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 22, 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 22, 2014, American Midstream Partners, LP (the “Partnership”), through its wholly owned subsidiary, American Midstream, LLC  entered into an agreement (the “Lavaca Purchase Agreement”) with ArcLight Energy Partners Fund V, L.P., a Delaware limited partnership, to purchase one of its wholly owned subsidiaries, HPIP Lavaca, LLC (“Lavaca LLC”), a Delaware limited liability company (the “Lavaca LLC Acquisition”).  The only asset of Lavaca LLC is the asset purchase agreement described in the paragraph below.  The aggregate purchase price for the Lavaca LLC Acquisition is $1,000. The closing of the Lavaca LLC Acquisition is subject to a financing condition for the Partnership and certain other customary conditions.
 
On December 13, 2013, Lavaca LLC entered into 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.  The assets to be acquired pursuant to the PVA Asset Purchase Agreement (the “PVA Asset Acquisition”) include 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 “PVA Assets”).    Construction of the PVA Assets began in 2011 and the related system currently has operating capacity of approximately 90 million cubic feet per day (MMcf/d). This system is currently flowing more than 40 MMcf/d between sales volume and gas lift, and the Partnership expects an increase in volumes throughout 2014 and thereafter.  Production gathered by this system is compressed and delivered to a third-party for processing or redelivered to PVA, which is currently operating six to seven rigs on this system, for gas lift.
 
The aggregate purchase price for the PVA Asset Acquisition is approximately $100 million, plus purchase price adjustments for certain capital costs and expenses incurred by PVA between October 1, 2013 and the closing date.  Payment of the aggregate purchase price for the PVA Asset Acquisition will become the Partnership’s obligation upon the closing of the Lavaca LLC Acquisition described above.  The PVA Asset Purchase Agreement contains customary representations and warranties and covenants, including provisions for indemnification, subject to the limitations described in the PVA Asset Purchase Agreement. The closing of the PVA Asset Acquisition, which is expected to occur in the first quarter of 2014, is subject to customary closing conditions.
 
In connection with the PVA Asset Acquisition, Lavaca LLC expects to enter into a Construction and Field Gathering Agreement (the “Construction and Field Gathering Agreement”) with a subsidiary of PVA, pursuant to which it will be 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 descriptions of the Lavaca Purchase Agreement and the PVA Asset Purchase Agreement set forth herein are summary in nature and are qualified in their entirety by reference to the full text of the Lavaca Purchase Agreement and the PVA Asset Purchase Agreement, copies of which are attached hereto as Exhibit 2.1, and are incorporated herein by reference.  The Lavaca Purchase Agreement and the PVA Asset Purchase Agreement contain customary representations, warranties, covenants and agreements by the Partnership and other parties thereto, indemnification obligations of the Partnership and other parties thereto, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in each such agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
 
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Item 3.02 Unregistered Sales of Equity Securities.
 
On January 22, 2014, the Partnership entered into a Series B Unit Purchase Agreement (the “Series B Unit Purchase Agreement”) with American Midstream GP, LLC, its general partner (the “General Partner”), and High Point Infrastructure Partners, LLC pursuant to which the Partnership agreed to issue in a private placement newly-designated Series B Units (the “Series B PIK Units”) representing limited partnership interests in the Partnership for approximately $30 million in aggregate proceeds (the “Series B Issuance”).  The Series B PIK Units will be issued in a private placement in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder.  The Series B PIK Units will convert into common units of the Partnership (“Common Units”) on a one-for-one basis on the second anniversary of the initial issuance of the Series B PIK Units.  The closing of the Series B Issuance is subject to a financing condition for us and certain other customary conditions.
 
In connection with issuance of the Series B PIK Units, the Partnership will enter into Amendment No. 2 to its Fourth Amended and Restated Agreement of Limited Partnership (the “Amendment”).  The 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 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 Amendment.  In addition, the Amendment increases 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 will 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 foregoing description of the Series B Unit Purchase Agreement set forth herein is summary in nature and is qualified in its entirety by reference to the full text of the Series B Unit Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The Series B Unit Purchase Agreement contains customary representations, warranties, covenants and agreements by the Partnership and other parties thereto, indemnification obligations of the Partnership and other parties thereto, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Series B Unit Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
 
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
(a) On January 16, 2014, Ms. Eileen Aptman announced her intention to resign as a member of the board of directors (the “Board”) of the General Partner.  Ms. Aptman’s resignation was not a result of any disagreement with the Partnership, the General Partner or its management on any matter relating to the Partnership’s or the General Partner’s operations, policies, or practices.  Ms. Aptman has agreed to continue to serve as a director until her replacement is appointed.  Ms. Aptman is a member of the Audit Committee and Compensation Committee and has previously served on Conflicts Committees of the Board.
 
Item 7.01 Regulation FD Disclosure.
 
On January 22, 2014, the Partnership issued a press release announcing the agreement to acquire Lavaca LLC described in Item 1.01 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.
 
Item 8.01  Other Information
 
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.
 
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Item 9.01	Financial Statements and Exhibits.	
 
(d) Exhibits.

Exhibit Number	 	Description	
2.1	 	Limited Liability Company Unit Purchase and Sale Agreement, dated as of January 22, 2014 by and between American Midstream, LLC and ArcLight Energy Partners V, L.P., and to which the Form of Purchase and Sale Agreement, dated as of December 13, 2013, by and among Penn Virginia Oil & Gas, L.P., HPIP Lavaca, LLC and certain other parties, is attached as Exhibit A.	
 	 	 	
10.1	 	Series B Unit Purchase Agreement dated January 22, 2014	
 	 	 	
99.1	 	Press Release, dated January 22, 2014	
 	 	 	
99.2	 	Cash Distribution Policy	
 
Cautionary Statement regarding Forward-Looking Statements
 
This Current Report on Form 8-K contains forward-looking statements as defined under the federal securities laws, including statements regarding the Lavaca LLC Acquisition, the PVA Asset Acquisition, operation of the PVA Assets, and the Series B Issuance. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond the Partnership’s control, including market conditions, financing conditions, and customary closing conditions for the transactions discussed herein. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, these transactions may not close and/or the Partnership’s actual results may vary materially from what management anticipated, estimated, projected or expected.
 
Investors are encouraged to closely consider the disclosures and risk factors contained in the Partnership’s reports filed from time to time with the Commission. The forward-looking statements contained herein speak only as of the date of this report.  The Partnership undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
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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	
 
January 22, 2014
 
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EXHIBITS INDEX

Exhibit Number	 	Description	
2.1	 	Limited Liability Company Unit Purchase and Sale Agreement, dated as of January 22, 2014 by and between American Midstream, LLC and ArcLight Energy Partners V, L.P., and to which the Form of Purchase and Sale Agreement, dated as of December 13, 2013, by and among Penn Virginia Oil & Gas, L.P., HPIP Lavaca, LLC and certain other parties, is attached as Exhibit A.	
 	 	 	
10.1	 	Series B Unit Purchase Agreement dated January 22, 2014	
 	 	 	
99.1	 	Press Release, dated January 22, 2014	
 	 	 	
99.2	 	Cash Distribution Policy	
 
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Exhibit 2.1
 
LIMITED LIABILITY COMPANY UNIT
PURCHASE AND SALE AGREEMENT
 
This LIMITED LIABILITY COMPANY UNIT PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is entered into on January 22, 2014, by and between American Midstream, LLC, a Delaware limited liability company (“ Buyer ”) and ArcLight Energy Partners Fund V, L.P., a Delaware limited partnership (“Seller”). Seller and Buyer are each individually referred to herein as a “ Party ” and collectively as the “ Parties .”
 
RECITALS
 
WHEREAS , Seller owns 100 units (the “ Units ”), representing 100% of the limited liability company units of HPIP Lavaca, LLC, a Delaware limited liability company (the “ Company ”);
 
WHEREAS , the Company has entered into that certain Purchase and Sale Agreement dated December 13, 2013 among the Company, Penn Virginia Oil & Gas L.P., a subsidiary of Penn Virginia Corporation (NYSE: PVA), Ted Collins, Jr. and Plein Sud Holdings, LLC, a form of which is attached hereto as Exhibit A (the “ Purchase and Sale Agreement ”); and
 
WHEREAS , Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of the Units upon the terms and conditions set forth in this Agreement.
 
AGREEMENT
 
NOW, THEREFORE , in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
 
ARTICLE 1
PURCHASE AND SALE; CLOSING
 
Section 1.1.                                 Purchase and Sale .  Upon the basis of the representations and warranties, and subject to the terms and conditions hereof, (i) Seller agrees to sell, convey, transfer and deliver to Buyer at the Closing (as defined below), the Units, free and clear of any and all liens and encumbrances, and (ii) Buyer agrees to purchase and accept from Seller at the Closing, the Units.  Such sale, conveyance, transfer, delivery, purchase and acceptance shall be made pursuant to the assignment and assumption agreement attached hereto as Exhibit B (the “ Assignment Agreement ”).
 
Section 1.2.                                 Purchase Price .   The aggregate purchase price for all of the Units shall be $1,000 (the “ Purchase Price ”).
 
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
 
Section 2.1.                                 Buyer’s Representations and Warranties .  Buyer hereby represents and warrants to Seller and the Company the matters set forth in this Section 2.1 :
 
(a)                                  Due Organization and Power . Buyer is a limited liability company duly formed, validly existing and in good standing, under the laws of the State of Delaware.  Buyer has the requisite corporate power and authority to carry out the business in which it is engaged and to own and use the properties owned and used by it.

 
(b)                                  Due Authorization . Buyer has all requisite limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the consummation by it of the transactions hereunder have been duly and validly authorized by all requisite limited liability company action on the part of Buyer. This Agreement has been duly executed and delivered by a duly authorized officer of Buyer.
 
(c)                                   Enforceability . This Agreement constitutes the valid and legally binding obligation of Buyer enforceable against it in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of creditors’ rights generally, general equitable principles and the discretion of courts in granting equitable remedies.
 
(d)                                  No Conflict . Neither the execution, delivery and performance of this Agreement, nor the consummation by Buyer of the transactions contemplated hereby, will conflict with, violate or result in a breach of any of the terms, conditions or provisions of (i) Buyer’s limited liability company agreement, or other organizational instruments, or (ii) any law applicable to Buyer or any of its properties or assets, or any order, writ, injunction, judgment or decree of any governmental authority or any arbitration award applicable to Buyer or any of its properties or assets.
 
(e)                                   No Contract Conflict . Neither the execution, delivery or performance by Buyer of this Agreement, nor the consummation by Buyer of the transactions contemplated hereby will conflict with, result in a breach or violation of, or constitute a default (with or without notice or lapse of time, or both) under, any contract to which Buyer is a party or by which any of its properties or assets is bound.
 
(f)                                    No Litigation Conflict . There is no action pending or, to Buyer’s knowledge, threatened against or affecting Buyer, or any of its properties or assets, at law or in equity, or before any governmental authority.
 
(g)                                   Consents and Regulatory Approvals . No notice, filing, authorization, approval, order or consent is required to be given, filed or obtained by Buyer from any governmental authority or third-party in connection with the execution, delivery and performance by Buyer of this Agreement or the transactions contemplated hereby.
 
Section 2.2.                                 Seller’s Representations and Warranties . Seller hereby represents and warrants to Buyer the matters set forth in this Section 2.2 :
 
(a)                                  Due Organization, Qualification and Power . Seller is a limited partnership duly formed, validly existing and in good standing, under the laws of the State of Delaware. Company is a limited liability company duly incorporated, validly existing and in good standing, under the laws of the State of Delaware.
 
(b)                                  Due Authorization . Seller has all requisite limited partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the consummation by it of the transactions hereunder have been duly and validly authorized by all requisite partnership action on the part of Seller. This Agreement has been duly and validly executed and delivered by the general partner of Seller.
 
(c)                                   Enforceability . This Agreement constitutes the valid and legally binding obligation of Seller enforceable against it in accordance with its terms and conditions, subject to applicable
 
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bankruptcy, insolvency and other similar laws affecting the enforceability of creditors’ rights generally, general equitable principles and the discretion of courts in granting equitable remedies.
 
(d)                                  No Conflict . None of the execution, delivery or performance of this Agreement, nor the consummation by Seller of the transactions contemplated hereby, will conflict with, violate or result in a breach of any of the terms, conditions or provisions of (i) Seller’s partnership agreement or other organizational instruments, or (ii) any law applicable to Seller, or any of its properties or assets, or any order, writ, injunction, judgment or decree of any governmental authority or any arbitration award applicable to Seller, or any of its properties or assets.
 
(e)                                   No Contract Conflict . None of the execution, delivery or performance by Seller of this Agreement, nor the consummation by Seller of the transactions contemplated hereby will (i) conflict with, result in a breach or violation of, or constitute a default (with or without notice or lapse of time, or both) or result in the creation of any lien upon any of the Company’s properties under, or the acceleration, relinquishment or modification of any rights or obligations of the Company contained in, any contract to which Seller or the Company is a party or by which any of their respective properties or assets are bound, or (ii) result in the creation of, or require the creation of, any lien upon the Units.
 
(f)                                    Consents and Regulatory Approvals . No notice, filing, authorization, approval, order or consent is required to be given, filed or obtained by Seller or the Company, from any governmental authority or third-party in connection with the execution, delivery and performance by Seller and the Company of this Agreement or the transactions contemplated hereby.
 
(g)                                   Capitalization . Seller has good and valid title to the Units, free and clear of any lien, and has the right, power, authority and capacity to sell and transfer the Units to Buyer in the manner provided herein, free and clear of any lien. The Units represent all of the issued and outstanding ownership interests of the Company. No rights, agreements, or commitments of any character exist that would obligate the Company to issue, transfer, or sell any additional ownership rights or interests in the Company or any other securities (debt, equity, or otherwise) convertible into or exchangeable for such ownership rights or interests.
 
(h)                                  Limited Liability Company Agreement . The limited liability company agreement of the Company, as amended, has been made available to Buyer prior to the date of this Agreement for its inspection, is complete and correct, has not been amended further and is in full force and effect.
 
ARTICLE 3
CONDITIONS PRECEDENT TO THE CLOSING
 
Section 3.1.                                 Conditions Precedent to Each Party’s Obligations . The respective obligations of each of Seller and Buyer to effect the transactions contemplated hereunder shall be subject to the fulfillment or written waiver, at or prior to the Closing, of the following conditions.
 
(a)                                  No action instituted by any governmental authority of competent jurisdiction shall be pending and no statute, rule, order, decree or regulation and no injunction, order, decree or judgment of any court or governmental authority of competent jurisdiction shall be in effect, in each case that prohibits, restrains, enjoins or restricts the consummation of the transactions contemplated herein.
 
Section 3.2.                                 Conditions Precedent to Seller’s Obligations .  The obligations of Seller to effect the
 
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transactions contemplated hereunder shall be subject to the fulfillment or written waiver by Seller, at or prior to the Closing, of each of the following conditions:
 
(a)                                  Accuracy of Representations and Warranties . The representations and warranties of Buyer contained herein shall be true and correct as the Closing Date;
 
(b)                                  Performance of Covenants . Buyer shall have performed in all material respects its obligations and complied in all material respects with its covenants and agreements required to be performed or complied with on or prior to the Closing, including the delivery of the executed Assignment Agreement by Buyer to Seller and the Company; and
 
(c)                                   Receipt of Funds . Seller shall have received Buyer’s transfer of the Purchase Price.
 
Section 3.3.                                 Conditions Precedent to Buyer’s Obligations .  The obligations of Buyer to effect the transactions contemplated hereunder shall be subject to the fulfillment or written waiver by Buyer, at or prior to the Closing, of the following conditions:
 
(a)                                  Accuracy of Representations and Warranties . The representations and warranties of Seller contained herein shall be true and correct as of the Closing Date;
 
(b)                                  Performance of Covenants . Seller and the Company shall have performed in all material respects its obligations and complied in all material respects with its covenants and agreements required to be performed or complied with on or prior to the Closing, including the delivery of the executed Assignment Agreement by Seller and the Company to Buyer;
 
(c)                                   Continuing Rights under PVA Agreement.   The Purchase and Sale Agreement shall be in full force and effect and the Company shall not have received notice of breach or notice of intent to terminate from any other party thereto;
 
(d)                                  Financing Contingency .  American Midstream Partners L.P., which owns 100% of the limited liability company interests of Buyer, shall have completed one or more equity offerings raising a minimum of $110 million; and
 
(e)                                   FIRPTA Certificate .  Seller shall have delivered a certificate that complied with Section 1.1445-2 of the Treasury Regulations sufficient to permit Buyer not to withhold on the transfer of funds to Seller.
 
ARTICLE 4 
 CLOSING
 
Section 4.1.                                 Closing Date . Subject to the satisfaction of the conditions set forth in ARTICLE 3 (or the waiver thereof by the Party entitled to waive those conditions), the consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Buyer, 1614 15 th  Street, Suite 300, Denver, Colorado 80202, at 10:00 a.m. (Mountain Standard time) on a date to be specified by Seller and Buyer, which date shall be no later than two (2) days after the satisfaction or waiver of each condition to the Closing set forth in ARTICLE 3 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in writing by Buyer and Seller. The date on which the Closing shall occur is referred to in this Agreement as the “ Closing Date ”.
 
Section 4.2.                                 Simultaneous Closing . All actions taken at the Closing are to be part of a simultaneous transaction, and no action is to be considered completed until all actions necessary to be completed at the Closing have been completed.
 
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ARTICLE 5
TERMINATION
 
Section 5.1.                                 Termination of Agreement . This Agreement may be terminated prior to the Closing as follows:
 
(a)                                  Mutual Consent . Upon the mutual written consent of Seller and Buyer.
 
(b)                                  Injunction . By Seller or Buyer if an injunction, order, decree or judgment of any court or governmental authority of competent jurisdiction shall be in effect, in each case that prohibits, restrains, enjoins or restricts the consummation of the transactions contemplated by this Agreement and such injunction, order, decree or judgment shall have become final and non-appealable.
 
(c)                                   Seller’s Termination Right . By Seller, by written notice to Buyer, if the condition precedent set forth in Section 3.3(d)  has not been fulfilled prior to February 10, 2014.
 
Section 5.2.                                 Effect of Termination .
 
(a)                                  In the event of the termination of this Agreement pursuant to and in compliance with the provisions of Section 5.1 , this Agreement and the proposed transactions contemplated hereunder shall terminate and, except as provided in this Section 5.2 , each Party hereto shall have no further obligation or liability hereunder, except that the provisions of Section 6.5 ( Notices ), Section 6.7 ( Governing Law ), and Section 6.8 ( Waiver of Jury Trial ).
 
(b)                                  Nothing in Section 5.2(a)  shall relieve any Party from any liability for breach of this Agreement.
 
ARTICLE 6
MISCELLANEOUS
 
Section 6.1.                                 No Third-Party Beneficiaries .  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.
 
Section 6.2.                                 Entire Agreement .  This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, with respect to the subject matter hereof.
 
Section 6.3.                                 Succession and Assignment .  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party.
 
Section 6.4.                                 Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. In addition, the Parties may execute this Agreement and furnish copies of their signatures by facsimile or other electronic transmission, each of which shall be as effective as an originally delivered signature.
 
Section 6.5.                                 Notices .  All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, or by expedited courier, next day delivery, and addressed to the intended recipient as set forth below:
 
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If to the Company after the Closing or Buyer:	If to the Company prior to the Closing or Seller:	
 	 	
American Midstream, LLC
1614 15 th  Street, Suite 300
Denver, Colorado 80202
Attention: William B. Mathews
Vice President and General Counsel
Telephone: (720) 457-6075
Facsimile: (720) 457-6040	ArcLight Energy Partners Fund V, L.P.
c/o ArcLight Capital Partners, LLC
200 Clarendon Street, 55 th  Floor
Boston, Massachusetts 02117
Attention: Christine Miller
Associate General Counsel
Telephone: (617) 531-6338
Fax: (617) 867-4698	
 
Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, messenger service, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
 
Section 6.6.                                 Severability .  If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future Law, and if the rights or obligations of any Party will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement and (d) in lieu of such illegal, invalid, or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be reasonably possible so that the contemplated transactions may be consummated as originally contemplated to the fullest extent possible.
 
Section 6.7.                                 Governing Law .  This Agreement shall be governed by, enforced in accordance with, and interpreted under, the Laws of the State of Colorado without reference to conflicts of laws principles except for matters concerning real property which shall be governed by, enforced in accordance with, and interpreted under the Laws of the State in which the real property is located.
 
Section 6.8.                                 Waiver of Jury Trial .
 
(a)                                  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE OUT OF OR RELATING TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
(b)                                  EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
 
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NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE WAIVERS SET FORTH IN SECTION 6.8(a) , (2) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (3) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (4) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN SUCH SECTION.
 
Section 6.9.                                 Amendments . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Seller and Buyer.
 
Section 6.10.                          No Waiver . The failure in any one or more instances of a Party to insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege in this Agreement conferred, or to waive any breach of any of the terms, covenants or conditions of this Agreement, shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving Party.
 
