Exhibit 10.1
 
 
(CHASE LOGO) [h83182h8318201.gif]
CREDIT AGREEMENT
dated as of
June 24, 2011
among
COMPRESSCO PARTNERS, L.P.,
COMPRESSCO PARTNERS OPERATING, LLC and
COMPRESSCO PARTNERS SUB, INC.,
as the “Borrowers”,
THE OTHER LOAN PARTIES PARTY HERETO,
as Loan Guarantors
and
JPMORGAN CHASE BANK, N.A.,
as the “Lender”
CHASE BUSINESS CREDIT
 
 

 

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TABLE OF CONTENTS

                              Page     ARTICLE I            Definitions     1  
Section 1.01  
Defined Terms
    1   Section 1.02  
Classification of Loans and Borrowings
    22   Section 1.03  
Terms Generally
    22   Section 1.04  
Accounting Terms; GAAP
    22   ARTICLE II            The Credits     23   Section 2.01  
Commitment
    23   Section 2.02  
Loans and Borrowings
    23   Section 2.03  
Requests for Borrowings
    23   Section 2.04  
Protective Advances
    24   Section 2.05  
Letters of Credit
    24   Section 2.06  
Funding of Borrowings
    26   Section 2.07  
Interest Elections
    26   Section 2.08  
Termination and Reduction of Commitment; Increase in Commitment
    27   Section 2.09  
Repayment of Loans; Evidence of Debt
    28   Section 2.10  
Prepayment of Loans
    28   Section 2.11  
Fees
    29   Section 2.12  
Interest
    30   Section 2.13  
Alternate Rate of Interest
    31   Section 2.14  
Increased Costs
    31   Section 2.15  
Break Funding Payments
    32   Section 2.16  
Taxes
    32   Section 2.17  
Payments Generally; Allocation of Proceeds
    33   Section 2.18  
Indemnity for Returned Payments
    34   Section 2.19  
Mitigation
    34   ARTICLE III            Representations and Warranties     34   Section
3.01  
Organization; Powers
    34   Section 3.02  
Authorization; Enforceability
    34   Section 3.03  
Governmental Approvals; No Conflicts
    35   Section 3.04  
Financial Condition; No Material Adverse Change
    35   Section 3.05  
Properties
    35   Section 3.06  
Litigation and Environmental Matters
    35   Section 3.07  
Compliance with Laws and Agreements
    36  

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                              Page     Section 3.08  
Investment Company Status
    36   Section 3.09  
Taxes
    36   Section 3.10  
ERISA
    36   Section 3.11  
Disclosure
    36   Section 3.12  
Material Agreements
    36   Section 3.13  
Solvency
    37   Section 3.14  
Insurance
    37   Section 3.15  
Capitalization and Subsidiaries
    37   Section 3.16  
Security Interest in Collateral
    37   Section 3.17  
Employment Matters
    37   Section 3.18  
Common Enterprise
    38   ARTICLE IV            Conditions     38   Section 4.01  
Effective Date
    38   Section 4.02  
Each Credit Event
    40   ARTICLE V            Affirmative Covenants     40   Section 5.01  
Financial Statements; Borrowing Base and Other Information
    40   Section 5.02  
Notices of Material Events
    43   Section 5.03  
Existence; Conduct of Business
    44   Section 5.04  
Payment of Obligations
    44   Section 5.05  
Maintenance of Properties
    45   Section 5.06  
Books and Records; Inspection Rights
    45   Section 5.07  
Compliance with Laws
    45   Section 5.08  
Use of Proceeds and Letters of Credit
    45   Section 5.09  
Insurance
    45   Section 5.10  
Casualty and Condemnation
    45   Section 5.11  
Appraisals
    46   Section 5.12  
Depository Banks
    46   Section 5.13  
Additional Collateral; Further Assurances
    46   Section 5.14  
Post-Effective Date Deliverables
    46   ARTICLE VI            Negative Covenants     47   Section 6.01  
Indebtedness
    47   Section 6.02  
Liens
    48   Section 6.03  
Fundamental Changes
    50   Section 6.04  
Investments, Loans, Advances, Guarantees and Acquisitions
    50   Section 6.05  
Asset Sales
    52   Section 6.06  
Sale and Leaseback Transactions
    52  

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                              Page     Section 6.07  
Swap Agreements
    52   Section 6.08  
Restricted Payments; Certain Payments of Indebtedness
    53   Section 6.09  
Transactions with Affiliates
    53   Section 6.10  
Restrictive Agreements
    54   Section 6.11  
Amendment of Certain Agreements
    54   Section 6.12  
Interest Coverage Ratio
    55   ARTICLE VII            Events of Default     55   ARTICLE
VIII           Miscellaneous     57   Section 8.01  
Notices
    57   Section 8.02  
Waivers; Amendments
    58   Section 8.03  
Expenses; Indemnity; Damage Waiver
    58   Section 8.04  
Successors and Assigns
    60   Section 8.05  
Survival
    61   Section 8.06  
Counterparts; Integration; Effectiveness
    61   Section 8.07  
Severability
    62   Section 8.08  
Right of Setoff
    62   Section 8.09  
Governing Law; Jurisdiction; Consent to Service of Process
    62   Section 8.10  
WAIVER OF JURY TRIAL
    62   Section 8.11  
Headings
    63   Section 8.12  
Confidentiality
    63   Section 8.13  
Nonreliance; Violation of Law
    63   Section 8.14  
USA PATRIOT Act
    63   Section 8.15  
Disclosure
    63   Section 8.16  
Interest Rate Limitation
    63   Section 8.17  
Releases of Guarantees and Liens
    64   Section 8.18  
Limitation of Liability
    64   ARTICLE IX            Loan Guaranty     65   Section 9.01  
Guaranty
    65   Section 9.02  
Guaranty of Payment
    65   Section 9.03  
No Discharge or Diminishment of Loan Guaranty
    65   Section 9.04  
Defenses Waived
    66   Section 9.05  
Rights of Subrogation
    66   Section 9.06  
Reinstatement; Stay of Acceleration
    66   Section 9.07  
Information
    66   Section 9.08  
Termination
    66   Section 9.09  
Taxes
    66  

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                              Page     Section 9.10  
Maximum Liability
    67   Section 9.11  
Contribution
    67   Section 9.12  
Liability Cumulative
    67   ARTICLE X            The Borrower Representative     68   Section 10.01
 
Appointment; Nature of Relationship
    68   Section 10.02  
Powers
    68   Section 10.03  
Employment of Agents
    68   Section 10.04  
Notices
    68   Section 10.05  
Successor Borrower Representative
    68   Section 10.06  
Execution of Loan Documents; Borrowing Base Certificate
    68   Section 10.07  
Reporting
    68  

SCHEDULES:
Schedule 3.05 — Properties
Schedule 3.06 — Disclosed Matters
Schedule 3.12 — Material Agreements
Schedule 3.14 — Insurance
Schedule 3.15 — Capitalization and Subsidiaries
Schedule 6.01 — Existing Indebtedness
Schedule 6.02 — Existing Liens
Schedule 6.04 — Existing Investments
Schedule 6.10 — Existing Restrictions
EXHIBITS:
Exhibit A — Form of Opinion of Borrowers’ Counsel
Exhibit B — Form of Borrowing Base Certificate
Exhibit C — Form of Compliance Certificate
Exhibit D — Joinder Agreement

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          This CREDIT AGREEMENT, dated as of June 24, 2011 (as it may be amended
or modified from time to time, this “Agreement”), is by and among Compressco
Partners, L.P., a Delaware limited partnership (“Compressco Partners”),
Compressco Partners Operating, LLC, a Delaware limited liability company
(“Compressco Operating”) and Compressco Partners Sub, Inc., a Delaware
corporation (“Compressco Sub” and together with Compressco Partners and
Compressco Operating, the “Borrowers” and each a “Borrower”), the other Loan
Parties party hereto, and JPMORGAN CHASE BANK, N.A. (the “Lender”).
          The parties hereto agree as follows:
ARTICLE I
Definitions
          SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
          “Account” has the meaning assigned to such term in the Security
Agreement.
          “Account Debtor” means any Person obligated on an Account.
          “Acquisition” means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Loan Party
(a) acquires any going business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.
          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing
for any Interest Period or for any CBFR Borrowing, an interest rate per annum
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.
          “Adjusted One Month LIBOR Rate” means, for any day, an interest rate
per annum equal to the sum of (i) 2.50% per annum plus (ii) the Adjusted LIBO
Rate for a one month interest period on such day (or if such day is not a
Business Day, the immediately preceding Business Day); provided that, for the
avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) at approximately 11:00 a.m. London time on such day (without
any rounding).
          “Affiliate” means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
          “Applicable Rate” means, for any day, (a) with respect to any
Eurodollar Loan, 2.25% per annum, (b) with respect to any CBFR Loan, 0.00% per
annum, or (c) with respect to the commitment fee payable hereunder, 0.425% per
annum.
          “Approved Fund” has the meaning assigned to such term in
Section 8.04(b).
          “Availability” means, at any time, an amount equal to (a) the lesser
of (i) the Commitment and (ii) the Borrowing Base, minus (b) the Exposure, minus
(c) without duplication, Reserves, minus (d) the Availability Block.
          “Availability Block” means an amount equal to $3,000,000.

 

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          “Availability Period” means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitment.
          “Available Commitment” means, at any time, the Commitment minus the
Exposure.
          “Banking Services” means each and any of the following bank services
provided to any Loan Party by the Lender or any of its Affiliates: (a) credit
cards for commercial customers (including, without limitation, “commercial
credit cards” and purchasing cards), (b) stored value cards and (c) treasury
management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).
          “Banking Services Obligations” of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
          “Banking Services Reserves” means all Reserves which the Lender from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.
          “Board” means the Board of Governors of the Federal Reserve System of
the United States of America.
          “Borrower” or “Borrowers” has the meaning assigned to such term in the
preamble to this Agreement.
          “Borrower Representative” means Compressco Partners, in its capacity
as contractual representative of the Borrowers pursuant to Article X.
          “Borrowing” means (a) Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect and (b) a Protective Advance.
          “Borrowing Base” means, at any time, the sum of (a) 85% of the Loan
Parties’ Eligible Accounts at such time, plus (b) the lesser of (i) 60% of the
Loan Parties’ Eligible Inventory, valued at the lower of cost, determined on an
average cost basis, or market value, and (ii) the product of 85% multiplied by
the Net Orderly Liquidation Value percentage identified in the most recent
inventory appraisal ordered by the Lender multiplied by the Loan Parties’
Eligible Inventory, valued at the lower of cost, determined on an average cost
basis, or market value, plus (c) the lesser of (i) 90% of the net book value of
the Loan Parties’ Eligible Service and Rental Compressor Fleet Equipment
(calculated based on a depreciation schedule not to exceed 12 years from the
date of original purchase by the relevant Loan Party), and (ii) the product of
85% multiplied by the Net Orderly Liquidation Value percentage identified in the
most recent service and rental compressor fleet appraisal ordered by the Lender
multiplied by the net book value of the Loan Parties’ Eligible Service and
Rental Compressor Fleet Equipment (calculated based on a depreciation schedule
not to exceed 12 years from the date of original purchase by the relevant Loan
Party), plus (d) 80% of the Loan Parties’ Eligible New Service and Rental
Compressor Fleet Equipment, valued at cost or, in the event no service and
rental compressor fleet appraisal has been received by the Lender during the
12 month period immediately preceding the calculation date, net book value,
minus (e) Reserves. The maximum amount of Inventory which may be included as
part of the Borrowing Base is an amount equal to 25% of the Commitment in effect
as of the calculation date. The Lender may, in its Permitted Discretion and
effective on delivery of notice to the Borrower Representative with respect to
clause (x) and on the third Business Day after notice thereof to the Borrower
Representative with respect to clauses (y) and (z), (x) during the continuance
of an Event of Default, reduce the advance rates set forth above, (y) adjust or
establish additional Reserves or (z) establish additional standards of
eligibility. Notwithstanding the above, with respect to the Borrowing Base in
effect prior to receipt by the Lender of the first appraisal delivered after the
Effective Date, such Borrowing Base shall equal the sum of (A) 85% of the Loan
Parties’ Eligible Accounts, plus (B) 60% of the Loan Parties’ Eligible
Inventory, valued at the lower of cost, determined on an average cost basis, or
market value, plus (C) 90% of the net book value of the Loan Parties’ Eligible
Service and Rental Compressor Fleet Equipment

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(calculated based on a depreciation schedule not to exceed 12 years from the
date of original purchase by the relevant Loan Party), minus (D) Reserves.
          “Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete by a Financial Officer, in substantially the form of
Exhibit B or another form which is acceptable to the Lender in its sole
discretion.
          “Borrowing Request” means a request by the Borrower Representative for
a Borrowing in accordance with Section 2.03.
          “Business Day” means any day that is not a Saturday, Sunday or other
day on which commercial banks in Dallas, Texas are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
          “Capital Expenditures” means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on a consolidated balance
sheet of Compressco Partners and its Subsidiaries prepared in accordance with
GAAP.
          “Capital Lease Obligations” of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
          “Cash Dominion” means the control by the Lender of the Loan Parties’
cash receipts and the application thereof to the Exposure in accordance with
Article VII of the Security Agreement
          “CB Floating Rate” means the Prime Rate; provided that the CB Floating
Rate shall not on any day be less than the Adjusted One Month LIBOR Rate on such
day (or if such day is not a Business Day, the immediately preceding Business
Day). Any change in the CB Floating Rate due to a change in the Prime Rate or
the Adjusted One Month LIBOR Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Adjusted One Month LIBOR
Rate, respectively.
          “CBFR”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the CB Floating Rate.
          “Change in Control” means (a) TETRA Technologies, Inc. shall cease to
own, free and clear of all Liens (other than Liens of the type described in
clauses (a) and (f) of the definition of Permitted Encumbrances), directly or
indirectly, greater than 50% of the outstanding voting Equity Interests of
Compressco GP on a fully diluted basis; (b) Compressco GP shall cease to own,
free and clear of all Liens (other than Liens of the type described in clauses
(a) and (f) of the definition of Permitted Encumbrances), 100% of the
outstanding general partner interests of Compressco Partners; or (c) Compressco
Partners shall cease to own, free and clear of all Liens (other than Liens in
favor of Lender and Permitted Encumbrances of the type described in clauses
(a) and (f) of the definition thereof), directly or indirectly, 100% of the
outstanding voting Equity Interests of each of the other Borrowers on a fully
diluted basis.
          “Change in Law” means (a) the adoption of any law, rule, regulation or
treaty (including any rules or regulations issued under or implementing any
existing law) after the date of this Agreement, (b) any change in any law, rule,
regulation or treaty or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by the
Lender (or, for purposes of Section 2.14(b), by any lending office of the Lender
or by the Lender’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement; provided that (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder, issued in connection therewith or in
implementation thereof, and (ii) all

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requests, rules, guidelines and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign financial
regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “Change in Law”, regardless of the date enacted, adopted,
issued or implemented; and provided, further, that clause (c) above shall not
apply to any request, guideline, or directive that is applicable to the Lender
as a result of its own acts or practices or those of any of its Affiliates that
are not of general applicability.
          “Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Loans or
Protective Advances.
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time.
          “Collateral” means any and all personal property owned or leased by a
Person covered by the Collateral Documents and any and all other personal
property of any Loan Party, now existing or hereafter acquired, that may at any
time be or become subject to a security interest or Lien in favor of the Lender,
to secure the Secured Obligations.
          “Collateral Access Agreement” has the meaning assigned to such term in
the Security Agreement.
          “Collateral Documents” means, collectively, the Security Agreement and
any other documents pursuant to which a Loan Party grants a Lien upon any
personal property as security for payment of the Secured Obligations.
          “Collection Account” has the meaning assigned to such term in the
Security Agreement.
          “Commitment” means the commitment of the Lender to make Loans and
issue Letters of Credit hereunder, as such commitment may be increased or
reduced from time to time pursuant to Section 2.08. The initial amount of the
Commitment is $20,000,000.
          “Compressco GP” means Compressco Partners GP Inc., a Delaware
corporation.
          “Compressco Operating” means Compressco Partners Operating, LLC, a
Delaware limited liability company.
          “Compressco Partners” means Compressco Partners, L.P., a Delaware
limited partnership.
          “Compressco Sub” means Compressco Partners Sub, Inc., a Delaware
corporation.
          “Compressor Unit” means a wellhead compressor unit used by any Loan
Party to provide natural gas wellhead compression-based production enhancement
services, including GasJack compressor units and VJack compressor units.
          “Conflicts Committee” has the meaning given such term in Compressco
Partners’ Partnership Agreement as in effect on the Effective Date or as
otherwise amended, supplemented or modified to the extent not prohibited by
Section 6.11.
          “Contribution Agreement” means the Contribution, Conveyance and
Assumption Agreement, dated as of the date hereof, among Compressco, Inc., a
Delaware corporation, Compressco Field Services, Inc., an Oklahoma corporation,
Compressco Canada, Inc., an Alberta corporation, Compressco de Mexico, S. de
R.L. de C.V., a Mexican limited liability corporation of variable capital,
Compressco GP, the Borrowers, Compressco Holdings, LLC, a Delaware limited
liability company, Compressco Netherlands B.V., a Netherlands private limited
liability company, Compressco Netherlands Cooperatief U.A., a Netherlands
coöperatief, TETRA International Incorporated, a Delaware corporation,
Production Enhancement Mexico, S. de R.L. de C.V., a Mexican limited liability
corporation of variable capital and TETRA, together with the additional
conveyance documents and instruments contemplated or referenced thereunder.

