American Midstream Partners, LP (Form: 8-K, Received: 11/04/2016 17:21:49)

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): October 31, 2016

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.)

2103 CityWest Boulevard

Building #4, Suite 800

Houston, Texas

77042

(Address of principal executive offices)

(Zip Code)

(713) 815-3900

(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:

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

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

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

☐	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

Securities Purchase Agreement and Issuance of Series D Preferred Units

On October 31, 2016, American Midstream Partners, LP (the “Partnership”) entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Magnolia Infrastructure Holdings, LLC (“Magnolia”), an affiliate of High Point Infrastructure Partners, LLC (“HPIP”), pursuant to which the Partnership issued 2,333,333 shares of newly-designated Series D convertible preferred units (the “Series D Preferred Units”) representing limited partnership interests in the Partnership in a private placement for $15.00 per unit, less a closing fee of 1.5%, for approximately $34.4 million in net proceeds. The Securities Purchase Agreement provides that if any of the Series D Preferred Units remain outstanding on June 30, 2017, the Partnership will issue Magnolia a warrant (the “Warrant” and, together with the issuance of the Series D Preferred Units, the “Securities Issuance”) to purchase 700,000 common units representing limited partnership interests in the Partnership (“Common Units”) with an exercise price of $22.0 per Common Unit. The Series D Preferred Units were issued, and the Warrant, if issued, will be issued, in a private placement in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder. The conflicts committee (the “Conflicts Committee”), a committee composed of independent members of the Board of Directors (the “Board”) of American Midstream GP, LLC, the general partner of the Partnership (the “General Partner”), reviewed and recommended the Securities Issuance to the Board for adoption and approval and the Board approved the Securities Issuance.

Series D Preferred Units

The Series D Preferred Units were created and issued pursuant to that certain Amendment No. 2 to Fifth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP (“Second Amendment”), which is filed as Exhibit 3.1 hereto.

The Series D Preferred Units have the right to receive cumulative distributions in the same priority as the Series A convertible preferred units representing limited partnership interests in the Partnership (the “Series A Preferred Units”) and the Series C convertible preferred units representing limited partnership interests in the Partnership (the “Series C Preferred Units”) and prior to any other distributions made in respect of any other partnership interests (the “Series D Quarterly Distribution”), in the amounts described herein. The Series D Quarterly Distribution will be paid entirely in cash at the Series D Distribution Rate (as defined below). The aggregate amount of cash for each quarter to be distributed in respect of the Series D Preferred Units outstanding will be paid out of Available Cash (as defined in the Fifth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP, as amended (the “Partnership Agreement”)) in the same priority as any cash distributions made to the holders of Series A Preferred Units and Series C Preferred Units, which will be made prior to any distributions to the General Partner or the Partnership’s common unitholders. To the extent that any portion of a quarterly distribution on Series A Preferred Units, a quarterly distribution on Series C Preferred Units and Series D Quarterly Distribution paid in cash with regard 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 holders of Series A Preferred Units, the holders of Series C Preferred Units and the holders of Series D Preferred Units, pro rata, and the balance of such Series D Quarterly Distributions will be unpaid and will become an arrearage and accrue interest until paid in a future quarter. If the Partnership fails to pay in full any Series D Quarterly Distribution, the amount of such unpaid distribution will accrue, accumulate and bear interest at a rate of 6.00% per annum from the first day of the quarter immediately following the quarter for which such distribution is due until paid in full.

The “Series D Distribution Rate” means an amount per quarter per Series D Preferred Unit payable in arrears equal to the greater of (i) $0.4125 and (ii) the Series D Distribution Amount. The “Series D Distribution Amount” with respect to any particular quarter is the cash distribution amount for such quarter that each Series D Preferred Unit would have received on an as-converted basis if it had been converted to Common Units immediately prior to the beginning of such quarter into which such Series D Preferred Unit is convertible pursuant to the Conversion Right (as defined below).

The record date for the determination of holders entitled to receive Series D Quarterly Distributions will be the same as the record date for determination of Common Unit holders entitled to receive quarterly distributions.

The Series D Preferred Units have voting rights that are identical to the voting rights of the Common Units and will vote with the Common Units as a single class on an as-converted basis, with each Series D Preferred Unit initially entitled to one vote for each Common Unit into which such Series D Preferred Unit is convertible. The Series D Preferred Units also have separate class voting rights on any matter, including a merger, consolidation or business combination, that adversely affects, amends or modifies any of the rights, preferences, privileges or terms of the Series D Preferred Units. The Series D Preferred Units are convertible in whole or in part into Common Units at the election of the holder of the Series D Preferred Unit at any

time after June 30, 2017 (the “Conversion Right”). As of the date of issuance, the conversion rate for each Series D Preferred Unit was one -to-one (the “Conversion Rate”). The Conversion Rate is subject to adjustment as described in the Partnership Agreement to account for additional issuances, distributions, combinations, subdivisions and reclassifications of the Partnership’s securities.

In the event that the Partnership issues, sells or grants any Common Units or securities convertible into Common Units at an indicative per Common Unit price that is less than $15.00 per unit (subject to customary anti-dilution adjustments), then the Conversion Rate will be adjusted according to a formula to provide for an increase in the number of Common Units into which Series D Preferred Units are convertible.

Prior to the consummation of any recapitalization, reorganization, consolidation, merger, spin-off or other business combination in which the holders of Common Units are to receive securities, cash or other assets (a “Partnership Event”), the Partnership is obligated to make an irrevocable written offer, subject to consummation of the Partnership Event, to the holders of Series D Preferred Units to redeem all (but not less than all) of the Series D Preferred Units for a price per Series D Preferred Unit payable in cash equal to the greater of:

(i) the sum of $15.00 and all accrued and accumulated but unpaid distributions for each Series D Preferred Unit; and

(ii) an amount equal to the product of:

(A) the number of Common Units into which each Series D Preferred Unit is then convertible; and

(B) the sum of the cash consideration per Common Unit to be paid to the holders of Common Units in connection with the Partnership Event, plus the fair market value per Common Unit of the securities or other assets to be distributed to the holders of the Common Units in connection with the Partnership Event.

Upon receipt of a redemption offer, each holder of Series D Preferred Units may elect to receive the cash amount or a preferred security issued by the person surviving or resulting from the Partnership Event and containing provisions substantially equivalent to the provisions set forth in the Partnership Agreement with respect to the Series D Preferred Units without material abridgement.

At any time prior to June 30, 2017, the Partnership has the right (the “Series D Call Right”) to redeem the Series D Preferred Units for the product of (i) the sum of $15.00 and all accrued and accumulated but unpaid distributions for each Series D Preferred Unit (including a proportionate amount of the distribution on each Series D Preferred Unit that has accrued for the quarter in which the redemption occurs); and (ii) 1.03.

Upon any liquidation and winding up of the Partnership or the sale of substantially all of the assets of the Partnership, the holders of Series D Preferred Units generally will be entitled to receive, in preference to the holders of any of the Partnership’s other securities (other than Series A Preferred Units and Series C Preferred Units), an amount equal to the sum of the $15.00 multiplied by the number of Series D Preferred Units owned by such holders, plus all accrued but unpaid distributions.

Warrant

Pursuant to the Securities Purchase Agreement, the Partnership is required to issue the Warrant to Magnolia if Series D Preferred Units remain outstanding as of June 30, 2017. Under the Warrant, Magnolia would have the right to purchase up to 700,000 Common Units at an exercise price of $22.00 per Common Unit.

The Warrant, if issued, will be subject to standard anti-dilution adjustments and will be exercisable at any time after June 30, 2017 and on or before the seventh anniversary of June 30, 2017.