Section 6.11.                          No Partnership .  Nothing in this Agreement shall be deemed to create a joint venture, partnership, tax partnership, or agency relationship between the Parties.
 
[ Signature page follows ]
 
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IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

 	ARCLIGHT ENERGY PARTNERS FUND V, L.P.	
 	 	
 	By: ArcLight PEF GP V, LLC, its general partner	
 	 	 	
 	By: ArcLight Capital Holdings, LLC, its Manager	

 	By:	/s/ Daniel R. Revers	
 	Name: Daniel R. Revers	
 	Title: Manager	

 	AMERICAN MIDSTREAM, LLC,
a Delaware limited liability company	

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

 
Exhibit A
 
FORM OF PURCHASE AND SALE AGREEMENT

 
Execution Copy
 
PURCHASE AND SALE AGREEMENT
 
DATED AS OF DECEMBER 13, 2013
 
AMONG
 
PENN VIRGINIA OIL & GAS, L.P.,
 
TED COLLINS, JR.
 
AND
 
PLEIN SUD HOLDINGS, LLC
 
AS SELLERS
 
AND
 
HPIP LAVACA, LLC
 
AS BUYER

 
Table of Contents

 	 	Page	
 	 	 	
ARTICLE 1	PURCHASE AND SALE	1	
1.1	Purchase and Sale	1	
1.2	No Other Assets	2	
1.3	Assumed Liabilities	2	
ARTICLE 2	PURCHASE PRICE	2	
2.1	Purchase Price	2	
2.2	Purchase Price Allocation	3	
2.3	Purchase Price Adjustments	3	
2.4	Payment of Closing Payment	4	
2.5	Revenues and Expenses	5	
ARTICLE 3	CLOSING	5	
3.1	Time and Place of Closing	5	
3.2	Deliveries by Sellers at Closing	5	
3.3	Deliveries by Buyer at Closing	6	
3.4	Transaction Documents	7	
ARTICLE 4	REPRESENTATIONS AND WARRANTIES	7	
4.1	Representations and Warranties of Each Seller	7	
4.2	Representations and Warranties of Sellers	9	
4.3	Representations and Warranties of Buyer	12	
4.4	Disclaimers and Notifications	13	
ARTICLE 5	COVENANTS	15	
5.1	General	15	
5.2	Access	15	
5.3	Conduct of Business	16	
5.4	Consents	17	
5.5	Risk of Loss of Purchased Assets	17	
5.6	Transfer Taxes	17	
5.7	Recording	17	
5.8	Allocation of Taxes	17	
5.9	Transaction Expenses	18	
5.10	Maintenance of Books and Records	18	
5.11	Confidentiality	19	
5.12	Release of Bonds	19	
5.13	Names	19	
5.14	Revised Schedules	19	
5.15	Government Reviews	19	
5.16	Further Assurances	20	
5.17	Financial Information	20	
5.18	Rights-of-Way	20	
5.19	Replacement of Drip Tanks	20	
ARTICLE 6	CONDITIONS TO CLOSING	21	
6.1	Conditions to Obligations of Sellers	21	
6.2	Conditions to Obligations of Buyer	21	
 
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ARTICLE 7	INDEMNIFICATION	22	
7.1	Survival of Representations, Warranties and Covenants	22	
7.2	Indemnification By Sellers	23	
7.3	Indemnification By Buyer	23	
7.4	Indemnification Procedures	24	
7.5	Other Limitations on Indemnification	25	
7.6	Exclusive Remedy	25	
7.7	Tax Treatment	26	
ARTICLE 8	TERMINATION	26	
8.1	Termination of Agreement	26	
8.2	Effect of Termination	26	
ARTICLE 9	SELLER MATTERS	27	
9.1	Appointment of Seller Representative	27	
9.2	Release of Seller Claims	29	
ARTICLE 10	MISCELLANEOUS	30	
10.1	Amendment and Waiver	30	
10.2	Successors and Assigns	30	
10.3	Notices	30	
10.4	Severability	32	
10.5	No Third Party Beneficiaries	32	
10.6	Construction	32	
10.7	References and Titles	32	
10.8	Exhibits and Schedules	33	
10.9	Headings	33	
10.10	Counterparts	33	
10.11	Entire Agreement	33	
10.12	Applicable Law	33	
10.13	Several Obligations of Sellers	33	
ARTICLE 11	GUARANTEE	33	
 	 	 	
Exhibits	 	 	
 	 	 	
Exhibit A	Form of Conveyance, Assignment and Bill of Sale	 	
Exhibit B	Form of Special Warranty Deed	 	
Exhibit C	Form of Partial Assignment	 	
Exhibit D	Form of Gas Gathering Agreement	 	
Exhibit E	Form of Transition Services Agreement	 	
Exhibit F	Equity Commitment Letter	 	
 
Schedules

Schedule 1.1(a)	Gathering Assets	
Schedule 1.1(b)	Rights of Way	
Schedule 1.1(c)	Fee Property	
Schedule 1.1(d)	Contracts	
 
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Schedule 1.1(e)	Permits	
Schedule 2.1	As-Built Maps Costs	
Schedule 2.4	Sellers’ Pro Rata Shares	
Schedule 4.1(c)	Individual Seller Violations	
Schedule 4.2(b)	Consents	
Schedule 4.2(c)	Proceedings	
Schedule 4.2(d)	Violations	
Schedule 5.3	Permitted Capital Expenditures	
Schedule 5.4	Consents	
Schedule 5.12	Bonds	
Schedule 5.18	Necessary ROWs	
 
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PURCHASE AND SALE AGREEMENT
 
This PURCHASE AND SALE AGREEMENT (this “ Agreement ”), is made and entered into this 13th day of December, 2013, by and among Penn Virginia Oil & Gas, L.P., a Texas limited partnership, Ted Collins, Jr., an individual, and Plein Sud Holdings, LLC, a Texas limited liability company (each, a “ Seller ” and collectively, “ Sellers ”), and HPIP Lavaca, LLC, a Delaware limited liability company (“ Buyer ”), and, solely for the purposes of Article 11, ArcLight Energy Partners Fund V, L.P., a Delaware limited partnership (“ Buyer Guarantor ”). Sellers and Buyer may be referred to herein individually as a “ Party ” or collectively as the “ Parties .”
 
RECITALS
 
WHEREAS, Sellers desire to sell, assign and transfer to Buyer, and Buyer desires to purchase from Sellers, the Purchased Assets (as defined in Section 1.1 below) in accordance with the terms and conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby specifically acknowledged, and intending to be legally bound hereby, Sellers and Buyer hereby agree as follows:
 
ARTICLE 1
PURCHASE AND SALE
 
1.1                                Purchase and Sale .  Subject to the terms and conditions hereof, at the Closing (as defined in Section 3.1 below), each Seller shall sell, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from such Seller, all right, title and interest of such Seller in, to and under the following assets (collectively, the “ Purchased Assets ”):
 
(a)                                  the natural gas gathering assets owned by Sellers and existing in Gonzales and Lavaca Counties, Texas and generally described on Schedule 1.1(a) , together with all gathering lines, pipelines, gas and liquid treating and conditioning facilities, compressor stations, pipe, scrubbers, dehydration units, tanks, traps, cathodic protection equipment, meters, recorders, valves, fittings, equipment, personal property and improvements used or held for use exclusively in connection with the ownership, use and operation of such gathering assets, including such real property and surface and use rights as are necessary for the ownership, use or operation of the such gathering assets and related facilities and equipment (collectively, the “ Gathering Assets ”); provided, however, that the Gathering Assets shall not include any drip tanks;
 
(b)                                  such surface leases, subleases, licenses, easements and rights-of-way used or held for use exclusively in connection with the ownership, use or operation of the Gathering Assets, including those described on Schedule 1.1(b)  (collectively, the “ Rights of Ways ”);
 
(c)                                   all owned real property used or held for use exclusively in connection with the ownership, use or operation of the Gathering Assets, together with all buildings, structures and fixtures existing thereon, including that real property described on Schedule 1.1(c)
 
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(collectively, the “ Fee Property ”);
 
(d)                                  with respect to rights and obligations from and after the Effective Time, all contracts and agreements used or held for use exclusively in connection with the ownership, use or operation of the Gathering Assets (other than the Rights of Way), including those described on Schedule 1.1(d)  (collectively, the “ Contracts ”);
 
(e)                                   to the extent assignable under applicable Laws and Regulations (as defined in Section 4.2(d) below), all permits, licenses, variances, exemptions, orders, franchises, registrations, approvals and authorizations obtained from any Governmental Authority (as defined in Section 4.2(b) below), and all pending applications therefor, used or held for use exclusively in connection with the ownership, use and operation of the Gathering Assets, including those described on Schedule 1.1(e)  (collectively, the “ Permits ”);
 
(f)                                    all condensate and natural gas liquids tank fill and pipeline fill as of the Effective Time; and
 
(g)                                   all files, books, records, information and data directly pertaining to the Purchased Assets in any Seller’s possession or control or to which any Seller has a right, including contract, land, title, engineering, environmental, operating, accounting, regulatory, legal, business, marketing and other data (whether electronic or hard copy), files, documents, instruments, notes, papers, ledgers, journals, reports, abstracts, surveys, keys, lock combinations, computer access codes and similar information, maps, books, records and studies, but excluding any files, books, records, information and data (i) to the extent that the disclosure or transfer thereof is prohibited by third party agreement or applicable Laws and Regulations, (ii) relating to a Seller’s business generally, (iii) constituting work product of a Seller’s legal counsel (other than title opinions) and (iv) relating to the negotiation and consummation of the sale of the Purchased Assets (collectively, the “ Records ”); provided, however, that each Seller may retain copies of the Records as may be necessary for litigation, tax, accounting or auditing purposes or as otherwise may be required by applicable Laws and Regulations.
 
1.2                                No Other Assets .  Except for the Purchased Assets expressly described in Section 1.1 above, Sellers shall not sell, and Buyer shall not purchase, any other assets, properties, interests or rights of Sellers.
 
1.3                                Assumed Liabilities .  As of the Effective Time, Buyer shall assume all liabilities, duties, obligations and responsibilities of every kind whatsoever attributable to the Purchased Assets, whether known or unknown, whether attributable to the period of time before or after the Effective Time (collectively, the “ Assumed Liabilities ”).
 
ARTICLE 2
PURCHASE PRICE
 
2.1                                Purchase Price .  The aggregate purchase price (the “ Purchase Price ”) for the Purchased Assets shall be (a) One Hundred Million Dollars ($100,000,000) (the “ Base Purchase Price ”), plus (b) the amount, if any, of all capital costs and expenses in respect of the Purchased Assets paid by Sellers prior to the date upon which the Proposed Final Settlement Statement is due to Buyer pursuant to Section 2.3(b) and either (i) incurred after October 1, 2013 (the “ Capital
 
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Date ”) and prior to the date hereof as set forth on Schedule 5.3 or (ii) incurred between the date hereof and the Closing Date in accordance with Section 5.3(c)(vii) ((i) and (ii) collectively, the “ Capital Adjustment ”), minus (c) the amount, if any, of all costs and expenses incurred by Buyer to create “as-built” maps for the Purchased Assets as set forth on Schedule 2.1 .
 
2.2                                Purchase Price Allocation .  As soon as practicable but no later than 90 days after the Closing Date, Buyer shall deliver to Sellers an allocation of the Base Purchase Price (and all other capitalizable costs) among the Purchased Assets (the “ Initial Allocation ” and any revision thereto as provided hereunder, the “ Purchase Price Allocation ”).  Upon any adjustment to the Base Purchase Price or the Assumed Liabilities pursuant to the terms of this Agreement or upon any Assumed Liability that was contingent becoming fixed and ascertainable, capitalizable costs becoming fixed and ascertainable, or any purchase price adjustment due to indemnification, Buyer shall deliver to Sellers a proposed revision to the Purchase Price Allocation then in effect, which shall be consistent with the methodology used to prepare the Initial Allocation.  Upon (i) Buyer’s delivery of the Initial Allocation or (ii) Buyer’s delivery of any proposed revision, Sellers shall have 10 business days to object to such proposed purchase price allocation.  If the Sellers do not timely object, the proposed purchase price allocation shall become the Purchase Price Allocation.  If the Sellers do timely object, the Parties shall negotiate in good faith to resolve such objection promptly; provided, however, that, if the Parties fail to agree on a new Purchase Price Allocation within 30 days of Buyer’s notice of proposed revision, either Party may refer the proposed revision and the objection to Deloitte & Touche LLP (the “ Audit Firm ”) and the resolution by such firm shall become the Purchase Price Allocation.  The Parties shall each report the federal, state and local income and other tax consequences of the transactions contemplated by this Agreement (which for such purposes includes the Transaction Documents (as defined in Section 3.4 below)) in a manner consistent with the Purchase Price Allocation, including the preparation and filing of Form 8594 under Section 1060 of the Internal Revenue Code of 1986, as amended (or any successor form or successor provision of any future tax law, or any comparable provision of state or local tax law), with respect to their respective federal, state and local income tax returns for the taxable year that includes the Closing Date and shall not take any position contrary thereto in connection with any amended return.
 
2.3                                Purchase Price Adjustments .
 
(a)                                  No later than three days prior to the Closing, the Seller Representative (as defined in Section 9.1(a) below) shall prepare and deliver to Buyer a preliminary settlement statement prepared by the Seller Representative in accordance with this Agreement and generally accepted accounting principles consistently applied by Seller (the “ Preliminary Settlement Statement ”), which sets forth the Seller Representative’s good faith estimate of the Capital Adjustment.
 
(b)                                  As soon as practicable but no later than 90 days after the Closing, the Seller Representative shall prepare and deliver to Buyer a statement in the same form of and on the same basis as the Preliminary Settlement Statement (the “ Proposed Final Settlement Statement ”), which sets forth the Seller Representative’s calculation of the final Purchase Price and each adjustment or payment that was not finally determined on the Preliminary Settlement Statement.  Each Party shall, during normal business hours, grant and provide the other Party access to the Purchased Records in the possession or control of such Party for the purposes of
 
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conducting an audit of the information set forth in the Proposed Final Settlement Statement.
 
(c)                                   Within 30 days following receipt by Buyer of the Proposed Final Settlement Statement, Buyer shall, if applicable, provide the Seller Representative with a written objection (a “ Notice of Disagreement ”) detailing Buyer’s objections, if any, to the Seller Representative’s calculation of the final Purchase Price.  To the extent such written notice is not delivered by Buyer within such time period, the Seller Representative’s calculation of the final Purchase Price, and each component thereof, shall become final and binding upon the Parties.
 
(d)                                  Any disagreement between Buyer and Sellers regarding the Seller Representative’s calculation of the final Purchase Price that cannot be resolved within 30 days after the date of the Notice of Disagreement shall be resolved by Audit Firm, who shall calculate the final Purchase Price in a manner consistent with the Preliminary Settlement Statement and this Agreement in all respects. Sellers and Buyer shall each have an opportunity to present its position to the Audit Firm and shall cooperate with the Audit Firm in making available to it any records or work papers requested by the Audit Firm. The determination of the Audit Firm shall be expressly limited to the determination of the final Purchase Price, and the Audit Firm will not render any decision or have any authority to render a decision with respect to any other matter relating to this Agreement, including with respect to any alleged breach of a representation, warranty or covenant by any Party.  In making such determination, the Audit Firm shall consider only those items and amounts in the Proposed Final Settlement Statement with which Buyer has disagreed and which are set forth in the Notice of Disagreement.  In no event shall the final Purchase Price as determined by the Audit Firm be more favorable to Sellers than reflected on the Proposed Final Settlement Statement by the Seller Representative nor more favorable to Buyer than shown in the proposed changes set forth in the Notice of Disagreement.  Buyer and Sellers shall use commercially reasonable efforts to cause the Audit Firm to render its decision within 15 business days after such points of disagreement are submitted to the Audit Firm. Subject to the provisions set forth in this Section 2.3(d), the decision of the Audit Firm shall be set forth in writing and shall be conclusive and binding on the Parties and subject to judicial enforcement.  The fees charged by the Audit Firm shall be borne 50% by Buyer and 50% by Sellers, and each Party shall bear all of its own costs and expenses associated with the submission of any disputed matters to the Audit Firm.
 
(e)                                   If the final Purchase Price, as determined pursuant to this Section 2.3, exceeds (i) the Base Purchase Price, plus (ii) the Seller Representative’s good faith estimate of the Capital Adjustment (the “ Closing Payment ”), then Buyer shall pay to Sellers the amount of such excess.  If the final Purchase Price, as determined pursuant to this Section 2.3, is less than the Closing Payment, then Sellers shall pay to Buyer the amount of such deficiency.  Any payment shall be made within three days after the date the final Purchase Price is deemed to be finally determined pursuant to this Section 3.4 via wire transfer of immediately available funds to the account(s) designated in writing by the Party entitled to such payment.
 
2.4                                Payment of Closing Payment .  At the Closing, Buyer shall pay to each Seller such Seller’s Pro Rata Share of the Closing Payment in cash by wire transfer of immediately available funds to an account(s) designated by such Seller. “ Pro Rata Share ” means, with respect to each Seller, the percentage set forth next to such Seller’s name on Schedule 2.4 .
 
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2.5                                Revenues and Expenses .
 
(a)                                  The Parties acknowledge and agree that (i) Sellers shall bear all (A) operating expenses which are incurred in respect of the ownership, maintenance, use or operation of the Purchased Assets before the Effective Time and (B) capital expenses which are incurred in respect of the ownership, maintenance, use or operation of the Purchased Assets before the Capital Date (the “ Seller Expenses ”), (ii) Sellers shall be entitled to receive all proceeds collectible in respect of the ownership, use or operation of the Purchased Assets attributable to the period prior to the Effective Time (the “ Pre-Closing Revenues ”), (iii) Buyer shall bear all (A) operating expenses which are incurred in respect of the ownership, maintenance, use or operation of the Purchased Assets after the Effective Time and (B) capital expenses which are incurred in respect of the ownership, maintenance, use or operation of the Purchased Assets after the Capital Date (the “ Buyer Expenses ”) and (iv) Buyer shall be entitled to receive all proceeds in respect of the ownership, use or operation of the Purchased Assets attributable to the period after the Effective Time (the “ Post-Closing Revenues ”).
 
(b)                                  In the event that Buyer pays any Seller Expenses, Sellers shall promptly reimburse Buyer for the amount of Seller Expenses paid by Buyer. In the event that Sellers receive any invoice or other statement relating to Buyer Expenses, Sellers shall promptly forward such invoice or statement to Buyer.
 
(c)                                   Promptly following the Closing, Sellers shall irrevocably authorize, instruct and direct all account parties to the Contracts from whom Post-Closing Revenues are or may be owed to Buyer to make and deliver all payments relating thereto on or after the Closing Date to such location, bank and account as Buyer shall specify.  In the event that any Seller or any of its Affiliates receives any Post-Closing Revenues, Sellers shall promptly deliver all such Post-Closing Revenues to Buyer.  In the event that Buyer or any of its Affiliates receives any Pre-Closing Revenues, Buyer shall promptly deliver all such Pre-Closing Revenues to Sellers.
 
ARTICLE 3
CLOSING
 
3.1                                Time and Place of Closing .  The consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at 10:00 a.m. in the offices of Penn Virginia Oil & Gas, L.P. (“ PVOG ”) at 840 Gessner, Suite 800, Houston, Texas 77024, on or before the fifth day after which all conditions set forth in Sections 6.1 and 6.2 have been satisfied or waived by the appropriate Party, or at such other time and place as mutually agreed by Sellers and Buyer (the “ Closing Date ”), and shall be effective as of 12:01 a.m. (Central time) on the Closing Date (the “ Effective Time ”).
 
3.2                                Deliveries by Sellers at Closing . At the Closing, each Seller shall execute and deliver, or cause to be executed and delivered, or just delivered, where no execution is required, to Buyer:
 
(a)                                  a conveyance, assignment and bill of sale assigning to Buyer all personal property (tangible and intangible) included in the Purchased Assets, in substantially the form attached hereto as Exhibit A (the “ Conveyance ”);
 
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(b)                                  special warranty deeds in recordable form conveying to Buyer all Fee Property, in substantially the form attached hereto as Exhibit B (the “ Deeds ”);
 
(c)                                   partial assignments in recordable form assigning to Buyer an undivided, non-exclusive interest in all Rights of Way, in substantially the form attached hereto as Exhibit C (the “ Partial Assignments ”);
 
(d)                                  a gas gathering agreement, in substantially the form attached hereto as Exhibit D (the “ Gathering Agreement ”);
 
(e)                                   a transition services agreement, in substantially the form attached hereto as Exhibit E (the “ Transition Agreement ”);
 
(f)                                    an equity commitment letter, in substantially the form attached hereto as Exhibit F (the “ Equity Commitment Letter”);
 
(g)                                   a receipt for the payment of the Closing Payment;
 
(h)                                  a certificate signed by an officer of such Seller certifying that the conditions set forth in Sections 6.2(a) and 6.2(b) below have been satisfied;
 
(i)                                      a certificate signed by an appropriate individual certifying that such Seller is not a foreign person in accordance with Section 1.1445-2(b) of the Treasury Regulations; and
 
(j)                                     any other agreements, documents, certificates, approvals, consents or other instruments reasonably necessary to consummate the transactions contemplated by this Agreement.
 