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          “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
          “Default” means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
          “Deposit Account Control Agreement” has the meaning assigned to such
term in the Security Agreement
          “Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
          “Disqualified Stock” means any Equity Interest, which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than Equity Interests not constituting
Disqualified Stock, pursuant to a sinking fund obligation or otherwise, or is
redeemable for any consideration other than Equity Interests not constituting
Disqualified Stock at the sole option of the holder thereof (other than solely
as a result of a change of control or asset sale), in whole or in part, on or
prior to the Maturity Date.
          “Document” has the meaning assigned to such term in the Security
Agreement.
          “Domestic Subsidiary” means any direct or indirect Subsidiary of a
Borrower that is organized under the laws of the United States of America or any
state thereof or the District of Columbia, other than any such Subsidiary that
is indirectly held through a Subsidiary that is not a Domestic Subsidiary.
          “dollars” or “$” except as otherwise specified, refers to lawful money
of the United States of America.
          “EBIT” means, for any period, Net Income for such period plus
(a) without duplication and to the extent deducted in determining Net Income for
such period, the sum of (i) Interest Expense for such period, (ii) income tax
expense (including any franchise taxes to the extent based upon net income) for
such period net of tax refunds, (iii) any extraordinary non-cash charges for
such period and (iv) any other non-cash charges for such period (but excluding
any non-cash charge in respect of an item that was included in Net Income in a
prior period and any non-cash charge that relates to the write-down or write-off
of inventory), minus (b) without duplication and to the extent included in Net
Income, (i) any cash payments made during such period in respect of non-cash
charges described in clause (a)(iv) taken in a prior period and (ii) any
extraordinary non-cash gains and any non-cash items of income for such period,
all calculated for the Borrowers and their Subsidiaries on a consolidated basis
in accordance with GAAP.
          “Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).
          “Eligible Accounts” means, at any time, the Accounts of a Loan Party
which the Lender determines in its Permitted Discretion are not ineligible for
inclusion in the calculation of the Borrowing Base pursuant to any of clauses
(a) through (w) below. Without limiting the Lender’s discretion provided herein,
Eligible Accounts shall not include any Account:
          (a) which is not subject to a first priority perfected security
interest (subject only to Permitted Encumbrances of the type specified in clause
(a) of the definition thereof) in favor of the Lender;
          (b) which is subject to any Lien other than (i) a Lien in favor of the
Lender and (ii) a Permitted Encumbrance or other Lien permitted by Section 6.02
which in each case does not have priority over the Lien in favor of the Lender;

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          (c) (i) with respect to which the scheduled due date is more than
90 days after the date of the original invoice therefor, (ii) which is unpaid
more than 60 days after the original due date therefor (“Overage”) (when
calculating the amount under this clause (ii), for the same Account Debtor, the
Lender shall include the net amount of such Overage and add back any credits,
but only to the extent that such credits do not exceed the total gross
receivables from such Account Debtor, or (iii) which has been written off the
books of the Loan Parties or otherwise designated as uncollectible;
          (d) which is owing by an Account Debtor for which more than 50% of the
Accounts owing from such Account Debtor and its Affiliates are ineligible
hereunder;
          (e) which is owing by an Account Debtor to the extent the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates to all Loan
Parties exceed 20% of the aggregate amount of Eligible Accounts of all Loan
Parties;
          (f) with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Security Agreement has been breached or is
not true;
          (g) which (i) does not arise from the sale or lease of goods or
performance of services in the ordinary course of business, (ii) is not
evidenced by an invoice or other documentation satisfactory to the Lender (in
its Permitted Discretion) which has been sent to the Account Debtor,
(iii) represents a progress billing, (iv) is contingent upon the Borrower’s
completion of any further performance, (v) represents a sale on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment,
cash-on-delivery or any other repurchase or return basis, or (vi) relates to
payments of interest;
          (h) for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to such
Account have not been performed by such Loan Party or if such Account was
invoiced more than once (but only with respect to any Account arising from such
additional invoice);
          (i) with respect to which any check or other instrument of payment has
been returned uncollected for any reason;
          (j) which is owed by an Account Debtor which has (i) applied for,
suffered, or consented to the appointment of any receiver, custodian, trustee,
or liquidator of its assets, (ii) has had possession of all or a material part
of its property taken by any receiver, custodian, trustee or liquidator,
(iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state or federal
bankruptcy laws (other than post petition accounts payable of an Account Debtor
that is a debtor in possession under the Bankruptcy Code and acceptable to the
Lender in its Permitted Discretion), (iv) has admitted in writing its inability,
or is generally unable to, pay its debts as they become due, (v) become
insolvent, or (vi) ceased operation of its business;
          (k) which is owed by any Account Debtor which has sold all or
substantially all of its assets;
          (l) which is owed by an Account Debtor which (i) does not maintain its
chief executive office in the U.S. or Canada or (ii) is not organized under
applicable law of the U.S., any state of the U.S., Canada, or any province of
Canada unless, in either case, such Account is backed by a letter of credit
acceptable to, and from an issuer acceptable to, the Lender in its Permitted
Discretion which is in the possession of, and is directly drawable by the
Lender;
          (m) which is owed in any currency other than U.S. dollars or Canadian
dollars;
          (n) which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
U.S. unless such Account is backed

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by a letter of credit acceptable, and from an issuer acceptable to, to the
Lender in its Permitted Discretion which is in the possession of, and is
directly drawable by, the Lender, or (ii) the government of the U.S., or any
department, agency, public corporation, or instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.
and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien
of the Lender in such Account have been complied with to the Lender’s
satisfaction;
          (o) which is owed by any Affiliate of any Loan Party or any employee,
officer, director, agent or stockholder of any Loan Party or any of its
Affiliates;
          (p) which is owed by an Account Debtor or any Affiliate of such
Account Debtor to which any Loan Party is indebted, but only to the extent of
such indebtedness or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;
          (q) which is subject to any counterclaim, deduction, defense, setoff
or dispute but only to the extent of any such counterclaim, deduction, defense,
setoff or dispute;
          (r) which is evidenced by any promissory note, chattel paper (other
than leases entered into in the ordinary course of business) or instrument
regardless of whether the original of which is in the possession of such Loan
Party;
          (s) with respect to which such Loan Party has made any agreement with
the Account Debtor for any reduction thereof, other than discounts, corrections,
and adjustments given in the ordinary course of business, or any Account which
was partially paid and such Loan Party created a new receivable for the unpaid
portion of such Account;
          (t) which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board;
          (u) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than a Loan Party has
or has had an ownership interest in such goods, or which indicates any party
other than such Loan Party as payee or remittance party;
          (v) which was created on cash on delivery terms; or
          (w) which the Lender, in its Permitted Discretion, determines shall
not be included in Eligible Accounts based on such credit and collateral
consideration as the Lender in its Permitted Discretion deems reasonable.
          In the event that any one Account totaling (A) $500,000 or more at any
time Borrowing Base Certificates are required to be delivered quarterly and (B)
$1,000,000 or more at all other times which was previously an Eligible Account
ceases to be an Eligible Account hereunder (other than as a result of the
payment by the applicable Account Debtor of such Eligible Account), such Loan
Party or the Borrower Representative shall notify the Lender thereof promptly,
and in any event within 10 Business Days, after any Financial Officer becomes
aware thereof. In determining the amount of an Eligible Account, the face amount
of an Account may, in the Lender’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that such Loan Party may be obligated to rebate
to an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) and (ii) the aggregate amount of all cash received in respect
of such Account but not yet applied by such Loan Party to reduce the amount of
such Account.

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          “Eligible Inventory” means, at any time, the Inventory of each Loan
Party which the Lender determines in its Permitted Discretion is not ineligible
for inclusion in the calculation of the Borrowing Base pursuant to any of
clauses (a) through (q) below. Without limiting the Lender’s discretion provided
herein, Eligible Inventory shall not include any Inventory:
          (a) which is not subject to a first priority perfected Lien (subject
only to Permitted Encumbrances of the type specified in clause (a) of the
definition thereof) in favor of the Lender;
          (b) which is subject to any Lien other than (i) a Lien in favor of the
Lender and (ii) a Permitted Encumbrance or other Lien permitted by Section 6.02
which in each case does not have priority over the Lien in favor of the Lender;
          (c) which is, in the Lender’s Permitted Discretion, slow moving,
obsolete, unmerchantable, defective, or unfit for sale or lease, not salable at
prices approximating at least the cost of such Inventory in the ordinary course
of business or unacceptable due to age, type, category and/or quantity;
          (d) with respect to which any covenant, representation, or warranty
contained in this Agreement or the Security Agreement has been breached or is
not true and which does not conform, in all material respects, to all standards
imposed by any Governmental Authority;
          (e) in which any Person other than such Loan Party shall (i) have any
direct or indirect ownership, interest or title to such Inventory (other than
Permitted Encumbrances and other Liens permitted by Section 6.02 which in the
case of Section 6.02, does not have priority over the Lien in favor of the
Lender) or (ii) be indicated on any purchase order or invoice with respect to
such Inventory as having or purporting to have an interest therein;
          (f) which is not finished goods or which constitutes work-in-process,
packaging and shipping material, manufacturing supplies, samples, prototypes,
displays or display items, bill-and-hold or ship-in-place goods, goods that are
returned or marked for return, repossessed goods, defective or damaged goods,
goods held on consignment, or goods which are not of a type held for sale in the
ordinary course of business;
          (g) which is not located in the U.S. or Canada (subject to clause
(a) above, including perfection of Lender’s Lien under Canadian law) or is in
transit with a common carrier from vendors and suppliers;
          (h) which is located in any location leased by such Loan Party unless
(i) the lessor has delivered to the Lender a Collateral Access Agreement or
(ii) a Reserve for rent, charges, and other amounts due or to become due with
respect to such facility has been established by the Lender in its Permitted
Discretion;
          (i) which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless (i) such warehouseman or bailee has delivered to the
Lender a Collateral Access Agreement and such other documentation as the Lender
may require in its Permitted Discretion or (ii) an appropriate Reserve has been
established by the Lender in its Permitted Discretion;
          (j) which is being processed offsite at a location other than a
Permitted Location or outside processor, or is in transit to or from such
location or outside processor;
          (k) which is the subject of a consignment by such Loan Party as
consignor;
          (l) which is perishable;

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          (m) which contains or bears any intellectual property rights licensed
to such Loan Party unless the Lender, in its Permitted Discretion, is satisfied
that it may sell or otherwise dispose of such Inventory without (i) infringing
the rights of such licensor, (ii) violating any contract with such licensor, or
(iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current
licensing agreement;
          (n) which is not reflected in a current perpetual inventory report of
such Loan Party;
          (o) for which reclamation rights have been asserted by the seller; or
          (p) which the Lender, in its Permitted Discretion, determines shall
not be included in Eligible Inventory based on such credit and collateral
consideration as the Lender, in its Permitted Discretion, deems reasonable.
          In the event that Inventory having a value of (A) $500,000 or more at
any time Borrowing Base Certificates are required to be delivered quarterly and
(B) $1,000,000 or more at all other times which was previously Eligible
Inventory ceases to be Eligible Inventory hereunder (other than as a result of
the sale or use of such Eligible Inventory), such Borrower or the Borrower
Representative shall notify the Lender thereof promptly (and in any event not
later than 10 Business Days) after any Financial Officer becomes aware thereof.
          “Eligible New Service and Rental Compressor Fleet Equipment” means, at
any time, the New Service and Rental Compressor Fleet Equipment of each Loan
Party which the Lender determines in its Permitted Discretion is not ineligible
for inclusion in the calculation of the Borrowing Base pursuant to any of
clauses (a) through (e) of the definition of Eligible Service and Rental
Compressor Fleet Equipment.
          “Eligible Service and Rental Compressor Fleet Equipment” means, at any
time, the Service and Rental Compressor Fleet Equipment (other than New Service
and Rental Compressor Fleet Equipment) of each Loan Party which the Lender
determines in its Permitted Discretion is not ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through
(g) below. Without limiting the Lender’s discretion provided herein, Eligible
Service and Rental Compressor Fleet Equipment shall not include any Service and
Rental Compressor Fleet Equipment:
          (a) which is not subject to a first priority perfected Lien in favor
of the Lender (subject only to Permitted Encumbrances of the type specified in
clause (a) of the definition thereof) in favor of the Lender;
          (b) which is subject to any Lien other than (i) a Lien in favor of the
Lender and (ii) a Permitted Encumbrance or other Lien permitted by Section 6.02
which is in each case does not have priority over the Lien in favor of the
Lender;
          (c) the full purchase price for which has not been paid;
          (d) which is at a location other than a Permitted Location;
          (e) which is not in good working order and condition (ordinary wear
and tear excepted) or in the process of being refurbished to good working order
and condition, which refurbishment will be completed within a reasonable period
of time and for a reasonable cost, or is not used or held for use in the
ordinary course of business by a Loan Party;
          (f) which is subject to any agreement which restricts the ability of
such Loan Party to use, sell, transport or dispose of such Equipment (other than
customary restrictions on the use, sale, transportation or disposal of Equipment
pursuant to leases of such Equipment or service contracts entered into in the
ordinary course of business and in which the Lender has been granted a security
interest to secure the Obligations) or which restricts the Lender’s ability to
take possession of, sell or otherwise dispose of such Equipment; or

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          (g) which constitutes “Fixtures” under the applicable laws of the
jurisdiction in which such Equipment is located.
          “Environmental Laws” means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
          “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
          “Equipment” has the meaning assigned to such term in the Security
Agreement.
          “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
          “ERISA Affiliate” means any trade or business (whether or not
incorporated) that, together with a Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
          “ERISA Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
failure with respect to any Plan to meet the minimum funding standards (as
defined in Section 412 of the Code or Section 302 of ERISA) of the Plan, whether
or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section
302(c) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA
Affiliates of a liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan under
Section 4041 or 4042 of ERISA; (f) the incurrence by any Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
          “Eurodollar”, when used in reference to any Loan or Borrowing (other
than a CBFR Loan or Borrowing), refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.
          “Event of Default” has the meaning assigned to such term in
Article VII.
          “Excluded Taxes” means, with respect to any payment made by any Loan
Party under any Loan Document, any of the following Taxes imposed on or with
respect to the Lender: (a) income or franchise Taxes imposed on (or measured by)
net income by the United States of America, or by the jurisdiction under the
laws of which the Lender is organized or in which its principal office or
applicable lending office is located, and (b) any branch profits Taxes imposed
by the United States of America or any similar Tax imposed by any other
jurisdiction

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in which any Loan Party is located.
          “Exposure” means, at any time, the sum of the outstanding principal
amount of Loans and LC Exposure at such time.
          “Fabricated Cost” means the total costs (other than allocations of
general and administrative expenses) incurred in fabricating a particular item
of PES Equipment, as determined by the books and records of the Loan Parties,
prepared in accordance with GAAP.
          “Federal Funds Effective Rate” means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.
          “Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of Compressco GP in its capacity as
general partner of the Borrower Representative.
          “Fixtures” has the meaning assigned to such term in the Security
Agreement.
          “Foreign Subsidiary” any direct or indirect Subsidiary of a Borrower
that is organized under the laws of any jurisdiction other than the United
States of America or any state thereof or the District of Columbia.
          “GAAP” means generally accepted accounting principles in the United
States of America.
          “Governmental Authority” means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
          “Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided, that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.
          “Guaranteed Obligations” has the meaning assigned to such term in
Section 9.01.
          “Hazardous Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
          “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to a requirement
to make deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person (excluding
current accounts payable incurred in

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the ordinary course of business), (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business, deferred
compensation and purchase price adjustments, earnouts and deferred payments of a
similar nature incurred in connection with a Permitted Acquisition), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (j) Disqualified Stock
and (k) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
          “Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed
on or with respect to any payment made by any Loan Party under any Loan Document
and (b) Other Taxes.
          “Interest Coverage Ratio” means, for any period, the ratio of (a) EBIT
for such period to (b) cash Interest Expense for such period.
          “Interest Election Request” means a request by the Borrower
Representative to convert or continue a Borrowing in accordance with
Section 2.07.
          “Interest Expense” means, for any period, the sum (determined without
duplication) of interest expense (including that attributable to Capital Lease
Obligations) of the Borrowers and their Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrowers and their Subsidiaries
(including all amortization or writeoff of debt discount, debt issuance costs,
commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans and any amendments to, or consents or waivers under, the
Loan Documents) or owed with respect to letters of credit and bankers’
acceptances and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated on a consolidated basis for the Borrowers and their Subsidiaries for
such period in accordance with GAAP.
          “Interest Payment Date” means (a) with respect to any CBFR Loan, the
first day of each calendar month, (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period, and (c) the Maturity Date.
          “Interest Period” means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower Representative may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
          “Inventory” means “Inventory” as defined in the Security Agreement;
provided, however, that for purposes of this Agreement “Inventory” shall not
include the Service and Rental Compressor Fleet Equipment, all of which shall be
included in “Equipment” for purposes of this Agreement.