The foregoing description of the Securities Purchase Agreement, the Series D Preferred Units and the Warrant contained in this Item 1.01 is not complete and is qualified in its entirety by reference to the full text of the Securities Purchase Agreement, which is filed as Exhibit 10.1 hereto and incorporated by reference herein, the Second Amendment, which is filed as Exhibit 3.1 hereto and incorporated by reference herein and the Warrant, a form of which is attached as an exhibit to the Securities Purchase Agreement. The Securities 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, covenants and other provisions contained in the Securities Purchase Agreement were made only for purposes of such agreement 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.

Certain Relationships

Magnolia is an affiliate of ArcLight Capital Partners, LLC (“ArcLight”). ArcLight is an affiliate of HPIP, which owns a 95% interest in the General Partner. Accordingly, the Board authorized the Conflicts Committee to review and evaluate the Securities Issuance and Securities Purchase Agreement for the purpose of determining whether to grant its special approval thereof as contemplated by the Partnership’s partnership agreement. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating the terms of the Securities Issuance and unanimously granted its special approval of the Securities Issuance as contemplated by the Securities Purchase Agreement and the Second Amendment.

The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Securities Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1, and the terms of which are incorporated by reference herein.

Amendment No. 2 to Fifth Amended and Restated Partnership Agreement

Effective as of October 31, 2016, the Partnership entered into the Second Amendment. As noted above, the Second Amendment reflects the issuance of the Series D Preferred Units, the potential future issuance of the Warrant, and other corrections and clarifications.

As the amendments in the Second Amendment are specific to the Securities Issuance to Magnolia, the Board, with the assistance of its legal and financial advisors, evaluated the terms of the Second Amendment, determined that it was in the best interests of the Partnership, and recommended the Second Amendment to the holders of Series A Preferred Units and the Series C Preferred Units for adoption and approval.

The description of the Second Amendment contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the Second Amendment, a copy of which is attached hereto as Exhibit 3.1, and the terms of which are incorporated by reference herein.

Delta House Purchase Agreements

On October 31, 2016, D-Day Offshore Holdings, LLC (“D-Day”), a wholly-owned, indirect subsidiary of the Partnership, entered into Purchase Agreements with (a) Red Willow Offshore, LLC (“Red Willow,” and such Purchase Agreement, the “Red Willow Purchase Agreement”), pursuant to which D-Day acquired from Red Willow (i) 1,555.26730 Class A Units of Delta House FPS LLC (“FPS LLC”) and (ii) 91.27621 Class A Units of Delta House Oil and Gas Lateral LLC (“Lateral LLC”), in exchange for a cash purchase price of approximately $13.25 million (the “Red Willow Transaction”); (b) ILX Prospect Niedermeyer, LLC (“ILX Niedermeyer,” and such Purchase Agreement, the “ILX Niedermeyer Purchase Agreement”), pursuant to which D-Day acquired from ILX Niedermeyer (i) 122.84877 Class A Units of FPS LLC and (ii) 7.20980 Class A Units of Lateral LLC, in exchange for a cash purchase price of approximately $1.05 million (the “ILX Niedermeyer Transaction”); (c) ILX Prospect Diller, LLC (“ILX Diller,” and such Purchase Agreement, the “ILX Diller Purchase Agreement”), pursuant to which D-Day acquired from ILX Diller (i) 268.91079 Class A Units of FPS LLC and (ii) 15.78196 Class A Units of Lateral LLC, in exchange for a cash purchase price of approximately $2.29 million (the “ILX Diller Transaction”); (d) ILX Prospect Marmalard, LLC (“ILX Marmalard”, and such Purchase Agreement, the “ILX Marmalard Purchase Agreement”), pursuant to which D-Day acquired from ILX Marmalard (i) 268.91079 Class A Units of FPS LLC and (ii) 15.78196 Class A Units of Lateral LLC, in exchange for a cash purchase price of approximately $2.29 million (the “ILX Marmalard Transaction”); (e) LLOG Bluewater Holdings, L.L.C. (“LLOG BW,” and such Purchase Agreement, the “LLOG BW Purchase Agreement”), pursuant to which D-Day acquired from LLOG BW (i) 2,855.28098 Class A Units of FPS LLC and (ii) 167.57201 Class A Units of Lateral LLC, in exchange for a cash purchase price of approximately $24.33 million (the “LLOG BW Transaction”); and (f) Ridgewood Energy Investment Funds (as defined in the Ridgewood Purchase Agreement, and referenced herein as “Ridgewood”) and Ridgewood Energy Corporation (such Purchase Agreement, the “Ridgewood Purchase Agreement,” and together with the Red Willow Purchase Agreement, the ILX Niedermeyer Purchase Agreement, the ILX Diller Purchase Agreement, the ILX Marmalard Purchase Agreement, and the LLOG BW Purchase Agreement, the “Delta House Purchase Agreements”), pursuant to which D-Day acquired from Ridgewood (i) 660.67032 Class A Units of FPS LLC and (ii) 38.77372 Class A Units of Lateral LLC, in exchange for a cash purchase price of approximately $5.63 million (the “Ridgewood Transaction,” and together with the Red Willow Transaction,

the ILX Niedermeyer Transaction, the ILX Diller Transaction, the ILX Marmalard Transaction, and the LLOG BW Transaction, the “Delta House Transactions”). The Partnership funded the aggregate purchase price for the Delta House Transactions with the net proceeds of the Securities Issuance and borrowings under that certain Amended and Restated Credit Agreement by and among the Partnership, American Midstream, LLC, Blackwater Investments, Inc., the Guarantors (as defined therein), Bank of America, N.A. as administrative agent, and the lenders party thereto dated as of September 5, 2014 (as further amended, the “Credit Agreement”).

The Delta House Purchase Agreements contain customary representations, warranties, covenants and agreements by D-Day and other parties thereto, indemnification obligations of D-Day and other parties thereto, and other obligations of the parties. The representations, warranties and covenants contained in each of the Delta House Purchase Agreements were made only for purposes of such agreement as of specific dates, were solely for the benefit of the parties to each such agreement, and may be subject to limitations agreed upon by the contracting parties.

The description of the Delta House Transactions and the Delta House Purchase Agreements contained in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the Delta House Purchase Agreements, copies of which are attached hereto as Exhibits 2.1 through 2.6 hereto and the terms of which are incorporated by reference herein.

Item 2.01

Completion of Acquisition or Disposition of Assets.

On October 31, 2016, D-Day completed the Delta House Transactions as described in Item 1.01 above. The description of the Delta House Transactions and the Delta House Purchase Agreements contained in Item 1.01 are incorporated by reference herein.

Item 3.02

Unregistered Sales of Equity Securities.

On October 31, 2016, the Partnership completed the transactions contemplated by the Securities Purchase Agreement described in Item 1.01 above. The description of the Securities Purchase Agreement, the Securities Issuance and the Series D Preferred Units contained in Item 1.01 is incorporated by reference herein.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 31, 2016, the Partnership entered into the Second Amendment to create the Series D Preferred Units described in Item 1.01 above. The description of the Series D Preferred Units and the Second Amendment contained in Item 1.01 is incorporated by reference herein.

Item 7.01

Regulation FD Disclosure.

FPS LLC and Lateral LLC own the Delta House fee-based, semi-submersible floating production system platform with associated oil and gas export pipelines (“Delta House”). The Partnership owns 20.1% of the issued and outstanding membership interests in Delta House, with the Delta House Transactions representing an incremental 6.2% increase in the Partnership’s percentage ownership interest in Delta House.