3.3                                Deliveries by Buyer at Closing .  At the Closing, Buyer shall deliver the Closing Payment as provided in Section 2.4 above and shall execute and deliver or cause to be executed and delivered, or just delivered, where no execution is required, to the Seller Representative the following:
 
(a)                                  the Conveyance;
 
(b)                                  the Deeds;
 
(c)                                   the Partial Assignments;
 
(d)                                  the Gathering Agreement;
 
(e)                                   the Transition Agreement;
 
(f)                                    the Equity Commitment Letter;
 
(g)                                   a certificate signed by an officer of Buyer certifying that the conditions set forth in Sections 6.1(a) and 6.1(b) below have been satisfied; and
 
(h)                                  any other agreements, documents, certificates, approvals consents or other
 
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instruments reasonably necessary to consummate the transactions contemplated by this Agreement.
 
3.4                                Transaction Documents .  The agreements, instruments and documents referenced in this Article 3, together with this Agreement and such other agreements and instruments required to be delivered pursuant to this Agreement, are referred to herein collectively as the “ Transaction Documents .”  The Transaction Documents to be executed and delivered by Sellers hereunder are referred to herein collectively as the “ Seller Transaction Documents .”  The Transaction Documents to be executed and delivered by Buyer hereunder are referred to herein collectively as the “ Buyer Transaction Documents .”
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
 
4.1                                Representations and Warranties of Each Seller .  Each Seller, on its own behalf and not with respect to any other Seller, represents and warrants to Buyer as of the date hereof and as of the Closing Date that:
 
(a)                                  Organization and Good Standing .  Such Seller is (i) a limited partnership or limited liability company validly existing and in good standing under the laws of the State of Texas or (ii) an individual.  Such Seller has all requisite limited partnership, personal or limited liability company power and authority to own, lease and operate the Purchased Assets and conduct its business as and where currently being conducted.
 
(b)                                  Authorization and Enforceability .  Such Seller has the requisite limited partnership, personal or limited liability company power and authority to execute, deliver and perform its obligations under this Agreement and the other Seller Transaction Documents and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by such Seller of this Agreement and the other Seller Transaction Documents have been duly and validly authorized by all necessary limited partnership, personal or limited liability company action on the part of such Seller.  This Agreement has been, and the other Seller Transaction Documents will be, duly and validly executed and delivered by such Seller.  This Agreement is, and the other Seller Transaction Documents will be, the legal, valid and binding obligations of such Seller, enforceable against such Seller in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance and similar laws affecting creditors’ rights generally and except to the extent that general equitable principles may affect the availability of certain remedies.
 
(c)                                   No Violation of Laws or Agreements .  Except as set forth on Schedule 4.1(c) , the execution, delivery and performance of this Agreement and the other Seller Transaction Documents by such Seller do not, and the consummation of the transactions contemplated hereby and thereby and the compliance by such Seller with any of the provisions hereof and thereof will not, conflict with, result in any violation of or default (with or without notice or lapse of time or both) under, give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any Lien (as defined in Section 4.1(d) below) on any of the Purchased Assets under, any provision of (i) the organizational documents of such Seller (if not an individual), (ii) any loan or
 
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credit agreement, note, bond, mortgage, indenture, contract, lease, permit, concession, franchise, license or other agreement or instrument applicable to such Seller or the Purchased Assets (other than any Right of Way or Contract) or (iii) any Laws and Regulations applicable to such Seller or the Purchased Assets, except, in the cases of clauses (ii) and (iii), for any such conflicts, violations, defaults, rights, losses or Liens that would not have a Material Adverse Effect.  For purposes of this Agreement, any event, occurrence or condition shall have a “ Material Adverse Effect ” if such event, occurrence or condition, either individually or together with all other events, occurrences or conditions, (1) has a material adverse effect on the ownership, use, operation or value of the Purchased Assets, taking into account the nature and valuation of the Purchased Assets or (2) materially hinders or impedes the consummation of the transactions contemplated by this Agreement, except to the extent resulting from or arising in connection with (i) this Agreement or the transactions contemplated hereby or the public announcement thereof; (ii) changes, circumstances or effects (A) that affect generally the oil and gas industry, such as fluctuations in the price of oil and gas, or (B) that result from (1) international, national, regional, state or local economic conditions, (2) general developments or conditions in the oil and gas industry, (3) changes in applicable Laws and Regulations or the application or interpretation thereof by any Governmental Authority enacted, promulgated or issued on or after the date hereof or (4) other general economic conditions, facts or circumstances that are not subject to the reasonable control of the Parties; (iii) effects of conditions or events resulting from an outbreak or escalation of hostilities (whether nationally or internationally), or the occurrence of any other calamity or crisis (whether nationally or internationally), including the occurrence of one or more terrorist attacks; or (iv) any action taken at the written request, or with the written approval, of the Buyer; provided , however , that the changes, circumstances or effects set forth in (2)(ii)(A) and (B) above shall be deemed to have a Material Adverse Effect to the extent such changes, circumstances or effects disproportionately impact the Purchased Assets compared with the oil and gas industry generally or international, national, regional, state or local economic conditions, as applicable.
 
(d)                                  Title to Purchased Assets .  Such Seller owns the Purchased Assets free and clear of all liens, mortgages, security interests, pledges, claims, charges, options or other encumbrances substantially equivalent thereto (collectively, “ Lien ”) created by, through or under such Seller, other than Permitted Liens (as defined below).  For purposes of this Agreement, the term “ Permitted Liens ” shall mean all (i) materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s, tax and other similar liens or charges arising in the ordinary course of business for obligations that are not delinquent and that will be paid and discharged in the ordinary course of business or, if delinquent, that are being contested in good faith by appropriate action of which Buyer is notified in writing before the Closing; (ii) Customary Post-Closing Consents; (iii) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations that do not materially interfere with or have an adverse effect on the ownership, use, value or operation of the Purchased Assets; (iv) rights reserved to or vested in any Governmental Authority to control or regulate any of the Purchased Assets in any manner; (v) applicable Laws and Regulations, (vi) terms and conditions of the Rights of Way and Contracts; and (vii) Liens released at or prior to the Closing.
 
(e)                                   Brokerage .  Neither such Seller nor any of its Affiliates has made any agreement or taken any other action which might cause any person or entity to become entitled to a broker’s or finder’s fee or commission for which Buyer or any of Buyer’s Affiliates shall
 
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directly or indirectly have any responsibility, liability or expense as a result of the transactions contemplated hereby.
 
4.2                                Representations and Warranties of Sellers .  Each Seller, jointly and severally, represents and warrants to Buyer as of the date hereof and as of the Closing Date that:
 
(a)                                  No Violation of Laws or Agreements .  The execution, delivery and performance of this Agreement and the other Seller Transaction Documents by any Seller does not, and the consummation of the transactions contemplated hereby and thereby and the compliance by any Seller with any of the provisions hereof and thereof will not, conflict with, result in any violation of or default (with or without notice or lapse of time or both) under, give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any Lien on any of the Purchased Assets under, any provision of any Right of Way or Contract (except as set forth on Schedule 4.2(b) ), except for any such conflicts, violations, defaults, rights, losses or Liens that would not have a Material Adverse Effect.
 
(b)                                  Approvals and Consents .  Except as set forth on Schedule 4.1(c)  or Schedule 4.2(b) , (i) no notice to, consent, approval, order or authorization of, registration, declaration or filing with, or permit from, any federal, state or local governmental or regulatory entity (or any agency, authority, board, bureau, commission, department, tribal authority or political subdivision thereof) or any court or arbitrator (each, a “ Governmental Authority ”) or any person or entity is required in connection with the execution or performance of this Agreement or the other Seller Transaction Documents by any Seller or the consummation by any Seller of the transactions contemplated hereby and thereby, except for consents or approvals of, or notices to, any Governmental Authority that are customarily obtained or given after closing in connection with the transactions contemplated hereby (collectively, the “ Customary Post-Closing Consents ”), and (ii) no Purchased Asset is subject to any preferential right to purchase, right of first refusal, right of first offer or similar right which would be binding on Buyer after the consummation of the transactions contemplated hereby.
 
(c)                                   Proceedings; Orders .  Except set forth on Schedule 4.2(c) , there are no actions, suits, claims or proceedings (including any arbitration or mediation or similar proceedings) by or before any Governmental Authority (collectively, “ Proceedings ”) pending or, to any Seller’s knowledge, threatened against any Seller affecting the Purchased Assets or that would prohibit, restrict or delay in any material respect the consummation of the transactions contemplated hereby.  There are currently no outstanding judgments, decrees, injunctions, rulings, orders or awards of any Governmental Authority (collectively, “ Orders ”) against any Seller which relate to or arise out of the ownership, condition, use or operation of the Purchased Assets or that would prohibit, restrict or delay in any material respect the consummation of the transactions contemplated hereby.
 
(d)                                  Compliance with Laws .  Except as set forth on Schedule 4.2(d) , no Seller has violated or failed to comply with any federal, state or local constitution, statute, law, ordinance, rule or regulation or any Order (collectively, “ Laws and Regulations ”) applicable to the Purchased Assets, except for any such violations or failures as would not have a Material Adverse Effect.  Except as set forth on Schedule 4.2(d) , no Seller has received any written notice
 
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from any Governmental Authority of any violation of any Laws and Regulations applicable to the Purchased Assets.
 
(e)                                   Permits .  Schedule 1.1(e)  sets forth all material Permits.  Sellers (i) possess all material Permits required to own, lease, operate or use the Purchased Assets under all Laws and Regulations and (ii) are in material compliance with all terms, provisions and conditions of the Purchased Permits.  All Permits are in full force and effect, and there are no Proceedings pending or, to Sellers’ knowledge, threatened that seek the revocation, cancellation, suspension or any materially adverse modification, or the imposition of any penalty with respect to, any Permits.
 
(f)                                    Rights of Way .  The Rights of Way listed on Schedule 1.1(b)  comprise all of the material Rights of Way necessary to own and operate the Gathering Assets as operated on the date hereof.  Sellers have all material Rights of Way necessary to own and operate the Gathering Assets.  The Gathering Assets are all located within valid Rights of Way.  With respect to each material Right of Way, no Seller is in material breach of or material default under, no Seller has received written notice that it is in material breach or material default under, and no event has occurred which with notice or lapse of time (or both) would constitute a material breach by any Seller of or material default by any Seller under, such Right of Way.  All payments due as of the Closing Date under each Right of Way have been paid in full.  Sellers have made available to Buyer true, correct and complete copies of all Rights of Way.
 
(g)                                   Environmental Matters .
 
(i)                                      Sellers have not received any written notice from any Governmental Authority or any other person or entity that the operation of any Purchased Asset is in violation of any Environmental Laws or that Sellers or any predecessors in title of Sellers are responsible (or potentially responsible) for remedying, stabilizing, neutralizing or cleaning up any pollutants, contaminants or hazardous or toxic waste, substances or materials at, on or beneath any such Purchased Asset, except for any such violations or responsibilities that would not have a Material Adverse Effect.  To Sellers’ knowledge, no environmental or physical condition of any Purchased Asset violates any Environmental Law, Right of Way, Contract or other agreement, except for any such violations that would not have a Material Adverse Effect.
 
(ii)                                   There has been no Release of any Hazardous Substance by a from any of the Purchased Assets, or as a result of any operations or activities of the Gathering Assets, that could reasonably be expected to give rise to any remedial obligation, corrective action requirement or other liability of any kind under applicable Environmental Laws, except for any such Releases that would not have a Material Adverse Effect.
 
(iii)                                For the purposes of this Agreement:
 
(A)                                “ Environmental Laws ” means any applicable law of any Governmental Authority relating to (i) the protection, preservation or restoration of the environment or the protection of the public health and safety (including, air, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource) or (ii) the exposure to, or the use, storage, recycling, treatment,
 
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generation, transportation, processing, handling, labeling, production, Release or disposal of Hazardous Substances, in each case as in effect at the date hereof.
 
(B)                                “ Hazardous Substance ” means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law.  Hazardous Substance includes any substance to which exposure is regulated by any Governmental Authority or any Environmental Law, including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.
 
(C)                                “ Release ” means any spill, effluent, emission, leaking, pumping, pouring, emptying, escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching, abandoning, adding or migration of any Hazardous Substance into the indoor or outdoor environment, or into or out of any property or facility.
 
(h)                                  Transactions with Affiliates .  There are no agreements, loans, leases, royalty agreements or other continuing transactions between any Seller and any officer, member, partner, manager, director or stockholder of any Seller or any of their Affiliates with respect to the Purchased Assets or the Gathering Assets which shall be binding on Buyer, the Purchased Assets or the Gathering Assets following the Closing (collectively, “ Affiliate Agreements ”).
 
(i)                                      Intellectual Property . There is no intellectual property-related proceeding pending or threatened by any third party before any court or tribunal (including, the United States Patent and Trademark Office or equivalent authority anywhere in the world) relating to the Purchased Assets or the Gathering Assets, nor has any written claim or demand been made by any third party that alleges any infringement, misappropriation or violation of any intellectual property of any third party, or unfair competition or trade practices relating to the Purchased Assets or the Gathering Assets.
 
(j)                                     Taxes .
 
(i)                                      Each Seller has filed all material tax returns with regard to the Purchased Assets that it was required to file.  All such tax returns as so filed disclose all taxes required to be paid for the periods covered thereby.  All material taxes due and owing by any Seller with regard to the Purchased Assets (whether or not shown on any tax return) have been paid.  No Seller is currently is the beneficiary of any extension of time within which to file any tax return with regard to the Purchased Assets.  There are no Liens for taxes (other than taxes not yet due and payable) upon any of the Purchased Assets.  Each Seller has withheld and paid all taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party with regard to the Purchased Assets, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.
 
(ii)                                   There is no material dispute or claim concerning any tax liability of any Seller with regard to the Purchased Assets either (A) claimed or raised by any
 
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Governmental Authority in writing or (B) as to which any Seller has knowledge based upon personal contact with any agent of such Governmental Authority.
 
(k)                                  Integrity Management; Maintenance .  The Purchased Assets have been operated in the ordinary course and all routine maintenance and integrity management procedures that would be completed by a reasonably prudent operator have been performed or are in process.
 
(l)                                      Contracts .  The Contracts listed on Schedule 1.1(c)  comprise all of the material Contracts.  With respect to each Contract, no Seller is in breach of or default under, no Seller has received written notice that it is in breach or default under, and no event has occurred which with notice or lapse of time (or both) would constitute a breach by any Seller of or default by any Seller under, such Contract, except for such breaches or defaults as would not have a Material Adverse Effect.  Sellers have made available to Buyer true, correct and complete copies of all Contracts.  To Sellers’ knowledge, no counterparty is in material default under, no Seller has delivered written notice that a counterparty is in breach or default under, and no event has occurred which with notice or lapse of time (or both) would constitute a material breach by any counterparty of or material default by any counterparty under, such Contract
 
4.3                                Representations and Warranties of Buyer . Buyer represents and warrants to Sellers as of the date hereof and as of the Closing Date that:
 
(a)                                  Organization and Good Standing .  Buyer is a limited liability company validly existing and in good standing under the laws of the State of Delaware.  Buyer has all requisite limited liability company power and authority to own, lease and operate its assets and properties and conduct its business as and where such business is currently being conducted. Buyer is qualified or registered to do business and is in good standing as a foreign entity in the State of Texas.
 
(b)                                  Authorization and Enforceability .  Buyer has the requisite limited liability company power and authority to execute, deliver and perform its obligations under this Agreement and the other Buyer Transaction Documents and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by Buyer of this Agreement and the other Buyer Transaction Documents have been duly and validly authorized by all necessary limited liability company action on the part of Buyer.  This Agreement has been, and the other Buyer Transaction Documents will be, duly and validly executed and delivered by Buyer.  This Agreement is, and the other Buyer Transaction Documents will be, the legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance and similar laws affecting creditors’ rights generally and except to the extent that general equitable principles may affect the availability of certain remedies.
 
(c)                                   No Violation of Laws or Agreements .  The execution, delivery and performance of this Agreement and the other Buyer Transaction Documents by Buyer do not, and the consummation of the transactions contemplated hereby and thereby and the compliance by Buyer with any of the provisions hereof and thereof will not, conflict with, result in any violation of or default (with or without notice or lapse of time or both) under, give rise to a right
 
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of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any Lien on any of the assets or properties of Buyer under, any provision of (i) the organizational documents of Buyer, (ii) any loan or credit agreement, note, bond, mortgage, indenture, contract, lease, permit, concession, franchise, license or other agreement or instrument applicable to Buyer or (iii) any Laws and Regulations applicable to Buyer or any of its assets or properties, except, in the cases of clauses (ii) and (iii), for any such conflicts, violations, defaults, rights, losses or Liens that would not materially hinder or impede the consummation of the transactions contemplated by this Agreement.
 
(d)                                  Approvals and Consents .  No notice to, consent, approval, order or authorization of, registration, declaration or filing with, or permit from, any governmental authority or other person or entity is required by or with respect to Buyer in connection with the execution and performance of this Agreement or the other Buyer Transaction Documents by Buyer or the consummation by Buyer of the transactions contemplated hereby and thereby, except for the Customary Post-Closing Consents.
 
(e)                                   Proceedings; Orders .  There are no Proceedings pending or, to Buyer’s knowledge, threatened against Buyer that would prohibit, restrict or delay in any material respect the consummation of the transactions contemplated hereby.  There are currently no outstanding Orders against Buyer that would prohibit, restrict or delay in any material respect the consummation of the transactions contemplated hereby.
 
(f)                                    Brokerage .  Neither Buyer nor any of its Affiliates has made any agreement or taken any other action which might cause any person or entity to become entitled to a broker’s or finder’s fee or commission for which any Sellers or any Affiliate of any Seller shall directly or indirectly have any responsibility, liability or expense as a result of the transactions contemplated hereby.
 
(g)                                   Funding .  Buyer has available adequate funds or the means to obtain adequate funds in the aggregate amount sufficient to pay (i) the Purchase Price and (ii) all expenses incurred by Buyer in connection with this Agreement and the transactions contemplated hereby.
 
(h)                                  Due Diligence Investigation .  Buyer has the expertise, knowledge and sophistication in financial and business matters generally and with respect to the oil and gas industry that make it capable of evaluating, and it has evaluated, the merits and economic risks of its investment in the Purchased Assets.  Buyer has had the opportunity to examine all aspects of the Purchased Assets Buyer has deemed relevant and has had access to all information requested by Buyer with respect to the Purchased Assets and the Assumed Liabilities in order to make an evaluation thereof.  In making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied and will rely solely on the provisions of this Agreement and its own independent investigation and evaluation of the Purchased Assets and the value thereof.
 
4.4                                Disclaimers and Notifications .  The Parties make the following disclaimers and notifications:
 
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(a)                                  No Other Seller Representations .  EXCEPT AS EXPRESSLY SET FORTH IN SECTIONS 4.1 AND 4.2, THE CONVEYANCE, THE DEEDS , THE PARTIAL ASSIGNMENTS OR ANY OTHER AGREEMENTS OR INSTRUMENTS DELIVERED AT THE CLOSING PURSUANT TO SECTION 3.2, SELLERS AND THEIR REPRESENTATIVES AND ADVISORS HAVE NOT MADE AND MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF ANY OF THE PURCHASED ASSETS OR ANY LIABILITIES OR OPERATIONS RELATED THERETO (INCLUDING THE ASSUMED LIABILITIES), INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED, IN EACH CASE INCLUDING, BUT NOT LIMITED TO, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED AS TO (I) TITLE TO ANY OF THE PURCHASED ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE PURCHASED ASSETS, (III) THE CURRENT VOLUME, NATURE, QUALITY, CLASSIFICATION OR VALUE OF THE HYDROCARBON RESERVES DEDICATED TO THE GATHERING ASSETS PURSUANT TO ANY GAS PURCHASE CONTRACTS, (IV) ANY ESTIMATES OF THE VALUE OF THE PURCHASED ASSETS OR FUTURE REVENUES GENERATED BY THE PURCHASED ASSETS, (V) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE PURCHASED ASSETS, (VI) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT OR (VII) ANY OTHER RECORD, FILES OR MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO BUYER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.  SELLERS FURTHER DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT.  BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN SECTIONS 4.1 AND 4.2, THE CONVEYANCE, THE DEEDS, THE PARTIAL ASSIGNMENTS OR ANY OTHER AGREEMENTS OR INSTRUMENTS DELIVERED AT THE CLOSING PURSUANT TO SECTION 3.2, BUYER IS PURCHASING THE PURCHASED ASSETS ON AN “AS-IS, WHERE-IS” BASIS WITH ALL FAULTS AND DEFECTS AND BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE.
 