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          “IRS” means the United States Internal Revenue Service.
          “Joinder Agreement” means a Joinder Agreement in substantially the
form of Exhibit D.
          “LC Collateral Account” has the meaning assigned to such term in
Section 2.05(h).
          “LC Disbursement” means a payment made by the Lender pursuant to a
Letter of Credit.
          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit plus (b) the aggregate amount of all
LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrowers.
          “Lender” means JPMorgan Chase Bank, N.A., its successors and assigns.
          “Letter of Credit” means any letter of credit issued pursuant to this
Agreement.
          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Lender from time to
time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London
office of the Lender in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. Notwithstanding the above, to the extent
that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with a CBFR
Borrowing, such rate shall be determined as modified by the definition of
Adjusted One Month LIBOR Rate.
          “Lien” means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
          “Loan Documents” means this Agreement, any promissory notes issued
pursuant to this Agreement, any letter of credit applications submitted by a
Borrower, or entered into by a Borrower, with the Issuing Bank and relating to a
Letter of Credit, the Collateral Documents, the Loan Guaranty and all other
agreements, instruments, documents and certificates identified in Section 4.01
executed and delivered to, or in favor of, the Lender by or on behalf of any
Loan Party.
          “Loan Guarantor” means each Loan Party.
          “Loan Guaranty” means Article IX of this Agreement.
          “Loan Parties” means the Borrowers, the Borrowers’ Domestic
Subsidiaries that are a party to this Agreement and any other Person who becomes
a party to this Agreement pursuant to a Joinder Agreement and their successors
and assigns.
          “Loans” means the loans and advances made by the Lender pursuant to
this Agreement, including Protective Advances.
          “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations, or condition, financial or otherwise, of the
Borrowers and their Subsidiaries taken as a whole, (b) the ability of any

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Loan Party to perform any of its obligations under the Loan Documents to which
it is a party, (c) the Lender’s Liens on the Collateral or the priority of such
Liens, or (d) the rights of or benefits available to the Lender under any of the
Loan Documents.
          “Material Indebtedness” means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Borrowers and their Subsidiaries in an aggregate
principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the principal amount of the “obligations” of any Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the Swap
Termination Value of such Swap Agreement.
          “Maturity Date” means the date that is four (4) years after the
Effective Date (or if such day is not a Business Day, the next preceding day
that is a Business Day) or any earlier date on which the Commitment is reduced
to zero or otherwise terminated pursuant to the terms hereof.
          “Maximum Liability” has the meaning assigned to such term in
Section 9.10.
          “Moody’s” means Moody’s Investors Service, Inc.
          “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding six years, has made or
been obligated to make contributions.
          “Net Book Value” means the net book value of a particular item of PES
Equipment, as determined by the books and records of the Loan Parties, prepared
in accordance with GAAP.
          “Net Income” means, for any period, the consolidated net income (or
loss) of the Borrowers and their Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrowers or any of their
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which the Borrowers or any of their Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by a
Borrower or Subsidiary in the form of dividends or similar distributions,
(c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary, (d) unrealized losses and gains from Swap Agreements resulting from
the application of the FASB (ASC) 815, and (e) any non-cash compensation charge
or expense realized from grants of Equity Interests or other rights to officers,
directors and employees.
          “Net Orderly Liquidation Value” means, with respect to Inventory and
Service and Rental Compressor Fleet Equipment of any Person, the orderly
liquidation value thereof based upon the most recent appraisal thereof conducted
in accordance with Section 5.11 and expressed as a percentage of average cost,
market value, or net book value, as applicable of such Inventory or Service and
Rental Compressor Fleet Equipment, as applicable, net of all costs of
liquidation thereof.
          “Net Proceeds” means, with respect to any event, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event (including, without limitation, any underwriting,
brokerage, advisory and other selling or other professional fees and
commissions), (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a Sale and Leaseback Transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made as a result of such event to prepay or repay Indebtedness (other than
Loans) secured by such asset or otherwise subject to mandatory prepayment as a
result of

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such event and (iii) the amount of all taxes paid (or reasonably estimated to be
payable) and the amount of any reserves established to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by a
Financial Officer).
          “New Service and Rental Compressor Fleet Equipment” means Service and
Rental Compressor Fleet Equipment purchased or completed by the applicable Loan
Party since the date of the most recent appraisal delivered to the Lender under
Section 5.11 after the Effective Date.
          “Non-Paying Guarantor” has the meaning assigned to such term in
Section 9.11.
          “Obligated Party” has the meaning assigned to such term in
Section 9.02.
          “Obligations” means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Exposure, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
owing to the Lender or any indemnified party arising under the Loan Documents.
          “Omnibus Agreement” means the Omnibus Agreement dated as of the date
hereof among Compressco GP, Compressco Partners and TETRA as in effect on the
Effective Date or as otherwise amended, supplemented or modified to the extent
not prohibited by Section 6.11.
          “Other Connection Taxes” means, with respect to the Lender, Taxes
imposed as a result of a present or former connection between the Lender and the
jurisdiction imposing such Taxes (other than a connection arising from the
Lender having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction pursuant to, or enforced,
any Loan Document), or sold or assigned an interest in any Loan Document).
          “Other Taxes” means any present or future stamp, court, documentary,
intangible, recording, filing or similar excise or property Taxes that arise
from any payment made under, from the execution, delivery, performance,
enforcement or registration of, or from the registration, receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document,
except any such Taxes that are Other Connection Taxes imposed with respect to an
assignment.
          “Participant” has the meaning assigned to such term in
Section 8.04(c).
          “Paying Guarantor” has the meaning assigned to such term in
Section 9.11.
          “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
          “Permitted Acquisition” means any Acquisition by any Loan Party in a
transaction that satisfies each of the following requirements:
          (a) the board of directors (or equivalent body) of the Person to be
acquired shall not have indicated publicly its opposition to the consummation of
such Acquisition (which opposition has not been publicly withdrawn);
          (b) the business acquired in connection with such Acquisition is a
Permitted Business;
          (c) both before and after giving effect to such Acquisition and the
Loans (if any) requested to be made in connection therewith, each of the
representations and warranties in the Loan Documents is true and correct in all
material respects (except (i) any such representation or warranty which relates
to a specified prior date and (ii) to the extent the Lender has been notified in
writing by the Loan Parties that any representation or warranty is not correct
and the Lender has explicitly waived in writing

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compliance with such representation or warranty) without duplicating any
materiality qualifier and no Default then exists, or would result therefrom;
          (d) with respect to any transaction involving acquisition
consideration of more than $10,000,000, unless the Lender shall otherwise agree,
the Borrower Representative has provided the Lender notice at least 15 days
prior to the consummation of such Acquisition and thereafter provides a copy of
all business and financial information reasonably requested by the Lender
including pro forma financial statements, statements of cash flow, and
Availability projections;
          (e) if the Accounts, Inventory and Equipment acquired in connection
with such Acquisition are proposed to be included in the determination of the
Borrowing Base, the Lender shall have conducted an audit and field examination
of such Accounts and Inventory and received an appraisal of such Equipment, in
each case, to its reasonable satisfaction;
          (f) if such Acquisition is an acquisition of the Equity Interests of a
Person, the Acquisition is structured so that at least 50% of the Equity
Interests of the acquired Person shall be owned by such Borrower on a fully
diluted basis and, unless such Person is or will be a Foreign Subsidiary, such
Person becomes a Loan Party pursuant to the terms of this Agreement;
          (g) if such Acquisition is an acquisition of Equity Interests, such
Acquisition will not result in any violation of Regulation U;
          (h) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect;
          (i) in connection with an Acquisition of the Equity Interests of any
Person, all Liens on property of such Person (other than Liens permitted by
Section 6.02) shall be terminated unless the Lender in its sole discretion
consents otherwise, and in connection with an Acquisition of the assets of any
Person, all Liens (other than Liens permitted by Section 6.02) on such assets
shall be terminated;
          (j) with respect to any transaction involving acquisition
consideration of more than $10,000,000, the Interest Coverage Ratio shall be
greater than 2.5 to 1.0 for the 12 month period ending on the last day of the
fiscal quarter ending immediately prior to the date of such Acquisition for
which the required financial statements and the certificate required by
Section 5.01(d) have been delivered to Lender;
          (k) the Borrower Representative shall certify (and provide the Lender
with a pro forma calculation in form and substance reasonably satisfactory to
the Lender) to the Lender that, after giving effect to the completion of such
Acquisition, Availability will not be less than $5,000,000 (without giving
effect to the Availability Block) on a pro forma basis after giving effect to
any Borrowing or the issuance of any Letter of Credit in connection with such
Acquisition; and
          (l) with respect to any Acquisition of any Person that will not become
a Loan Party upon the consummation of such Acquisition or any Acquisition of
assets and property that will not be owned or held by a Loan Party upon the
consummation of such Acquisition, no proceeds of any Loans may be used, directly
or indirectly, to pay any of consideration for such Acquisition unless on the
date of and immediately after giving effect to such Acquisition, the Borrowing
Base exceeds the Commitment by an amount not less than 80% of the Commitment.
          “Permitted Business” means any business in which the Loan Parties are
engaged on the Closing Date and any business activities that are similar,
related, complementary or incidental thereto.
          “Permitted Discretion” means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.

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          “Permitted Encumbrances” means:
          (a) Liens imposed by law for Taxes assessments or other governmental
charges or levies which are not delinquent or which are being Properly
Contested;
          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s, suppliers’, construction and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or which are being Properly Contested;
          (c) pledges and deposits made in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations or securing deductibles, self-insurance, insurance premiums,
co-payment, co-insurance, retentions and similar obligations to providers of
insurance;
          (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
          (e) Liens arising solely by virtue of any statutory or common law
provision relating to banker’s liens, rights of set-off or similar rights and
remedies, or under general depositary agreements, and burdening only deposit
accounts or other funds maintained with a creditor depository institution,
provided that no such deposit account is a dedicated cash collateral account or
is subject to restrictions against access by the depositor in excess of those
set forth by regulations promulgated by the Board and no such deposit account is
intended by any Loan Party to provide collateral to the depository institution;
          (f) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
          (g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of any Loan Party;
          (h) Liens arising by virtue of precautionary UCC financing statement
filing (or similar filings under applicable law) regarding operating leases
entered into by the Loan Parties in the ordinary course of business;
          (i) leases, subleases, space leases, licenses or sublicenses, in each
case in the ordinary course of business and which do not interfere in any
material respect with the business of any Loan Party; and
          (j) options, put and call arrangements, rights of first refusal,
setoff rights and customary limitations and restrictions constituting negative
pledges, in each case, in the ordinary course of business, contained in, and
limited to, specific leases, licenses, conveyances, partnership agreements and
co owners’ agreements, and similar conveyances and agreements to the extent that
any such Lien referred to in this clause does not materially impair the use of
the property covered by such Lien for the purposes for which such property is
held or materially impair the value of such property to the relevant Loan Party
subject thereto;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (f) above.
          “Permitted Investments” means:

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          (a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
          (b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;
          (c) investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
          (d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
and
          (e) money market funds that (i) comply with the criteria set forth in
SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by
S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$1,000,000,000.
          “Permitted Location” means (a) premises owned by a Loan Party that is
not subject to a Lien to secure Indebtedness for borrowed money (unless the
holder of such Indebtedness has delivered to the Lender a Collateral Access
Agreement), (b) premises leased by a Loan Party where (i) the lessor has
delivered to the Lender a Collateral Access Agreement or (ii) a Reserve for
rent, charges, and other amounts due or to become due with respect to such
facility has been established by the Lender in its Permitted Discretion or
(c) any other location within the United States of America or Canada not
otherwise owned or leased by a Loan Party and as to which the Borrower
Representative shall have provided written notice (including pursuant to a
perfection certificate or Borrowing Base Certificate) to the Lender identifying
(which in the case of the location of the Eligible Service and Rental Compressor
Fleet Equipment located on a customer’s lease or fee-owned real property, shall
be sufficiently identified by name of customer, state, county, well name and, if
available, GPS coordinates) such location as an additional “Permitted Location”.
          “Permitted Partnership Distributions” means distributions by
Compressco Partners to the holders of its limited partnership interests required
or permitted pursuant to its limited partnership agreement or other
organizational or governing documents as in effect on the Effective Date or as
otherwise amended, supplemented or modified to the extent not prohibited by
Section 6.11.
          “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
          “PES Equipment” means Compressor Units, well monitoring assets,
automated sand separation assets and other equipment and assets, together with
any tangible components thereof, all related appliances, parts, accessories,
appurtenances, accessions, additions, improvements and replacements thereto, all
other equipment or components of any nature from time to time incorporated or
installed therein and all substitutions for any of the foregoing.
          “Plan” means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which any
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
          “Prepayment Event” means:

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          (a) any sale, transfer or other disposition (including pursuant to a
Sale and Leaseback Transaction) of any property or asset of any Loan Party,
other than dispositions described in Section 6.05 (other than clauses (e),
(f) and (g) thereof), that yields gross proceeds to the Loan Parties (valued at
the initial principal amount thereof in the case of non-cash proceeds consisting
of notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $1,500,000 in any period of 12 consecutive
calendar months; or
          (b) any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Loan Party that yields gross proceeds to any Loan Party (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $1,500,000; or
          (c) the incurrence by any Loan Party of any Indebtedness, other than
Indebtedness permitted under Section 6.01.
          “Prime Rate” means the rate of interest per annum publicly announced
from time to time by the Lender as its prime rate; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
          “Projections” has the meaning assigned to such term in
Section 5.01(f).
          “Properly Contested” means, with respect to any obligation of any
Person or any Lien on any property of any Person, (a) the obligation or Lien is
subject to a bona fide dispute regarding amount or such Person’s liability to
pay; (b) the obligation or Lien is being properly contested in good faith by
appropriate proceedings promptly instituted and diligently pursued; (c)
appropriate reserves have been established in accordance with GAAP;
(d) non-payment of such obligation could not reasonably be expected to have a
Material Adverse Effect; (e) no Lien is imposed on assets of such Person
constituting Collateral, unless bonded and stayed to the satisfaction of the
Lender and junior to the Lender’s Liens on any or all of such Collateral and
(f) if such obligation or Lien results from entry of a judgment or other order,
such judgment or order is stayed pending appeal or other judicial review.
          “Protective Advance” has the meaning assigned to such term in
Section 2.04.
          “Related Parties” means, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.
          “Report” means reports prepared by the Lender or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of the Borrowers from information furnished by or on behalf of the
Borrowers, after the Lender has exercised its rights of inspection pursuant to
this Agreement.
          “Requirement of Law” means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
          “Reserves” means any and all reserves which the Lender deems
necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Secured Obligations,
Banking Services Reserves, volatility reserves, reserves for rent at locations
leased or occupied by any Loan Party and for consignee’s, warehousemen’s and
bailee’s charges, reserves for dilution of Accounts, reserves for Inventory
shrinkage, reserves for customs charges and shipping charges related to any
Inventory in transit, reserves for Swap Obligations, reserves for contingent
liabilities of any Loan Party, reserves for uninsured losses of any Loan Party,
reserves for uninsured, underinsured, un indemnified or under indemnified
liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments, and other governmental charges) with respect to
the Collateral or any Loan Party; provided, however that Reserves shall bear a
reasonable relation to