Delta House is operated by LLOG Exploration Offshore, L.L.C. and is located in the highly prolific Mississippi Canyon region of the deep-water Gulf of Mexico. The facility has 100,000 barrels of crude oil and 240 million cubic feet of natural gas and liquids per day of peak processing capacity. Cash flows for Delta House are supported by long-term volumetric-tiered fee-based tariffs with ship-or-pay components and life-of-lease dedications with well positioned counterparties. Delta House commenced operations in April 2015 and currently has eleven wells online. The eleventh well tie-back was online in mid-October and brought the floating production system to peak capacity. Producers are continually evaluating additional tie-backs to keep Delta House operating at peak capacity for the foreseeable future.

“We are pleased with the performance of Delta House and the associated strong returns since our initial acquisition. We continue to see substantial resource development where the production growth and producer economics in the Gulf of Mexico are exceeding expectations. To take advantage of significant future production growth, we have decided to increase our investment. We are excited about further integrating this strategic asset as part of our long-term Gulf Coast strategy,” stated Lynn Bourdon III, Chairman, President and Chief Executive Officer. “Delta House is a world-class offshore production handling facility which contributes significant long-term, fee-based cash flows.”

The information in this Item 7.01 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as specifically identified therein as being incorporated by reference.

This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are based on current expectations, speak only as of the date of this report and are not guarantees of future performance. Further, the forward-looking statements are subject to the limitations and risks described in our reports filed with the Securities and Exchange Commission. Actual events or results may differ materially from those in the forward-looking statements.

Item 9.01

Financial Statements and Exhibits.

To the extent financial statements are required by Item 9.01(a) and pro forma financial information is required by Item 9.01(b), they will be filed with the SEC by amendment to this Current Report on Form 8-K no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(d) Exhibits.


Exhibit Number		Description

2.1*		Unit Purchase Agreement by and between Red Willow Offshore, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.2*		Unit Purchase Agreement by and between ILX Prospect Niedermeyer, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.3*		Unit Purchase Agreement by and between ILX Prospect Diller, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.4*		Unit Purchase Agreement by and between ILX Prospect Marmalard, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.5*		Unit Purchase Agreement by and between LLOG Bluewater Holdings, L.L.C. and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.6*		Unit Purchase Agreement by and among Ridgewood Energy Investment Funds (as defined in such Unit Purchase Agreement), Ridgewood Energy Corporation and D-Day Offshore Holdings, LLC dated October 31, 2016.

3.1		Amendment No. 2 to Fifth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP dated October 31, 2016.

10.1		Securities Purchase Agreement by and between American Midstream Partners, LP and Magnolia Infrastructure Partners, LLC dated October 31, 2016.

*	Pursuant to Item 601(b)(2) of Regulation S-K, the Partnership agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

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/ Eric Kalamaras
	Name:	Eric Kalamaras
	Title:	Senior Vice President and Chief Financial Officer

November 4, 2016

EXHIBITS INDEX


Exhibit Number		Description

2.1*		Unit Purchase Agreement by and between Red Willow Offshore, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.2*		Unit Purchase Agreement by and between ILX Prospect Niedermeyer, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.3*		Unit Purchase Agreement by and between ILX Prospect Diller, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.4*		Unit Purchase Agreement by and between ILX Prospect Marmalard, LLC and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.5*		Unit Purchase Agreement by and between LLOG Bluewater Holdings, L.L.C. and D-Day Offshore Holdings, LLC dated October 31, 2016.

2.6*		Unit Purchase Agreement by and among Ridgewood Energy Investment Funds (as defined in such Unit Purchase Agreement), Ridgewood Energy Corporation and D-Day Offshore Holdings, LLC dated October 31, 2016.

3.1		Amendment No. 2 to Fifth Amended and Restated Agreement of Limited Partnership of American Midstream Partners, LP dated October 31, 2016.

10.1		Securities Purchase Agreement by and between American Midstream Partners, LP and Magnolia Infrastructure Partners, LLC dated October 31, 2016.

*	Pursuant to Item 601(b)(2) of Regulation S-K, the Partnership agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

Exhibit 2.1

EXECUTION VERSION

UNIT PURCHASE AGREEMENT

BY AND BETWEEN

RED WILLOW OFFSHORE, LLC

AS SELLER

AND

D-DAY OFFSHORE HOLDINGS, LLC

AS BUYER

TABLE OF CONTENTS


ARTICLE I DEFINITIONS			1

	Section 1.01	Definitions	1
	Section 1.02	Rules of Interpretation	5

ARTICLE II SALE AND PURCHASE			5

	Section 2.01	Sale and Purchase	5
	Section 2.02	Closing	6
	Section 2.03	Seller Deliverables	6
	Section 2.04	Buyer Deliverables	7
	Section 2.05	Withholding	7

ARTICLE III REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLER			7

	Section 3.01	Organization	7
	Section 3.02	Validity of Agreement; Authorization	7
	Section 3.03	Consents and Approvals	7
	Section 3.04	Noncontravention	8
	Section 3.05	Ownership, Due Authorization and Transfer of Purchased Units	8
	Section 3.06	Litigation	8
	Section 3.07	Financial Advisors	8

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER			8

	Section 4.01	Organization; Affiliated Status	8
	Section 4.02	Validity of Agreement; Authorization	9
	Section 4.03	Consents and Approvals	9
	Section 4.04	Noncontravention	9
	Section 4.05	Investment Intent	9
	Section 4.06	Available Funds	10
	Section 4.07	Financial Advisors	10
	Section 4.08	Litigation	10

ARTICLE V COVENANTS			10

	Section 5.01	Transfer Taxes	10
	Section 5.02	Other Tax Matters	10
	Section 5.03	Further Assurances	10

ARTICLE VI INDEMNIFICATION			10

	Section 6.01	Survival of Representations and Warranties	10
	Section 6.02	Indemnification	11
	Section 6.03	Indemnification Procedure	12


			Page

	Section 6.04	Limitations		13
	Section 6.05	Calculation of Losses		13
	Section 6.06	No Duplication		13
	Section 6.07	Tax Treatment of Indemnity Payments		13
	Section 6.08	Exclusive Remedy		13

ARTICLE VII MISCELLANEOUS				14

	Section 7.01	Amendments and Modifications		14
	Section 7.02	Waiver		14
	Section 7.03	Notices		14
	Section 7.04	Governing Law		14
	Section 7.05	Consent to Jurisdiction; Waiver of Jury Trial		14
	Section 7.06	Assignment; Third-Party Beneficiaries		15
	Section 7.07	Expenses		15
	Section 7.08	Specific Performance		15
	Section 7.09	Entire Agreement		16
	Section 7.10	Severability		16
	Section 7.11	Facsimiles; Electronic Transmission; Counterparts		16

EXHIBITS AND SCHEDULES


		Exhibit A		Assignment and Assumption Agreement
		Exhibit B		Purchase Price Allocation
		Schedule 1.01(a)		Seller Knowledge
		Schedule 1.01(b)		Buyer Knowledge
		Schedule 2.01(b)		Wire Transfer Instructions

UNIT PURCHASE AGREEMENT

This UNIT PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 31, 2016, is entered into between Red Willow Offshore, LLC, a Colorado limited liability company (the “ Seller ”), and D-Day Offshore Holdings, LLC, a Delaware limited liability company (the “ Buyer ”).