(b)                                  No Other Buyer Representations .  EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.3, THE CONVEYANCE, THE DEEDS, THE PARTIAL ASSIGNMENTS OR ANY OTHER AGREEMENTS OR INSTRUMENTS DELIVERED AT THE CLOSING PURSUANT TO SECTION 3.3, THE BUYER AND THEIR REPRESENTATIVES AND ADVISORS HAVE NOT MADE AND MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY.
 
(c)                                   Disclaimer with Respect to NORM, etc. BUYER ACKNOWLEDGES AND AGREES THAT THE PURCHASED ASSETS HAVE BEEN UTILIZED BY SELLERS FOR THE PURPOSE OF GATHERING AND TRANSPORTING HYDROCARBONS AND
 
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THAT MATERIALS ASSOCIATED THEREWITH MAY HAVE BEEN STORED, KEPT OR DISPOSED OF ON OR IN THE PURCHASED ASSETS.  BUYER ACKNOWLEDGES THAT EQUIPMENT, IMPROVEMENTS, ABANDONED AND PIPING, GATHERING LINES AND OTHER HYDROCARBON PROCESSING FACILITIES AND APPURTENANCES MAY BE LOCATED THEREON.  BUYER ACKNOWLEDGES THAT THERE MAY HAVE BEEN SPILLS OF HYDROCARBONS OR OTHER MATERIALS IN THE PAST ON OR IN THE ASSETS.  IN ADDITION, SOME ASSETS MAY CONTAIN ASBESTOS AND NATURALLY OCCURRING RADIOACTIVE MATERIAL (“ NORM ”).  IN THIS REGARD, BUYER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NORM MAY AFFIX OR ATTACH ITSELF TO THE INSIDE OF THE FACILITIES AND EQUIPMENT AS SCALE, OR IN OTHER FORMS, AND THAT THE FACILITIES AND EQUIPMENT MAY CONTAIN NORM AND THAT NORM-CONTAINING MATERIAL MAY BE BURIED AND OTHERWISE DISPOSED OF ON THE ASSETS.  BUYER ALSO EXPRESSLY UNDERSTANDS THAT SPECIAL PROCEDURES MAY BE REQUIRED FOR THE REMOVAL AND DISPOSAL OF ASBESTOS AND NORM FROM THE ASSETS AND THAT BUYER ASSUMES ALL LIABILITY AND EXPENSE FOR SUCH ASSESSMENT, REMOVAL AND DISPOSAL OF ANY SUCH MATERIALS AND ASSOCIATED ACTIVITIES.
 
(d)                                  Disclaimer with Respect to Data.   All data, evaluations, reports and other information heretofore furnished to Buyer by Sellers concerning any or all of the Purchased Assets, and the operation thereof, have been and shall be furnished solely for Buyer’s convenience and have not constituted and shall not constitute a representation or warranty of any kind by Sellers.  Sellers do not warrant or represent the accuracy or completeness of any information, data or materials furnished to Buyer with respect to the transactions contemplated by this Agreement.  Buyer acknowledges that Sellers may not have the requisite information with which to accurately determine the exact nature or condition of the Purchased Assets.  Buyer is purchasing the Purchased Assets solely in reliance on the representations and covenants of Sellers in the Transaction Documents and on its own evaluation and investigation of the Purchased Assets.
 
ARTICLE 5
COVENANTS
 
5.1                                General .  Each of Buyer and Sellers shall use its reasonable efforts in good faith to take all actions and to do all things necessary or advisable in order to consummate and make effective the purchase and sale of the Purchased Assets contemplated by this Agreement, including satisfaction of the closing conditions set forth in Sections 6.1 and 6.2 below.
 
5.2                                Access .  From and after the date of this Agreement and until the Closing Date, Sellers shall permit Buyer’s officers, employees, agents and advisors, at Buyer’s sole risk and expense, to (i) have reasonable access to the Purchased Assets (so long as such access occurs during normal business hours or at mutually agreeable times and does not unreasonably interfere with the operation of the Purchased Assets) to observe the condition, use and operation of the Purchased Assets and to facilitate the transactions contemplated by this Agreement and (ii) otherwise perform due diligence activities, including title searches.  Buyer agrees to maintain the confidentiality of all information acquired by Buyer pursuant to this Section 5.2 in
 
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accordance with the terms of the Confidentiality Agreement (as defined in Section 5.11 below). Buyer agrees to indemnify, defend and hold harmless the Seller Indemnified Parties from and against any and all Damages (as defined in Section 7.2 below) arising out of or relating to access to the Purchased Assets prior to the Closing by Buyer, even if caused in whole or in part by the negligence (whether sole, joint or concurrent), strict liability or other legal fault of any Seller Indemnified Parties (but excluding gross negligence or willful misconduct on the part of any Seller Indemnified Parties).
 
5.3                                Conduct of Business .  From and after the date of this Agreement and until the Closing Date, each Seller agrees that:
 
(a)                                  It shall conduct its business and operations in the ordinary course of business and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement;
 
(b)                                  It shall maintain, operate and administer the Purchased Assets in the ordinary course of business and consistent with past practice and in compliance with all applicable Laws and Regulations; and
 
(c)                                   It shall not:
 
(i)                                      sell, assign, transfer or lease or agree to sell, assign, transfer or lease or otherwise dispose of any of the Purchased Assets, except for (A) sales and dispositions of oil and gas in the ordinary course of business (including all condensate and natural gas liquids tank fill and pipeline fill) and (B) sales and dispositions of equipment and materials that are surplus, obsolete or replaced, provided , however , that such sales and dispositions of equipment and materials that are surplus, obsolete or replaced shall not exceed One Hundred Thousand Dollars ($100,000);
 
(ii)                                   subject any of the Purchased Assets to any Lien (other than a Permitted Lien);
 
(iii)                                amend any tax returns or change any tax elections with respect to the Purchased Assets to the extent such could affect Buyer after the Closing Date;
 
(iv)                               modify, amend or terminate any Right of Way or Contract;
 
(v)                                  enter into any new Contract that (i) may not be cancelled, without undue burden or cost, within ninety (90) days or (ii) the total obligation or benefit or which is, or could be reasonably contemplated to be, in excess of Fifty Thousand Dollars ($50,000);
 
(vi)                               abandon or release any Right of Way or Permit;
 
(vii)                            incur any capital costs or expenses in respect of the Purchased Assets, other than those set forth on Schedule 5.3 , in excess of Two Hundred Fifty Thousand Dollars ($250,000) per month;
 
(viii)                         enter into any Affiliate Agreement; or
 
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(ix)                               waive, compromise or settle any material rights under any Right of Way or Contract.
 
Buyer’s approval of any action restricted by this Section 5.3 shall not be unreasonably withheld or delayed and shall be considered granted 10 days (unless a shorter time is reasonably required by the circumstances and such shorter time is specified in the Seller Representative’s notice) after the Seller Representative’s notice to Buyer requesting such consent unless Buyer notifies the Seller Representative to the contrary during that period.  Notwithstanding the foregoing provisions of this Section 5.3, in the event of an emergency, Sellers may take such action as reasonably necessary to prevent damage to people or property and shall notify Buyer of such action promptly thereafter.
 
5.4                                Consents .  From and after the date of this Agreement and until the Closing Date, Sellers shall use commercially reasonable efforts to obtain the written consent from any person or entity with respect to any Right of Way or Contract that is required to permit the sale, transfer and assignment of such Right of Way or Contract pursuant to the terms and conditions thereof (the “ Consents ”).  All such Consents are set forth on Schedule 5.4 .  Notwithstanding anything in this Agreement to the contrary, neither Party shall be obligated to make any payments to any holder of any Consent or incur any other material burden in order to comply with the requirements set forth in this Section 5.4 and the failure to obtain any such Consent shall not be deemed a breach of any covenant of any Party hereunder.
 
5.5                                Risk of Loss of Purchased Assets .  The risk of damage or loss to the Purchased Assets shall remain with Sellers until the Effective Time.
 
5.6                                Transfer Taxes .  Buyer shall pay all sales, use, gross receipts, transfer, real property transfer, documentary stamp, recording and other similar taxes arising from and with respect to the purchase and sale of the Purchased Assets.
 
5.7                                Recording . Buyer shall be solely responsible for recording of the Partial Assignments and any other documents related to the conveyance of the Purchased Assets and shall promptly furnish Sellers with either the recorded originals or with the recording information thereof.  All recording and filing shall be at the sole cost and expense of Buyer.
 
5.8                                Allocation of Taxes .
 
(a)                                  All ad valorem real property taxes, personal property taxes, fees or assessments for the calendar year 2014 due with respect to the Purchased Assets or payable by Sellers pursuant to the terms of any Rights of Way or Contracts shall be prorated between Sellers, on the one hand, and Buyer, on the other hand, as of the Closing Date on a calendar year basis, using the calendar year 2013 tax rates and assessments by the appropriate Governmental Authority; provided, however, that, if the taxes for 2014 are thereafter determined to be more or less than the taxes for 2013 (after any appeal of the assessed valuation thereof is concluded), Buyer and Sellers promptly shall adjust the proration of such taxes based on actual taxes paid with respect to 2014, and Sellers or Buyer, as the case may be, shall pay to the other any amount required as a result of such adjustment.  The portion of such taxes allocable to the portion of calendar year 2014 ending on the Effective Time shall be deemed to be (A) the amount of such
 
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taxes for the entire period multiplied by (B) a fraction, the numerator of which is the number of calendar days in the portion of calendar year 2014 ending on the Effective Time and the denominator of which is 365.  All special taxes or assessments prior to the end of 2014 shall be prorated as set forth above.  If any Party shall pay such taxes for which it is entitled to be reimbursed because of such proration, the other Party responsible therefor shall promptly reimburse the party so paying upon notice of the amount paid by such Party.
 
(b)                                  Sellers shall be responsible for any sales, use, excise, environmental, custom or other like tax, duty, fee or assessment or charge imposed by a Governmental Authority that is associated with the Purchased Assets prior to the Effective Time.
 
(c)                                   Sellers shall be entitled to any refunds or credits of taxes paid with respect to the Purchased Assets to the extent attributable to the period prior to the Effective Time.  Buyer shall be entitled to any refunds or credits of taxes paid with respect to the Purchased Assets to the extent attributable to the period after the Effective Time.
 
(d)                                  Sellers shall be responsible for the preparation and filing of any tax returns, consistent with past practice, and the payment of any tax required to be paid in connection therewith related to Sellers that are required to be filed for taxable periods ending prior to or on the Closing Date.  Buyer shall be responsible for the preparation and filing of all tax returns and the payment of any tax required to be paid in connection therewith related to Buyer that are required to be filed for taxable periods ending after the Closing Date.
 
(e)                                   Each Party shall be responsible for its own income taxes, if any, which may result from the transactions contemplated by this Agreement.
 
(f)                                    No Seller shall take or omit to take any action outside of the ordinary course of business or in a manner inconsistent with past practice if such action or omission could have the effect of increasing the tax liability relating to any of the Purchased Assets, Buyer or any of Buyer’s Affiliates, unless required by applicable Laws and Regulations.
 
5.9                                Transaction Expenses . Except as expressly provided otherwise herein, each Party shall pay its own expenses and the fees and expenses of its counsel, accountants, consultants and other experts and representatives incurred in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.
 
5.10                         Maintenance of Books and Records .  At the Closing, Sellers shall deliver to Buyer the Records.  Buyer and Sellers shall cooperate fully with one another after the Closing so that (subject to any limitations that are reasonably required to preserve any applicable attorney-client or other legal privilege) each Party has access to the business records, contracts and other information existing at the Closing Date and relating in any manner to the Purchased Assets (whether in the possession of Sellers or Buyer). No files, books or records existing at the Closing Date and relating in any manner to the Purchased Assets shall be destroyed by any Party for a period of two years after the Closing Date (or such longer period as is required by applicable Laws and Regulations).  The access to files, books and records contemplated by this Section 5.10 shall be during normal business hours and upon not less than two days prior written
 
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request, shall be subject to such reasonable limitations as the Party having custody or control thereof may impose to preserve the confidentiality of information contained therein, and shall not extend to material subject to a claim of privilege unless expressly waived by the Party entitled to claim the same.
 
5.11                         Confidentiality .  The respective obligations of the Parties with regard to the use and disclosure of information provided to one Party by the other are set forth in the Confidentiality Agreement dated September 5, 2013 (the “ Confidentiality Agreement ”), between PVOG and American Midstream Partners, L.P. (“ AMID ”), an Affiliate of Buyer. Notwithstanding anything in the Confidentiality Agreement or this Agreement to the contrary, Sellers and Buyer shall consult with each other with regard to all publicity and other public releases concerning this Agreement and the transactions contemplated hereby; provided, however, that nothing contained in this Agreement or the Confidentiality Agreement shall restrict any Party or any Affiliate of any Party from making any disclosure required by applicable Laws and Regulations or the applicable rules of any stock exchange.  Sellers shall use commercially reasonable efforts to (i) assign all confidentiality agreements relating to the sale of the Purchased Assets to Buyer or (ii) if such assignment cannot be made, cause any person or entity which received confidential information about the Purchased Assets to return to Sellers or destroy such confidential information.
 
5.12                         Release of Bonds .  Upon the request of Sellers, Buyer shall assist Sellers in a commercially reasonable manner to release or cause the release or cancellation any bonds, letters of credit or guarantees posted by any Seller with Governmental Authorities and relating to the Purchased Assets.  All such bonds, letters of credit or guarantees are set forth on Schedule 5.12 .
 
5.13                         Names .  As soon as reasonably possible after the Closing, but in no event later than 60 days after Closing, Buyer shall remove the names of PVOG, including “Penn Virginia,” “Penn Virginia Oil & Gas,” “PVOG” and all variations thereof, from all of the Purchased Assets and make the requisite filings with, and provide the requisite notices to, the appropriate Governmental Authorities to place the title or other indicia of ownership, including operation of the Purchased Assets, in a name other than any name of PVOG or any variations thereof.
 
5.14                         Revised Schedules .  On one or more occasions not later than three business days prior to the Closing Date, the Seller Representative may prepare and deliver to Buyer revised Schedules to this Agreement relating to the representations and warranties set forth in Section 4.1 or Section 4.2 above, which revised Schedules may include new Schedules to the extent that any of the representations and warranties set forth in Section 4.1 or Section 4.2 above do not provide for Schedules, reflecting events or changes in circumstances occurring after the date of this Agreement. Prior to the Closing, any such revised or supplemental Schedules shall be for informational purposes only and of no force or effect in connection with determining whether the conditions to the Closing set forth in Section 6.2 below have occurred or been satisfied.  In the event that the Closing occurs, then for the sole purposes of the indemnification provisions set forth in Article 7 below, any representations and warranties of Sellers as set forth in Section 4.1 or Section 4.2 above shall be subject to, and modified by, any such timely delivered revisions or supplements to the Schedules to this Agreement.
 
5.15                         Government Reviews .  As promptly as practicable after the date of this
 
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Agreement (but in any event within three business days of this date of this Agreement), Sellers and Buyer shall in a timely manner (a) make all required filings, if any, with and prepare applications to and conduct negotiations with each Governmental Authority as to which such filings, applications or negotiations are necessary or appropriate in connection with the consummation of the transactions contemplated hereby, specifically including, but not limited to, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), (b) provide such information as each may reasonably request to make such filings, prepare such applications and conduct such negotiations and (c) request early termination or waiver of any applicable waiting period under the HSR Act.  To the extent reasonably practicable, Sellers and Buyer shall each have the right to review in advance all information relating to such Party that is disclosed for any filing. Each Party shall cooperate with and use all commercially reasonable efforts to assist the other with respect to such filings, applications and negotiations and shall promptly furnish each other with copies of any written communications delivered to such Party from any Governmental Authority.  The applicable filing fee in connection with the filings to be made under the HSR Act shall be borne 50% by Buyer and 50% by Sellers.
 
5.16                         Further Assurances . At or after the Closing, any Party, at the request of any other Party and without additional consideration, shall execute and deliver to the requesting Party all such further assignments, deeds, agreements, contracts, instruments and other documents as the requesting Party may reasonably request in order to perform, accomplish, perfect or record, if reasonably necessary, the sale, assignment, transfer and delivery to Buyer of the Purchased Assets as contemplated by this Agreement, to obtain the Customary Post-Closing Consents and to otherwise carry out the intention of this Agreement.
 
5.17                         Financial Information .  Sellers hereby agree to provide to Buyer access to such records, materials and documents in Sellers possession as may be reasonably requested from time to time by Buyer and its auditors in connection with the completion and delivery of such information as is required by the Securities and Exchange Commission to be included in any periodic report to be filed by AMID under the Securities Exchange Act of 1934, as amended, with respect to the Gathering Assets.
 
5.18                         Rights-of-Way .  Sellers shall use all commercially reasonable efforts to (a) procure and record valid rights-of-way across the leases set forth on Schedule 5.18 (the “ Necessary ROWs ”) and (b) record (to the extent not already recorded) all of the Rights of Way set forth on Schedule 1.1(b) .
 
5.19                         Replacement of Drip Tanks .  Buyer acknowledges and agrees that the drip tanks currently used to operate the Gathering Assets are not Purchased Assets and, consequently, Buyer will need to procure and install new drip tanks for the operation of the Gathering Assets following the Closing.  Buyer shall procure and install such new drip tanks within 90 days following the Closing Date.  During such 90-day period, Sellers shall allow Buyer to continue to use Sellers’ existing drip tanks in connection with the operation of the Gathering Assets.  Buyer agrees to indemnify, defend and hold harmless the Seller Indemnified Parties from and against any and all Damages arising out of or relating to Buyer’s use of Sellers’ existing drip tanks, even if caused in whole or in part by the negligence (whether sole, joint or concurrent), strict liability or other legal fault of any Seller Indemnified Parties (but excluding gross negligence or willful misconduct on the part of any Seller Indemnified Parties).
 
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ARTICLE 6
CONDITIONS TO CLOSING
 
6.1                                Conditions to Obligations of Sellers . The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject, at the option of Sellers, to the following conditions:
 
(a)                                  Representations .  The representations and warranties of Buyer herein contained shall be made again at the Closing and shall be true and correct in all material respects on the Closing Date.
 
(b)                                  Performance .  Buyer shall have performed and complied with in all material respects all of its obligations, covenants and agreements contained in this Agreement to be performed or complied with by it at or prior to the Closing.
 
(c)                                   Regulatory Compliance . Buyer and Sellers shall each be in compliance with all material regulatory requirements of all applicable Governmental Authorities necessary to consummate the transactions contemplated herein (all of which shall be in full force and effect as of the Closing).  Any waiting period applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or terminated (by early termination or otherwise).
 
(d)                                  Pending Matters .  No Order or Proceeding shall be outstanding or pending that restrains, enjoins or otherwise prohibits, or could reasonably be expected to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement.
 
(e)                                   No Bankruptcy .  There shall be no bankruptcy, reorganization, receivership or arrangement proceedings pending against Buyer or any Affiliate of Buyer.
 
(f)                                    Closing Deliveries.   Sellers shall have received all of the deliveries required by Section 3.3 above.
 
The Seller Representative may waive any condition specified in this Section 6.1 if it executes a writing so stating at or prior to the Closing.
 
6.2                                Conditions to Obligations of Buyer .  The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject, at the option of Buyer, to the following conditions:
 
(a)                                  Representations .  The representations and warranties of Sellers herein contained shall be made again at the Closing and shall be true and correct in all material respects on the Closing Date.
 
(b)                                  Performance .  Sellers shall have performed and complied with in all material respects all of their obligations, covenants and agreements contained in this Agreement to be performed or complied with by them at or prior to the Closing.
 
(c)                                   Regulatory Compliance . Buyer and Sellers shall each be in compliance
 
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with all material regulatory requirements of all applicable Governmental Authorities necessary to consummate the transactions contemplated herein (all of which shall be in full force and effect as of the Closing).  Any waiting period applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or terminated (by early termination or otherwise).
 
(d)                                  Pending Matters .  No Order or Proceeding shall be outstanding or pending that restrains, enjoins or otherwise prohibits, or could reasonably be expected to restrain, enjoin or otherwise prohibit, the consummation of the transactions contemplated by this Agreement.
 
(e)                                   No Bankruptcy .  There shall be no bankruptcy, reorganization, receivership or arrangement proceedings pending against any Seller or any Affiliate of any Seller.
 
(f)                                    Closing Deliveries .  Buyer shall have received all of the deliveries required by Section 3.2 above.
 
(g)                                   Consents .  Sellers shall have received all Consents and delivered copies of all such Consents to Buyer.
 
(h)                                  Rights-of-Way .  Sellers shall have received all Necessary ROWs and shall have recorded all of the Rights of Ways set forth on Schedule 1.1(b) .
 
(i)                                      Casualty Loss .  Notwithstanding Section 5.5, in the event of damage or loss to the Purchased Assets valued at over Ten Million Dollars ($10,000,000), Sellers shall have fully remedied the damage or loss.
 
Buyer may waive any condition specified in this Section 6.2 if it executes a writing so stating at or prior to the Closing.
 
