the holders of not less than 66 2 / 3 % of all outstanding units, voting together as a single class, including units held by our general partner and its affiliates, or (b) prior to August 9, 2018, so long as the holders of the incentive distribution rights as of the date of our partnership agreement, together with their affiliates, continue to own a majority of the incentive distribution rights, the holders of a majority of the incentive distribution rights, and we receive an opinion of counsel regarding limited liability and tax matters. Any removal of our general partner is also subject to the approval of a successor general partner by the vote of (x) the holders of a majority of the outstanding common units, series B units, and series A preferred units voting as a single class and including units held by our general partner and its affiliates, and (y) prior to August 9, 2018, so long as the holders of the incentive distribution rights as of the date of our partnership agreement, together with their affiliates, continue to own a majority of the incentive distribution rights, the holders of a majority of the incentive distribution rights. The ownership of more than 33 2 / 3 % of the outstanding common, series B and series A preferred units and a majority of the incentive distribution rights by our general partner and its affiliates gives them the ability to prevent our general partner’s removal. As of December 31, 2013, affiliates of our general partner owned 47.3% of the aggregate outstanding common, series B and series A preferred units, on an as converted to common units basis, and our general partner and its affiliates owns 100% of the outstanding incentive distribution rights.
 
Our partnership agreement also provides that if our general partner is removed as our general partner under circumstances where cause does not exist and units held by our general partner and its affiliates are not voted in favor of that removal:
 
·                   any existing arrearages in payment of the minimum quarterly distribution on the common units will be extinguished; and
 
·                   our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests based on the fair market value of the interests at the time.
 
In the event of removal of our general partner under circumstances where cause exists or withdrawal of our general partner where that withdrawal violates our partnership agreement, a successor general partner will have the option to purchase the general partner interest and incentive distribution rights of the departing general partner for a cash payment equal to the fair market value of those interests. Under all other circumstances where our general partner withdraws or is removed by the limited partners, the departing general partner will have the option to require the successor general partner to purchase the general partner interest of the departing general partner and its incentive distribution rights for their fair market value. In each case, this fair market value will be determined by agreement between the departing general partner and the successor general partner. If no agreement is reached, an independent investment banking firm or other independent expert selected by the departing general partner and the successor general partner will determine the fair market value. Or, if the departing general partner and the successor general partner cannot agree upon an expert, then an expert chosen by agreement of the experts selected by each of them will determine the fair market value.
 
If the option described above is not exercised by either the departing general partner or the successor general partner, the departing general partner’s general partner interest and its incentive distribution rights will automatically convert into common units equal to the fair market value of those interests as determined by an investment banking firm or other independent expert selected in the manner described in the preceding paragraph.
 
In addition, we will be required to reimburse the departing general partner for all amounts due to it, including, without limitation, all employee-related liabilities, including severance liabilities, incurred in connection with the termination of any employees employed by the departing general partner or its affiliates for our benefit.
 
Transfer of General Partner Interest
 
Except for transfer by our general partner of all, but not less than all, of its general partner interest to:
 
·                   an affiliate of our general partner (other than an individual); or

 
·                   another entity as part of the merger, consolidation or conversion of our general partner with or into another entity or the transfer by our general partner of all or substantially all of its assets to another entity.
 
·                   our general partner may not transfer all or any of its general partner interest to another person prior to June 30, 2020 without the approval of the holders of at least a majority of the outstanding common units, series B units and series A preferred units, voting as a single class and excluding common units, series B units and series A preferred units held by our general partner and its affiliates. As a condition of this transfer, the transferee must, among other things, assume the rights and duties of our general partner, agree to be bound by the provisions of our partnership agreement and furnish an opinion of counsel regarding limited liability and tax matters.
 
Our general partner and its affiliates may, at any time, transfer common units, series B units or series A preferred units to one or more persons, without unitholder approval.
 
Transfer of Ownership Interests in Our General Partner
 
At any time, the owners of our general partner may sell or transfer all or part of their ownership interests in our general partner to an affiliate or a third party without the approval of our unitholders.
 
Transfer of Preferred Units and Incentive Distribution Rights
 
By transfer of units, incentive distribution rights or other limited partnership interests in accordance with our partnership agreement, each transferee of such a limited partnership interest will be admitted as a limited partner with respect to the limited partnership interest transferred when such transfer and admission is reflected in our books and records. Each transferee:
 
·                   represents that the transferee has the capacity, power and authority to become bound by our partnership agreement;
 
·                   automatically becomes bound by the terms and conditions of our partnership agreement; and
 
·                   gives the consents, waivers and approvals contained in our partnership agreement, such as the approval of all transactions and agreements we entered into in connection with our formation and the initial public.
 