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events or conditions that affect the Collateral; and provided, further, that, at
the request of the Borrower Representative, the Lender shall disclose to the
Borrower Representative the conditions or events based on which the Lender has
established any Reserve and shall eliminate or reduce such Reserve to the extent
that the Borrowers remedy such condition or event to the satisfaction of the
Lender, leaving only such amount of such Reserve, if any, as the Lender
determines in its Permitted Discretion is required after giving effect to such
remedy.
          “Restricted Payment” means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
any Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in any Borrower or any option, warrant or other
right to acquire any such Equity Interests in any Borrower.
          “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.
          “Sale and Leaseback Transaction” has the meaning assigned to such term
in Section 6.06.
          “SEC means the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
          “Secured Obligations” means all Obligations, together with all
(a) Banking Services Obligations and (b) Swap Obligations owing to the Lender or
its Affiliates.
          “Security Agreement” means that certain Pledge and Security Agreement,
dated as of the date hereof, among the Loan Parties and the Lender, and any
other pledge or security agreement entered into after the date of this Agreement
by any other Loan Party (as required by this Agreement or any other Loan
Document) granting a Lien on any property of any Loan Party to secure the
obligations and liabilities of any Loan Party under any Loan Document, or any
other Person, as the same may be amended, restated or otherwise modified from
time to time.
          “Service and Rental Compressor Fleet Equipment” means completed
natural gas wellhead compression Equipment owned by a Loan Party and generally
consisting of metal skid mounted integrated power and compressor units and
related liquids separation equipment, together with other ancillary equipment
used in performing wellhead compression services for customers and/or held for
or sale or lease.
          “Statutory Reserve Rate” means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
          “Subordinated Indebtedness” of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Lender.
          “subsidiary” means, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise

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Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
          “Subsidiary” means any direct or indirect subsidiary of a Loan Party.
          “Swap Agreement” means any agreement with respect to any swap,
forward, future, credit default or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.
          “Swap Obligations” of a Loan Party means any and all obligations of
such Loan Party, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.
          “Swap Termination Value” means, in respect of any one or more Swap
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after
the date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.
          “Taxes” means any present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
          “TETRA” means TETRA Technologies, Inc., a Delaware corporation, and
its successors.
          “Transactions” means (a) the contribution by TETRA and certain other
Subsidiaries of TETRA of a portion of their respective businesses, operations
and related assets and liabilities in accordance with the Contribution
Agreement, (b) the issuance of Equity Interests of Compressco Partners to
certain Affiliates of TETRA, including Compressco GP, (c) the issuance to
Compressco GP of certain incentive distribution rights, (d) the execution and
delivery of the Omnibus Agreement among the Borrowers, TETRA and certain of its
Subsidiaries, (e) the consummation of an offering and sale to the public of
Equity Interests consisting of common units in Compressco Partners pursuant to
an effective registration statement under the Securities Act filed on Form S-1
resulting in Compressco Partners having not less than $9,000,000 of cash
available for general corporate purposes after giving effect to the payment of
certain intercompany Indebtedness with the proceeds thereof, (f) the execution,
delivery and performance by the Borrowers of this Agreement, the borrowing of
Loans and other credit extensions, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder and (g) the payment of all structuring
fees, offering expenses and other costs and expenses incurred in connection with
the foregoing.
          “Transaction Documents” means the Contribution Agreement, the Omnibus
Agreement, this Agreement and the other Loan Documents.
          “Type”, when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the CB
Floating Rate.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of Texas or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

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          “Withdrawal Liability” means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
          “Withholding Agent” means any Loan Party and the Lender.
          SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans and Borrowings may be classified by Type (e.g., a
“Eurodollar Loan” or a “Eurodollar Borrowing”).
          SECTION 1.03 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural 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 word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference in
any definition to the phrase “at any time” or “for any period” shall refer to
the same time or period for all calculations or determinations within such
definition, and (f) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
          SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if after the date hereof there occurs any change in GAAP or in the
application thereof on the operation of any provision hereof and the Borrower
Representative notifies the Lender that the Borrowers request an amendment to
any provision hereof to eliminate the effect of such change in GAAP or in the
application thereof (or if the Lender notifies the Borrower Representative that
the Lender requests an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. The Borrower shall not be obligated to
pay an amendment fee for any such amendment the sole purpose of which is to
effectuate such amendment.
ARTICLE II
The Credits
          SECTION 2.01 Commitment. Subject to the terms and conditions set forth
herein, the Lender agrees to make Loans to the Borrowers from time to time
during the Availability Period in an aggregate principal amount that will not
result in the Exposure exceeding the sum of (a) the lesser of (i) the Commitment
or (ii) the Borrowing Base, minus (b) without duplication, Reserves, minus
(c) the Availability Block; subject to the Lender’s authority, in its sole
discretion, to make Protective Advances pursuant to the terms of Section 2.04.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Loans.
          SECTION 2.02 Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Type. Any Protective Advance
shall be made in accordance with the procedures set forth in Section 2.04.
          (b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of CBFR Loans or Eurodollar Loans as the Borrower Representative may
request in accordance herewith, provided that all Borrowings

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made on the Effective Date must be made as CBFR Borrowings. The Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of the Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement.
          (c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $250,000 and not less than $500,000. CBFR Borrowings may be in any
amount. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
eight Eurodollar Borrowings outstanding.
          (d) Notwithstanding any other provision of this Agreement, the
Borrower Representative shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
          SECTION 2.03 Requests for Borrowings. To request a Borrowing, the
Borrower Representative shall notify the Lender of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Dallas,
Texas time, three Business Days before the date of the proposed Borrowing or
(b) in the case of a CBFR Borrowing, not later than noon, Dallas, Texas time, on
the date of the proposed Borrowing; provided that no such notice shall be
required for any deemed request of a CBFR Borrowing to finance the reimbursement
of an LC Disbursement as provided in Section 2.05(d). Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile to the Lender of a written Borrowing Request in a form
approved by the Lender and signed by the Borrower Representative. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

  (i)   the name of the applicable Borrower;     (ii)   the aggregate amount of
the requested Borrowing, a breakdown of the separate wires comprising such
Borrowing and the account number and any other necessary identifying information
for each deposit account (which shall be a deposit account subject to a Deposit
Account Control Agreement) into which the proceeds of such Borrowing are to be
deposited;     (iii)   the date of such Borrowing, which shall be a Business
Day;     (iv)   whether such Borrowing is to be a CBFR Borrowing or a Eurodollar
Borrowing; and     (v)   in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a CBFR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the applicable Borrowers
shall be deemed to have selected an Interest Period of one month’s duration.
          SECTION 2.04 Protective Advances. Subject to the limitations set forth
below, the Lender is authorized by the Borrowers, from time to time in the
Lender’s sole discretion (but shall have absolutely no obligation), to make
Loans to the Borrowers, which the Lender, in its Permitted Discretion, deems
necessary or desirable (a) to preserve or protect the Collateral, or any portion
thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations, or (c) to pay any other amount chargeable to
or required to be paid by the Borrowers pursuant to the terms of this Agreement,
including payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including costs, fees, and expenses as described in
Section 8.03) and other sums payable under the Loan Documents (any of such Loans
are herein referred to as “Protective Advances”); provided that, the aggregate
amount of Protective Advances outstanding at any time shall not at any time
exceed $3,000,000; provided further that, the aggregate amount of outstanding
Protective Advances plus the aggregate Exposure shall not exceed the Commitment.
Protective Advances may be

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made even if the conditions precedent set forth in Section 4.02 have not been
satisfied. The Protective Advances shall be secured by the Liens in favor of the
Lender in and to the Collateral and shall constitute Obligations hereunder. All
Protective Advances shall be CBFR Borrowings.
          SECTION 2.05 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the
issuance of Letters of Credit for its own account or for the account of another
Loan Party, in a form reasonably acceptable to the Lender at any time and from
time to time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrowers to, or entered into by the Borrowers with, the Lender relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.
          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower
Representative shall deliver by hand or facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the Lender) to
the Lender (prior to 9:00 am, Dallas, Texas time, at least two Business Days
prior to the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Lender, the applicable Borrower also shall submit a letter of credit
application on the Lender’s standard form in connection with any request for a
Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed an amount equal to 25% of the Commitment then in
effect and (ii) the total Exposure shall not exceed the sum of (A) the lesser of
(1) the Commitment or (2) the Borrowing Base, minus (B) without duplication,
Reserves, minus (C) the Availability Block.
          (c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
          (d) Reimbursement. If the Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Lender an amount equal to such LC Disbursement
(i) not later than 11:00 a.m., Dallas, Texas time, on the date that such LC
Disbursement is made, if the Borrower Representative shall have received notice
of such LC Disbursement prior to 9:00 a.m., Dallas, Texas time, on such date,
or, (ii) if such notice has not been received by the Borrower Representative
prior to such time on such date, then not later than 11:00 a.m., Dallas, Texas
time, on (a) the Business Day that the Borrower Representative receives such
notice, if such notice is received prior to 9:00 a.m., Dallas, Texas time, on
the day of receipt, or (b) the Business Day immediately following the day that
the Borrower receives such notice, if such notice is not received prior to such
time on the day of receipt; provided that the Borrower shall, subject to the
conditions to Borrowing set forth herein, be deemed to have requested, and the
Borrower does hereby request under such circumstances, such payment be financed
with a CBFR Borrowing in an equivalent amount and, to the extent so financed,
the Borrowers’ obligation to make such payment shall be discharged and replaced
by the resulting CBFR Borrowing.
          (e) Obligations Absolute. The Borrowers’ joint and several obligation
to reimburse LC Disbursements as provided in paragraph (d) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect,

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(iii) payment by the Lender under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of
Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers’ obligations hereunder. Neither the Lender nor any
of its Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Lender; provided that the foregoing shall not be construed to excuse the Lender
from liability to the Borrowers to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by any Borrower
that are caused by the Lender’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Lender (as finally
determined by a court of competent jurisdiction), the Lender shall be deemed to
have exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Lender may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
          (f) Disbursement Procedures. The Lender shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Lender shall promptly notify the
applicable Borrower by telephone (confirmed by facsimile) of such demand for
payment and whether the Lender has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrowers of their obligation to reimburse the Lender with
respect to any such LC Disbursement.
          (g) Interim Interest. If the Lender shall make any LC Disbursement,
then, unless the Borrowers shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrowers reimburse such LC Disbursement, at
the rate per annum then applicable to CBFR Loans; provided that, if the
Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph
(d) of this Section, then Section 2.12(d) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Lender.
          (h) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representative receives notice
from the Lender demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in an account with the Lender, in the
name and for the benefit of the Lender (the “LC Collateral Account”), an amount
in cash equal to 105% of the LC Exposure as of such date plus accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to any Borrower described in clause (h) or
(i) of Article VII. Such deposit shall be held by the Lender as collateral for
the payment and performance of the Secured Obligations. The Lender shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over the LC Collateral Account and the Borrowers hereby grant the Lender a
security interest in the LC Collateral Account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Lender and at the Borrowers’ risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in the LC Collateral Account. Moneys in the LC
Collateral Account shall be applied by the Lender for LC Disbursements for which
it has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other Secured Obligations. If the Borrowers are required to
provide an

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amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrowers within three Business Days after all such Events of Default
have been cured or waived in accordance with this Agreement.
          SECTION 2.06 Funding of Borrowings. The Lender shall make each Loan to
be made by it hereunder on the proposed date thereof available to the Borrowers
by promptly sending by wire transfer the amounts in immediately available funds
to the deposit accounts identified in the applicable Borrowing Request; provided
that CBFR Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(d) or a Protective Advance shall be retained by the
Lender.
          SECTION 2.07 Interest Elections. (a) Each Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower Representative may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower Representative may elect different
options with respect to different portions of the affected Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
This Section shall not apply to Protective Advances, which may not be converted
or continued.
          (b) To make an election pursuant to this Section, the Borrower
Representative shall notify the Lender of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrowers
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Lender of a written Interest Election Request in a form
approved by the Lender and signed by the Borrower Representative.
          (c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

  (i)   the Borrower and the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);     (ii)
  the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;     (iii)   whether the resulting
Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and     (iv)   if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month’s duration.
          (d) If the Borrower Representative fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to a CBFR Borrowing. Notwithstanding any contrary provision hereof, if
a Default has occurred and is continuing and the Lender so notifies the Borrower
Representative, then, so long as a Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and
(ii) unless repaid, each Eurodollar Borrowing shall be converted to a CBFR
Borrowing at the end of the Interest Period applicable thereto.

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          SECTION 2.08 Termination and Reduction of Commitment; Increase in
Commitment. (a) Unless previously terminated, the Commitment shall terminate on
the Maturity Date.
          (b) The Borrowers may at any time terminate the Commitment upon
(i) the payment in full of all outstanding Loans, together with accrued and
unpaid interest thereon and on any Letters of Credit, (ii) the cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Lender of a cash deposit, or
at the discretion of the Lender a back up standby letter of credit satisfactory
to the Lender, equal to 105% of the LC Exposure as of such date), (iii) the
payment in full of the accrued and unpaid fees and (iv) the payment in full of
all reimbursable expenses and other Obligations together with accrued and unpaid
interest thereon.
          (c) The Borrowers may from time to time reduce the Commitment by an
aggregate amount of up to $5,000,000; provided that (i) each reduction of the
Commitment shall be in an amount that is an integral multiple of $2,500,000 and
(ii) the Borrowers shall not reduce the Commitment if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.10, the sum
of the Exposures would exceed the sum of (A) the lesser of (1) the Commitment or
(2) the Borrowing Base, minus (B) without duplication, Reserves, minus (C) the
Availability Block.
          (d) The Borrower Representative shall notify the Lender of any
election to terminate or reduce the Commitment under paragraph (b) or (c) of
this Section at least five Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Each notice delivered by the Borrower Representative pursuant to this
Section shall be irrevocable; provided that a notice of termination of the
Commitment delivered by the Borrower Representative may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower Representative (by notice to the
Lender on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitment shall be permanent.
          (e) The Borrowers may request that the Lender agree, in its sole and
absolute discretion, to increase the Commitment by an aggregate amount of up to
$20,000,000; provided that (i) any such request for an increase shall be in a
minimum amount of $5,000,000, (ii) the Borrower Representative, on behalf of the
Borrowers, may make a maximum of four such requests and (iii) the procedures
described in Section 2.08(f) have been satisfied.
          (f) Any amendment hereto for such an increase shall be in form and
substance satisfactory to the Lender in its sole and absolute discretion. As a
condition precedent to such an increase, the Borrowers shall deliver to the
Lender a certificate of each Loan Party signed by an authorized officer of such
Loan Party (i) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such increase, and (ii) in the case of the
Borrowers, certifying that, before and after giving effect to such increase,
(A) the representations and warranties contained in Article III and the other
Loan Documents are true and correct, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and (B) no Default
exists.
          SECTION 2.09 Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby unconditionally promise to pay (i) to the Lender for its account the then
unpaid principal amount of each Loan on the Maturity Date and (ii) to the Lender
the then unpaid amount of each Protective Advance on the earlier of the Maturity
Date and demand by the Lender.
          (b) At all times that Cash Dominion is in effect, each Business Day,
the Lender shall apply all funds credited to the Collection Account on such
Business Day or the immediately preceding Business Day (at the discretion of the
Lender, whether or not immediately available) first to prepay any Protective
Advances that may be outstanding and second to prepay the Loans and to cash
collateralize outstanding LC Exposure.
          (c) The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to the Lender
resulting from each Loan made by the Lender, including the amounts of principal
and interest payable and paid to the Lender from time to time hereunder.