WHEREAS, Seller is (a) a Member of (i) Delta House FPS LLC, a Delaware limited liability company (“ FPS LLC ”), and (ii) Delta House Oil and Gas Lateral LLC, a Delaware limited liability company (“ Lateral LLC ”), and (b) a party to (i) that certain Amended and Restated Limited Liability Company Operating Agreement of FPS LLC, dated as of December 6, 2012, as amended by that certain First Amendment thereto, dated as of June 20, 2014, that certain Second Amendment thereto, dated as of September 17, 2014, and that certain Third Amendment thereto, dated as of August 27, 2015 (the “ FPS LLC Agreement ”), and (ii) that certain Amended and Restated Limited Liability Company Operating Agreement of Lateral LLC, dated as of December 6, 2012, as amended by that certain First Amendment thereto, dated as of September 17, 2014, and that Second Amendment thereto, dated as of August 27, 2015 (the “ Lateral LLC Agreement ,” together with the FPS LLC Agreement, the “ LLC Agreements ,” and each, an “ LLC Agreement ”);

WHEREAS, Buyer is an “Affiliate” (as defined in the LLC Agreements) of (a) Stork Offshore Holdings, LLC, a Delaware limited liability company, which is a Member of FPS LLC and a party to the FPS LLC Agreement, (b) Otter Offshore Holdings, LLC, a Delaware limited liability company, which is a Member of Lateral LLC and a party to the Lateral LLC Agreement, and (c) Pinto Offshore Holdings, LLC, a Delaware limited liability company, which is a Member of each of the FPS LLC and the Lateral LLC and a party to each of the FPS LLC Agreement and the Lateral LLC Agreement;

WHEREAS, the Seller owns 1,555.26731 Class A Units of FPS LLC and 91.27622 Class A Units of Lateral LLC; and

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, 1,555.26730 Class A Units of FPS LLC and 91.27621 Class A Units of Lateral LLC (together, the “ Purchased Units ”), upon the terms and subject to the conditions set forth in this Agreement.

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 are hereby acknowledged, the Buyer and the Seller hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . As used in this Agreement, and unless the context otherwise requires, the following terms have the meanings specified or referred to in this Section 1.01 :

“ Affiliate ” means (i) with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common

Control with such Person, including any affiliated investment funds or any investment funds with a common principal advisor and (ii) with respect to any natural person, any spouse, lineal descendants, parents or siblings of such natural persons.

“ Agreement ” has the meaning specified in the preamble of this Agreement.

“ Assignment and Assumption Agreement ” means the assignment and assumption agreement to be entered into by Buyer and Seller in connection with the consummation of the transactions contemplated hereby, substantially in the form attached hereto as Exhibit A .

“ Business Day ” means any day other than a Saturday, a Sunday or a legal holiday for commercial banks in New York, New York.

“ Buyer ” has the meaning specified in the preamble of this Agreement.

“ Buyer Indemnified Parties ” has the meaning specified in Section 6.02(a) .

“ Claim ” has the meaning specified in Section 6.03(a) .

“ Claim Notice ” has the meaning specified in Section 6.03(a) .

“ Closing ” has the meaning specified in Section 2.02 .

“ Closing Date ” has the meaning specified in Section 2.02 .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral Agent ” has the meaning specified in the FPS LLC Pledge Agreement.

“ Commission ” means the United States Securities and Exchange Commission.

“ Contract ” means any contract, agreement, indenture, note, bond, mortgage, loan, instrument, evidence of Indebtedness, security agreement, lease, easement, right of way agreement, sublease, license, commitment, subcontract, or other arrangement, understanding, undertaking, commitment, or obligation, whether written or oral.

“ Control ” means with respect to any Person, the ability or power, directly or indirectly, through one or more intermediaries, to direct or cause the direction of the management of such Person, whether through ownership of voting securities, by contract or otherwise; provided , that a natural person cannot be “Controlled by” or “under common Control” with another Person.

“ FPS LLC ” has the meaning specified in the recitals to this Agreement.

“ FPS LLC Agreement ” has the meaning specified in the recitals to this Agreement.

“ FPS LLC Pledge Agreement ” means that certain Pledge Agreement dated as of June 20, 2014, from the pledgors referred to therein and Deutsche Bank Trust Company Americas, as collateral agent.

“ Governmental Authority ” means any (a) federal, state, local, or municipal government, or any subsidiary body thereof or (b) governmental or quasi-governmental authority of any nature, including, (i) any governmental agency, branch, department, official, or entity, (ii) any court, judicial authority, or other tribunal, and (iii) any arbitration body or tribunal.

“ Indebtedness ” means, with respect to any Person, all of the following obligations of such Person, without duplication: (a) obligations for indebtedness for borrowed money or for the deferred purchase price of property, goods or services; (b) obligations for indebtedness evidenced by a note, bond, debenture or similar instrument; (c) reimbursement obligations with respect to draws under outstanding letters of credit, surety bonds, acceptances and similar obligations created for the account of such Person; (d) obligations under any commodity swap agreements, commodity cap agreements, interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements, hedging agreements and other similar agreements; and (e) guarantees of any of the foregoing of another Person, in each case of clauses (a) through (e), together with all accrued interest thereon, if any, and any termination fees, redemption or prepayment premiums or penalties, “breakage” costs or similar costs, expenses and payments associated with the repayment of or default under such indebtedness.

“ Indemnified Party ” means any of the Buyer Indemnified Parties or the Seller Indemnified Parties.

“ Indemnifying Party ” has the meaning specified in Section 6.03(a) .

“ Knowledge ” means the actual knowledge after due inquiry of, in the case of the Seller, the individuals listed in Schedule 1.01(a) and, in the case of the Buyer, the individuals listed in Schedule 1.01(b) .

“ Lateral LLC ” has the meaning specified in the recitals to this Agreement.

“ Lateral LLC Agreement ” has the meaning specified in the recitals to this Agreement.

“ Law ” means any applicable domestic or foreign federal, state, local, municipal, or other administrative order, constitution, law, Order, policy, ordinance, rule, code, principle of common law, case, decision, regulation, statute, tariff or treaty, or other requirements with similar effect of any Governmental Authority or any binding provisions or interpretations of the foregoing.

“ Liability ” means, collectively, any Indebtedness, commitment, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation, contingency, responsibility or other liability, in each case, whether fixed or unfixed, asserted or unasserted, due or to become due, accrued or unaccrued, absolute, contingent or otherwise.

“ Lien ” means with respect to any property or asset, any mortgage, deed of trust, proxy, voting or similar agreement, legal or equitable lien, encumbrance, encroachment, reservation, attachment, servitude, pledge, assessment, levy, charge, security interest, warrant, claim, equitable interest, option, right of first refusal or offer, put or call, transfer or security for the payment of any Indebtedness, or restriction or limitation on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom.

“ LLC Agreement ” has the meaning specified in the recitals to this Agreement.

“ Loss ” has the meaning specified in Section 6.02(a) .

“ Member ” has the meaning specified in the FPS LLC Agreement or the Lateral LLC Agreement, as applicable.

“ Order ” means any award, decision, injunction, judgment, order, ruling, subpoena, writ, decree or verdict entered, issued, made or rendered by any Governmental Authority.

“ Organizational Document ” means, with respect to Buyer or Seller, as applicable, its certificate of formation and the operating or limited liability company agreement or regulations thereof, or any comparable organizational, constituent or governing documents or instruments.

“ Party ” means, as applicable, the Buyer or the Seller.

“ Permitted Liens ” means (a) Liens existing under the FPS LLC Agreement or the Lateral LLC Agreement, as applicable, (b) restrictions on sales of securities under applicable securities Laws and, (c) solely with respect to FPS LLC, Liens securing Indebtedness of FPS LLC.

“ Person ” means any individual, partnership, limited partnership, limited liability company, corporation, joint venture, trust, cooperative, association, foreign trust, unincorporated organization, foreign business organization or Governmental Authority or any department or agency thereof, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person” where the context so permits.