We may, at our discretion, treat the nominee holder of units or incentive distribution rights as the absolute owner. In that case, the beneficial holder’s rights are limited solely to those that it has against the nominee holder as a result of any agreement between the beneficial owner and the nominee holder.
 
Units and incentive distribution rights are securities and any transfers are subject to the laws governing transfer of securities. In addition to other rights acquired upon transfer, the transferor gives the transferee the right to become a limited partner for the transferred units or incentive distribution rights.
 
Until a unit or incentive distribution right has been transferred on our books, we and the transfer agent may treat the record holder of the unit or right as the absolute owner for all purposes, except as otherwise required by law or stock exchange regulations.
 
Change of Management Provisions
 
Our partnership agreement contains specific provisions that are intended to discourage a person or group from attempting to remove our general partner or otherwise change our management. If any person or group, other than our general partner and its affiliates, acquires beneficial ownership of 20.0% or more of any class of units, that person or group loses voting rights on all of its units. This loss of voting rights does not apply to any person or group that acquires the units directly from our general partner or its affiliates or any transferee of that person or group that

 
is approved by our general partner or to any person or group who acquires the units with the prior approval of the board of directors of our general partner.
 
Our partnership agreement also provides that if our general partner is removed as our general partner under circumstances where cause does not exist and units held by our general partner and its affiliates are not voted in favor of that removal:
 
·                   any existing arrearages in payment of the minimum quarterly distribution on the common units will be extinguished; and
 
·                   our general partner will have the right to convert its general partner interest and its incentive distribution rights into common units or to receive cash in exchange for those interests based on the fair market value of the interests at the time.
 
Limited Call Right
 
If at any time our general partner and its affiliates own more than 80.0% of the then-issued and outstanding limited partner interests of any class, our general partner will have the right, which it may assign in whole or in part to any of its affiliates or to us, to acquire all, but not less than all, of the remaining limited partner interests of the class held by unaffiliated persons as of a record date to be selected by our general partner, on at least 10, but not more than 60, days notice. The purchase price in the event of this purchase is the greater of:
 
·                   the highest price paid by our general partner or any of its affiliates for any limited partner interests of the class purchased within the 90 days preceding the date on which our general partner first mails notice of its election to purchase those limited partner interests; and
 
·                   the average of the daily closing prices of the partnership securities of such class for the 20 consecutive trading days preceding the date three days before the date the notice is mailed.
 
As a result of our general partner’s right to purchase outstanding limited partner interests, a holder of limited partner interests may have his limited partner interests purchased at an undesirable time or price. The tax consequences to a unitholder of the exercise of this call right are the same as a sale by that unitholder of his common units in the market. Please read “Material U.S. Federal Income Tax Consequences—Disposition of Common Units.”
 
Limited Series A Preferred Unit Conversion Right, Redemption Right and Anti-Dilution Right
 
The series A preferred units are convertible in whole or in part into common units at the holder’s election at any time after January 1, 2014, or prior to that date with the consent of the required lenders under our credit agreement. As of the date of the partnership agreement, each series A preferred unit was convertible into one common unit. However, the conversion rate is subject to adjustment as described in the partnership agreement to account for additional issuances, distributions, combinations, subdivisions and reclassifications of our securities.

 
Prior to the consummation of any recapitalization, reorganization, consolidation, merger, spin-off or other business combination in which the holders of common units are to receive securities, cash or other assets, we are obligated to make an irrevocable written offer, subject to consummation of such transaction, to each holder of series A preferred units to redeem all (but not less than all) of such holder’s series A preferred units for a price per series A preferred unit payable in cash equal to the greater of (i) the sum of $17.50 and all accrued and accumulated but unpaid distributions for each Series A Preferred Unit; and (ii) an amount equal to the product of (A) the number of common units into which each series A preferred unit is then convertible, and (B) the sum of the cash consideration per common unit to be paid to the holders of common units in connection with such transaction, plus the fair market value per common unit of the securities or other assets to be distributed to the holders of the common units in connection with such transaction. Upon receipt of such a redemption offer from us, each holder of series A preferred units may elect to receive such cash amount or a preferred security issued by the person surviving or resulting from such transaction and containing provisions substantially equivalent to the provisions set forth in the partnership agreement with respect to the series A preferred units without material abridgement.
 
In the event that we issue, sell or grant any common units or convertible securities at an indicative per common unit price that is less than $17.50 (subject to customary anti-dilution adjustments), then the conversion rate will be adjusted according to a formula to provide for an increase in the number of common units into which series A preferred units are convertible.
 