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          (d) The Lender shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to the Lender
hereunder and (iii) the amount of any sum received by the Lender hereunder.
          (e) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the
Lender to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans in accordance with the
terms of this Agreement.
          (f) The Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to the Lender a promissory note payable to the order of the Lender (or, if
requested by the Lender, to the Lender and its registered assigns) and in a form
approved by the Lender. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 8.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
          SECTION 2.10 Prepayment of Loans. (a) The Borrowers shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (e) of this Section.
          (b) In the event and on such occasion that the total Exposure exceeds
the sum of (i) the lesser of (A) the Commitment or (B) the Borrowing Base, minus
(ii) without duplication, Reserves, minus (iii) the Availability Block, the
Borrowers shall prepay the Loans and cash collateralize LC Exposure in an
aggregate amount equal to such excess.
          (c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of any Loan Party in respect of any Prepayment Event,
the Borrowers shall, immediately after such Net Proceeds are received by any
Loan Party, prepay the Obligations as set forth in Section 2.10(e) below in an
aggregate amount equal to 100% of such Net Proceeds, provided that, in the case
of any event described in clause (a) or (b) of the definition of the term
“Prepayment Event”, if the Borrower Representative shall deliver to the Lender a
certificate of a Financial Officer to the effect that the Loan Parties (1) have
applied or (2) intend to apply the Net Proceeds from such event (or a portion
thereof specified in such certificate) within 180 days after receipt of such Net
Proceeds, as applicable, to acquire (or replace or rebuild) assets used or to be
used in the business of the Loan Parties, and certifying that no Default has
occurred and is continuing, then either (i) so long as Cash Dominion is not in
effect, no prepayment shall be required pursuant to this paragraph in respect of
the Net Proceeds specified in such certificate or (ii) if Cash Dominion is in
effect, then, if the Net Proceeds specified in such certificate are to be
applied by (A) the Borrowers, then such Net Proceeds shall be applied by the
Lender to reduce the outstanding principal balance of the Loans (without a
permanent reduction of the Commitment) and upon such application, the Lender
shall establish a Reserve against the Borrowing Base in an amount equal to the
amount of such proceeds so applied and (B) any Loan Party that is not the
Borrower, such Net Proceeds shall be deposited in a cash collateral account, and
in the case of either (A) or (B), thereafter, such funds shall be made available
to the applicable Loan Party as follows:
     (1) the Borrower Representative shall request a Borrowing (specifying that
the request is to use Net Proceeds pursuant to this Section) or the applicable
Loan Party shall request a release from the cash collateral account be made in
the amount needed;
     (2) so long as the conditions set forth in Section 4.02 have been met, the
Lender shall make such Borrowing or the Lender shall release funds from the cash
collateral account; and
     (3) in the case of Net Proceeds applied against the Borrowing, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Borrowing;

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provided that any such Net Proceeds therefrom that have not been so applied by
the end of such 180-day period shall be applied to prepay the Loans in an amount
equal to such Net Proceeds that have not been so applied.
          (d) All amounts prepaid pursuant to Section 2.10(c) shall be applied,
first to prepay any Protective Advances that may be outstanding and second to
prepay the Loans without a corresponding reduction in the Commitment and to cash
collateralize outstanding LC Exposure.
          (e) The Borrower Representative shall notify the Lender by telephone
(confirmed by facsimile) of any prepayment hereunder (other than a prepayment
pursuant to Section 2.10(b)) not later than 10:00 a.m., Dallas, Texas time,
(i) in the case of prepayment of a Eurodollar Borrowing three Business Days
before the date of prepayment, or (ii) in the case of prepayment of a CBFR
Borrowing on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitment as
contemplated by Section 2.08, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.08. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing (other than a prepayment
pursuant to Section 2.10(b) and 2.10(c)) of the same Type as provided in
Section 2.02. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.
          SECTION 2.11 Fees. (a) The Borrowers agree to pay to the Lender a
commitment fee, which shall accrue at the Applicable Rate on the average daily
amount of the Available Commitment of the Lender during the period from and
including the Effective Date to but excluding the date on which the Lender’s
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the first day of each calendar quarter and on the date on which the Commitment
terminates, commencing on the first such date to occur after the date hereof.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed.
          (b) The Borrowers agree to pay (i) to the Lender a letter of credit
fee with respect to Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of the Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which the
Lender’s Commitment terminates and the date on which the Lender ceases to have
any LC Exposure, and (ii) the Lender’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Letter of credit fees accrued through and including the
last day of each calendar quarter shall be payable on the first day of each
calendar quarter following such last day, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be payable on
the date on which the Commitment terminates and any such fees accruing after the
date on which the Commitment terminates shall be payable on demand. Any other
fees payable to the Lender pursuant to this paragraph shall be payable within
10 days after demand. All letter of credit fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days
elapsed.
          (c) The Borrowers agree to pay to the Lender an annual administration
fee in the amount of $20,000, which administration fee shall be payable annually
in advance beginning on the Effective Date and on each anniversary thereof
during the term of the Commitment. The administration fee shall be deemed fully
earned by the Lender on the first day of the year and shall be due and payable
in full on that date.
          (d) The Borrowers agree to pay to the Lender a closing fee in an
amount equal to $100,000. The entire closing fee shall be deemed fully earned by
the Lender and shall be due and payable in full on the Effective Date.
          (e) The Borrowers agree to pay to the Lender at all times that Cash
Dominion is in effect a fee equal to the additional interest that the Borrowers
would have paid in respect of the Loans, at the CB Floating Rate plus the
Applicable Margin for CBFR Loans, as if each check was received one Business Day
after application to the Loans. Such fee will be payable monthly in arrears.

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          (f) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Lender. Fees paid shall not be refundable
under any circumstances.
          SECTION 2.12 Interest. (a) The Loans comprising each CBFR Borrowing
shall bear interest at the CB Floating Rate plus the Applicable Rate.
          (b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
          (c) Each Protective Advance shall bear interest at the CB Floating
Rate plus the Applicable Rate plus 2%.
          (d) Notwithstanding the foregoing, during the occurrence and
continuance of an Event of Default, the Lender may, at its option, by notice to
the Borrower Representative, declare that (i) all Loans shall bear interest at
2% plus the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 2% plus the rate applicable to such fee
or other obligation as provided hereunder.
          (e) Accrued interest on each Loan (for CBFR Loans, accrued through the
last day of the prior calendar month) shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitment;
provided that (i) interest accrued pursuant to paragraph (d) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of a CBFR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
          (f) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the CB Floating Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed.
The applicable CB Floating Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Lender, and such determination shall be conclusive absent
manifest error.
          SECTION 2.13 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
          (a) the Lender reasonably determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
          (b) the Lender reasonably determines the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to the Lender of making or maintaining their Loans (or
its Loan) included in such Borrowing for such Interest Period;
          then the Lender shall give notice thereof to the Borrower
Representative by telephone or facsimile as promptly as practicable thereafter
and, until the Lender notifies the Borrower Representative that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as a CBFR Borrowing.
          SECTION 2.14 Increased Costs. (a) If any Change in Law shall:

  (i)   impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, the Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);

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  (ii)   impose on the Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein; or     (iii)   subject the Lender to any
Taxes on its loans, loan principal, letters of credit, commitments, or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto (other than (A) Indemnified Taxes and (B) Other Connection
Taxes on gross or net income, profits or receipts (including value-added or
similar Taxes));

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Eurodollar Loan) or to increase the cost to the
Lender of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by the Lender hereunder
(whether of principal, interest or otherwise), then the Borrowers will pay to
the Lender such additional amount or amounts as will compensate the Lender for
such additional costs incurred or reduction suffered.
          (b) If the Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
Lender’s capital or on the capital of the Lender’s holding company, as a
consequence of this Agreement or the Loans made by, Letters of Credit issued by
the Lender to a level below that which the Lender or the Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration the Lender’s policies and the policies of the Lender’s holding
company with respect to capital adequacy), then from time to time the Borrowers
will pay to the Lender such additional amount or amounts as will compensate the
Lender or the Lender’s holding company for any such reduction suffered.
          (c) A certificate of the Lender setting forth the amount or amounts
necessary to compensate the Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower Representative and shall be conclusive absent manifest error. The
Borrowers shall pay the Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
          (d) Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender’s right to
demand such compensation; provided that the Borrowers shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrower Representative of the Change in Law giving rise to such
increased costs or reductions and of the Lender’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
          SECTION 2.15 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.08(d) and is revoked in accordance therewith), then, in any such
event, the Borrowers shall compensate the Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to the Lender shall be deemed to include an amount determined by the
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Eurodollar Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Eurodollar Loan, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which the
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of the Lender setting forth any amount or amounts that the
Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower Representative and shall be conclusive absent manifest error. The
Borrowers shall pay the Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

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          SECTION 2.16 Taxes. (a) Withholding of Taxes; Gross-Up. Each payment
by any Loan Party under any Loan Document shall be made without withholding for
any Taxes, unless such withholding is required by any law. If any Withholding
Agent determines, in its sole discretion exercised in good faith, that it is so
required to withhold Taxes, then such Withholding Agent may so withhold and
shall timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law. If such Taxes are Indemnified
Taxes, then the amount payable by such Loan Party shall be increased as
necessary so that, net of such withholding (including such withholding
applicable to additional amounts payable under this Section), the Lender
receives the amount it would have received had no such withholding been made.
          (b) Payment of Other Taxes by the Borrowers. The Borrowers shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
          (c) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes by any Loan Party to a Governmental Authority, such Loan Party
shall deliver to the Lender the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Lender.
          (d) Indemnification by the Loan Parties. The Loan Parties shall
jointly and severally indemnify the Lender for any Indemnified Taxes that are
paid or payable by the Lender in connection with any Loan Document (including
amounts paid or payable under this Section 2.16(d)) and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. The indemnity under this Section 2.16(d) shall be paid within 10 days
after the Lender delivers to any Loan Party a certificate stating the amount of
any Indemnified Taxes so paid or payable by the Lender and describing the basis
for the indemnification claim. Such certificate shall be conclusive of the
amount so paid or payable absent manifest error.
          (e) Treatment of Certain Refunds. If the Lender determines, in its
sole discretion, exercised in good faith, that it has received a refund of any
Taxes as to which it has been indemnified pursuant to this Section 2.16
(including additional amounts paid pursuant to this Section 2.16), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including any Taxes) of
the Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund). Such indemnifying party,
upon the request of the Lender, shall repay to the Lender the amount paid to the
Lender (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event the Lender is required to repay such refund
to such Governmental Authority. This Section shall not be construed to require
the Lender to make available its tax returns (or any other information relating
to its taxes which it deems confidential) to the Borrower or any other Person.
Notwithstanding anything to the contrary in this Section 2.16(e), in no event
will the Lender be required to pay any amount to any indemnifying party pursuant
to this Section 2.16 if such payment would place the Lender in a less favorable
position (on a net after-Tax basis) than the Lender would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This Section 2.16(e) shall not be construed to require the
Lender to make available its Tax returns (or any other information relating to
its Taxes which it deems confidential) to the indemnifying party or any other
Person.
          SECTION 2.17 Payments Generally; Allocation of Proceeds. (a) The
Borrowers shall make each payment required to be made by them hereunder (whether
of principal, interest, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 2:00 p.m.,
Dallas, Texas time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Lender, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Lender at its offices at 10 South
Dearborn Street, 22nd Floor, Chicago, Illinois. If any payment hereunder shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in dollars.

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          (b) Any proceeds of Collateral received by the Lender (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
Borrowers), (B) a mandatory prepayment (which shall be applied in accordance
with Section 2.10) or (C) amounts to be applied from the Collection Account when
Cash Dominion is in effect (which shall be applied in accordance with
Section 2.09(a)) or (ii) after an Event of Default has occurred and is
continuing and the Lender so elects such funds shall be applied ratably first,
to pay any fees, indemnities, or expense reimbursements including amounts then
due to the Lender from the Borrowers, second, to pay interest due in respect of
the Protective Advances, third, to pay the principal of the Protective Advances,
fourth, to pay interest then due and payable on the Loans (other than the
Protective Advances), fifth, to prepay principal on the Loans (other than the
Protective Advances) and unreimbursed LC Disbursements, sixth, to pay an amount
to the Lender equal to one hundred five percent (105%) of the aggregate undrawn
face amount of all outstanding Letters of Credit and the aggregate amount of any
unpaid LC Disbursements, to be held as cash collateral for such Obligations,
seventh, to payment of any amounts owing with respect to Banking Services and
Swap Obligations, and eighth, to the payment of any other Secured Obligation due
to the Lender by the Borrowers. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower Representative,
or unless a Default is in existence, the Lender shall not apply any payment
which it receives to any Eurodollar Loan, except (a) on the expiration date of
the Interest Period applicable thereto or (b) in the event, and only to the
extent, that there are no outstanding CBFR Loans and, in any such event, the
Borrowers shall pay the break funding payment required in accordance with
Section 2.15. The Lender shall have the continuing and exclusive right to apply
and reverse and reapply any and all such proceeds and payments to any portion of
the Secured Obligations.
          (c) At the election of the Lender, all payments of principal,
interest, LC Disbursements, fees, premiums, reimbursable expenses (including,
without limitation, all reimbursement for fees and expenses pursuant to
Section 8.03), and other sums payable under the Loan Documents, may be paid from
the proceeds of Borrowings made hereunder whether made following a request by
the Borrower Representative pursuant to Section 2.03 or a deemed request as
provided in this Section or may be deducted from any deposit account of any
Borrower maintained with the Lender. Each Borrower hereby irrevocably authorizes
(i) the Lender to make a Borrowing for the purpose of paying each payment of
principal, interest and fees as it becomes due hereunder or any other amount due
under the Loan Documents and agrees that all such amounts charged shall
constitute Loans (but such a Borrowing may only constitute a Protective Advance
if it is to reimburse costs, fees and expenses as described in Section 8.03) and
that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03 or 2.04, as applicable and (ii) the Lender to charge any deposit
account of any Borrower maintained with the Lender for each payment of
principal, interest and fees as it becomes due hereunder or any other amount due
under the Loan Documents.
          SECTION 2.18 Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Lender is for any reason compelled to surrender such payment or proceeds to
any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Lender. The
provisions of this Section 2.18 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Lender in reliance upon
such payment or application of proceeds. The provisions of this Section 2.18
shall survive the termination of this Agreement.
          SECTION 2.19 Mitigation. If the Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional amount to the
Lender or any Governmental Authority for the account of the Lender pursuant to
Section 2.16, then the Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of the Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.14 or
Section 2.16, as the case may be, in the future and (ii) would not subject the
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by the Lender in connection with any such
designation or assignment.

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ARTICLE III
Representations and Warranties
          Each Borrower, jointly and severally, represents and warrants to the
Lender that:
          SECTION 3.01 Organization; Powers. Each Loan Party and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except as could not
reasonably be expected, individually or in the aggregate, to have Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
          SECTION 3.02 Authorization; Enforceability. The Transactions are
within each Loan Party’s organizational powers and have been duly authorized by
all necessary organizational actions and, if required, actions by equity
holders. The Loan Documents to which each Loan Party is a party have been duly
executed and delivered by such Loan Party and constitute a legal, valid and
binding obligation of such Loan Party, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
          SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except for filings
necessary to perfect Liens created pursuant to the Loan Documents, (b) will not
violate any Requirement of Law applicable to any Loan Party or any of its
Subsidiaries, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Loan Party or any of its
Subsidiaries or the assets of any Loan Party or any of its Subsidiaries, or give
rise to a right thereunder to require any payment to be made by any Loan Party
or any of its Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of any Loan Party or any of its
Subsidiaries, except Liens created pursuant to the Loan Documents.
          SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The
Borrowers have heretofore furnished to the Lender (i) Compressco Partners’
unaudited pro forma consolidated balance sheet as of March 31, 2011, and
unaudited statements of income, partners equity and cash flows as of and for the
portion of the fiscal year ended March 31, 2011 (the “Pro Forma Financials”), in
each case reflecting on a pro-forma basis the transactions described therein,
and (ii) audited combined consolidated balance sheet and statements of income,
shareholders equity and cash flows of Compressco, Inc., and its subsidiaries,
together with certain subsidiaries of TETRA, conducting business in Mexico
(collectively, the “Predecessor”) as of and for the fiscal years 2009 and 2010,
and (iii) unaudited combined consolidated balance sheet and statements of
income, shareholders equity and cash flows of the Predecessor as of and for
fiscal quarter and the portion of the fiscal year ended March 31, 2011
(collectively with the financial statements described in clause (ii), the
“Predecessor Financials”). The Pro Forma Financials present fairly, in all
material respects, the financial position and results of operations and cash
flows of Compressco Partners and its consolidated Subsidiaries as of such dates
and for such periods in accordance with GAAP, assuming that the transactions
described therein had occurred as of the dates specified therein. The
Predecessor Financials present fairly, in all material respects, the financial
position and results of operations and cash flows of Compressco, Inc. and its
consolidated Subsidiaries, respectively, as of such dates and for such periods
in accordance with GAAP, subject to normal year-end audit adjustments (all of
which, when taken as a whole, would not be materially adverse) and the absence
of footnotes.
          (b) Since December 31, 2010, no development or event has occurred that
has had, or could reasonably be expected to have, a Material Adverse Effect.
          SECTION 3.05 Properties. (a) As of the date of this Agreement,
Schedule 3.05 sets forth the address of each parcel of real property that is
owned or leased by each Loan Party. Each of such leases and subleases is valid
and enforceable in accordance with its terms and is in full force and effect,
and no default by any party to any such lease or sublease exists. Each of the
Loan Parties and its Subsidiaries has good and indefeasible