ARTICLE 7
INDEMNIFICATION
 
7.1                                Survival of Representations, Warranties and Covenants .  The representations, warranties and covenants of the Parties in this Agreement or any certificate delivered pursuant to this Agreement shall survive and continue in full force and effect as follows (each applicable period, the “ Survival Period ”):
 
(a)                                  All of the representations, warranties and covenants of each Seller contained in Sections 4.1, 4.2 (other than the Fundamental Representations), 5.3 and 5.19 above shall survive the Closing and continue in full force and effect for a period of twelve months after the Closing;
 
(b)                                  All of the representations and warranties of each Seller set forth in Sections 4.1(a), 4.1(b), 4.1(c)(i), 4.1(d) and 4.1(e) above (collectively, the “ Fundamental Representations ”) shall continue in full force and effect indefinitely;
 
(c)                                   All of the representations and warranties of Buyer set forth in Section 4.3
 
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above shall continue in full force and effect for a period of twelve months after the Closing; and
 
(d)                                          All of the covenants set forth herein (other than those set forth in Section 5.3 above and Section 5.19 above with respect to Sellers only and the indemnification provisions of this Article 7) shall continue in full force and effect for a period of two years. Notwithstanding the foregoing the indemnification provisions of this Article 7 shall continue in full force and effect indefinitely.
 
After the expiration of the applicable Survival Period for a particular representation, warranty or covenant, such representation, warranty or covenant shall automatically expire and terminate. Any claim for indemnification with respect to any breach of any representation, warranty or covenant which is not asserted within the applicable Survival Period by a written notice given as herein provided that identifies the breach underlying such claim may not be pursued and shall be thereafter forever barred.
 
7.2                                Indemnification By Sellers .  In the event that the Closing occurs, then each Seller hereby agrees to indemnify, defend and hold Buyer and its Affiliates, each of its and their respective shareholders, members, partners, directors, officers, employees and agents and each of their respective successors and permitted assigns (collectively, the “ Buyer Indemnified Parties ”) harmless from and against any and all liabilities, taxes, Liens, injunctions, awards, judgments, orders, obligations, damages, losses, fines, penalties, amounts paid in settlement, and all costs, fees and expenses (including court costs and reasonable legal and other professional fees and expenses actually incurred in investigating, defending and preparing for any claim, demand, charge, suit, litigation, judicial or administrative proceeding, action, suit, hearing, investigation or complaint) (collectively, “ Damages ”) directly or indirectly arising out of, resulting from or in connection with any of the following:
 
(a)                                  the breach of or inaccuracy in any representation or warranty made by such Seller in this Agreement or any certificate delivered pursuant to this Agreement; and
 
(b)                                  the breach of or default in the performance by such Seller of any covenant, agreement or obligation in this Agreement.
 
The indemnification obligations of Sellers pursuant to this Section 7.2 shall be (A) several, and not joint, with respect to breach of the representations and warranties set forth in Section 4.1 above or any covenant, agreement or obligation in this Agreement and (B) joint and several with respect to breach of the representations and warranties set forth in Section 4.2 above.
 
7.3                                Indemnification By Buyer .  In the event that the Closing occurs, Buyer agrees to indemnify, defend and hold each Seller and its Affiliates, each of its and their respective shareholders, members, partners, directors, officers, employees and agents and each of their respective successors and permitted assigns (collectively, the “ Seller Indemnified Parties ”) harmless from and against any and all Damages directly or indirectly arising out of, resulting from or in connection with any of the following:
 
(a)                                  the breach of or inaccuracy in any representation or warranty made by Buyer in this Agreement or any certificate delivered pursuant to this Agreement;
 
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(b)                                  the breach of or default in performance by Buyer of any covenant, agreement or obligation in this Agreement; and
 
(c)                                   the Assumed Liabilities.
 
7.4                                Indemnification Procedures .  All claims for indemnification under this Agreement related to Third Party Claims shall be asserted and resolved pursuant to this Section 7.4.
 
(a)                                  Promptly after the receipt by any Person seeking indemnification hereunder (an “ Indemnified Party ”) of a notice of any Proceeding by any third party that may be subject to indemnification hereunder (a “ Third Party Claim ”), such Indemnified Party shall give written notice of such Third Party Claim to the indemnifying Party (the “ Indemnifying Party ”) stating the nature and basis of the Third Party Claim and the amount thereof, to the extent known, along with copies of the relevant documents evidencing the Third Party Claim and the basis for indemnification sought.  Failure of the Indemnified Party to give such notice shall not relieve the Indemnifying Party from liability on account of this indemnification, except if and to the extent that the Indemnifying Party is actually prejudiced thereby.
 
(b)                                  The Indemnifying Party, at its own expense, shall have the right, exercisable within 30 days of receipt of notice of the Third Party Claim, to assume the defense of the Indemnified Party against the Third Party Claim so long as (i) the Indemnifying Party proceeds in good faith and in a timely manner and (ii) such Third Party Claim involves (and continues to involve) solely monetary damages.
 
(c)                                   So long as the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 7.4(b) above, (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, it being understood that the Indemnifying Party shall pay all costs and expenses of counsel for the Indemnified Party (A) for all periods prior to such time as the Indemnifying Party has notified the Indemnified Party that it has assumed the defense of such Third Party Claim and (B) if there is a conflict of interest between the Indemnifying Party and the Indemnified Party, (ii) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed), and (iii) the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed).
 
(d)                                  The Parties shall use commercially reasonable efforts to minimize Damages from Third Party Claims and shall act in good faith and in a timely manner in responding to, defending against, settling or otherwise dealing with Third Party Claims.  The Parties shall also cooperate in any such defense and give each other reasonable access to all information relevant thereto.  Whether or not the Indemnifying Party shall have assumed the defense of a Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party hereunder for any settlement entered into without the Indemnifying Party’s prior written consent, which consent shall not unreasonably withheld or delayed. Notwithstanding the foregoing, the Indemnified Party shall have the sole and exclusive right to
 
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settle any Third Party Claim, on such terms and conditions as it deems reasonably appropriate, to the extent such claim involves equitable or other non-monetary relief.
 
7.5                                Other Limitations on Indemnification .
 
(a)                                  No Party shall have any liability pursuant to Section 7.2(a) or Section 7.3(a) above with respect to any breach of any representation or warranty (other than any Fundamental Representation) unless and until the aggregate amount of all of the Damages to the Buyer Indemnified Parties exceeds $2,000,000 (the “ Indemnification Threshold ”), in which case the Buyer Indemnified Parties shall be entitled to indemnification only to the extent of the excess over the Indemnification Threshold. There shall be no threshold or deductible with respect to (i) Sellers’ obligations to Buyer pursuant to Section 7.2(a) above with respect to any breach of any Fundamental Representation or pursuant to Section 7.2(b) above or (ii) Buyer’s obligations to Sellers pursuant to Section 7.3(b) or Section 7.3(c).
 
(b)                                  The aggregate liability of any Party pursuant to this Article 7 shall in no event exceed, individually or in the aggregate, $15,000,000; provided, however, that subject to Section 7.5(c) below, (a) Buyer’s liability pursuant to Section 7.3(b) above with respect to any covenant (including Buyer’s liability to fund the Purchase Price at the Closing) and Section 7.3(c) and (b) Seller’s liability pursuant to Section 7.2(a) with respect to any Fundamental Representation and Section 7.2(b) with respect to any covenant, shall, in each case, be without limit.
 
(c)                                   Under no circumstances shall any Party be liable to any other Party for any indirect, contingent, consequential, unforeseen, exemplary or punitive, special Damages of any nature (including lost profits); provided, however, that any such Damages recovered by any third party for which a Party owes another Party an indemnity under this Agreement shall not be waived.
 
(d)                                  The Parties will make appropriate adjustments for any insurance proceeds actually received by the Indemnified Party in determining Damages for purposes of this Article 7.  All indemnification payments under this Article 7 will be deemed to be adjustments to the amounts paid to Sellers pursuant to Article 2.  Any liability for indemnification under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement.
 
(e)                                   Each Indemnified Party seeking indemnification hereunder shall use commercially reasonable efforts to mitigate any Damages that it asserts under this Article 7, but any reasonable costs and expenses (other than internal costs and expenses) incurred in connection therewith shall constitute Damages.
 
7.6                                        Exclusive Remedy .  IN THE ABSENCE OF FRAUD, AFTER THE CLOSING THE RIGHT OF THE PARTIES TO ASSERT INDEMNIFICATION CLAIMS AND RECEIVE INDEMNITY PAYMENTS UNDER THIS AGREEMENT IS THE SOLE AND EXCLUSIVE RIGHT AND REMEDY EXERCISABLE BY THE PARTIES WITH RESPECT TO ANY DAMAGES ARISING OUT OF ANY BREACH BY ANY PARTY OF ANY
 
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REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT OF SUCH PARTY SET FORTH IN THIS AGREEMENT OR OTHERWISE RELATING TO THE CONTEMPLATED TRANSACTIONS.  NO PARTY WILL HAVE ANY OTHER REMEDY (STATUTORY, EQUITABLE, COMMON LAW OR OTHERWISE) AGAINST ANY OTHER PARTY WITH RESPECT TO SUCH MATTERS, AND ALL SUCH OTHER REMEDIES ARE HEREBY WAIVED.  WITHOUT LIMITING THE FOREGOING, IN THE ABSENCE OF FRAUD, EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT SUCH PARTY WILL NOT HAVE ANY REMEDY AFTER THE CLOSING FOR ANY BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT SET FORTH IN THIS AGREEMENT, EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 7.
 
7.7                                Tax Treatment .  Indemnification payments made pursuant to this Article 7 may be treated as adjustments of the Purchase Price as permitted by applicable Laws and Regulations.
 
ARTICLE 8
TERMINATION
 
8.1                                Termination of Agreement .  The Parties may terminate this Agreement as provided below:
 
(a)                                  Buyer and Sellers may terminate this Agreement by mutual written consent at any time prior to the Closing;
 
(b)                                  Buyer may terminate this Agreement by giving written notice to the Seller Representative (i) at any time prior to the Closing in the event that any Seller has breached in any material respect any representation, warranty or covenant contained in this Agreement, Buyer has notified the Seller Representative of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (ii) at any time following February 28, 2014 (the “ Termination Date ”) if the Closing shall not have occurred on or before the Termination Date; or
 
(c)                                   Sellers may terminate this Agreement by giving written notice to Buyer (i) at any time prior to the Closing in the event that Buyer has breached in any material respect any representation, warranty or covenant contained in this Agreement, the Seller Representative has notified Buyer of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (ii) at any time following the Termination Date if the Closing shall not have occurred on or before the Termination Date.
 
8.2                                Effect of Termination .
 
(a)                                  In the event that this Agreement is terminated by either Party pursuant to Section 8.1 above, then, except as expressly hereinafter provided, this Agreement shall become void and have no effect; provided, however, that (i) the provisions of Sections 5.2, 5.11, 7.4, 7.5(c), 7.5(d) and 7.5(e), this Article 8, Article 9 and Article 10 shall survive any such termination and (ii) each Party shall, in all events, remain bound by and continue to be subject to the terms of the Confidentiality Agreement.
 
(b)                                  In the event that (i) Buyer terminates this Agreement pursuant to
 
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Section 8.1(b) above, (ii) any Seller has knowingly taken any action or knowingly omitted to take any action where such action or omission to take any such action resulted in the breach or failure in any material respect of any of such Seller’s representations or warranties set forth herein or any covenants of such Seller which are to be performed or observed at or prior to the Closing and (iii) as of the date of such termination, Buyer has not breached in any material respect any representation, warranty or covenant of Buyer contained in this Agreement (including Buyer’s failure to consummate the transactions contemplated by this Agreement upon satisfaction of the conditions set forth in Section 6.2 above), then, subject to the limitations set forth in Section 7.5(c) above and this Section 8.2, Buyer shall be entitled to all remedies available at law or in equity (including specific performance to the extent that a court of competent jurisdiction determines that Buyer is entitled to such remedy).
 
(c)                                   In the event that (i) Sellers terminate this Agreement pursuant to Section 8.1(c) above , (ii) Buyer has knowingly taken any action or knowingly omitted to take any action where such action or omission to take any such action resulted in the breach or failure in any material respect of any of Buyer’s representations or warranties set forth herein or any covenants of Sellers which are to be performed or observed at or prior to the Closing and (iii) as of the date of such termination, no Seller has not breached in any material respect any representation, warranty or covenant of such Seller contained in this Agreement (including such Seller’s failure to consummate the transactions contemplated by this Agreement upon satisfaction of the conditions set forth in Section 6.1 above), then, subject to the limitations set forth in Section 7.5(c) above and this Section 8.2, Sellers shall be entitled to all remedies available at law or in equity (including specific performance to the extent that a court of competent jurisdiction determines that Sellers are entitled to such remedy).
 
(d)                                  In the event that (i) this Agreement terminates pursuant to Section 8.1 above and (ii) the conditions described in either Section 8.2(b) or Section 8.2(c) above have not been satisfied, then no Party shall have any obligations or liabilities hereunder except for the obligations and liabilities with respect to Sections 5.2 and 5.11, this Article 8, Article 9 and Article 10.
 
ARTICLE 9
SELLER MATTERS
 
9.1                        Appointment of Seller Representative .
 
(a)                                  By the execution and delivery of this Agreement, each Seller, effective immediately, hereby irrevocably constitutes and appoints PVOG as the true and lawful agent and attorney-in-fact with full authority and power of substitution to act in the name, place and stead of such Seller with respect to the performance of the obligations and rights of Sellers under this Agreement (the “ Seller Representative ”) and any action contemplated to be taken by the Seller Representative hereunder in connection therewith, including the power to (i) determine the Capital Adjustment, make adjustments to the Base Purchase Price and prepare the Preliminary Settlement Statement and the Proposed Final Settlement Statement, (ii) receive from Buyer any amounts owed to Sellers pursuant to this Agreement (including any amounts owed to Sellers pursuant to Section 2.3 or Section 2.5) and disburse to each Seller such Seller’s Pro Rata Share thereof, (iii) settle or pursue claims or controversies on behalf of Sellers with respect to amounts
 
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owed by or to Sellers pursuant to this Agreement (including pursuant to Section 2.3(d)), (iv) give and receive any consents or notices required or permitted by this Agreement and (v) do or refrain from doing all such further acts and things, and execute, deliver and receive all such documents, waivers, extensions and amendments as the Seller Representative shall deem necessary or appropriate in its sole discretion in connection with the administration of this Agreement (and any such actions shall be binding on Sellers).  Each of the Parties hereto covenants and agrees that it will not take any action to voluntarily revoke the power of attorney conferred in this Section 9.1.  By its execution of this Agreement, PVOG hereby (1) accepts its appointment and authorization to act as the Seller Representative and attorney-in-fact on behalf of each Seller in accordance with the terms of this Agreement, and (2) agrees to perform its obligations under, and otherwise comply with, this Section 9.1.
 
(b)                                  Buyer, Sellers and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Seller Representative as the action of each Seller hereunder and in all matters referred to herein, and each Seller confirms all that the Seller Representative shall do or cause to be done in good faith by virtue of its appointment as the Seller Representative.
 
(c)                                   The Seller Representative may resign as the Seller Representative for any reason and at any time by written notice to Buyer and Sellers.  If at any time the Seller Representative (or any successor Seller Representative) resigns from such Person’s position as the Seller Representative, a successor shall be designated by the mutual agreement of each Seller or, absent such mutual agreement, by a majority vote of the Sellers, as soon as practicable (but in no event later than 30 days after resignation of the Seller Representative or successor Seller Representative, as applicable), and the Parties shall thereafter be notified in writing of such designation; provided, however, that the Parties agree that a court of competent jurisdiction sitting in Harris County, Texas shall have the authority to appoint a successor Seller Representative in the event that a successor Seller Representative is not designated within the 30-day period pursuant to the provisions hereof.
 
(d)                                  The Seller Representative shall have no duties except those which are expressly set forth herein.  Each Seller hereby consents and agrees to all actions or inactions taken or omitted to be taken, in each case in good faith, by the Seller Representative under this Agreement.  Notwithstanding anything in this Agreement to the contrary, including the provisions set forth in Article 7, each Seller hereby agrees to severally, and not jointly or jointly and severally, indemnify and hold harmless the Seller Representative from and against all Damages incurred in connection with the performance of its duties under this Agreement, excluding such Damages caused by the gross negligence, bad faith or willful misconduct of the Seller Representative.  The Seller Representative shall be entitled and is hereby granted the right to set off and deduct any such unpaid, unsatisfied Damages from any amounts owed to a Seller pursuant to this Agreement.
 
(e)                                   Each of the Parties acknowledges and agrees that the Seller Representative shall not be liable, responsible or accountable in Damages or otherwise to any Party by reason of, arising from or relating to any action taken or failure to act on behalf of Sellers, unless caused by the gross negligence, bad faith or willful misconduct of the Seller Representative.
 
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(f)                                    The Seller Representative shall be fully protected in relying in good faith upon the records of Sellers and upon such information, opinions, reports or statements presented to the Seller Representative by any of its accountants, consultants, brokers, financial advisors, legal counsel and other professionals as to matters the Seller Representative reasonably believes are within such Person’s professional or expert competence.
 
(g)                                   IN NO EVENT SHALL THE SELLER REPRESENTATIVE BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING LOST PROFITS), EVEN IF THE SELLERS’ REPRESENTATIVE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES REGARDLESS OF THE FORM OF ACTION, UNLESS CAUSED BY THE GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF THE SELLER REPRESENTATIVE.
 
(h)                                  EXCEPT TO THE EXTENT PROHIBITED BY LAW, EACH SELLER UNDERSTANDS AND AGREES THAT INDEMNIFICATION PURSUANT TO THIS SECTION 9.1 SHALL INCLUDE INDEMNIFICATION FOR THE SELLER REPRESENTATIVE’S OWN NEGLIGENCE OR UNDER THEORIES OF STRICT LIABILITY TO THE FULLEST EXTENT PERMITTED BY LAW, BUT SHALL EXCLUDE INDEMNIFICATION FOR THE SELLER REPRESENTATIVE’S GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT.
 
(i)                                      The provisions set forth in this Section 9.1 shall survive the resignation of the Seller Representative and the termination of this Agreement; provided, however, that the authorizations of the Seller Representative shall be effective only until its rights and obligations under this Agreement terminate by virtue of the termination of any and all obligations of Sellers and of Buyer under this Agreement.
 
(j)                                     The appointment and grant of power and authority by each Seller under this Section 9.1 is coupled with an interest and is irrevocable and shall not be terminated by any act of such Party or by operation of law, whether by the death or incapacity of such Party or by the occurrence of any other event.
 
9.2                                Release of Seller Claims .  Save and except for (i) any rights of any Seller under this Agreement and (ii) any claims of PVOG against any Seller for any outstanding System Costs as defined in that certain Gathering System Agreement dated as of June 1, 2012 by and among Sellers, each Seller, effective as of the Closing, for itself and its representatives and assigns, hereby finally, unconditionally, irrevocably and absolutely releases, acquits, remises and forever discharges each of the other Sellers and any of their Affiliates, predecessors, successors, assigns, agents and representatives (collectively, the “ Releasees ”) from any and all claims, counterclaims, demands, causes of action, liabilities costs, expenses and fees (including attorneys’ fees and court costs), existing as of the Closing accruing to such Seller in connection with the Purchased Assets (the “ Claims ”), and finally, unconditionally, irrevocably and absolutely waives any and all offsets and defenses, in each case related to any action, inaction, event, circumstance or occurrence occurring or alleged to have occurred on or prior to the Closing with respect to such Claims, whether known or unknown, absolute or contingent, matured or unmatured, foreseeable or unforeseeable, presently existing or hereafter discovered, at law, in equity or otherwise,
 
29 

 
whether arising by statute, common law, in contract, in tort or otherwise, that such Seller may now have or that might subsequently accrue to it, including without limitation those against any current or former officer, director, manager, partner, employee or agent of any Releasee.
 
ARTICLE 10
MISCELLANEOUS
 
10.1                         Amendment and Waiver .  The Parties may, by mutual written agreement, amend this Agreement in any respect, and either party, as to such Party, may (i) extend the time for the performance of any of the obligations of the other Party; (ii) waive any inaccuracies in representations and warranties by the other Party; (iii) waive compliance by the other Party with any of the covenants or agreements contained herein and performance of any obligations by the other Party; and (iv) waive the fulfillment of any condition that is precedent to the performance by such Party of any of its obligations under this Agreement.  To be effective, any such extension or waiver must be in writing and be signed by the Party providing such waiver or extension, as the case may be.  No such extension or waiver by any Party, nor any waiver by any Party of any breach of any provision of this Agreement, shall operate or be construed as a waiver of any subsequent breach, whether or not similar.  No failure or any delay by any Party in exercising any right, power or privilege under this Agreement or any of the other Transaction Documents shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  Except as otherwise provided in this Agreement, the rights and remedies herein provided are cumulative and are not alternative.
 