Series B Unit Conversion Right
 
The series B units, including any additional series B units issued in distributions, will convert into common units on the second anniversary of the date on which they are issued.
 
Meetings; Voting
 
Except as described below regarding a person or group owning 20.0% or more of any class of units then outstanding, unitholders who are record holders of units on the record date will be entitled to notice of, and to vote at, meetings of our limited partners and to act upon matters for which approvals may be solicited.
 
Our general partner does not anticipate that any meeting of unitholders will be called in the foreseeable future. Any action that is required or permitted to be taken by the unitholders may be taken either at a meeting of the unitholders or without a meeting if consents in writing describing the action so taken are signed by holders of the number of units necessary to authorize or take that action at a meeting. Meetings of the unitholders may be called by our general partner or by unitholders owning at least 20.0% of the outstanding units of the class for which a meeting is proposed. Unitholders may vote either in person or by proxy at meetings. The holders of a majority of the outstanding units of the class or classes for which a meeting has been called, represented in person or by proxy, will constitute a quorum unless any action by the unitholders requires approval by holders of a greater percentage of the units, in which case the quorum will be the greater percentage.
 
Each record holder of a unit has a vote according to its percentage interest in us, although additional limited partner interests having special voting rights could be issued. Please read “—Issuance of Additional Securities.” However, if at any time any person or group, other than our general partner and its affiliates, or a direct or subsequently approved transferee of our general partner or its affiliates or any person or group who acquires the units with the prior approval of the board of directors of our general partner, acquires, in the aggregate, beneficial ownership of 20.0% or more of any class of units then outstanding, that person or group will lose voting rights on all of its units and the units may not be voted on any matter and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating required votes, determining the presence of a quorum, or for other similar purposes. Common units held in nominee or street name account will be voted by the broker or other nominee in accordance with the instruction of the beneficial owner unless the arrangement between the beneficial owner and its nominee provides otherwise.
 
Any notice, demand, request, report or proxy material required or permitted to be given or made to record holders of common units under our partnership agreement will be delivered to the record holder by us or by the transfer agent.

 
Status as Limited Partner
 
By transfer of common units in accordance with our partnership agreement, each transferee of common units will be admitted as a limited partner with respect to the common units transferred when such transfer and admission are reflected in our books and records. Except as described above under “—Limited Liability,” the common units will be fully paid, and unitholders will not be required to make additional contributions.
 
Non-Citizen Assignees; Redemption
 
To avoid any adverse effect on the maximum applicable rates chargeable to customers by us under Federal Energy Regulatory Commission regulations, or in order to reverse an adverse determination that has occurred regarding such maximum applicable rate, our partnership agreement provides our general partner the power to amend the agreement. If our general partner, with the advice of counsel, determines that our not being treated as an association taxable as a corporation or otherwise taxable as an entity for U.S. federal income tax purposes, coupled with the tax status (or lack of proof thereof) of one or more of our limited partners, has, or is reasonably likely to have, a material adverse effect on the maximum applicable rates chargeable to customers by us, then our general partner may adopt such amendments to our partnership agreement as it determines necessary or advisable to:
 
·                   obtain proof of the U.S. federal income tax status of our member (and their owners, to the extent relevant); and
 
·                   permit us to redeem the units held by any person whose tax status has or is reasonably likely to have a material adverse effect on the maximum applicable rates or who fails to comply with the procedures instituted by our general partner to obtain proof of the U.S. federal income tax status. The redemption price in the case of such a redemption will be the average of the daily closing prices per unit for the 20 consecutive trading days immediately prior to the date set for redemption.
 
A non-taxpaying assignee will not have the right to direct the voting of his units and may not receive distributions in kind upon our liquidation.
 
Non-Taxpaying Assignees; Redemption
 
In the event any rates that we charge our customers become regulated by the Federal Energy Regulatory Commission, to avoid any adverse effect on the maximum applicable rates chargeable to customers by us, or in order to reverse an adverse determination that has occurred regarding such maximum rate, our partnership agreement provides our general partner the power to amend the agreement. If our general partner, with the advice of counsel, determines that our not being treated as an association taxable as a corporation or otherwise taxable as an entity for U.S. federal income tax purposes, coupled with the tax status (or lack of proof thereof) of one or more of our limited partners, has, or is reasonably likely to have, a material adverse effect on the maximum applicable rates chargeable to customers by us, then our general partner may adopt such amendments to our partnership agreement as it determines necessary or advisable to:
 
·                   obtain proof of the U.S. federal income tax status of our member (and their owners, to the extent relevant); and
 
·                   permit us to redeem the units held by any person whose tax status has or is reasonably likely to have a material adverse effect on the maximum applicable rates or who fails to comply with the procedures instituted by our general partner to obtain proof of the U.S. federal income tax status. The redemption price in the case of such a redemption will be the average of the daily closing prices per unit for the 20 consecutive trading days immediately prior to the date set for redemption.
 