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title to, or valid leasehold or other interests in, all of its real and personal
property, subject only to Permitted Encumbrances, other Liens permitted by
Section 6.02, and any other defects in title that could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
          (b) Each Loan Party and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, except as would not be
expected, individually or in the aggregate, to have a Material Adverse Effect, a
correct and complete list of which, as of the date of this Agreement, is set
forth on Schedule 3.05, and, except as set forth on Schedule 3.05, each Loan
Party’s rights thereto are not subject to any licensing agreement or similar
arrangement. The use thereof by each Loan Party and its Subsidiaries does not
infringe in any material respect upon the rights of any other Person, except as
would not reasonably be expected to have a Material Adverse Effect.
          SECTION 3.06 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Loan Party, threatened
against or affecting any Loan Party or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
          (b) Except for the Disclosed Matters and any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect (i) no Loan Party nor any of its Subsidiaries has
received notice of any claim with respect to any Environmental Liability or
knows of any basis for any Environmental Liability and (ii) no Loan Party nor
any of its Subsidiaries (1) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law or (2) has become subject to any
Environmental Liability.
          (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
          SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and
its Subsidiaries is in compliance with all Requirements of Law applicable to it
or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
          SECTION 3.08 Investment Company Status. No Loan Party nor any of its
Subsidiaries is an “investment company” as defined in the Investment Company Act
of 1940.
          SECTION 3.09 Taxes. Each Loan Party and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being Properly Contested. No tax liens have been
filed (except tax liens that are being Properly Contested) and no material
claims are being asserted with respect to any such taxes.
          SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $1,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $1,000,000 the fair
market value of the assets of all such underfunded Plans.
          SECTION 3.11 Disclosure. None of the reports, financial statements,
certificates or other information (including the S-1 Registration Statement)
furnished by or on behalf of any Loan Party to the Lender in

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connection with the negotiation of this Agreement or any other Loan Document (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to
the Effective Date, as of the Effective Date.
          SECTION 3.12 Material Agreements. All agreements and contracts to
which any Loan Party is a party or is bound as of the date of this Agreement
that are individually material to the business and operations of the Loan
Parties taken as a whole are listed on Schedule 3.12 and all material agreements
and contracts of any Loan Party with Affiliates of any Loan Party (other than
(i) agreements and contracts between or among any one or more Loan Parties only
and not involving any Affiliate that is not a Loan Party and (ii) agreements and
contracts that are entered into in accordance with the terms of the Omnibus
Agreement) as of the date hereof are listed on Schedule 3.12. No Loan Party, or
with respect to the Omnibus Agreement and any material agreement entered into in
accordance with its terms, no Loan Party or Affiliate of such Loan Party party
to any such agreement, is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(i) any material agreement or contract with an Affiliate, including the Omnibus
Agreement and any material agreement or contract entered into in accordance with
the terms of the Omnibus Agreement or (ii) any agreement to which it is a party
that is individually material to the business and operations of the Loan Parties
taken as a whole and, in each case, has or is otherwise required to be filed or
summarized in any filing with the SEC under applicable rules and regulations,
except any default that would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
          SECTION 3.13 Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) no Loan Party will have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after
the Effective Date.
          (b) No Loan Party intends to or believes that it will incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness.
          SECTION 3.14 Insurance. Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as
of the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrowers believe that the insurance maintained by
or on behalf of the Borrowers and their Subsidiaries is adequate.
          SECTION 3.15 Capitalization and Subsidiaries. Schedule 3.15 sets forth
(a) a correct and complete list of the name and relationship to the Borrowers of
each Subsidiary of the Borrowers as of the date hereof, (b) a true and complete
listing of each class of each of the Borrowers’ authorized Equity Interests, of
which all of such issued Equity Interests are validly issued, outstanding, fully
paid and non-assessable as of the date hereof, and (c) the type of entity of
each Borrower and each of its Subsidiaries. All of the issued and outstanding
Equity Interests owned by any Loan Party have been (to the extent such concepts
are relevant with respect to such ownership interests) duly authorized and
issued and are fully paid and non-assessable.
          SECTION 3.16 Security Interest in Collateral. The provisions of the
Security Agreements create legal and valid Liens on all the Collateral described
therein in favor of the Lender, and when financing statements and other filings
are filed in the appropriate offices and other actions specified therein to be
taken are taken with respect thereto, such Liens will constitute perfected and
continuing Liens on such Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party, and having priority over all
other Liens on such

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Collateral subject to (a) Permitted Encumbrances and other Liens permitted by
section 6.02, to the extent any such Permitted Encumbrances or other Liens would
have priority over the Liens in favor of the Lender pursuant to any applicable
law and (b) Liens perfected only by control or possession (including possession
of any certificate of title) to the extent the Lender has not obtained or does
not maintain control or possession of such Collateral.
          SECTION 3.17 Employment Matters. As of the Effective Date, there are
no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary
pending or, to the knowledge of the Borrowers, threatened. Except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, the hours worked by and payments made to employees of the Loan
Parties and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, and all payments due from any Loan Party or any
Subsidiary, or for which any claim may be made against any Loan Party or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Loan Party or such Subsidiary.
          SECTION 3.18 Common Enterprise. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
the credit extended by the Lender to the Borrowers hereunder. Each Loan Party
has determined that execution, delivery, and performance of this Agreement and
any other Loan Documents to be executed by such Loan Party is within its
purpose, in furtherance of its direct and/or indirect business interests, will
be of direct and indirect benefit to such Loan Party, and is in its best
interest.
ARTICLE IV
Conditions
          SECTION 4.01 Effective Date. The obligations of the Lender to make
Loans and to issue Letters of Credit hereunder shall not become effective until
the date on which each of the following conditions is satisfied (or waived in
accordance with Section 8.02):
          (a) Credit Agreement and Loan Documents. The Lender (or its counsel)
shall have received (i) from each party hereto either (A) a counterpart of this
Agreement signed on behalf of such party or (B) written evidence satisfactory to
the Lender (which may include facsimile or other electronic transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as
the Lender shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including a written
opinion of the Loan Parties’ counsel, addressed to the Lender in substantially
the form of Exhibit A.
          (b) Financial Statements and Projections. The Lender shall have
received (i) the Pro Forma Financials, (ii) the Predecessor Financials, and
(iii) satisfactory projections with respect to Compressco Partners for fiscal
years 2011 through 2013.
          (c) Closing Certificates; Certified Certificate of Incorporation; Good
Standing Certificates. The Lender shall have received (i) a certificate of each
Loan Party, dated the Effective Date and executed by its Secretary or Assistant
Secretary, which shall (A) certify the resolutions of its general partner, Board
of Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, (B) identify by name
and title and bear the signatures of the Financial Officers and any other
officers of such Loan Party (or such Loan Party’s general partner) authorized to
sign the Loan Documents to which it is a party, and (C) contain appropriate
attachments, including the certificate or articles of incorporation or
organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, and (ii) a long
form good standing certificate for each Loan Party from its jurisdiction of
organization.
          (d) No Default Certificate. The Lender shall have received a
certificate, signed by a Financial Officer on the initial Borrowing date
(i) stating that no Default has occurred and is continuing, (ii) stating that
the

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representations and warranties contained in Article III are true and correct as
of such date, and (iii) certifying any other factual matters as may be
reasonably requested by the Lender.
          (e) Fees. The Lender shall have received all fees required to be paid,
and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the Effective Date.
All such amounts will be paid with proceeds of Loans made on the Effective Date
and will be reflected in the funding instructions given by the Borrower
Representative to the Lender on or before the Effective Date.
          (f) Lien Searches. The Lender shall have received the results of a
recent lien search in each of the jurisdictions where assets of the Loan Parties
are located, and such search shall reveal no liens on any of the assets of the
Loan Parties except for Liens permitted by Section 6.02 or discharged on or
prior to the Effective Date pursuant to a pay-off letter or other documentation
satisfactory to the Lender.
          (g) Customer List. The Lender shall have received a true and complete
customer list for the Borrowers and their Subsidiaries, which list shall state
the customer’s name, mailing address and phone number.
          (h) Borrowing Base Certificate. The Lender shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of April 30,
2011.
          (i) Closing Availability. After giving effect to all Borrowings to be
made on the Effective Date and the issuance of any Letters of Credit on the
Effective Date and payment of all fees and expenses due hereunder, and with all
of the Loan Parties’ indebtedness, liabilities, and obligations current, the
Availability (calculated without giving effect to the Availability Block) shall
not be less than $19,000,000.
          (j) Transactions. The Transactions shall have been (or
contemporaneously with this Agreement becoming effective will be) consummated in
accordance with the Transaction Documents (other than those described in clause
(g) thereof) and Lender shall have received reasonably acceptable evidence that
upon the consummation of the Transactions (other than those described in clause
(g) thereof) contemplated to occur on the Effective Date, the Borrowers,
collectively, have at least $9,000,000 in cash available for their use for
general corporate purposes.
          (k) Pledged Stock; Stock Powers; Pledged Notes. The Lender shall have
received (i) the certificates representing the shares of Equity Interests
pledged pursuant to the Security Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of the
pledgor thereof and (ii) each promissory note (if any) pledged to the Lender
pursuant to the Security Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof.
          (l) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Collateral
Documents or under law or reasonably requested by the Lender to be filed,
registered or recorded in order to create in favor of the Lender a perfected
Lien on the Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by
Section 6.02), shall be in proper form for filing, registration or recordation.
          (m) Insurance. The Lender shall have received evidence of insurance
coverage in form, scope, and substance reasonably satisfactory to the Lender and
otherwise in compliance with the terms of Section 5.09 and Section 4.12 of the
Security Agreement.
          (n) Letter of Credit Application. The Lender shall have received a
properly completed letter of credit application (whether standalone or pursuant
to a master agreement, as applicable) if the issuance of a Letter of Credit will
be required on the Effective Date.
          (o) Tax Withholding. The Lender shall have received a properly
completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

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          (p) Corporate Structure. The corporate and partnership structure,
capital structure and other material debt instruments, material accounts and
governing documents of the Borrowers and their Affiliates shall be acceptable to
the Lender in its sole discretion.
          (q) Field Examination. The Lender or its designee shall have conducted
a field examination of the Borrowers’ Accounts, Inventory and related working
capital matters and of the Borrowers’ related data processing and other systems,
the results of which shall be satisfactory to the Lender in its sole discretion.
          (r) Legal Due Diligence. The Lender and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Lender in its sole discretion.
          (s) Other Documents. The Lender shall have received such other
documents as the Lender or its counsel may have reasonably requested.
The Lender shall notify the Borrowers of the Effective Date, and such notice
shall be conclusive and binding. Notwithstanding the foregoing, the obligations
of the Lender to make Loans and to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 8.02) at or prior to 2:00 p.m., Dallas, Texas time, on
June 30, 2011 (and, in the event such conditions are not so satisfied or waived,
the Commitment shall terminate at such time).
          SECTION 4.02 Each Credit Event. The obligation of the Lender to make a
Loan on the occasion of any Borrowing, and to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:
          (a) The representations and warranties of the Borrowers set forth in
this Agreement and the other Loan Documents shall be true and correct in all
material respects with the same effect as though made on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date or, if applicable, as of the date of the most recent updated
schedule delivered pursuant to Section 5.01(o), and that any representation or
warranty which is subject to any materiality qualifier shall be required to be
true and correct in all respects).
          (b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
          (c) After giving effect to any Borrowing or the issuance, amendment,
renewal or extension of any Letter of Credit, Availability is not less than
zero.
          (d) If after giving effect to any Borrowing or the issuance,
amendment, renewal or extension of any Letter of Credit, Availability will be
less than $10,000,000, the Lender shall have received a Borrowing Base
Certificate and all other reports and information required to be delivered
pursuant to Section 5.01(g) and (h) as of a date that is no earlier than 30 days
prior to the proposed date of such Borrowing or the proposed date of such
issuance, amendment, renewal or extension of any Letter of Credit.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
ARTICLE V
Affirmative Covenants
          Until the Commitment has expired or terminated and the principal of
and interest on each Loan and

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all fees payable hereunder have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements have been reimbursed,
each Borrower covenants and agrees, jointly and severally with all of the other
Borrowers, with the Lender that:
          SECTION 5.01 Financial Statements; Borrowing Base and Other
Information. The Borrowers will furnish to the Lender:
          (a) within 90 days after the end of each fiscal year of Compressco
Partners, its audited consolidated (and unaudited consolidating) balance sheet
and related statements of operations, partners’ equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by Compressco Partners’
independent public accountants reasonably acceptable to the Lender (without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Compressco Partners and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said accountants;
          (b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Compressco Partners, its consolidated balance
sheet and related statements of operations, stockholders’ equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of the Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of Compressco Partners and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
          (c) to the extent Availability (calculated without giving effect to
the Availability Block) is less than $5,000,000 as of the last day of any fiscal
month, within 20 days after the end of such fiscal month of Compressco Partners,
its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal month
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of the Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of Compressco
Partners and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal quarter-end adjustments and
normal year-end audit adjustments and the absence of footnotes;
          (d) concurrently with any delivery of financial statements under
clause (a), (b) or (c) above, a certificate of a Financial Officer in
substantially the form of Exhibit C (i) certifying, in the case of the financial
statements delivered under clause (b), as presenting fairly in all material
respects the financial condition and results of operations of Compressco
Partners and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes, (ii) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (iii) in the case of the
financials referred to in clause (a) or (b) above, setting forth reasonably
detailed calculations demonstrating compliance with Section 6.12 (if applicable)
and (iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
          (e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
          (f) as soon as available, but in any event no later than the end of,
and no earlier than 60 days prior to the end of, each fiscal year of Compressco
Partners, a copy of the plan and forecast (including a projected

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consolidated balance sheet, income statement and funds flow statement) of the
Borrowers for each month of such fiscal year (the “Projections”) in form
reasonably satisfactory to the Lender;
          (g) as soon as available but in any event (i) so long as Exposure
equals $0 at all times during such calendar quarter, within 30 days after the
end of each calendar quarter, a Borrowing Base Certificate and supporting
information in connection therewith as of the end of such calendar quarter,
(ii) so long as Exposure is greater than $0 at any time during any calendar
month and Availability (calculated without giving effect to the Availability
Block) is greater than $5,000,000 at all times during such calendar month,
within 20 days after the end of each calendar month, a Borrowing Base
Certificate and supporting information in connection therewith as of the end of
such calendar month and (iii) so long as Exposure is greater than $0 at any time
during any calendar week and Availability (calculated without giving effect to
the Availability Block) is less than or equal to $5,000,000 at any time during
such calendar week, within three Business Days after the end of each calendar
week, a Borrowing Base Certificate (limited to a roll-forward of Accounts) as of
the end of such calendar week, in each case, together with any additional
reports with respect to the Borrowing Base as the Lender may reasonably request;
          (h) as soon as available but in any event (i) so long as Exposure
equals $0 at all times during such calendar quarter, within 30 days after the
end of each calendar quarter and (ii) so long as Exposure is greater than $0 at
any time during any calendar month, within 20 days after the end of each
calendar month, delivered electronically in a text formatted file reasonably
acceptable to the Lender, a worksheet of calculations prepared by the Loan
Parties to determine Eligible Accounts, Eligible Inventory, Eligible Service and
Rental Compressor Fleet Equipment and Eligible New Service and Rental Compressor
Fleet Equipment, such worksheets describing (including by category) the
Accounts, Inventory and Service and Rental Compressor Fleet Equipment excluded
from Eligible Accounts, Eligible Inventory, Eligible Service and Rental
Compressor Fleet Equipment and Eligible New Service and Rental Compressor Fleet
Equipment, respectively, and the reason for such exclusion, which, with respect
to such calculations delivered pursuant to clause (i) above, shall be as of the
end of such calendar quarter and, with respect to such calculations delivered
pursuant to clause (ii) above, shall be as of the end of such calendar month;
          (i) as soon as available but in any event within 30 days after the end
of each calendar quarter, as of the end of such quarter, delivered
electronically in a text formatted file reasonably acceptable to the Lender and
certified as true and correct, in all material respects, by a Financial Officer
of the Borrowers:
     (A) a detailed aging of the Loan Parties’ Accounts including all invoices
aged by invoice date and due date (with an explanation of the terms offered)
prepared in a manner reasonably acceptable to the Lender, together with a
summary specifying the name and balance due for each Account Debtor;
     (B) a schedule detailing the Loan Parties’ Inventory, in form reasonably
satisfactory to the Lender, (1) by location (showing Inventory in transit and
any Inventory located with a third party under any consignment, bailee
arrangement, or warehouse agreement), by class (raw material, work-in-process
and finished goods), by product type, and by volume on hand, which Inventory
shall be valued at the lower of cost (determined on an average cost basis) or
market and adjusted for Reserves as the Lender has previously indicated to the
Borrower Representative are deemed by the Lender to be appropriate, and
(2) including a report of any variances or other results of Inventory counts
performed by the Borrowers since the last Inventory schedule (including
information regarding sales or other reductions, additions, returns, credits
issued by Borrowers and complaints and claims made against the Borrowers);
     (C) a schedule detailing the Loan Parties’ Service and Rental Compressor
Fleet Equipment located in the United States or Canada, in form reasonably
satisfactory to the Lender, by location (showing Equipment in transit and any
Equipment located with a third party) and by type (including whether such
Equipment constitutes New Service and Rental Compressor Fleet Equipment) which
Equipment shall be valued at net book value (calculated based on a depreciation
schedule not to exceed 12 years from the date of original purchase by the
relevant Loan Party) or, with respect to New Service and Rental Compressor Fleet
Equipment, at cost or, if no appraisal of