10.2                         Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that no Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other Party. Any transfer or assignment in violation of this Section 10.2 shall be void ab initio .
 
10.3                         Notices .  All notices, requests, demands and communications required or permitted under this Agreement shall be in writing, and any communication or delivery hereunder shall be deemed to have been duly made when personally delivered to the individual indicated below, or if mailed or by facsimile or email transmission, when received by the Party charged with such notice and addressed as follows:
 
If to Sellers:
 
Penn Virginia Oil & Gas, L.P.
Four Radnor Corporate Center, Suite 200
100 Matsonford Road
Radnor, Pennsylvania 19087-4564
Attention:  H. Baird Whitehead
Fax: (610) 687-3688
Email:  baird.whitehead@pennvirginia.com
 
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and
 
Ted Collins, Jr.
508 West Wall Street, Suite 1200
Midland, Texas 79701
Fax: (432) 686-0302
Email:  tedc@collinsandware.com
 
and
 
Plein Sud Holdings, LLC
3131 McKinney Ave, Suite 439
Dallas, Texas 75204
Attention:  J. Patrick Collins
Fax: (214) 628-9160
Email:  jpcollins@cortezoil.com
 
With a copy to:
 
Penn Virginia Oil & Gas, L.P.
840 Gessner, Suite 800
Houston, Texas 77024
Attention:  Jill T. Zivley
Fax: (713) 722-6610
Email:  jill.zivley@pennvirginia.com
 
and
 
Penn Virginia Corporation
Four Radnor Corporate Center, Suite 200
100 Matsonford Road
Radnor, Pennsylvania 19087-4564
Attention: Nancy M. Snyder
Fax: (610) 687-3688
Email:  nancy.snyder@pennvirginia.com
 
If to Buyer:
 
HPIP Lavaca, LLC
c/o ArcLight Capital Partners, LLC
200 Clarendon Street, 55 th Floor
Boston, Massachusetts 02117
Attention:  Christine Miller
Fax: (617) 867-4698
Email:  cmiller@arclightcapital.com
 
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With a copy to:
 
American Midstream Partners, L.P.
1614 15 th Street, Suite 300
Denver, Colorado 80202
Attention:  William B. Mathews
Fax: (720) 457-6040
Email:  bmathews@americanmidstream.com
 
Any Party may, by written notice so delivered to the other Parties, change the address or individual to which delivery shall thereafter be made.  If any Party rejects or otherwise refuses to accept a notice, or if the notice cannot be delivered because of a change in address for which no notice was given to the Party attempting to give or make such notice, such notice shall be deemed to have been received upon such rejection, refusal or such inability to deliver.
 
10.4                         Severability .  The Parties agree that (i) the provisions of this Agreement shall be severable in the event that any provision hereof is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, (ii) such invalid, void or otherwise unenforceable provision shall be automatically replaced by another provision which is as similar as possible in terms to such invalid, void or otherwise unenforceable provision but which is valid and enforceable and (iii) the remaining provisions shall remain enforceable to the fullest extent permitted by law.
 
10.5                         No Third Party Beneficiaries .  Nothing in this Agreement, express or implied, is intended to or shall (i) confer on any person or entity other than the Parties (and the Indemnified Parties referred to in Article 7 above) and their respective successors or assigns any rights (including third party beneficiary rights), remedies, obligations or liabilities under or by reason of this Agreement, or (ii) constitute the Parties as partners or as participants in a joint venture. This Agreement shall not provide third parties with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to the terms of this Agreement.  No third party shall have any right, independent of any right which may exist irrespective of this Agreement, under or granted by this Agreement, to bring any suit at law or equity for any matter governed by or subject to the provisions of this Agreement.
 
10.6                         Construction .  Buyer and Sellers have participated jointly in the negotiation and drafting of this Agreement and the Transaction Documents.  In the event that any ambiguity or question of intent or interpretation arises, this Agreement and the Transaction Documents shall be construed as if drafted jointly by Buyer and Sellers, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement or the other Transaction Documents.
 
10.7                         References and Titles .  All references to cash or monetary amounts refer to U.S. Dollars only unless specifically stated to be in the currency of another government.  The words “ this Agreement ,” “ herein ,” “ hereby ,” “ hereunder ” and “ hereof ,” and words of similar import, refer to this Agreement as a whole and not to any particular subdivision, unless expressly so limited.  The words “ this Article ,” “ this Section” and “ this subsection ,” and words of similar import, refer only to the Articles, Sections or subsections, respectively, hereof in which such
 
32 

 
words occur.  The word “ including ” (in its various forms) means “ including without limitation .” Any reference to any federal, state or local statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise expressly requires. Unless the context otherwise requires, all defined terms contained herein shall include the singular and plural and the conjunctive and disjunctive forms of such defined terms.
 
10.8                         Exhibits and Schedules .  All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.
 
10.9                         Headings .  The headings preceding the text of the articles, sections and paragraphs hereof are inserted solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.
 
10.10                  Counterparts .  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.  Any executed counterpart delivered by facsimile or other means of electronic transmission shall be deemed an original for all purposes.
 
10.11                  Entire Agreement .  This Agreement, together with the exhibits and schedules attached hereto and the other Transaction Documents, and the Confidentiality Agreement constitute the entire understanding of the Parties with respect to the subject matter hereof, superseding all prior negotiations, discussions, agreements or understandings, written or oral, between the Parties with respect to the subject matter hereof.
 
10.12                  Applicable Law .  This Agreement shall be governed by, and construed and interpreted in accordance with the Laws and Regulations of the State of Texas, without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the Laws and Regulations of any jurisdiction other than the State of Texas.
 
10.13                  Several Obligations of Sellers .  Except as provided in Section 7.2, the obligations of each Seller under or arising out of this Agreement are several and not joint.  Without limiting the generality of the foregoing, any representation, warranty or covenant of a Seller contained in this Agreement (other than the representations and warranties set forth in Section 4.2) is made by such Seller only with respect to itself and its own interest in the Purchased Assets and such Seller shall not be liable for any breach (or Damages arising out of a breach) by another Seller of any of its representations, warranties or covenants contained in this Agreement (other than the representations and warranties set forth in Section 4.2).
 
ARTICLE 11
GUARANTEE
 
Buyer Guarantor shall cause payment of all amounts owed by Buyer to Sellers pursuant to Article 2 hereunder if, as and when provided in this Agreement.  In no event shall Buyer Guarantor have any greater liability than Buyer pursuant to this Agreement.
 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of the date first written above.

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

 	By:	 	
 	 	Name:	H. Baird Whitehead	
 	 	Title:	President and Chief Executive Officer	

 	By:	 	
 	 	Ted Collins, Jr.	

 	PLEIN SUD HOLDINGS, LLC	

 	By:	 	
 	 	Name:	J. Patrick Collins	
 	 	Title:	Member	

 	BUYER:	
 	 	 	
 	HPIP LAVACA, LLC	

 	By:	 	
 	 	Name:	Daniel R. Revers	
 	 	Title:	President	
 
Signature Page to Purchase and Sale Agreement

 
The undersigned hereby executes this Agreement for the sole purpose of its obligations pursuant to Article 11 of this Agreement, subject to the limitations set forth therein.

ARCLIGHT ENERGY PARTNERS FUND V, L.P.	 	
 	 	 	
By:	ArcLight PEF GP V, LLC, its general partner	 	
 	 	 	
By:	ArcLight Capital Holdings, LLC, its Manager	 	

By:	 	 	
 	Name:	 	
 	Title:	 	
 
Signature Page to Purchase and Sale Agreement

 
EXHIBIT B
 
MEMBERSHIP INTEREST
ASSIGNMENT AND ASSUMPTION AGREEMENT
 
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is executed by ArcLight Energy Partners Fund V, L.P., a Delaware limited partnership (“ Assignor ”); American Midstream, LLC, a Delaware limited liability company (“ Assignee ”); and HPIP Lavaca, LLC, a Delaware limited liability company (the “ Company ”), as of the [ · ] day of January, 2014 (the “ Effective Date ”).
 
RECITALS
 
Assignor agreed to that certain Limited Liability Company Agreement of the Company (the “ Company Agreement ”) as of November 26, 2013;
 
Assignor is the sole member of the Company and owns 100% of the limited liability company units in the Company (the “ Interest ”); and
 
Assignor wishes to transfer the Interest in the Company, and assign all of its rights in or connected with the Interest to Assignee.
 
AGREEMENT
 
In consideration of the foregoing Recitals (which are incorporated herein by this reference), and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
 
1.                                       Transfer; Admission as Member.   Assignor hereby grants, assigns and transfers the Interest as a Member (as defined in the Company Agreement) of the Company and all of its rights, title and interests in or connected with the Interest (the “ Transfer ”) to Assignee.  Upon the Transfer, Assignee shall be admitted as the sole Member of the Company replacing Assignor as the Member, and shall own all of the interests in the profits, losses and capital of the Company previously owned by Assignor.  Assignee hereby adopts the Company Agreement as the operating agreement of the Company upon the Transfer.
 
2.                                       Representations and Warranties of Assignor .  Assignor represents and warrants, to and for the benefit of Assignee and the Company, as follows:
 
(a)                                  Assignor has full power and authority to execute, deliver and perform its obligations under this Agreement and all agreements, instruments and documents contemplated hereby, and all actions of Assignor necessary for such execution, delivery and performance have been duly taken.
 
(b)                                  This Agreement, when executed and delivered, is a legal, valid and binding obligation of Assignor, and, upon due execution and delivery by the parties thereto, all agreements, instruments and documents to be executed by Assignor in connection with the transactions contemplated hereby will be legal, valid and binding obligations of Assignor, each

 
enforceable against Assignor in accordance with its respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance.
 
(c)                                   Assignor is the owner, beneficially and of record, of the interests being transferred hereby, free and clear of any liens, encumbrances, security agreements, equities, options, claims, charges or restrictions, and effective with the Transfer, Assignor’s entire right, title and interest in and to such interests shall have been conveyed.
 
(d)                                  The execution, delivery, and performance of and compliance with this Agreement by Assignor and the Transfer pursuant hereto, will not violate any contract or agreement to which either Assignor is a party or by which Assignor is bound.
 
3.                                       Governing Law.   This Agreement shall be governed by, enforced in accordance with, and interpreted under, the Laws of the State of Colorado without reference to conflicts of laws principles except for matters concerning real property which shall be governed by, enforced in accordance with, and interpreted under the Laws of the State in which the real property is located.
 
4.                                       Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future Law, and if the rights or obligations of any party will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement and (d) in lieu of such illegal, invalid, or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be reasonably possible so that the contemplated transactions may be consummated as originally contemplated to the fullest extent possible.
 
5.                                       No Waiver.   The failure in any one or more instances of a party to insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege in this Agreement conferred, or to waive any breach of any of the terms, covenants or conditions of this Agreement, shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
 
6.                                       Multiple Counterparts.   This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. In addition, the parties may execute this Agreement and furnish copies of their signatures by facsimile or other electronic transmission, each of which shall be as effective as an originally delivered signature.

 
7.                                       Survival.   Notwithstanding any subsequent amendment to the Company Agreement, this Agreement shall remain in full force and effect.
 
8.                                       Acceptance of Company Agreement.   Assignee agrees to be bound by the terms of the Company Agreement from and after the Effective Date.

 
T he parties have executed this Agreement effective as of the Effective Date.

 
 	ASSIGNOR:	
 	 	
 	ARCLIGHT ENERGY PARTNERS FUND V, L.P.	
 	 	
 	By:	ArcLight PEF GP V, LLC, its general partner	
 	 	 	
 	By:	ArcLight Capital Holdings, LLC, its Manager	

 	By:	 	
 	Name: Daniel R. Revers	
 	Title: Manager	

 	ASSIGNEE:	
 	 	
 	AMERICAN MIDSTREAM, LLC,	
 	a Delaware limited liability company	

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

 	COMPANY:	
 	 	
 	HPIP LAVACA, LLC,	
 	a Delaware limited liability company	
 	 	 	
 	By:	ArcLight Energy Partners Fund V, L.P., its	
 	 	sole member	
 	 	 	
 	By:	ArcLight PEF GP V, LLC, its general partner	
 	 	 	
 	By:	ArcLight Capital Holdings, LLC, its Manager	

 	By:	 	
 	Name: Daniel C. Revers	
 	Title: Manager	

Exhibit 10.1

SERIES B UNIT PURCHASE AGREEMENT
 
by and among
 
AMERICAN MIDSTREAM PARTNERS, LP
 
and
 
THE PURCHASERS NAMED ON SCHEDULE A HERETO

 
TABLE OF CONTENTS
 
ARTICLE I
 
DEFINITIONS

Section 1.1	Definitions	1	
 	 	 	
 	ARTICLE II	 	
 	AGREEMENT TO SELL AND PURCHASE	 	
 	 	 	
Section 2.1	Sale and Purchase	4	
Section 2.2	Closing	4	
Section 2.3	Mutual Conditions	4	
Section 2.4	Purchasers’ Conditions	4	
Section 2.5	AMID’s Conditions	5	
Section 2.6	AMID Deliveries	5	
Section 2.7	Purchasers’ Deliveries	6	
 	 	 	
 	ARTICLE III	 	
 	REPRESENTATIONS AND WARRANTIES OF AMID	 	
 	 	 	
Section 3.1	Existence	6	
Section 3.2	Purchased Units; Capitalization	6	
Section 3.3	No Conflict	7	
Section 3.4	No Default	7	
Section 3.5	Authority	7	
Section 3.6	Approvals	7	
Section 3.7	Compliance with Laws	8	
Section 3.8	Due Authorization	8	
Section 3.9	Valid Issuance; No Options or Preemptive Rights of Units	8	
Section 3.10	Periodic Reports	8	
Section 3.11	Litigation	9	
Section 3.12	No Material Adverse Change	9	
Section 3.13	Certain Fees	9	
Section 3.14	No Registration	9	
Section 3.15	No Integration	9	
Section 3.16	Investment Company Status	9	
Section 3.17	Form S-3 Eligibility	9	

 	ARTICLE IV	 	
 	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	 	
 	 	 	
Section 4.1	Existence	10	
Section 4.2	Authorization, Enforceability	10	
Section 4.3	No Breach	10	
Section 4.4	Certain Fees	10	
Section 4.5	Investment	10	
Section 4.6	Nature of Purchaser	11	
Section 4.7	Restricted Securities	11	
Section 4.8	Legend	11	

 

 	ARTICLE V	 	
 	COVENANTS	 	
 	 	 	
Section 5.1	Taking of Necessary Action	11	
Section 5.2	Other Actions	11	
Section 5.3	Use of Proceeds	11	
 	 	 	
 	ARTICLE VI	 	
 	INDEMNIFICATION	 	
 	 	 	
Section 6.1	Indemnification by AMID	12	
Section 6.2	Indemnification by the Purchaser	12	
Section 6.3	Indemnification Procedure	12	
 	 	 	
 	ARTICLE VII	 	
 	MISCELLANEOUS	 	
 	 	 	
Section 7.1	Interpretation and Survival of Provisions	13	
Section 7.2	Survival of Provisions	13	
Section 7.3	No Waiver; Modifications in Writing	13	
Section 7.4	Binding Effect; Assignment	14	
Section 7.5	Communications	14	
Section 7.6	Removal of Legend	15	
Section 7.7	Entire Agreement	15	
Section 7.8	Governing Law	15	
Section 7.9	Execution in Counterparts	15	
Section 7.10	Termination	15	
Section 7.11	Recapitalization, Exchanges, Etc. Affecting the LP Units	16	
 	 	 	
Schedule A	List of Purchasers, Commitment Amounts and Contact Information	 	
 	 	 	
Exhibit A —	Form of Partnership Agreement Amendment	 	
Exhibit B —	Form of Transfer Application	 	

 
SERIES B UNIT PURCHASE AGREEMENT
 
This SERIES B UNIT PURCHASE AGREEMENT, dated as of January 22, 2014 (this “ Agreement ”), is entered into by and among AMERICAN MIDSTREAM PARTNERS, LP, a Delaware limited partnership (“ AMID ”), and each of the purchasers listed on Schedule A hereof (each, a “ Purchaser ” and collectively, the “ Purchasers ”).
 
WHEREAS, to fund a portion of the purchase price for the Acquisition (as defined below) and the subsequent capital expansion plan, AMID desires to sell to the Purchasers, and the Purchasers desire to purchase from AMID, certain Series B Units (as defined below), in accordance with the provisions of this Agreement; and
 
WHEREAS, the General Partner (as defined below) intends to enter into the Partnership Agreement Amendment (as defined below) to, among other things, provide for the issuance of Series B Units (as defined below) in order to fund the portion of the purchase price for the Acquisition; and
 
WHEREAS, AMID intends to make an underwritten offering of Common Units (as defined below) in order to fund the remaining portion of the purchase price for the Acquisition that is not satisfied by the proceeds of the issuance of Series B Units (the “ Offering ”); and
 
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:
 
ARTICLE I
DEFINITIONS
 
Section 1.1 Definitions . As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:
 
“ Acquisition ” means the acquisition by an indirect subsidiary of AMID of the PVA Assets pursuant to the Acquisition Agreement.
 
“ Acquisition Agreement ” means 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 as Buyer, dated as of December 13, 2013.
 
“ Affiliate ” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
 
“ Agreement ” has the meaning set forth in the introductory paragraph.
 
“ AMID ” has the meaning set forth in the introductory paragraph.
 
“ AMID Entities ” and each an “ AMID Entity ” means the General Partner, AMID and each of AMID’s Subsidiaries, other than those Subsidiaries which, individually or in the aggregate, would not constitute a “significant subsidiary” as defined in Regulation S-X.
 
“ AMID Related Parties ” has the meaning specified in Section 6.2 .
 
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“ AMID SEC Documents ” has the meaning specified in Section 3.11 .
 
“ Business Day ” means a day other than (i) a Saturday or Sunday or (ii) any day on which banks located in New York, New York, U.S.A. are authorized or obligated to close.
 
“ Closing ” has the meaning specified in Section 2.2 .
 
“ Closing Date ” has the meaning specified in Section 2.2 .
 
“ Commission ” means the United States Securities and Exchange Commission.
 
“ Common Units ” means common units representing limited partnership interests in AMID.
 
“ Delaware LP Act ” means the Delaware Revised Uniform Limited Partnership Act.
 
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
 
“ General Partner ” means American Midstream GP, LLC, a Delaware limited liability company.
 
“ Governmental Authority ” means, with respect to a particular Person, any country, state, county, city and political subdivision in which such Person or such Person’s Property is located or that exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authority that exercises valid jurisdiction over any such Person or such Person’s Property. Unless otherwise specified, all references to Governmental Authority herein with respect to AMID mean a Governmental Authority having jurisdiction over AMID, its Subsidiaries or any of their respective Properties.
 
“ Indemnified Party ” has the meaning specified in Section 6.3 .
 
“ Indemnifying Party ” has the meaning specified in Section 6.3 .
 
“ Law ” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.
 
“ Lien ” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. For the purpose of this Agreement, a Person shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.
 
“ LP Units ” means units representing limited partnership interests in AMID other than the Series B Units.
 
“ Material Adverse Effect ” has the meaning specified in Section 3.1 .
 
“ NYSE ” means The New York Stock Exchange, Inc.
 
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“ Operative Documents ” means, collectively, this Agreement and the Partnership Agreement Amendment, or any amendments, supplements, continuations or modifications thereto.
 
“ Partnership Agreement ” means the Fourth Amended and Restated Agreement of Limited Partnership of AMID 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 AMID, adopted effective as of October 28, 2013, and as further amended by the Partnership Agreement Amendment.
 
“ Partnership Agreement Amendment ” means Amendment No. 2 to the Fourth Amended and Restated Agreement of Limited Partnership of AMID dated as of August 9, 2013, substantially in the form of Exhibit A, to be entered into and effectuated by the General Partner on the Closing Date.
 
“ Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other form of entity.
 
“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
 
“ Purchased Units ” means that number of Series B Units required to result in the Purchase Price being equal to $30 million or an amount just in excess of $30 million so as not to result in the issuance of fractional units.
 
“ Purchase Price ” means, an amount equal to the number of Purchased Units multiplied by the Series B Unit Price.
 
“ Purchaser Related Parties ” has the meaning specified in Section 6.1 .
 
“ Purchaser ” has the meaning set forth in the introductory paragraph.
 
“ Representatives ” of any Person means the Affiliates, officers, directors, managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person.
 
“ Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.
 
“ Series B Unit Price ” has the meaning specified in Section 2.1(b).
 
“ Series B Units ” means the Series B Units representing limited partnership interests in AMID having the rights and obligations specified in the Partnership Agreement Amendment.
 
“ Subsidiary ” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person. For the avoidance of doubt, Subsidiaries to be acquired by AMID or its subsidiaries pursuant to the Acquisition Agreement shall not be deemed to be Subsidiaries of AMID for purposes of this Agreement.
 
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ARTICLE II
AGREEMENT TO SELL AND PURCHASE
 
Section 2.1 Sale and Purchase.
 