“ Proceedings ” means any claim, action, arbitration, mediation, audit, hearing, investigation, proceeding, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority, arbitrator, or mediator.

“ Purchased Units ” has the meaning specified in the recitals of this Agreement.

“ Purchase Price ” has the meaning specified in Section 2.01(a) .

“ Remedies Exception ” means the extent to which enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

“ Securities Act ” means the Securities Act of 1933 and the rules and regulations of the Commission promulgated thereunder.

“ Seller ” has the meaning specified in the preamble of this Agreement.

“ Seller Indemnified Parties ” has the meaning specified in Section 6.02(b) .

“ Survival Period ” has the meaning specified in Section 6.01 .

“ Third Party Claim ” has the meaning specified in Section 6.03(b) .

“ Transaction Documents ” means, collectively, this Agreement, the Assignment and Assumption Agreement and any and all other agreements or instruments provided for in this Agreement to be executed and delivered by the Parties in connection with the transactions contemplated hereby.

“ Transfer Taxes ” means any transfer, sales, use, stamp, documentary, registration, conveyance, recording, or other similar tax or governmental fee (and any interest, penalty, or addition imposed by a Governmental Authority with respect thereto) incurred as a result of the consummation of the transactions contemplated hereby, excluding any withholding tax and any tax measured by reference to net income or capital gain.

Section 1.02 Rules of Interpretation . The definitions in Section 1.01 shall apply equally to both the singular and plural forms and to correlative forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The words “herein”, “hereof” and “hereunder” and words of similar import refer to this Agreement (including the Exhibits and Schedules to this Agreement) in its entirety and not to any part hereof unless the context shall otherwise require. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Unless the context shall otherwise require, any references to any Contract (including this Agreement) or Law shall be deemed to be references to such Contract or Law as amended, supplemented or modified from time to time in accordance with its terms and the terms hereof, as applicable, and in effect at any given time (and, in the case of any Law, to any successor provisions). Any reference to any federal, state, local, or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context shall otherwise require. Unless the context shall otherwise require, references to any Person include references to such Person’s successors and permitted assigns, and in the case of any Governmental Authority, to any Person(s) succeeding to its functions and capacities. Unless the context shall otherwise require, the word “or” shall not be exclusive and shall have the inclusive meaning of “and/or”. Any reference in this Agreement to a “day” or a number of “days” (without explicit reference to “Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.

ARTICLE II

SALE AND PURCHASE

Section 2.01 Sale and Purchase .

(a) Subject to the terms and conditions of this Agreement, at the Closing, the Seller hereby agrees to sell to the Buyer, and the Buyer hereby agrees to purchase from the Seller, all of the Seller’s right, title and interest in and to the Purchased Units free and clear of any and all Liens (other than Permitted Liens), and in consideration therefor, the Buyer agrees to pay Seller $13,252,810.37 (the “ Purchase Price ”), in accordance with Section 2.01(b).

(b) The Purchase Price shall be paid at Closing in cash by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth on Schedule 2.01(b) to the account designated therein.

(c) The Parties have agreed upon the purchase price allocation set forth in Exhibit B, in accordance with applicable tax law (including Section 755 of the Code), for the assets and rights acquired by the Buyer as a result of the consummation of the transactions contemplated hereby. Each Party shall prepare and file all tax returns in a manner consistent with such allocation; provided, however , that nothing contained herein shall prevent the Buyer or Seller from settling any proposed deficiency or adjustment by any taxing authority based upon or arising out of the Purchase Price allocation, and neither the Buyer nor Seller shall be required to litigate before any court any proposed deficiency or adjustment by any taxing authority challenging such Purchase Price allocation.

Section 2.02 Closing . On the terms and subject to the conditions set forth in this Agreement, the closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place (a) simultaneously with the execution of this Agreement at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, or (b) at such other place or other time on the date hereof as the Parties may mutually agree, including via teleconference or electronic communication (the date and time on which the Closing takes place, the “ Closing Date ”).

Section 2.03 Seller Deliverables . At the Closing, subject to the terms and conditions of this Agreement, the Seller shall deliver, or cause to be delivered, to the Buyer:

(a) a counterpart duly executed by the Seller of the Assignment and Assumption Agreement;

(b) a certificate duly executed by a duly authorized representative of the Seller, dated as of the Closing Date, in customary form, attesting to the resolutions of the board of managers, board of directors or similar governing body of the Seller authorizing the execution and delivery of the Transaction Documents to which the Seller is a party and the consummation of the transactions contemplated hereby and thereby, and certifying that such resolutions were duly adopted and have not been rescinded or amended as of the Closing Date;

(c) a properly executed affidavit, prepared in accordance with Treasury Regulations Section 1.1445-2(b)(2) and in form reasonably acceptable to the Buyer, certifying that the Seller is not a foreign person within the meaning of the Code; and

(d) a copy of (i) the notice delivered by Seller to the Collateral Agent pursuant to and in accordance with Section 9(b) of the FPS LLC Pledge Agreement dated as of a date at least five (5) Business Days prior to the Closing Date and (ii) any other documentation reasonably requested by the Collateral Agent under the FPS LLC Pledge Agreement pursuant to Section 9(b) of the FPS LLC Pledge Agreement (including any transfer powers relating to newly-issued membership interest certificates).

Section 2.04 Buyer Deliverables . At the Closing, subject to the terms and conditions of this Agreement, the Buyer shall deliver, or cause to be delivered to the Seller:

(a) payment of the Purchase Price in accordance with Section 2.01 ;

(b) a counterpart duly executed by the Buyer of the Assignment and Assumption Agreement; and

(c) a certificate duly executed by the Secretary or an Assistant Secretary of the Buyer, dated as of the Closing Date, in customary form, attesting to the resolutions of the sole and managing member of the Buyer authorizing the execution and delivery of the Transaction Documents to which the Buyer is a party and the consummation of the transactions contemplated hereby and thereby, and certifying that such resolutions were duly adopted and have not been rescinded or amended as of the Closing Date.

Section 2.05 Withholding . The Buyer (or its assignee pursuant to Section 7.06 or its agent) may withhold from any payment hereunder any tax required by applicable Law to be withheld, and the tax withheld will be treated for all purposes hereof as paid to the Person with respect to which the withholding was made, to the extent that the withholding Person complies with applicable Law with respect to the withholding (including any applicable Law for depositing the tax withheld with a Governmental Authority).

ARTICLE III

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLER

Except with respect to representations or warranties expressly made as of a specified date, the Seller represents and warrant to the Buyer as of the date hereof as follows:

Section 3.01 Organization . The Seller is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization.

Section 3.02 Validity of Agreement; Authorization . The Seller has the requisite power and authority to enter into the Transaction Documents to which it is a party, and to carry out its obligations thereunder. The execution and delivery of the Transaction Documents and the performance of the Seller’s obligations thereunder have been duly authorized by the board of managers, board of directors or similar governing body of the Seller and no other action on the part of the Seller is necessary to authorize such execution, delivery and performance. Each of the Transaction Documents to which the Seller is a party has been duly executed and delivered by the Seller and constitutes the Seller’s valid and binding obligation, enforceable against the Seller in accordance with its terms (except to the extent that its enforceability may be limited by the Remedies Exception).

Section 3.03 Consents and Approvals . No consent, approval, waiver or authorization of, or filing, registration or qualification with any Governmental Authority or any other Person is required on the part of the Seller for the Seller to execute and deliver the Transaction Documents to which it is a party, or to perform its respective obligations thereunder, other than any consent, approval, waiver or authorization that would not, individually or in the aggregate, have a material adverse effect on the ability of the Seller to consummate the transactions contemplated by the Transaction Documents.