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such Equipment has been delivered to the Lender during the immediately preceding
12 month period, net book value, and adjusted for Reserves as the Lender has
previously indicated to the Borrower Representative are deemed by the Lender to
be appropriate;
     (D) a reconciliation of the Loan Parties’ Accounts, Inventory, Service and
Rental Compressor Fleet Equipment located in the United States and Canada, and
New Service and Rental Compressor Fleet Equipment located in the United States
and Canada between (1) the amounts shown in the Loan Parties’ general ledger and
financial statements and the reports delivered pursuant to clauses (A), (B) and
(C) above, and (2) the amounts and dates shown in the reports delivered pursuant
to clauses (A), (B) and (C) above and the Borrowing Base Certificate delivered
pursuant to clause (g) above as of such date;
     (E) a reconciliation of the loan balance per the Borrowers’ general ledger
to the loan balance under this Agreement;
     (F) a schedule and aging of the Borrowers’ accounts payable;
          (j) as soon as available but in any event within 30 days of the end of
each calendar quarter, as of the quarter then ended, and as may be requested by
the Lender at any time a Default exists, an updated customer list for the
Borrowers and their Subsidiaries, which list shall state the customer’s name,
mailing address and phone number, delivered electronically in a text formatted
file acceptable to the Lender and certified as true and correct, in all material
respects, by a Financial Officer of the Borrowers;
          (k) promptly upon the Lender’s request at any time a Default exists:

  (i)   copies of invoices issued by the Borrowers in connection with any
Accounts, credit memos, shipping and delivery documents, and other information
related thereto;     (ii)   copies of purchase orders, invoices, and shipping
and delivery documents in connection with any Inventory or Equipment purchased
by any Loan Party; and     (iii)   a schedule detailing the balance of all
intercompany accounts of the Loan Parties;

          (l) as soon as reasonably practicable and in any event within 10 days
of filing thereof, copies of all tax returns filed by any Loan Party with the
U.S. Internal Revenue Service;
          (m) within 15 days of the first Business Day of each March and
September, a certificate of good standing for each Loan Party from the
appropriate governmental officer in its jurisdiction of incorporation,
formation, or organization
          (n) reasonably promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by any Borrower or any Subsidiary with the SEC, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by Compressco Partners to the
holders of its Equity Interests generally, as the case may be;
          (o) within 90 days after the end of each fiscal year of Compressco
Partners (or more frequently if desired by the Borrowers), supplements in
writing to the Schedules hereto related to Article III hereof to the extent
necessary to ensure such representations and warranties are true and correct
(without giving effect to any limitation in such representations and warranties
as to date); provided that delivery or receipt of such supplements shall not
constitute a waiver by the Lender or a cure of any Default resulting from or in
connection with the matters disclosed; and

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          (p) reasonably promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of any Borrower or any Subsidiary, or compliance with the terms of this
Agreement, as the Lender may reasonably request.
Documents required to be delivered pursuant to Section 5.01(a), (b) or (n) (to
the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (1) on which Compressco Partners posts such
documents, or provides a link thereto on Compressco Partners’ website on the
Internet; or (2) on which such documents are posted on Compressco Partners’
behalf on an Internet or intranet website, if any, to which the Lender has
access.
          SECTION 5.02 Notices of Material Events. The Borrowers will furnish to
the Lender written notice of the following reasonably promptly after any officer
of the General Partner becomes aware thereof (but in any event within any time
period that may be specified below):
          (a) the occurrence of any Default;
          (b) receipt of any notice of any governmental investigation or any
litigation commenced or threatened against any Loan Party that (i) seeks damages
in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets, (iv) alleges
criminal misconduct by any Loan Party, (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Laws;
(vi) contests any tax, fee, assessment, or other governmental charge in excess
of $500,000, or (vii) involves any product recall;
          (c) any Lien (other than Permitted Encumbrances or Liens permitted by
Section 6.02 which do not have priority over Lender’s Liens) or claim made or
asserted against any of the Collateral for an amount in excess of $1,000,000;
          (d) any one event resulting in any loss, damage, or destruction to the
Collateral in the amount of $1,000,000 or more, whether or not covered by
insurance;
          (e) within two Business Days of receipt thereof, any and all default
notices received under or with respect to any leased location or public
warehouse where Collateral having a value greater than $1,000,000 is located;
          (f) all material amendments to any agreement listed on Schedule 3.12,
together with a copy of each such amendment;
          (g) within two Business Days after the occurrence thereof, any Loan
Party entering into a Swap Agreement or an amendment thereto, together with
copies of all agreements evidencing such Swap Agreement or amendment;
          (h) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrowers and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and
          (i) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
          Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
Representative setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
          SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and
will cause each Subsidiary to, (a) do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and,
except to the extent that the failure to do so would reasonably be expected,
individually or in

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the aggregate, to have a Material Adverse Effect, the rights, qualifications,
licenses, permits, franchises, governmental authorizations, intellectual
property rights, licenses and permits required for to the conduct of its
business, and, except to the extent that the failure to do so would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect, maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03 and (b) carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
constituting Permitted Businesses.
          SECTION 5.04 Payment of Obligations. Each Loan Party will, and will
cause each Subsidiary to, pay or discharge all Material Indebtedness and all
other material liabilities and obligations, including Taxes, before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being Properly Contested; provided, however, each Loan Party will,
and will cause each Subsidiary to, remit withholding taxes and other payroll
taxes to appropriate Governmental Authorities as and when claimed to be due,
notwithstanding the foregoing exceptions.
          SECTION 5.05 Maintenance of Properties. Each Loan Party will, and will
cause each Subsidiary to, keep and maintain all property required for the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
          SECTION 5.06 Books and Records; Inspection Rights. Each Loan Party
will, and will cause each Subsidiary to, (a) keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities and (b) permit any
representatives designated by the Lender (including employees of the Lender, or
any consultants, accountants, lawyers and appraisers retained by the Lender),
upon reasonable prior notice, to visit and inspect its properties, to conduct at
the Loan Party’s premises, field examinations of the Loan Party’s assets,
liabilities, book and records, including examining and making extracts from its
books and records, environmental assessment reports and Phase I or Phase II
studies, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested. The Loan Parties acknowledge that the Lender, after
exercising its rights of inspection, may prepare certain Reports pertaining to
the Loan Parties’ assets for internal use by the Lender.
          SECTION 5.07 Compliance with Laws. Each Loan Party will, and will
cause each Subsidiary to, comply with all Requirements of Law applicable to it
or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
          SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only to provide for working capital and for general
partnership and corporate purposes of the Borrowers and the other Loan Parties,
including (a) the making of Restricted Payments permitted under Section 6.08,
(b) the making of Capital Expenditures permitted hereunder and (c) the making of
Permitted Investments and Permitted Acquisitions in accordance with
Section 6.04; provided that no proceeds of any Loan may be used to make a
Permitted Acquisition of any Person that will not become a Loan Party upon the
consummation of such Acquisition or the assets and properties acquired in such
Acquisition will not be owned or held by a Loan Party upon consummation of such
Acquisition, except as otherwise provided in clause (l) of the definition of
Permitted Acquisition. No part of the proceeds of any Loan and no Letter of
Credit will be used, whether directly or indirectly, (i) for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X or (ii) to make any Acquisition other than Permitted
Acquisitions. Letters of Credit will be issued only to support the general
partnership and corporate purposes of the Borrowers and the other Loan Parties.
          SECTION 5.09 Insurance. Each Loan Party will, and will cause each
Subsidiary to, maintain with financially sound and reputable carriers having a
financial strength rating of at least A- by A.M. Best Company (a) insurance in
such amounts (with no greater risk retention) and against such risks (including
(i) loss or damage by fire and loss in transit; (ii) employee theft, premises
theft, theft in transit, computer fraud, crimes related to funds transfers and
credit card related crimes; (iii) general liability and (iv) and such other
hazards), as is customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or

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similar locations and (b) all insurance required pursuant to the Collateral
Documents. The Borrowers will furnish to the Lender such information in
reasonable detail as is reasonably requested by the Lender as to the insurance
so maintained.
          SECTION 5.10 Casualty and Condemnation. The Borrowers will (a) furnish
to the Lender written notice, reasonably promptly after any officer of the
General Partner becomes aware thereof, of any casualty or other insured damage
to any material portion of the Collateral or the commencement of any action or
proceeding for the taking of any material portion of the Collateral or interest
therein under power of eminent domain or by condemnation or similar proceeding
and (b) ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied
in accordance with the applicable provisions of this Agreement and the
Collateral Documents.
          SECTION 5.11 Appraisals. At any time that the Lender requests, the
Borrowers will, and will cause each Subsidiary to, provide the Lender with
appraisals or updates thereof of their Inventory and Service and Rental
Compressor Fleet Equipment from an appraiser selected and engaged by the Lender,
and prepared on a basis satisfactory to the Lender, such appraisals and updates
to include, without limitation, information required by applicable law and
regulations; provided, however, that if (a) no Event of Default has occurred and
is continuing, one such appraisal per calendar year shall be at the sole expense
of the Borrowers and (b) no Event of Default has occurred and is continuing and
so long as Availability (calculated without giving effect to the Availability
Block) is an amount less than $5,000,000 at any time during any calendar year or
any portion thereof, two such appraisals per calendar year shall be at the sole
expense of the Borrowers. All such appraisals and updates shall be commenced
upon reasonable notice to the Borrower Representative and performed during
normal business hours of the relevant Loan Party, except that at any time an
Event of Default exists, one Business Day shall be deemed reasonable notice.
          SECTION 5.12 Depository Banks. The Borrowers and their Subsidiaries
will maintain Bank of America, N.A. or another financial institution reasonably
acceptable to the Lender as their principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of their business.
          SECTION 5.13 Additional Collateral; Further Assurances. (a) Subject to
applicable law, each Borrower and each Subsidiary that is a Loan Party shall,
unless the Lender otherwise consents, cause each of its Domestic Subsidiaries
formed or acquired after the date of this Agreement in accordance with the terms
of this Agreement to become a Loan Party by executing a Joinder Agreement. Upon
execution and delivery thereof, each such Person (i) shall automatically become
a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents and (ii) will
grant Liens to the Lender in any property of such Loan Party which constitutes
Collateral.
          (b) Each Borrower and each Subsidiary that is a Loan Party will cause
(i) 100% of the issued and outstanding Equity Interests of each of its Domestic
Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in
applicable law after the date hereof, (1) could not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
U.S. federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to
cause any material adverse tax consequences) of the issued and outstanding
Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
in each Foreign Subsidiary directly owned by each Borrower or any Domestic
Subsidiary to be subject at all times to a first priority, perfected Lien in
favor of the Lender pursuant to the terms and conditions of the Loan Documents
or other security documents as the Lender shall reasonably request.
          (c) Without limiting the foregoing, each Loan Party will, and will
cause each Subsidiary to, execute and deliver, or cause to be executed and
delivered, to the Lender such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings and other documents and such
other actions or deliveries of the type required by Section 4.01, as
applicable), which may be required by law or which the Lender may, from time to
time, reasonably request to carry out the terms and conditions of this Agreement
and the other Loan Documents and to ensure perfection and

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priority of the Liens created or intended to be created by the Collateral
Documents, all at the expense of the Loan Parties.
          SECTION 5.14 Post-Effective Date Deliverables. (a) No later than
30 days after the Effective Date (or such later date as the Lender shall
designate in its discretion), the Borrowers shall deliver to the Lender a
“desktop” appraisal of the Loan Parties’ Inventory and of the Loan Parties’
Service and Rental Compressor Fleet Equipment from a firm or firms satisfactory
to the Lender, which appraisal shall be satisfactory to the Lender in its
Permitted Discretion.
          (b) No later than 60 days after the Effective Date (or such later date
as the Lender shall designate in its discretion), the Lender shall have received
each (i) Collateral Access Agreement required to be provided pursuant to
Section 4.13 of the Security Agreement and (ii) Deposit Account Control
Agreement required to be provided pursuant to Section 4.14 of the Security
Agreement.
          (c) No later than 60 days after the Effective Date (or such later date
as the Lender shall designate in its discretion), the Lender shall have received
an agreement, reasonably satisfactory to the Lender, with Compressco GP to
ensure the continued operation of the Borrowers following an Event of Default
for the purpose of collecting, assembling and liquidating the Collateral.
ARTICLE VI
Negative Covenants
          Until the Commitment has expired or terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, each Loan
Party executing this Agreement covenants and agrees, jointly and severally with
all of the other Loan Parties, with the Lender that:
          SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
          (a) the Secured Obligations;
          (b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01;
          (c) intercompany Indebtedness between the Borrowers or between any
Borrower and any Subsidiary or between Subsidiaries to the extent permitted by
Section 6.04(d) or (e), provided that Indebtedness of any Borrower to any
Subsidiary and Indebtedness of any Subsidiary that is a Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Lender;
          (d) Guarantees in respect of Indebtedness otherwise permitted pursuant
to this Section 6.01, provided that Guarantees by any Borrower or any Subsidiary
that is a Loan Party of Indebtedness of any Subsidiary that is not a Loan Party
shall be subject to Section 6.04 and shall be subordinated to the Secured
Obligations of the applicable Subsidiary on the same terms as the Indebtedness
so Guaranteed is subordinated to the Secured Obligations;
          (e) Indebtedness incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including office equipment, data
processing equipment and motor vehicles (whether or not constituting purchase
money Indebtedness), including Capital Lease Obligations (including Capital
Lease Obligations arising from Sale and Leaseback Transactions permitted by
Section 6.06) and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof; provided that (i) such Indebtedness is incurred or assumed prior to or
within 120 days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) at any time outstanding shall not exceed the greater of (i)
$2,500,000 and

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(ii) 25% of the excess of the Borrowing Base (calculated without giving effect
to any Reserves) over the Commitment (the “Excess Borrowing Base”);
          (f) Indebtedness which represents an extension, refinancing,
replacement, or renewal (such Indebtedness being referred to herein as the
“Refinancing Indebtedness”) of any of the Indebtedness described in clauses (b),
(e), (i) and (o) hereof (including any such Indebtedness that has previously
been extended, refinanced, replaced, or renewed pursuant to this clause (f))
(such Indebtedness being so extended, refinanced or renewed being referred to
herein as the “Refinanced Indebtedness”); provided that, (i) such Refinancing
Indebtedness does not increase the principal amount or interest rate of the
Refinanced Indebtedness, (ii) any Liens securing such Refinanced Indebtedness
are not extended to any additional property of any Loan Party, (iii) no Loan
Party that is not originally obligated with respect to repayment of such
Refinanced Indebtedness is required to become obligated with respect to such
Refinancing Indebtedness, (iv) such Refinancing Indebtedness does not result in
a shortening of the average weighted maturity of such Refinanced Indebtedness,
(v) the terms of such Refinancing Indebtedness are not materially less favorable
to the obligor thereunder than the original terms of such Refinanced
Indebtedness and (iv) if such Refinanced Indebtedness was subordinated in right
of payment to the Secured Obligations, then the terms and conditions of such
Refinancing Indebtedness must include subordination terms and conditions that
are at least as favorable to the Lender as those that were applicable to such
Refinanced Indebtedness;
          (g) Indebtedness owed to any Person providing workers’ compensation,
health, disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
          (h) Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations, and Indebtedness in respect of
letters of credit, bank guarantees or similar instruments related thereto, in
each case provided in the ordinary course of business;
          (i) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (ii) the aggregate principal amount
of Indebtedness permitted by this clause (i) at any time outstanding shall not
exceed the greater of (i) $2,500,000 and (ii) 25% of the Excess Borrowing Base;
          (j) Indebtedness under Swap Agreements permitted under Section 6.07;
          (k) subject to Section 5.12, cash management obligations and other
Indebtedness in respect of netting services, overdraft protections and similar
arrangements in each case in the ordinary course of business;
          (l) Indebtedness consisting of the financing of insurance premiums in
the ordinary course of business;
          (m) Indebtedness supported by a Letter of Credit, in a principal
amount not to exceed the face amount of such Letter of Credit;
          (n) Indebtedness of any Subsidiary that is not a Loan Party; provided
that, except as otherwise permitted by clause (d) of this Section 6.01, only
Subsidiaries that are not Loan Parties are obligated to pay such Indebtedness or
grant Liens on their Property to secure the obligations under such Indebtedness;
          (o) other secured Indebtedness not otherwise listed in clauses
(a) through (n) above, at any time outstanding in an aggregate principal amount
not exceeding $5,000,000; provided that such Indebtedness is not secured by any
Collateral;
          (p) other unsecured Indebtedness not otherwise listed in clauses
(a) through (n) above at any time outstanding in an aggregate principal amount
not exceeding $10,000,000, but subject to the limitations set forth in clause
(d) of this Section 6.01 with respect to Subsidiaries that are not Loan Parties.