(a) Subject to the terms and conditions hereof, AMID hereby agrees to issue and sell to the Purchasers and each Purchaser hereby agrees to purchase from AMID their respective percentage of Purchased Units as set forth on Schedule A hereto and to pay AMID the Series B Unit Price for each Purchased Unit as set forth in paragraph (b) below.
 
(b) The amount per Series B Unit the Purchaser will pay to AMID to purchase the Purchased Units (the “ Series B Unit Price ”) hereunder shall be equal to the price per Common Unit received by AMID, net of underwriting discounts and commissions, in the Offering.
 
Section 2.2 Closing . Subject to the terms and conditions hereof, the consummation of the purchase and sale of the Purchased Units hereunder (the “ Closing ”) shall take place at the offices of Holland & Hart LLP, 555 17th Street, Suite 3200, Denver, Colorado 80202, or such other location as mutually agreed by the parties, and upon the later to occur of (i) the first Business Day following the satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4 and 2.5 (other than those conditions that are by their terms to be satisfied at the Closing) and (ii) the closing of the Acquisition; provided, however, that if such later event is the closing of the Acquisition, then the Closing shall occur concurrently therewith (the date of such closing, the “ Closing Date ”).
 
Section 2.3 Mutual Conditions . The respective obligations of each party to consummate the purchase and issuance and sale of the Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):
 
(a) no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby or makes the transactions contemplated hereby illegal;
 
(b) there shall not be pending any suit, action or proceeding by any Governmental Authority seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement; and
 
(c) the closing of the Acquisition shall have occurred or shall occur concurrently with the Closing in which case all conditions set forth in Section 6.2 (Conditions to Obligations of Buyer) of the Acquisition Agreement shall have been satisfied in all material respects or the fulfillment of any such conditions to HPIP Lavaca, LLC’s obligations shall have been waived, except for those conditions which, by their nature, will be satisfied concurrently with the Closing.
 
(d) the closing of the Offering shall have occurred or shall occur concurrently with the Closing.
 
Section 2.4 Purchasers’ Conditions . The obligation of the Purchasers to consummate the purchase of the Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by the Purchasers in writing with respect to the Purchased Units, in whole or in part, to the extent permitted by applicable Law):
 
(a) AMID shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by AMID on or prior to the Closing Date;
 
(b) (i) The representations and warranties of AMID (A) set forth in Sections 3.1, 3.2 and 3.5 and (B) contained in this Agreement that are qualified by materiality or a Material Adverse Effect shall be true and correct when made and as of the Closing Date and (ii) all other representations and warranties of AMID shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only, it being expressly understood and agreed that representations and warranties made “As of the date hereof” or “As of the date of this Agreement”, or a similar phrase, are made as of January 22, 2014);
 
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(c) AMID shall have received or be entitled to receive at closing of the Offering net proceeds of not less than $80 million;
 
(d) The NYSE shall have authorized, upon official notice of issuance, the listing of the LP Units issuable upon conversion of Series B Units, as set forth in the Partnership Agreement Amendment;
 
(f) No notice of delisting from the NYSE shall have been received by AMID with respect to the LP Units;
 
(g) The Partnership Agreement Amendment, in all material respects in the form attached as Exhibit A to this Agreement, shall have been duly adopted and be in full force;
 
(h) AMID shall have delivered, or caused to be delivered, to the Purchaser at the Closing, AMID’s closing deliveries described in Section 2.6 ; and
 
Section 2.5 AMID’s Conditions . The obligation of AMID to consummate the sale of the Purchased Units to the Purchasers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by AMID in writing, in whole or in part, to the extent permitted by applicable Law):
 
(a) the representations and warranties of the Purchasers contained in this Agreement that are qualified by materiality shall be true and correct when made and as of the Closing Date and all other representations and warranties of the Purchasers shall be true and correct in all material respects as of the Closing Date (except that representations of the Purchasers made as of a specific date shall be required to be true and correct as of such date only); and
 
(b) the Purchasers shall have delivered, or caused to be delivered, to AMID at the Closing the Purchasers’ closing deliveries described in Section 2.7 .
 
By acceptance of the certificate or certificates representing the Purchased Units, the Purchasers shall be deemed to have represented to AMID that the Purchasers have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by it on or prior to the Closing Date; and the representations and warranties of the Purchasers contained in this Agreement that are qualified by materiality are true and correct as of the Closing Date and all other representations and warranties of the Purchasers are true and correct in all material respects as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only).
 
Section 2.6 AMID Deliveries . At the Closing, subject to the terms and conditions hereof, AMID will deliver, or cause to be delivered, to the Purchasers:
 
(a) A certificate or certificates representing the Purchased Units (bearing the legend set forth in Section 4.9 ) and meeting the requirements of the Partnership Agreement, free and clear of any Liens, other than transfer restrictions under the Partnership Agreement and applicable federal and state securities laws;
 
(b) A certificate of the Secretary of State of the State of Delaware, dated a recent date, to the effect that each of the General Partner and AMID is in good standing;
 
(c) A cross-receipt executed by AMID and delivered to each Purchasers certifying that it has received the Purchase Price from the Purchasers as of the Closing Date;
 
(d) A certificate, dated the Closing Date and signed by an officer of the General Partner, on behalf of AMID, in their capacities as such, stating that:
 
(i) AMID has performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by AMID on or prior to the Closing Date; and
 
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(ii) The representations and warranties of AMID contained in this Agreement that are qualified by materiality or Material Adverse Effect are true and correct as of the Closing Date and all other representations and warranties of AMID are, individually and in the aggregate, true and correct in all material respects as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only); and
 
(f) A certificate of the Secretary or Assistant Secretary of the General Partner, on behalf of AMID, certifying as to (1) the Amended and Restated Certificate of Limited Partnership of AMID, as amended, and the Partnership Agreement, (2) board resolutions authorizing the execution and delivery of the Operative Documents and the consummation of the transactions contemplated thereby, including the issuance of the Purchased Units and (3) its incumbent officers authorized to execute the Operative Documents, setting forth the name and title and bearing the signatures of such officers.
 
Section 2.7 Purchasers’ Deliveries . At the Closing, subject to the terms and conditions hereof, the Purchasers will deliver, or cause to be delivered, to AMID:
 
(a) Payment to AMID of each such Purchaser’s respective portion of the Purchase Price by wire transfer of immediately available funds to an account designated by AMID in writing at least two Business Days prior to the Closing Date;
 
(b) A cross-receipt executed by the Purchasers and delivered to AMID certifying that it has received the Purchased Units as of the Closing Date; and
 
(c) A transfer application in substantially the form attached hereto as Exhibit B , which shall have been duly executed by each Purchaser.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMID
 
AMID represents and warrants to the Purchaser as follows:
 
Section 3.1 Existence . Each of the AMID Entities has been duly incorporated or formed, as the case may be, and is validly existing as a limited liability company, limited partnership or corporation, as the case may be, in good standing under the Laws of its jurisdiction of incorporation or formation, as the case may be, and has the full limited liability company, limited partnership or corporate, as the case may be, power and authority, and has all governmental licenses, authorizations, consents and approvals, necessary to own, lease or hold its Properties and assets and to conduct the businesses in which it is engaged, and is duly registered or qualified to do business and in good standing as a foreign limited liability company, limited partnership or corporation, as the case may be, in each jurisdiction in which its ownership or lease of Property or the conduct of its business requires such qualification, except where the failure to so register or qualify could not reasonably be expected to (i) have, individually or in the aggregate, a material adverse effect on the condition (financial or other), results of operations, securityholders’ equity, Properties or business of the AMID Entities taken as a whole, the ability of the AMID Entities to meet their obligations under the Operative Documents or the ability of the AMID Entities to consummate the transactions under any Operative Document on a timely basis (a “ Material Adverse Effect ”) or (ii) subject the limited partners of AMID to any material liability or disability.
 
Section 3.2 Purchased Units; Capitalization .
 
(a) On the Closing Date, the Purchased Units shall have those rights, preferences, privileges and restrictions governing the Series B Units as set forth in the Partnership Agreement.
 
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(b) The General Partner is the sole general partner of AMID, with a non-economic general partner interest in AMID; such general partner interest is the only general partner interest of the Partnership that is issued and outstanding; and such general partner interest has been duly authorized and validly issued.
 
(c) The limited partners of AMID hold LP Units in AMID, represented as of January 22, 2014 by approximately 12,881,909 LP Units; such LP Units are the only limited partner interests of AMID that are issued and outstanding; all of such LP Units have been duly authorized and validly issued pursuant to the Partnership Agreement and are fully paid and nonassessable (except to the extent such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
 
Section 3.3 No Conflict . None of (i) the offering, issuance and sale by AMID of the Purchased Units and the application of the proceeds therefrom and from the Offering, (ii) the execution, delivery and performance of the Operative Documents by AMID or the General Partner, or (iii) the consummation of the transactions contemplated hereby or thereby conflicts or will conflict with, or results or will result in a breach or violation of or imposition of any Lien upon any Property or assets of the AMID Entities pursuant to, (A) the formation or governing documents of any of the AMID Entities, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which any of the AMID Entities is a party, by which any of them is bound or to which any of their respective Properties or assets is subject, or (C) any Law applicable to any of the AMID Entities or injunction of any court or governmental agency or body to which any of the AMID Entities of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over any of the AMID Entities or any of their Properties, except in the case of clauses (B) and (C) for such conflict, breach, violation or default that would notreasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or materialy impair the ability of the AMID Entities to consummate the transactions contemplated by this Agreement.
 
Section 3.4 No Default . None of the AMID Entities is in violation or default of (i) any provision of its respective formation or governing documents, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party, by which it is bound or to which its property is subject, or (iii) any Law of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the AMID Entities or any of their Properties, as applicable, except, in the case of clauses (ii) or (iii), as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or materialy impair the ability of the AMID Entities to consummate the transactions contemplated by this Agreement.
 
Section 3.5 Authority . On the Closing Date, AMID will have all requisite power and authority to issue, sell and deliver the Purchased Units, in accordance with and upon the terms and conditions set forth in this Agreement and the Partnership Agreement. On the Closing Date, all partnership or limited liability company action, as the case may be, required to be taken by the General Partner and AMID for the authorization, issuance, sale and delivery of the Purchased Units, the execution and delivery of the Operative Documents and the consummation of the transactions contemplated hereby and thereby shall have been validly taken. No approval from the holders of outstanding LP Units is required under the Partnership Agreement or the rules of the NYSE in connection with AMID’s issuance and sale of the Purchased Units to the Purchaser or the Series B Units pursuant to the Acquisition Agreement.
 
Section 3.6 Approvals . No authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by AMID of any of the Operative Documents to which it is a party or AMID’s issuance and sale of the Purchased Units, except (i) as may be required under the state securities or “Blue Sky” Laws, or (ii) where the failure to receive such authorization, consent, approval, waiver, license, qualification or written exemption or to make such filing, declaration, qualification or registration would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
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Section 3.7 Compliance with Laws . As of the date hereof, neither AMID nor any of its Subsidiaries is in violation of any Law applicable to AMID or its Subsidiaries, except as would not, individually or in the aggregate, have a Material Adverse Effect. AMID and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, have a Material Adverse Effect, and neither AMID nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect.
 
Section 3.8 Due Authorization . Each of the Operative Documents has been duly and validly authorized and has been or, with respect to the Operative Documents to be delivered at the Closing Date, will be, validly executed and delivered by AMID or the General Partner, as the case may be, and constitutes, or will constitute, the legal, valid and binding obligations of AMID or the General Partner, as the case may be, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
Section 3.9 Valid Issuance; No Options or Preemptive Rights of Units .
 
(a) The Purchased Units to be issued and sold by AMID to the Purchaser hereunder have been duly authorized in accordance with the Partnership Agreement and, when issued and delivered against payment therefor pursuant to this Agreement, will be validly issued in accordance with the Partnership Agreement, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
 
(b) The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Series B Units, which shall be reflected in the Partnership Agreement Amendment.
 
(c) The Common Units issuable upon conversion of the Purchased Units, the Series B Units issuable to holders of Series B Units as a distribution in kind in lieu of cash distributions on the Series B Units, in each case, the limited partner interests represented thereby, upon issuance in accordance with the terms of the Series B Units as reflected in the Partnership Agreement Amendment have been duly authorized in accordance with the Partnership Agreement and will be validly issued, fully paid (to the extent required by applicable law and the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
 
(d) Other than the General Partner’s right to maintain its general partner interest, the holders of outstanding LP Units are not entitled to statutory, preemptive or other similar contractual rights to subscribe for LP Units or Series B Units; and no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, partnership securities or ownership interests in AMID are outstanding.
 
Section 3.10 Periodic Reports . AMID’s forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act or the Securities Act during the 12 months preceding the date hereof (all such documents filed prior to the date hereof, collectively the “ AMID SEC Documents ”) have been filed with the Commission on a timely basis. The AMID SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequent AMID SEC Document) (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, (c) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, (d)
 
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were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and (e) fairly present (subject in the case of unaudited statements to normal and recurring audit adjustments) in all material respects the consolidated financial position of AMID and its consolidated subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended. PricewaterhouseCoopers, LLP is an independent registered public accounting firm with respect to AMID and the General Partner and has not resigned or been dismissed as independent registered public accountants of AMID as a result of or in connection with any disagreement with AMID on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures.
 
Section 3.11 Litigation . As of the date hereof, except as described in the AMID SEC Documents, there are no legal or governmental proceedings pending to which any AMID Entity is a party or to which any Property or asset of any AMID Entity is subject that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or which challenges the validity of any of the Operative Documents or the right of any AMID entity to enter into any of the Operative Documents or to consummate the transactions contemplated hereby and thereby and, to the knowledge of AMID, no such proceedings are threatened by Governmental Authorities or others.
 
Section 3.12 No Material Adverse Change . As of the date hereof, except as set forth in the AMID SEC Documents filed with the Commission on or prior to the date hereof, since September 30, 2013, there has not occurred any material adverse change in the condition (financial or other), results of operations, securityholders’ equity, Properties, prospects or business of the AMID Entities, taken as a whole.
 
Section 3.13 Certain Fees . No fees or commissions are or will be payable by AMID to brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transaction contemplated by this Agreement. AMID agrees that it will indemnify and hold harmless the Purchaser from and against any and all claims, demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by AMID in connection with the sale of the Purchased Units or the consummation of the transactions contemplated by this Agreement.
 
Section 3.14 No Registration . Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 4.6 and Section 4.7 , the issuance and sale of the Purchased Units pursuant to this Agreement is exempt from registration requirements of the Securities Act, and neither AMID nor, to the knowledge of AMID, any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.
 
Section 3.15 No Integration . Neither AMID nor any of its Affiliates have, directly or indirectly through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any “security” (as defined in the Securities Act of 1933, as amended) that is or will be integrated with the sale of the Purchased Units in a manner that would require registration under the Securities Act.
 
Section 3.16 Investment Company Status . None of the AMID Entities currently is, or following the sale of the Purchased Units hereby and the application of proceeds therefrom, will be an “investment company” or a company “controlled by” an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
 
Section 3.17 Form S-3 Eligibility . As of the date hereof, AMID has been, since the time of filing its most recent Form S-3 Registration Statement, and continues to be eligible to use Form S-3.
 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
Each Purchaser, severally and not jointly, hereby represents and warrants to AMID that:
 
Section 4.1 Existence . Such Purchaser is duly organized and validly existing and in good standing under the Laws of its jurisdiction of organization, with all requisite corporate, limited liability company or partnership power and authority, as applicable, to own, lease, use and operate its Properties and to conduct its business as currently conducted.
 
Section 4.2 Authorization, Enforceability . Such Purchaser has all necessary corporate, limited liability company or partnership power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated thereby, and the execution, delivery and performance by such Purchaser of this Agreement has been duly authorized by all necessary action on the part of such Purchaser; and this Agreement constitutes the legal, valid and binding obligations of such Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
 
Section 4.3 No Breach . The execution, delivery and performance of this Agreement by such Purchaser and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (a) conflict with or result in a material breach or violation of any of the terms or provisions of, or constitute a default under, any material agreement to which the Purchaser is a party or by which such Purchaser is bound or to which any of the property or assets of such Purchaser is subject, (b) conflict with or result in any violation of the provisions of the organizational documents of such Purchaser, or (c) materially violate any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over such Purchaser or the property or assets of such Purchaser, except in the cases of clauses (a) and (c), for such conflicts, breaches, violations or defaults as would not prevent the consummation of the transactions contemplated by this Agreement.
 
Section 4.4 Certain Fees . No fees or commissions are or will be payable by such Purchaser to brokers, finders, or investment bankers with respect to the purchase of any of the Purchased Units or the consummation of the transaction contemplated by this Agreement. Such Purchaser agrees that it will indemnify and hold harmless AMID from and against any and all claims, demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by such Purchaser in connection with the purchase of the Purchased Units or the consummation of the transactions contemplated by this Agreement.
 
Section 4.5 Investment . The Purchased Units are being acquired for such Purchaser’s own account, the account of its Affiliates, or the accounts of clients for whom such Purchaser exercises discretionary investment authority (all of whom such Purchaser hereby represents and warrants are “accredited investors” within the meaning of Rule 501(a) of Regulation D promulgated by the Commission pursuant to the Securities Act), not as a nominee or agent, and with no present intention of distributing the Purchased Units or any part thereof, and such Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any state, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units under a registration statement under the Securities Act and applicable state securities laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated thereunder). If such Purchaser should in the future decide to dispose of any of the Purchased Units, such Purchaser understands and agrees (a) that it may do so only in compliance with the Securities Act and applicable state securities law, as then in effect, including a sale contemplated by any registration statement pursuant to which such securities are being offered, or pursuant to an exemption from the Securities Act, and (b) that stop-transfer instructions to that effect will be in effect with respect to such securities.
 
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Section 4.6 Nature of Purchaser . Such Purchaser represents and warrants to, and covenants and agrees with, AMID that, (a) it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Commission pursuant to the Securities Act and (b) by reason of its business and financial experience it has such knowledge, sophistication and experience in making similar investments and in business and financial matters generally so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment.
 
Section 4.7 Restricted Securities . Such Purchaser understands that the Purchased Units, the Common Units issuable upon conversion of the Purchased Units, the Series B Units issuable to holders of Series B Units as a distribution in kind in lieu of cash distributions on the Series B Units are characterized as “restricted securities” under the federal securities Laws inasmuch as they are being acquired from AMID in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, such Purchaser represents that it is knowledgeable with respect to Rule 144 of the Commission promulgated under the Securities Act.
 
Section 4.8 Legend . Such Purchaser understands that the certificates evidencing the Purchased Units will bear the following legend: “NEITHER THE OFFER NOR SALE OF THESE SECURITIES NOR THE SECURITIES INTO WHICH THEY ARE CONVERTIBLE 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.”
 
ARTICLE V
COVENANTS
 
Section 5.1 Taking of Necessary Action . Each of the parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, each of AMID and the Purchasers shall use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the other parties, as the case may be, advisable for the consummation of the transactions contemplated by the Operative Documents.
 
Section 5.2 Other Actions . AMID shall (i) cause the Partnership Agreement Amendment to be adopted immediately prior to the issuance of the Purchased Units contemplated by this Agreement, (ii) file prior to the Closing a supplemental listing application with the NYSE to list the LP Units underlying the Purchased Units and (iii) file prior to the issuance of any Series B Units as a distribution in kind in lieu of cash distributions on the Series B Units a supplemental listing application with the NYSE to list the LP Units underlying such Series B Units issued as a distribution in kind.
 
Section 5.3 Use of Proceeds . AMID shall use the proceeds from the sale of the Purchased Units to partially fund the Acquisition. If the transactions contemplated by the Acquisition Agreement are not closed concurrently with the Closing or within two Business Days thereafter, AMID shall return the Purchase Price paid to AMID to the
 
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Purchaser within two Business Days of receipt thereof and the Purchaser shall promptly return all Purchased Units to AMID.
 
ARTICLE VI
INDEMNIFICATION
 
Section 6.1 Indemnification by AMID . AMID agrees to indemnify each Purchaser and its respective Representatives (collectively, “ Purchaser Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, promptly upon demand, to pay or reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of AMID contained herein, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties; and provided further, that no Purchaser Related Party shall be entitled to recover special, consequential (including lost profits or diminution in value) or punitive damages. Notwithstanding anything to the contrary, consequential damages shall not be deemed not to include diminution in value of the Purchased Units, which is specifically excluded included in damages covered by Purchaser Related Parties’ indemnification.
 
Section 6.2 Indemnification by the Purchaser . Each Purchaser, severally and not jointly, agrees to indemnify AMID, the General Partner and their respective Representatives (collectively, “ AMID Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, promptly upon demand, to pay or reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Purchaser contained herein, provided that such claim for indemnification relating to a breach of the representations and warranties is made prior to the expiration of such representations and warranties; and provided further, that no AMID Related Party shall be entitled to recover special, consequential (including lost profits or diminution in value) or punitive damages.
 
Section 6.3 Indemnification Procedure . Promptly after any AMD Related Party or Purchaser Related Party (hereinafter, the “ Indemnified Party ”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “ Indemnifying Party ”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any
 
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defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party.
 