Section 3.04 Noncontravention . Neither the execution and delivery by the Seller of the Transaction Documents to which it is a party, nor the consummation by the Seller of the transactions contemplated thereby conflicts with any provision of the Organizational Documents of the Seller or violates any Law to which the Seller is subject, other than any conflict or violation that would not, individually or in the aggregate, have a material adverse effect on the ability of the Seller to consummate the transactions contemplated by the Transaction Documents.

Section 3.05 Ownership, Due Authorization and Transfer of Purchased Units .

(a) The Seller is the record and beneficial owner of the Purchased Units.

(b) The Seller has good and valid title to the Purchased Units free and clear of any and all Liens (other than Permitted Liens). The Seller has the power, authority and legal capacity to sell, transfer, assign and deliver the Purchased Units held by it as provided in this Agreement, and such delivery will convey to the Buyer good and marketable title to such Purchased Units free and clear of any and all Liens (other than Permitted Liens and those arising under this Agreement).

(d) Except as set forth in the FPS LLC Agreement or the Lateral LLC Agreement, as applicable, and other than the Buyer’s rights under this Agreement, there are no outstanding options, warrants or similar rights to purchase or acquire from the Seller any of the Purchased Units.

Section 3.06 Litigation . As of the date hereof, there are no Proceedings pending or, to the Knowledge of the Seller, threatened, against the Seller or to which the Seller is otherwise a party or, to the Knowledge of the Seller, a threatened party, challenging the transactions contemplated by the Transaction Documents or otherwise relating to such transactions, the Purchased Units or the Transaction Documents.

Section 3.07 Financial Advisors . The Seller has not incurred any Liability for fees of any broker, finder or financial advisor in respect of the transactions contemplated by this Agreement for which the Buyer will have any responsibility or Liability whatsoever.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

Except with respect to representations or warranties expressly made as of a specified date, the Buyer represents and warrants to the Seller as of the date hereof as follows:

Member of Lateral LLC and a party to the Lateral LLC Agreement, and (c) Pinto Offshore Holdings, LLC, a Delaware limited liability company, which is a Member of each of the FPS LLC and the Lateral LLC and a party to each of the FPS LLC Agreement and the Lateral LLC Agreement.

Section 4.02 Validity of Agreement; Authorization . The Buyer has the requisite power and authority to enter into the Transaction Documents to which it is a party, and to carry out its obligations thereunder. The execution and delivery of the Transaction Documents and the performance of the Buyer’s obligations thereunder have been duly authorized by the board of directors or similar governing body of the Buyer, and no other action on the part of the Buyer are necessary to authorize such execution, delivery and performance. Each of the Transaction Documents to which the Buyer is a party has been duly executed and delivered by the Buyer and constitutes the Buyer’s valid and binding obligation, enforceable against the Buyer in accordance with its terms (except to the extent that its enforceability may be limited by the Remedies Exception).

Section 4.03 Consents and Approvals . No consent, approval, waiver or authorization of, or filing, registration or qualification with any Governmental Authority or any other Person is required on the part of the Buyer for the Buyer to execute and deliver the Transaction Documents to which it is a party, or to perform its obligations thereunder, other than any consent, approval, waiver or authorization that would not, individually or in the aggregate, have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated by the Transaction Documents.

Section 4.04 Noncontravention . Neither the execution and delivery by the Buyer of the Transaction Documents to which it is a party, nor the consummation by the Buyer of the transactions contemplated thereby conflicts with any provision of the Organizational Documents of the Buyer or violates any Law to which the Buyer is subject, other than any conflict or violation that would not, individually or in the aggregate, have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated by the Transaction Documents.

Section 4.05 Investment Intent . The Buyer (a) is an “accredited investor” as defined in the Securities Act, (b) understands and has evaluated the risks associated with acquiring the Purchased Units and (c) is not relying on any representations of Seller other than those set forth in Article III . The Buyer acknowledges and agrees that other than the representations and warranties set forth in Article III hereof, the Buyer is acquiring the Purchased Units on an “as-is, where-is basis” without representations and warranties of any type whatsoever. The Buyer agrees that it will not transfer all or any number of the Purchased Units, or solicit offers to buy from or otherwise approach or negotiate in respect thereof with any Person or Persons whomsoever, all or any number of the Purchased Units in any manner that would violate the applicable LLC Agreements or applicable securities Laws. The Buyer is able to bear the economic risk of the investment contemplated hereunder, and has knowledge and experience in financial and business matters such that it is capable of evaluating the risks of the investment in the Purchased Units.

Section 4.06 Available Funds . The Buyer has access to all of the funds necessary to pay the Purchase Price for the Purchased Units pursuant to this Agreement, as and when needed, and to perform its obligations under this Agreement.

Section 4.07 Financial Advisors . The Buyer has not incurred any Liability for fees of any broker, finder or financial advisor in respect of the transactions contemplated by this Agreement for which the Seller will have any responsibility or Liability whatsoever.

Section 4.08 Litigation . As of the date hereof, there are no Proceedings pending or, to the Knowledge of the Buyer, threatened, against the Buyer or to which the Buyer is otherwise a party or, to the Knowledge of the Buyer, a threatened party, challenging the transactions contemplated by the Transaction Documents or otherwise relating to such transactions, the Purchased Units or the Transaction Documents.

ARTICLE V

COVENANTS

Section 5.01 Transfer Taxes . Notwithstanding Section 7.07 , any Transfer Tax will be borne by the Seller, and the Seller will provide the Buyer with evidence satisfactory to the Buyer that all Transfer Taxes have been paid. Each Party will prepare and timely file any tax return required by applicable Law to be filed by the Party in connection with Transfer Taxes; provided , that if any such tax return is required to be filed jointly by the Parties, then the Seller will prepare the tax return; provided , further , that with respect to any such tax return prepared by either Party, the preparing Party shall deliver such tax return to the other Party for the other Party’s review, within a reasonable period of time before the filing date, and the preparing Party will consider in good faith any revision that the other Party reasonably and promptly requests.

Section 5.02 Other Tax Matters . For purposes of allocating the taxable income of FPS LLC and Lateral LLC for the 2016 tax year between Seller and Buyer, the Parties shall cause FPS LLC and Lateral LLC to use an interim closing of the books as of the Closing Date.

Section 5.03 Further Assurances . Following the Closing, the Parties shall each (i) take all further action as may be required or reasonably requested by the Collateral Agent pursuant to the FPS LLC Pledge Agreement in connection with the transfer of the Class A Units of FPS LLC pursuant to this Agreement and (ii) execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions consistent with the terms of this Agreement as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

ARTICLE VI

INDEMNIFICATION

the Closing shall survive the Closing and continue in full force and effect until the performance of such covenants and agreements in accordance with their terms (the applicable period of survival of a representation, warranty, covenant or agreement being the “ Survival Period ”), and there shall be no liabilities or obligations with respect to any such representation, warranty, covenant or agreement from and after the expiration of its applicable Survival Period. Notwithstanding the expiration of any Survival Period, any obligations under Section 6.02(a) and Section 6.02(b) shall not terminate with respect to any Losses as to which the Person to be indemnified shall have given notice to the Indemnifying Party in accordance with Section 6.03(a) before the expiration of the applicable Survival Period.

Section 6.02 Indemnification .