Indemnification
 
Under our partnership agreement, we will indemnify the following persons, in most circumstances, to the fullest extent permitted by law, from and against all losses, claims, damages or similar events:
 
·                   our general partner;

 
·                   any departing general partner;
 
·                   any person who is or was an affiliate of our general partner or any departing general partner;
 
·                   any person who is or was a member, manager, partner, director, officer, fiduciary or trustee of our partnership, our subsidiaries, our general partner, any departing general partner or any of their affiliates;
 
·                   any person who is or was serving at the request of the general partner or any departing general partner as an officer, director, member, manager, partner, fiduciary or trustee of another person; and
 
·                   any person designated by our general partner.
 
However, we will not provide indemnification 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, the indemnittee acted in bad faith or engaged in fraud or willful misconduct, or, in the case of a criminal matter, acted with knowledge that the indemnitee’s conduct was unlawful. In addition, we will, to the fullest extent permitted by law, advance expenses (including legal fees and expenses) incurred by an indemnittee in defending any claim, demand, action, suit or proceeding upon receipt of an undertaking by or on behalf of the indemnitee to repay such amount if is ultimately determined that the indemnitee was not entitled to indemnification pursuant to the partnership agreement.
 
Any indemnification under these provisions will only be out of our assets. Unless it otherwise agrees, our general partner will not be personally liable for, or have any obligation to contribute or loan funds or assets to us to enable us to effectuate, indemnification. We may purchase insurance against liabilities asserted against and expenses incurred by persons for our activities, regardless of whether we would have the power to indemnify the person against liabilities under our partnership agreement.
 
Reimbursement of Expenses
 
Our partnership agreement requires us to reimburse our general partner for all direct and indirect expenses it incurs or payments it makes on our behalf and all other expenses allocable to us or otherwise incurred by our general partner in connection with operating our business. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. Our general partner is entitled to determine in good faith the expenses that are allocable to us.
 
Books and Reports
 
Our general partner is required to keep or cause to be kept appropriate books and records of our business at our principal offices. The books will be maintained for both tax and financial reporting purposes on an accrual basis. For fiscal and tax reporting purposes, we use the calendar year.
 
We will furnish or make available (by posting on our website or other reasonable means) to record holders of common units, within 120 days after the close of each fiscal year, an annual report containing audited financial statements and a report on those financial statements by our independent public accountants, including a balance sheet and statements of operations, and our equity and cash flows. Except for our fourth quarter, we will also furnish or make available summary financial information within 90 days after the close of each quarter.
 
As soon as practicable, but in no event later than 90 days after the close of each quarter except the last quarter of each fiscal year, our general partner will mail or make available to each record holder of a unit a report containing our unaudited financial statements and such other information as may be required by applicable law, regulation or rule. This information is expected to be furnished in summary form so that some complex calculations normally required of partners can be avoided. Our ability to furnish this summary information to unitholders will depend on the cooperation of unitholders in supplying us with specific information. Every unitholder will receive information to assist him in determining its federal and state tax liability and filing its federal and state income tax returns, regardless of whether he supplies us with information.

 
Right to Inspect Our Books and Records
 
Our partnership agreement provides that a limited partner can, for a purpose reasonably related to its interest as a limited partner, upon reasonable demand and at its own expense, have furnished to him:
 
·                   a current list of the name and last known business, residence or mailing address of each record holder;
 
·                   copies of our partnership agreement, the certificate of limited partnership of the partnership, related amendments, and powers of attorney under which they have been executed;
 
·                   information regarding the status of our business and financial condition; and
 
·                   any other information regarding our affairs as is just and reasonable.
 
·                   Our general partner may, and intends to, keep confidential from the limited partners trade secrets or other information the disclosure of which our general partner believes in good faith is not in our best interests or that we are required by law or by agreements with third parties to keep confidential.
 
Registration Rights
 
Under our partnership agreement, we have agreed to register for resale under the Securities Act and applicable state securities laws any common units, series B units, series A preferred units, or other partnership securities proposed to be sold by our general partner or any of its affiliates, other than individuals, or their assignees if an exemption from the registration requirements is not otherwise available. These registration rights continue for two years and for so long thereafter as is required for the holder to sell its partnership securities following any withdrawal or removal of American Midstream GP, LLC as our general partner. We are obligated to pay all expenses incidental to the registration, excluding underwriting discounts and commissions.