ARTICLE VII
MISCELLANEOUS
 
Section 7.1 Interpretation and Survival of Provisions . Article, Section and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any party has an obligation under the Operative Documents, the expense of complying with that obligation shall be an expense of such party unless otherwise specified. Whenever any determination, consent, or approval is to be made or given by the Purchaser, such action shall be in the Purchaser’s sole discretion unless otherwise specified in this Agreement. If any provision in the Operative Documents is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Operative Documents shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of the Operative Documents, and the remaining provisions shall remain in full force and effect. The Operative Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.
 
Section 7.2 Survival of Provisions . The representations and warranties set forth in Sections 3.1, 3.2, 3.5, 3.9, 3.10, 3.15, 4.1, 4.2, 4.5, 4.6 and 4.7 hereunder shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth herein shall survive for a period of twelve months following the Closing Date regardless of any investigation made by or on behalf of AMID or either Purchaser. The covenants made in this Agreement or any other Operative Document shall survive the Closing of the transactions described herein and remain operative and in full force and effect regardless of acceptance of any of the Purchased Units and payment therefor and repayment, conversion, exercise or repurchase thereof.
 
Section 7.3 No Waiver; Modifications in Writing .
 
(a)  Delay . No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.
 
(b)  Specific Waiver . Except as otherwise provided herein, no amendment, waiver, consent, modification, or termination of any provision of this Agreement or any other Operative Document (except in the case of the Partnership Agreement, for amendments adopted pursuant to the terms thereof) shall be effective unless signed by each of the parties hereto or thereto affected by such amendment, waiver, consent, modification, or termination. Any amendment, supplement or modification of or to any provision of this Agreement or any other Operative
 
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Document, any waiver of any provision of this Agreement or any other Operative Document, and any consent to any departure by AMID from the terms of any provision of this Agreement or any other Operative Document shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on a party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
 
Section 7.4 Binding Effect; Assignment .
 
(a)  Binding Effect . This Agreement shall be binding upon AMID, each Purchaser, and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.
 
(b)  Assignment of Rights . All or any portion of the rights and obligations of the Purchasers under this Agreement may be transferred by a Purchaser to any Affiliate of the Purchaser without the consent of AMID. No portion of the rights and obligations of the Purchasers under this Agreement may be transferred by a Purchaser to a non-Affiliate without the written consent of AMID (which consent shall not be unreasonably withheld by AMID).
 
Section 7.5 Communications . All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the following addresses:
 
(a)                         If to a Purchaser, to the address set forth on Schedule A.
 
(b)                         If to AMID:
 
American Midstream Partners, LP
1614 15th Street, Suite 300
Denver, CO 80202
Attention: General Counsel
Facsimile:
 
with a copy to:
 
Holland & Hart, LLP
555 17th Street
Suite 2700
Denver, CO 80202
Attention: Lucy Schlauch Stark
Facsimile: 303.291.9145
 
or to such other address as AMID or the Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given: (i) at the time delivered by hand, if personally delivered; (ii)  if sent via electronic mail, upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “read receipt requested” function, if applicable, return e-mail or other written acknowledgment) excluding “out of office” and similar automatic replies; (iii) upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; (iv) when receipt acknowledged, if sent via facsimile (except, that, if not given during normal business hours for the recipient, such notice shall be deemed to have been given at the opening of
 
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business on the next Business Day for the recipient); and (v) upon actual receipt when delivered to an air courier guaranteeing overnight delivery.
 
Section 7.6 Removal of Legend . In connection with a sale of the Purchased Units by a Purchaser in reliance on Rule 144, a Purchaser or its broker shall deliver to the transfer agent and AMID a broker representation letter providing to the transfer agent and AMID any information AMID deems necessary to determine that the sale of the Purchased Units is made in compliance with Rule 144, including a certification that such Purchaser is not an Affiliate of AMID and regarding the length of time the Purchased Units have been held. Upon receipt of such representation letter, AMID shall promptly direct its transfer agent to exchange unit certificates bearing a restrictive legend for unit certificates without the legend (or a credit for such shares to book-entry accounts maintained by the transfer agent), including the legend referred to in Section 4.9, and AMID shall bear all costs associated therewith. After a Purchaser or its permitted assigns have held the Purchased Units for one year, if the certificate for such Purchased Units still bears the restrictive legend referred to in Section 4.9, AMID agrees, upon request of such Purchaser or permitted assignee, to take all steps necessary to promptly effect the removal of the legend described in Section 4.9 from the Purchased Units, and AMID shall bear all costs associated therewith, regardless of whether the request is made in connection with a sale or otherwise, so long as such Purchaser or its permitted assigns provide to AMID any information AMID deems necessary to determine that the legend is no longer required under the Securities Act or applicable state laws, including a certification that the holder is not an Affiliate of AMID (and a covenant to inform AMID if it should thereafter become an Affiliate and to consent to exchange its certificates for certificates bearing an appropriate restrictive legend) and regarding the length of time the Purchased Units have been held.
 
Section 7.7 Entire Agreement . This Agreement, the other Operative Documents and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or the other Operative Documents with respect to the rights granted by AMID or any of its Affiliates or the Purchaser or any of its Affiliates set forth herein or therein. This Agreement, the other Operative Documents and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter.
 
Section 7.8 Governing Law . This Agreement will be construed in accordance with and governed by the laws of the State of New York.
 
Section 7.9 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.
 
Section 7.10 Termination .
 
(a) Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by the joint written consent of the Purchasers, upon a breach in any material respect by AMID of any covenant or agreement set forth in this Agreement.
 
(b) Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing:
 
(i) if a statute, rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Authority of competent jurisdiction that permanently restrains, permanently precludes, permanently enjoins or otherwise permanently prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal;
 
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(ii) upon the termination of the Acquisition Agreement; or
 
(iii) if the Closing shall not have occurred by February 15, 2014.
 
(c) In the event of the termination of this Agreement as provided in this Section 7.10 , this Agreement shall forthwith become null and void. In the event of such termination, there shall be no liability on the part of any party hereto, except as set forth in Article VI of this Agreement; provided that nothing herein shall relieve any party from any liability or obligation with respect to any willful breach of this Agreement.
 
Section 7.11 Recapitalization, Exchanges, Etc. Affecting the LP Units . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of AMID or any successor or assign of AMID (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the LP Units, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring after the date of this Agreement and prior to the Closing.
 
[Signature pages follow.]
 
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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 Unit Purchase Agreement
 
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Schedule A — List of Purchasers, Commitment Amounts, and Contact Information

Purchaser	 	Percentage of Purchased Units	 	Contact Information	
American Midstream GP, LLC	 	14.98	 	 	
High Point Infrastructure Partners, LLC	 	85.02	 	 	
 
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Exhibit A — Form of Amendment No. 2 to Fourth Amended and
Restated Agreement of Limited Partnership
 
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 [ · ], 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 [ · ], dated as of January [ · ], 2014; and
 
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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 Unit Purchase Agreement, dated as of January [ · ], 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
 
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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.
 
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“ 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 [  ·  ], 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 [ · ], 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.
 
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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
 
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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
 
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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.
 
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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 [ · ] 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
 
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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 Section 5.13(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.
 
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(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.
 
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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) ;
 
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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.
 
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IN WITNESS WHEREOF , the undersigned have executed this Amendment as of the effective date written above.

 	GENERAL PARTNER:	
 	 	
 	AMERICAN MIDSTREAM GP, LLC	

 	By:	 	
 	 	 	
 	Name:	 	
 	 	 	
 	Title:	 	
 
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Exhibit B — Form of Transfer Application
 
No transfer of the Series B Units evidenced hereby will be registered on the books of the Partnership, unless the Partnership provides authentication instructions to the Transfer Agent and Registrar and an Application for Transfer of Units has been executed by a transferee on the form set forth below. A transferor of the Series B Units shall have no duty to the transferee with respect to execution of the transfer application in order for such transferee to obtain registration of the transfer of the Series B Units.
 
APPLICATION FOR TRANSFER OF SERIES B UNITS
 
The undersigned (“ Assignee ”) hereby applies for transfer to the name of the Assignee of the Series B Units evidenced hereby.
 
The Assignee (a) requests admission as an additional Limited Partner and agrees to comply with and be bound by, and hereby executes, the Fourth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP (the “ Partnership ”), as amended, supplemented or restated to the date hereof (the “ Partnership Agreement ”), (b) represents and warrants that the Assignee has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be appointed, the Liquidator of the Partnership as the Assignee’s attorney-in-fact, to execute, swear to, acknowledge and file any document, including, without limitation, the Partnership Agreement and any amendment thereto and the Amended and Restated Certificate of Limited Partnership of the Partnership and any amendment thereto, necessary or appropriate for the Assignee’s admission as an additional Limited Partner and as a party to the Partnership Agreement, (d) gives the power of attorney provided for in the Partnership Agreement, and (e) makes the waivers and gives the consents and approvals contained in the Partnership Agreement. Capitalized terms not defined herein have the meanings assigned to such terms in the Partnership Agreement.
 
Date:                            , 2014

 	 	 	 	
Tax Identification Number of assignee	 	 	 	
 	 	 	 	
$	 	By:	 	
Purchase Price including commissions, if any	 	 	Name:	
 	 	 	Title:	

 	 	 	
 	 	Name and address of assignee	

Type of Entity (check one):

 	o Individual	o Partnership	o Corporation	
 	 	 	
 	o Trust	o Other (specify)	 	 	
 	 	 	
Nationality (check one):	 	
 	 	 	
 	o U.S. Citizen, Resident or Domestic Entity	
 	 	 	
 	o Foreign Corporation	 	o Non resident Alien	

If the U. S. Citizen, Resident or Domestic Entity box is checked, the following certification must be completed.
 
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “ Code ”), the Partnership must withhold tax with respect to certain transfers of property if a holder of an interest in the Partnership is a foreign person. To inform the Partnership
 
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that no withholding is required with respect to the undersigned interestholder’s interest in it, the undersigned hereby certifies the following (or, if applicable, certifies the following on behalf of the interestholder).
 
Complete Either A or B:

 	A.	Individual Interestholder	
 	 	1.	I am not a non-resident alien for purposes of U.S. income taxation.	
 	 	 	 	
 	 	 	My U.S. taxpayer identification number (Social Security Number) is                  .	
 	 	 	 	
 	 	 	My home address is                  .	
 	B.	Partnership, Corporation or Other Interestholder	
 	1.	                  . is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Treasury Regulations).	
 	2.	                  . is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii) of the Treasury Regulations.	
 	 	2.	The interestholder’s U.S. employer identification number is               .	
 	3.	The interestholder’s office address and place of incorporation (if applicable) is                          (incorporated in                         .	
 
The interestholder agrees to notify the Partnership within sixty (60) days of the date the interestholder becomes a foreign person.
 
The interestholder understands that this certificate may be disclosed to the Internal Revenue Service by the Partnership and that any false statement contained herein could be punishable by fine, imprisonment or both.
 
[The remainder of this page is intentionally left blank]
 
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Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have authority to sign this document on behalf of:
 
Date:                              , 2014

 	 	
 	By:	 	
 	 	Name:	
 	 	Title:	

Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee owner or an agent of any of the foregoing, the above certification as to any person for whom the signee will hold the Units shall be made to the best of the Assignee’s knowledge.
 
[The remainder of this page is intentionally left blank.]
 
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Acknowledged by:   

 [AMERICAN MIDSTREAM                   ]	

By:	 	 	
 	Name:	 	
 	Title:	 	
 
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Exhibit 99.1

 
American Midstream Announces Agreement to Acquire Natural Gas
Gathering System in the Prolific Eagle Ford Shale for Approximately $100 Million
 
Partnership Provides Updated 2014 Guidance
 
DENVER, CO — January 22, 2014 — American Midstream Partners, LP (NYSE: AMID) today announced the execution of an agreement to purchase an approximate 120-mile natural gas gathering and redelivery system located in the oil window of the Eagle Ford shale. In December 2013, an affiliate of American Midstream’s general partner entered into a purchase and sale agreement with a subsidiary of Penn Virginia Corporation (NYSE: PVA) to acquire the gathering and redelivery system. American Midstream will effect the closing of the transaction by acquiring 100 percent of the equity of the affiliate of its general partner that previously entered into the purchase and sale agreement with Penn Virginia. Upon closing the acquisition with Penn Virginia, American Midstream will also enter into a long-term, fee-based gathering agreement, whereby Penn Virginia will dedicate for 25 years all current and future natural gas production from the areas served by the system. The system is located in Gonzales and Lavaca counties, Texas, in close proximity to the previously announced full-well-stream gathering system currently under development by an affiliate of American Midstream’s general partner. American Midstream expects the acquired system to generate approximately $8 million of EBITDA in 2014, and will be acquired for an aggregate purchase price of $100 million, subject to certain purchase price adjustments to account for capital expenditures incurred by Penn Virginia during the fourth quarter of 2013 and through the acquisition closing date. 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.
 
Construction and operation of the Penn Virginia system began in 2011 and the system currently has operating capacity of approximately 90 million cubic feet per day (MMcf/d). The system is currently flowing more than 40 MMcf/d 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.
 
American Midstream anticipates investing between $60 million and $70 million over the next five years, including the capital expenditures associated with the purchase price adjustment, to expand the system to accommodate Penn Virginia’s drilling program, and anticipates EBITDA will increase over the same period of time to approximately $25 million in 2018.
 
“We are excited to be working with Penn Virginia in the prolific oily window of the Eagle Ford shale,” stated Steve Bergstrom, Executive Chairman, President and Chief Executive Officer.  “The gathering system is located in an area of the Eagle Ford that is a primary investment focus for Penn Virginia.  As such, we believe there are opportunities for significant midstream infrastructure growth, which we expect will lower the acquisition multiple by several hundred basis points over the next several years.  Moreover, the long-term, fee-based gathering agreement increases our percentage of fee-based gross margin to more
 
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than 70 percent on a pro-forma, run-rate basis.  When combined with the system that our general partner is developing in Gonzales County and stated it intends to drop down to American Midstream, we are developing a sizable midstream presence in the Eagle Ford.”
 
“The Penn Virginia acquisition is expected to be accretive on a distributable cash flow per unit basis and provide access to significant organic growth opportunities, including oil gathering and water treating, disposal, and distribution,” continued Mr. Bergstrom. “Due to the increase in adjusted EBITDA and distributable cash flow that we expect from the Penn Virginia acquisition, management intends to recommend to the board of directors an increase in the quarterly distribution of approximately two percent beginning with the distribution for the third quarter 2014, in addition to our intent to recommend to the board an approximate two percent increase for the first quarter 2014 distribution associated with the recently closed Blackwater acquisition.  Looking forward, we believe the Penn Virginia acquisition reflects our ongoing commitment to drive long-term, sustainable growth at American Midstream.”
 
The transaction is expected to close in January 2014, and the closing is subject to financing and other customary closing conditions.
 
Updated 2014 Adjusted EBITDA, DCF and Capital Expenditure Forecast
 
American Midstream updated its 2014 forecast to account for the acquisition of the Penn Virginia gathering system.  2014 Adjusted EBITDA is now forecasted in a range of $41million to $44 million and distributable cash flow, or DCF, is forecasted in a range of $21 million to $24 million.  Growth capital expenditures in 2014, which exclude maintenance capital, are forecasted to be in a range of $55 million to $60 million, of which approximately $30 million is associated with the Penn Virginia system.
 
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 a potential acquisition, operational volumetrics and improvements, growth projects, cash flows, expected Adjusted EBITDA, DCF and capital expenditures and an expected recommendation to increase distribution levels. 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. Our operations 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. The closing of the Penn Virginia acquisition is subject to conditions beyond our control.  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
 
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acting on our behalf are expressly qualified in their entirety by the previous statements. 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.
 
Non-GAAP Financial Measures
 
This press release includes forecasted non-GAAP financial measures, including “Adjusted EBITDA” and “Distributable Cash Flow.” The GAAP measure most directly comparable to adjusted EBITDA and Distributable Cash Flow is net income (loss).
 
Adjusted EBITDA is calculated as net income (loss) attributable to the partnership plus interest expense, depreciation expense, certain non-cash charges such as non-cash equity compensation, unrealized losses on commodity derivative contracts and selected charges that are unusual or non-recurring including debt issuance costs, transaction costs, and losses on the impairment of property, plant and equipment, less interest income, unrealized gains on commodity derivative contracts, construction, operating and maintenance agreement (COMA) income, amortization of commodity put purchase costs and selected gains that are unusual or nonrecurring such as the benefit of our other post-employment benefit plan (OPEB), gains on the sale of assets, and gains on the involuntary conversion of property, plant and equipment.
 
Distributable cash flow is calculated as Adjusted EBITDA plus interest income, less cash paid for interest expense, normalized maintenance capital expenditures, and dividends related to the Series A convertible preferred units.
 
This press release also contains the non-GAAP financial measure “EBITDA” related to the acquisition of the Penn Virginia gathering system. The GAAP measure most directly comparable to EBITDA is net income (loss).  The estimated 2014 EBITDA of $8 million related to the Penn Virginia gathering system is based on forecasted volume throughput on the gathering system, gathering and compression fees as stated in the Construction and Field Gathering Agreement that American Midstream will execute with Penn Virginia upon closing the acquisition, and estimated costs required to operate the gathering system.
 
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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 intend to issue newly-designated series B units in a private placement. In connection with the proposed 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 , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% to our general partner, until we distribute for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter;
 
·                   second , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% 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 1.439% 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 1.439% 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 1.439% general partner interest if we issue additional units. Our general partner’s 1.439% interest, and the percentage of our cash distributions to which it is entitled

 
from such 1.439% 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 1.439% 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 1.439% 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:
 
·                   50.561% to the common unitholders and series B unitholders, pro rata, 1.439% 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 1.439% 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 unitholdersand common 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 and common 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 1.439% general partner interest and assume that our general partner has contributed any additional capital necessary to maintain its 1.439% 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, (iii) distributions are made prior to the coupon conversion quarter, and (iv) we have not issued series B 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.

 

 	 	 	 	Marginal Percentage
Interest in Distributions After Payment of the
Series A Preferred Distribution	 	
 	 	Total Quarterly
Distribution
Per Unit Amount	 	Common
Unitholders	 	Series A
Preferred
Unitholder(1)	 	General
Partner	 	Incentive
Distribution
Right Holders	 	
Minimum Quarterly Distribution	 	$0.4125	 	98.561	%	—	 	1.439	%	—	 	
Thereafter	 	Above $0.4125	 	50.561	%	—	 	1.439	%	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 , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% 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 , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% 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 , 50.561% to the common unitholders and series B unitholders, pro rata, 1.439% 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 1.439% 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, (iii) any distributions are made prior to the coupon conversion quarter, and (iv) we have not issued series B 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.

 	 	 	 	Marginal Percentage
Interest in Distributions After Payment of the
Series A Preferred Distribution	 	Quarterly	 	
 	 	Total Quarterly
Distribution
Per Unit Amount	 	Common
Unitholders	 	Series A
Preferred
Unitholder(1)	 	General
Partner	 	Incentive
Distribution
Right Holders	 	Distributions per
Unit Following
Hypothetical Reset	 	
Minimum Quarterly Distribution	 	$0.4125	 	98.561	%	—	 	1.439	%	—	 	$0.65	 	
Thereafter	 	Above $0.4125	 	50.561	%	—	 	1.439	%	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 7,421,293 common units outstanding, 5,278,562 series A preferred units outstanding, our general partner has maintained its 1.439% general partner interest, we have not issued any series B units, 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
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	 	$	3,061,283	 	$	—	 	$	44,703	 	$	—	 	$	3,105,986	 	
Thereafter	 	Above $0.4125	 	1,762,557	 	—	 	50,172	 	1,673,289	 	3,486,018	 	
 	 	 	 	$	4,823,840	 	$	—	 	$	94,875	 	$	1,673,289	 	$	6,592,004	 	

(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 9,995,583 common units and 5,278,562 series A preferred units outstanding, our general partner’s 1.439% interest has been maintained, and the average distribution to each common unit would be $0.65. The table assumes that we have not issued any series B units. 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 $1,673,289, 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
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	 	$	4,823,840	 	$	94,875	 	$	—	 	$	—	 	$	1,673,289	 	$	6,592,004	 	
Thereafter	 	Above $0.65	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	 	 	$	4,823,840	 	$	94,875	 	$	—	 	$	—	 	$	1,673,289	 	$	6,592,004	 	

(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 , 98.561% to all unitholders, pro rata, and 1.439% 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 , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% 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 1.439% 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 , 98.561% to the common unitholders and series B unitholders, pro rata, and 1.439% 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 , 50.561% to all unitholders (including holders of series A preferred units), pro rata, 1.439% 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 , 98.561% to the holders of common units and series B units in proportion to the positive balances in their capital accounts and 1.439% to our general partner, until the capital accounts of the common unitholders have been reduced to zero;
 
·                   second , 98.561% to all unitholders (including holders of series A preferred units), pro rata, and 1.439% 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.