(a) From and after the Closing, subject to Section 6.01 and Section 6.04 , the Seller hereby agrees to indemnify and hold the Buyer, its Affiliates and each of their respective equityholders, members, directors, managers, officers, employees, agents and representatives (collectively, the “ Buyer Indemnified Parties ”) harmless from and against, and pay to the applicable Buyer Indemnified Parties the amount of, any and all losses, liabilities, claims, obligations, deficiencies, demands, judgments, settlements, damages, interest, fines, penalties, claims, suits, actions, causes of action, assessments, awards, taxes, costs and expenses (including costs of investigation and defense and attorneys’ and other professionals’ fees), whether or not involving a Third Party Claim (a “ Loss ”) based upon, attributable to or resulting from (including any and all Proceedings, demands, or assessments arising out of):

(i) any inaccuracy or breach of the representations or warranties made by the Seller in this Agreement, the Assignment and Assumption Agreement, or any certificate delivered pursuant hereto; and

(ii) any breach of any covenant or other agreement on the part of the Seller under this Agreement, the Assignment and Assumption Agreement, or any certificate delivered pursuant hereto.

(b) From and after the Closing, subject to Section 6.01 and Section 6.04 , the Buyer hereby agrees to indemnify and hold the Seller, its Affiliates and each of their respective equityholders, members, directors, managers, officers, employees, agents and representatives (collectively, the “ Seller Indemnified Parties ”) harmless from and against, and pay to the applicable Seller Indemnified Parties the amount of, any and all Losses based upon, attributable to or resulting from (including any and all Proceedings, demands, or assessments arising out of):

(i) any inaccuracy or breach of the representations or warranties made by the Buyer in this Agreement, the Assignment and Assumption Agreement, or any certificate delivered pursuant hereto; and

(ii) any breach of any covenant or other agreement on the part of the Buyer under this Agreement, the Assignment and Assumption Agreement, or any certificate delivered pursuant hereto.

(c) Materiality, material adverse effect and similar qualifiers contained in any representation or warranty, or in any defined term used therein, shall be disregarded for purposes

of subsections (a)(i) and (b)(i) of this Section 6.02 in (i) determining any inaccuracy, untruth or breach of the representations or warranties contained herein and (ii) calculating the amount of Losses suffered by an Indemnified Party.

Section 6.03 Indemnification Procedure .

(a) Each Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a claim by it for indemnification pursuant to Section 6.02 , such Indemnified Party will assert its claim for indemnification under Section 6.02 (each, a “ Claim ”) by providing a written notice (a “ Claim Notice ”) within the applicable Survival Period to the applicable indemnifying party (the “ Indemnifying Party ”) specifying, in reasonable detail, to the extent known by such Indemnified Party, the nature and basis for such Claim ( e.g. , the underlying representation, warranty or covenant alleged to have been breached and the condition or conduct allegedly resulting in such breach). Notwithstanding the foregoing, an Indemnified Party’s delay in sending a Claim Notice will not relieve the Indemnifying Party from Liability hereunder with respect to such Claim except to the extent (and limited solely to the extent) of any material prejudice to the Indemnifying Party by such failure or delay; provided , that such Claim Notice is provided within the applicable Survival Period.

(b) In the event that any Proceeding is instituted or any Claim is asserted by any Third Party in respect of which indemnification may be sought under Section 6.02 hereof and in respect of which the Indemnifying Party has agreed in writing to indemnify the Indemnified Party for all of such Indemnified Party’s Losses (subject to any applicable limitations in this Article VI ) (a “ Third Party Claim ”), the Indemnifying Party will have the right, at such Indemnifying Party’s expense, to assume the defense of the same, including the appointment and selection of counsel on behalf of the Indemnified Party, so long as such counsel is reasonably acceptable to the Indemnified Party. If the Indemnifying Party elects to assume the defense of any such Third Party Claim, it shall within thirty (30) days notify the Indemnified Party in writing of its intent to do so. Subject to Section 6.03(c) , the Indemnifying Party will have the right to settle or compromise or take any corrective or remedial action with respect to any such Third Party Claim by all appropriate proceedings, which proceedings will be diligently prosecuted by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party. The Indemnified Party will be entitled, at its own cost, to participate with the Indemnifying Party in the defense of any such Third Party Claim, unless separate representation of the Indemnified Party by counsel is reasonably necessary to avoid a conflict of interest, in which case such representation shall be at the expense of the Indemnifying Party. If the Indemnifying Party assumes the defense of any such Third Party Claim but fails to diligently prosecute such Third Party Claim, or if the Indemnifying Party does not assume the defense of any such Third Party Claim, the Indemnified Party may assume control of such defense and in the event the Third Party Claim is determined to be a matter for which the Indemnifying Party is required to provide indemnification under the terms of this Article VI , the Indemnifying Party will bear the reasonable costs and expenses of such defense (including fees and expenses of counsel).

Indemnified Party’s prior written consent, in each case, that (i) does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a binding, irrevocable, written release of any Indemnified Party from all Liability, (ii) provides for any admission of Liability on the part of any Indemnified Party, (iii) requires an admission of guilt or wrongdoing on the part of any Indemnified Party or (iv) imposes any Liability or continuing obligation on or requires any payment from any Indemnified Party.

Section 6.04 Limitations .

(a) In no event shall the aggregate Liability of any Party for indemnifiable Losses hereunder exceed the Purchase Price.

(b) No Indemnifying Party shall be liable under Section 6.02 for any special, incidental, consequential, multiplied, exemplary, speculative or punitive Losses, except to the extent that, (i) in the case of any special, incidental, consequential or multiplied Losses, any of the foregoing are the reasonably foreseeable result of a breach of this Agreement or (ii) the payment of such damages or amount of Losses is to a Person making a Third Party Claim in satisfaction of such Third Party Claim pursuant to this Agreement.

Section 6.05 Calculation of Losses . In calculating amounts payable to an Indemnified Party, the amount of any indemnified Losses shall be computed net of (a) payments actually recovered by any Indemnified Party under any insurance policy with respect to such Losses net of expenses and (b) any actual recovery by any Indemnified Party from any Person with respect to such Losses net of expenses. Each Indemnified Party shall use commercially reasonable efforts to pursue reimbursement for Losses, including under insurance policies and indemnity arrangements.

Section 6.06 No Duplication . In no event shall any Indemnified Party be entitled to recover any Losses under one Section or provision of this Agreement to the extent of the full amount of such Losses already recovered by such Indemnified Party, nor shall its insurer or indemnitor be entitled to any kind of subrogation or substitution which would give it the right to make a claim against the Indemnifying Party.

Section 6.07 Tax Treatment of Indemnity Payments . The Seller and the Buyer agree to treat any indemnity payment made pursuant to this Article VI as an adjustment to the Purchase Price for all tax purposes, unless otherwise required by Law.

Section 6.08 Exclusive Remedy . From and after the Closing, the indemnification provisions of this Article VI shall be the sole and exclusive remedy of any Indemnified Party for Losses, including claims for contribution or other rights of recovery arising out of or relating to claims for breach of Contract, breach of representation or warranty, negligent misrepresentation and all other claims for breach of duty that it may at any time suffer or incur, or become subject to, as a result of, or in connection with any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby. Notwithstanding the foregoing, the Buyer and the Seller agree that each Party shall retain all remedies at Law or in equity with respect to actual fraud.

ARTICLE VII

MISCELLANEOUS

Section 7.01 Amendments and Modifications . This Agreement may be amended, modified or supplemented only by written agreement of the Parties.

Section 7.02 Waiver . Except as otherwise provided in this Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement or condition herein may be waived by the Party entitled to the benefits thereof only by a written instrument signed by the Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

Section 7.03 Notices . All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission, or mailed by a nationally recognized overnight courier, postage prepaid, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided , that notices of a change of address shall be effective only upon receipt thereof):

If to the Buyer:

c/o American Midstream Partners, LP

2103 CityWest Blvd, Building 4, Suite 800

Houston, TX 77042

Attention: Regina Gregory

Facsimile: (713) 278-8870

If to the Seller:

Red Willow Offshore, LLC

1415 Louisiana Street, Suite 4000

Houston, TX 77002

Attention: Rex Richardson

Facsimile: 281-822-7501

Section 7.04 Governing Law . This Agreement and all claims arising out of or relating to this Agreement and the transactions contemplated hereby shall be governed by the Laws of the State of Delaware, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of Delaware.

