15. SUBSEQUENT EVENTS

On October 28, 2016, the Partnership entered into a limited duration waiver agreement to the Credit Agreement extending the waiver of certain covenant defaults until November 30, 2016.

Declining commodity prices throughout 2015 and continuing in 2016, have adversely affected the Partnership’s ability to comply with the financial covenants included in the Credit Agreement with the Lenders. On September 27, 2016, the Partnership entered into a limited duration waiver agreement to the Credit Agreement, which waived certain covenant defaults until October 28, 2016.

Terms of the limited duration waiver agreement executed October 28, 2016 include:

extended the waiver of certain covenant defaults until November 30, 2016:

borrowing capacity remained unchanged from prior limited duration waiver Agreement at $173.7 million; and

No later than November 15, 2016, the Partnership will set up a data room containing all information reasonably anticipated to be required by potential purchasers to conduct an evaluation of a capital raise involving the Partnership’s equity and the marketing and sale of all of the Partnership’s and its subsidiaries’ assets.

In October 2016, we identified a triggering event impacting the fair value of our Legacy System long-lived assets. The triggering event will result in the Partnership completing a detailed analysis comparing the fair value to the carrying value, and determining if the fair value is below the carrying value. This could result in an impairment during the fourth quarter of 2016.