Section 7.05 Consent to Jurisdiction; Waiver of Jury Trial . Each Party irrevocably submits to the exclusive jurisdiction of (i) state courts of the State of Delaware and (ii) the United States District Court for the District of Delaware or the Delaware Chancery Court for the purposes of any Proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby (and agrees not to commence any Proceeding relating hereto except in such courts). Each Party further agrees that service of any process, summons, notice or document hand delivered or sent by U.S. registered mail to such Party’s respective address set forth in

Section 7.03 will be effective service of process for any Proceeding in Delaware with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in (i) state courts of the State of Delaware or (ii) the United States District Court for the District of Delaware or the Delaware Chancery Court, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity. EACH PARTY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

Section 7.06 Assignment; Third-Party Beneficiaries . This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. Neither Party may assign, delegate or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the other Party, except that Buyer may assign any of its rights or obligations hereunder without such consent to any Affiliate of Buyer for purpose of having such Affiliate take ownership of all or a portion of the Purchased Units so long as (i) Buyer remains jointly and severally obligated to satisfy all of Buyer’s obligations under the terms of this Agreement, and (ii) such assignment is permissible under the terms of the applicable LLC Agreement. No assignment of this Agreement will in any way affect the assigning Party’s obligations or liabilities under this Agreement and any attempted assignment of this Agreement or any rights or obligations hereunder in violation of this Section 7.06 shall be deemed void ab initio . Except as expressly provided for herein, none of the provisions of this Agreement shall be for the benefit of or enforceable by any Person other than the Parties.

Section 7.07 Expenses . Except as otherwise expressly provided for herein, each Party shall pay its own costs and expenses (including legal, accounting, financial advisory and consulting fees and expenses) incurred by such Party in connection with the negotiation and consummation of the transactions contemplated by this Agreement and the other Transaction Documents.

Section 7.08 Specific Performance . Each Party acknowledges and agrees that the other Party would be damaged irreparably if any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached by such Party. Accordingly, each Party agrees that the other Party will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement by such Party and to enforce specifically this Agreement and its terms and provisions in any action instituted in any court of the United States or any state thereof having jurisdiction over such Party and the matter, subject to Section 7.04 and Section 7.05 , in addition to any other remedy to which it may be entitled, in equity or at Law.

Section 7.09 Entire Agreement . This Agreement (including the Exhibits and Schedules hereto), together with each of the other Transaction Documents, constitute the entire understanding and agreement between the Parties with respect to the subject matter hereof and supersede any and all prior or contemporaneous discussions, agreements and understandings, whether written or oral.

Section 7.10 Severability . If any provision of this Agreement or the application of any such provision to any Person or circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such determination that any provision, or the application of any such provision, is invalid, illegal, void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the greatest extent possible.

Section 7.11 Facsimiles; Electronic Transmission; Counterparts . This Agreement may be executed by facsimile or other electronic transmission (including scanned documents delivered by email) by any Party and such execution shall be deemed binding for all purposes hereof, without delivery of an original signature being thereafter required. This Agreement may be executed in one or more counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document.

* * * * *

[ Signature pages follow .]

IN WITNESS WHEREOF, the Parties execute and deliver this Agreement, effective as of the date first above written.


THE BUYER:

D-DAY OFFSHORE HOLDINGS, LLC

By:		/s/ Eric T. Kalamaras
Name:		Eric T. Kalamaras
Title:		Senior Vice President and Chief Financial Officer

[Signature Page to Unit Purchase Agreement]


		THE SELLER:

RED WILLOW OFFSHORE, LLC

By:		/s/ Richard L. Smith
Name:		Richard L. Smith
Title:		Authorized Representative

[Signature Page to Unit Purchase Agreement]

Exhibit 2.2

EXECUTION VERSION

UNIT PURCHASE AGREEMENT

BY AND BETWEEN

ILX PROSPECT NIEDERMEYER, LLC

AS SELLER

AND

D-DAY OFFSHORE HOLDINGS, LLC

AS BUYER

TABLE OF CONTENTS


ARTICLE I DEFINITIONS			1

	Section 1.01	Definitions	1
	Section 1.02	Rules of Interpretation	5

ARTICLE II SALE AND PURCHASE			5

	Section 2.01	Sale and Purchase	5
	Section 2.02	Closing	6
	Section 2.03	Seller Deliverables	6
	Section 2.04	Buyer Deliverables	7
	Section 2.05	Withholding	7

ARTICLE III REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLER			7

	Section 3.01	Organization	7
	Section 3.02	Validity of Agreement; Authorization	7
	Section 3.03	Consents and Approvals	7
	Section 3.04	Noncontravention	8
	Section 3.05	Ownership, Due Authorization and Transfer of Purchased Units	8
	Section 3.06	Litigation	8
	Section 3.07	Financial Advisors	8

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER			8

	Section 4.01	Organization; Affiliated Status	8
	Section 4.02	Validity of Agreement; Authorization	9
	Section 4.03	Consents and Approvals	9
	Section 4.04	Noncontravention	9
	Section 4.05	Investment Intent	9
	Section 4.06	Available Funds	9
	Section 4.07	Financial Advisors	10
	Section 4.08	Litigation	10

ARTICLE V COVENANTS			10

	Section 5.01	Transfer Taxes	10
	Section 5.02	Other Tax Matters	10
	Section 5.03	Further Assurances	10

ARTICLE VI INDEMNIFICATION			10

	Section 6.01	Survival of Representations and Warranties	10
	Section 6.02	Indemnification	11
	Section 6.03	Indemnification Procedure	11


			Page

	Section 6.04	Limitations		13
	Section 6.05	Calculation of Losses		13
	Section 6.06	No Duplication		13
	Section 6.07	Tax Treatment of Indemnity Payments		13
	Section 6.08	Exclusive Remedy		13

ARTICLE VII MISCELLANEOUS				13

	Section 7.01	Amendments and Modifications		13
	Section 7.02	Waiver		13
	Section 7.03	Notices		14
	Section 7.04	Governing Law		14
	Section 7.05	Consent to Jurisdiction; Waiver of Jury Trial		14
	Section 7.06	Assignment; Third-Party Beneficiaries		15
	Section 7.07	Expenses		15
	Section 7.08	Specific Performance		15
	Section 7.09	Entire Agreement		15
	Section 7.10	Severability		15
	Section 7.11	Facsimiles; Electronic Transmission; Counterparts		16

EXHIBITS AND SCHEDULES


		Exhibit A		Assignment and Assumption Agreement
		Schedule 1.01(a)		Seller Knowledge
		Schedule 1.01(b)		Buyer Knowledge
		Schedule 2.01(b)		Wire Transfer Instructions

UNIT PURCHASE AGREEMENT

This UNIT PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 31, 2016, is entered into between ILX Prospect Niedermeyer, LLC, a Delaware limited liability company (the “ Seller ”), and D-Day Offshore Holdings, LLC, a Delaware limited liability company (the “ Buyer ”).

WHEREAS, the Seller owns 165.93205 Class A Units of FPS LLC and 9.73829 Class A Units of Lateral LLC; and

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, 122.84877 Class A Units of FPS LLC and 7.20980 Class A Units of Lateral LLC (together, the “ Purchased Units ”), upon the terms and subject to the conditions set forth in this Agreement.