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          SECTION 6.02 Liens. No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including, except as permitted in Section 6.05(c), accounts
receivable) or rights in respect of any thereof, except:
          (a) Liens created pursuant to any Loan Document;
          (b) Permitted Encumbrances;
          (c) any Lien on any property or asset of any Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (i) such Lien shall not apply to any other property or asset of such
Borrower or Subsidiary (other than proceeds of such property or asset and
accessions and additions to the original property to the extent subject to such
Lien) and (ii) such Lien shall secure only those obligations which it secures on
the date hereof (other than extensions, refinancings, replacements, or renewals
thereof permitted pursuant to Section 6.01(f));
          (d) Liens on fixed or capital assets acquired, leased, constructed or
improved by any Borrower or any Subsidiary (other than Service and Rental
Compressor Fleet Equipment or any other Collateral constituting fixed or capital
assets); provided that (i) such Liens secure Indebtedness permitted by clause
(e) of Section 6.01 or an extension, refinancing, replacement, or renewal
thereof permitted pursuant to Section 6.01(f), (ii) such Liens and the
Indebtedness secured thereby are incurred prior to or within 120 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed the cost of acquiring, constructing
or improving such fixed or capital assets and (iv) such security interests shall
not apply to any other property or assets of such Borrower or Subsidiary or any
other Borrower or such Subsidiary (other than proceeds of such fixed or capital
assets and accessions and additions to the original property to the extent
subject to such Lien);
          (e) any Lien existing on any property or asset (other than Accounts
and Inventory) prior to the acquisition thereof by any Borrower or any
Subsidiary or existing on any property or asset (other than Accounts and
Inventory) of any Person that becomes a Loan Party after the date hereof prior
to the time such Person becomes a Loan Party; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the Loan Party (other than proceeds of such
property or asset and accessions and additions to the original property to the
extent subject to such Lien)and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be and extensions, refinancings,
replacements, or renewals thereof permitted pursuant to Section 6.01(f) ;
          (f) Liens of a collecting bank arising in the ordinary course of
business under Section 4-208 of the Uniform Commercial Code in effect in the
relevant jurisdiction covering only the items being collected upon;
          (g) Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06;
          (h) Liens granted by a Subsidiary that is not a Loan Party in favor of
any Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;
          (i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business;
          (j) Liens on deposits or other cash advances to or for the benefit of
a seller of property in a transaction permitted pursuant to Section 6.04 to be
applied against the purchase price for such property
          (k) Liens consisting of an agreement to transfer any property (other
than with respect to a transfer pursuant to Section 6.05(f)) in a disposition
permitted under Section 6.05;
          (l) Liens in favor of a Loan Party securing Indebtedness permitted
under Section 6.01 granted by a Subsidiary that is not a Loan Party;

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          (m) Liens arising out of conditional sale, title retention,
consignment (subject to Section 4.13 of the Security Agreement) or similar
arrangements for sale of goods entered into in the ordinary course of business
or Liens arising by operation of law under Article 2 of the UCC or by contract
in favor of a reclaiming seller of goods or buyer of goods (including purchase
money security interests in favor of vendors in the ordinary course of
business); and
          (n) Liens securing insurance premium financing under customary terms
and conditions in respect of insurance policies, provided that no such Lien may
extend to or cover any property other than the insurance being acquired with
such financing, the proceeds thereof and any unearned or refunded insurance
premiums related thereto;
          (o) Liens deemed to exist in connection with Investments in repurchase
agreements constituting Permitted Investments;
          (p) Liens on property of any Subsidiary that is not a Loan Party
acquired in a Permitted Acquisition or granted on Property of such Subsidiary in
connection with a Permitted Acquisition of such Subsidiary; and
          (q) Liens on property not constituting the Collateral and not
otherwise permitted by this Section so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair market value (determined as of the date such Lien is incurred) of
the assets subject thereto exceeds (as to the Borrowers and all Subsidiaries)
$5,000,000 at any one time.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clause (a) above and clause (k) above only with respect to a disposition
permitted under Section 6.05(c), and (2) Inventory, other than those permitted
under clauses (a) and (b) of the definition of Permitted Encumbrance and clauses
(a), (k), and (m) above, if such Inventory would be Eligible Inventory but for
such Lien.
          SECTION 6.03 Fundamental Changes. (a) No Loan Party will, nor will it
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default shall have occurred and be continuing (i) any
Loan Party (other than a Borrower) or any Subsidiary that is not a Loan Party
may merge into any other Loan Party in a transaction in which the surviving
entity is a Loan Party; (ii) any Subsidiary that is not a Loan Party may merge
with any other Subsidiary that is not a Loan Party; (iii) any Subsidiary may
liquidate or dissolve if the Borrower which owns such Subsidiary determines in
good faith that such liquidation or dissolution is in the best interests of such
Borrower and is not materially disadvantageous to the Lender; (iv) any Borrower
(other than Compresso Partners) may merge with any other Borrower or any other
Loan Party so long as the surviving entity is a wholly owned Subsidiary and such
surviving entity assumes all of such Borrower’s obligations and liabilities
hereunder and under the other Loan Documents by operation of law or contract;
(v) any Person may merge into a Loan Party in connection with a Permitted
Acquisition; and (vi) any Investment permitted by Section 6.04(d) may be
structured as a merger, consolidation or amalgamation; provided that any merger
referred to in clause (i), (ii), (iv), (v) or (vi) involving a Person that is
not a wholly owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.04.
          (b) No Loan Party will, nor will it permit any Subsidiary to, engage
to any material extent in any business other than Permitted Businesses.
          SECTION 6.04 Investments, Loans, Advances, Guarantees and
Acquisitions. No Loan Party will, nor will it permit any Subsidiary to, form any
subsidiary after the Effective Date, make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Equity Interests, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, any Person (all of the foregoing,
“Investments”) except:

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          (a) Investments in cash and Permitted Investments subject to control
agreements in favor of the Lender or otherwise subject to a perfected security
interest in favor of the Lender;
          (b) Investments in existence on the date of hereof and described in
Schedule 6.04;
          (c) so long as no Default has occurred and is continuing, Permitted
Acquisitions;
          (d) so long as no Event of Default has occurred and is continuing,
Investments by the Borrowers and their Subsidiaries in Equity Interests in their
respective Subsidiaries, provided that (A) any such Equity Interests held by a
Loan Party shall be pledged pursuant to the Security Agreement (subject to the
limitations applicable to Equity Interests of a Foreign Subsidiary referred to
in Section 5.13) and (B) in the case of any Investment made by any Loan Party in
or to any Subsidiary that is not a Loan Party (other than Investments made in
Equity Interests of such Subsidiary with the proceeds of a substantially
contemporaneous issuance of Equity Interests of Compressco Partners), (i) such
Investments in the aggregate, taken together with Investments permitted by
clause (B)(i) of Section 6.04(e), do not exceed $2,500,000 at any time
outstanding or (ii) on the date of and after giving effect to such Investment
the Borrowing Base exceeds the Commitment by an amount not less than 80% of the
Commitment;
          (e) so long as no Event of Default has occurred and is continuing,
loans or advances made by any Borrower to any Subsidiary and made by any
Subsidiary to any Borrower or any other Subsidiary, provided that (A) any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Security Agreement and (B) in the case of any loan or
advance made by a Loan Party to a Subsidiary that is not a Loan Party (other
than any loan or advance made to such Subsidiary with the proceeds of a
substantially contemporaneous issuance of Equity Interests of Compressco
Partners), (i) such Investments in the aggregate, taken together with
Investments permitted by clause (B)(i) of Section 6.04(d), do not exceed
$2,500,000 at any time outstanding or (ii) on the date of and after giving
effect to such loan or advance, the Borrowing Base exceeds the Commitment by an
amount not less than 80% of the Commitment;
          (f) Guarantees constituting Indebtedness permitted by Section 6.01,
provided that in the case of Guarantees by any Loan Party of Indebtedness of
Subsidiaries that are not Loan Parties the aggregate amount of Indebtedness
guaranteed shall not exceed $2,500,000 at any time outstanding (in each case
determined without regard to any write-downs or write-offs);
          (g) loans or advances made by a Loan Party to its employees on an
arms-length basis in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $100,000 in the aggregate at any one time
outstanding;
          (h) subject to Sections 4.2(a) and 4.4 of the Security Agreement,
notes payable, or stock or other securities issued by Account Debtors to a Loan
Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor’s Accounts in the ordinary course of business;
          (i) Investments in the form of Swap Agreements permitted by
Section 6.07;
          (j) Investments of any Person existing at the time such Person becomes
a Subsidiary of a Borrower or consolidates or merges with a Borrower or any of
the Subsidiaries (including in connection with a Permitted Acquisition) so long
as such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;
          (k) Investments received in connection with the dispositions of assets
permitted by Section 6.05;
          (l) Investments constituting deposits described in clauses (c) and
(d) of the definition of the term “Permitted Encumbrances”;

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          (m) accounts receivable or notes receivable arising, and trade credit
granted, in the ordinary course of business and other credits to suppliers or
vendors in the ordinary course of business;
          (n) Investments (including debt obligations and Equity Interests) and
other assets received in connection with the bankruptcy or reorganization of
suppliers and customers or in settlement or delinquent obligations of, or other
disputes with, customers and suppliers arising in the ordinary course of
business or received upon the foreclosure with respect to any secured investment
or other transfer of title with respect to any secured investment; and
          (o) other Investments at any time outstanding not to exceed
$2,500,000.
          SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will any Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to another Borrower or another Subsidiary in compliance with Section 6.04),
except:
          (a) sales, transfers, leases, and dispositions of (i) inventory and
Service and Rental Compressor Fleet Equipment in the ordinary course of
business, (ii) used, obsolete, worn out or surplus equipment or property, or
(iii) property no longer used or useful in connection with the business or
operations of the Loan Parties;
          (b) sales, transfers, leases, and dispositions of assets (including
sales, transfers, and dispositions of Equity Interests) to any Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with
Section 6.09;
          (c) sales, transfers, and dispositions of accounts receivable in
connection with the compromise, settlement or collection thereof;
          (d) sales, transfers, and dispositions of Permitted Investments and
other investments permitted by clauses (i) and (k) of Section 6.04;
          (e) Sale and Leaseback Transactions permitted by Section 6.06;
          (f) dispositions resulting from any casualty or other insured damage
to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Borrower or any Subsidiary;
          (g) sales, transfers, leases, and other dispositions of assets (other
than Accounts (except as permitted in clause (c) above) or Equity Interests in a
Subsidiary unless all Equity Interests owned by the Loan Parties in such
Subsidiary are sold) that are not permitted by any other paragraph of this
Section, provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this paragraph (g) shall
not exceed $2,500,000 during any fiscal year of the Borrowers;
          (h) leases, subleases, licenses and sublicenses in each case in the
ordinary course of business and that do not materially interfere with the
business of the Borrowers or the Subsidiaries.
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clauses (b) and (f) above) shall be made
for fair value.
          SECTION 6.06 Sale and Leaseback Transactions. No Loan Party will, nor
will it permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred (a “Sale and Leaseback Transaction”), except for any such Sale and
Leaseback Transaction with respect to any fixed or capital assets by any
Borrower or any Subsidiary that is made for cash consideration in an

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amount not less than the fair value of such fixed or capital asset and is
consummated within 90 days after such Borrower or such Subsidiary acquires or
completes the construction of such fixed or capital asset.
          SECTION 6.07 Swap Agreements. No Loan Party will, nor will it permit
any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which any Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of any
Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of any Borrower or
any Subsidiary.
          SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.
(a) No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except (i) each
Borrower may declare and pay dividends with respect to its Equity Interests
solely in additional shares of its Equity Interests, (ii) Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests (other
than Disqualified Stock), (iii) so long no Event of Default has occurred and is
continuing, the Borrowers may pay dividends or make distributions to the holders
of their Equity Interests in an aggregate amount not greater than the amount
necessary for such holders to pay their actual state and United States federal
income tax liabilities in respect of income earned by the Borrowers, (iv) the
Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity
Interests issued by it with the proceeds received from the substantially
concurrent issue of new Equity Interests and (v) so long as no Default exists,
Compressco Partners may declare and make Permitted Partnership Distributions.
          (b) No Loan Party will, nor will it permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property but excluding Permitted
Partnership Distributions) of or in respect of principal of or interest on any
Indebtedness, or any payment or other distribution (whether in cash, securities
or other property but excluding Permitted Partnership Distributions), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:

  (i)   payment of Indebtedness created under the Loan Documents;     (ii)  
payment of regularly scheduled interest and principal payments as and when due
in respect of any Indebtedness, other than payments in respect of the
Subordinated Indebtedness prohibited by the subordination provisions thereof;  
  (iii)   refinancings of Indebtedness to the extent permitted by Section 6.01;
    (iv)   payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
and     (v)   so long as after giving effect to such payment Availability is
greater than $10,000,000 and no Default shall exist or be caused thereby, any
other payment or distribution of or in respect of any Indebtedness, including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness.

          SECTION 6.09 Transactions with Affiliates. No Loan Party will, nor
will it permit any Subsidiary to, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to such Loan
Party or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties; provided that, so long as no Event of Default exists,
any sale, lease or like-kind exchange of PES Equipment among Loan Parties and
their Affiliates (other than transactions described in clause (b)) shall be
deemed to satisfy the requirements of this clause (a)(ii) if such sale, lease,
or exchange is for consideration that is equivalent to the amount determined,
pursuant to a transfer pricing analysis prepared by a consultant that is not an
Affiliate, to be the

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consideration that can be charged in such transaction consistent with the
transfer pricing laws, rules, and regulations applicable to such transaction, so
long as, (x) with respect to any sale or like-kind exchange, the consideration
(A) attributed to any newly fabricated PES Equipment is equal to or greater than
the Fabricated Cost thereof and (B) attributed to any other PES Equipment is
equal to or greater than the Net Book Value thereof, and (y) with respect to any
PES Equipment that is being leased, the lease consideration is calculated by the
consultant based on such PES Equipment having a value that is not less than the
amount for which such PES Equipment could be transferred pursuant to the
preceding clause (A) or (B), as applicable, if the transaction were a sale
rather than a lease, (b) transactions between or among any one or more Loan
Parties not involving any other Affiliate, (c) any Lien permitted by
Section 6.02(h), any transaction permitted by Section 6.03 other than a
Permitted Acquisition, and any Investment permitted by Sections 6.04(d),
6.04(e), (d) any Indebtedness permitted under Section 6.01(c), (e) any
Restricted Payment permitted by Section 6.08, including Permitted Partnership
Distributions, (f) loans or advances to employees permitted under
Section 6.04(g), (g) the payment of reasonable fees and expenses to directors of
any Borrower or any Subsidiary who are not employees of such Borrower or
Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of the
Borrowers or their Subsidiaries in the ordinary course of business, (h) any
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by a Borrower’s board of directors,
(i) the Omnibus Agreement, the Contribution Agreement and the limited
partnership agreement of Compressco Partners as in effect on the Effective Date
and the transactions contemplated thereby, (j) any issuance (but not any
redemption or purchase) by Compressco Partners of its units (including incentive
distribution units) to the Compressco GP, and (k) any transactions approved by
the Conflicts Committee.
          SECTION 6.10 Restrictive Agreements. No Loan Party will, nor will it
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets
to secure the Secured Obligations, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any Equity Interests or to make
or repay loans or advances to any Borrower or any other Subsidiary or to
Guarantee Indebtedness of any Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.10 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof or customary provisions in contracts
restricting the assignment thereof, (vi) the foregoing shall not apply to any
agreement or other instrument of a Person acquired in a Permitted Acquisition or
other Investment permitted by Section 6.04 in existence at the time of such
Permitted Acquisition or other Investment (but not created in connection
therewith or in contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person so acquired, (vii) the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (viii) customary non-assignment provisions in purchase and sale or
exchange agreements or similar operational agreements or in licenses, easements
or leases, in each case entered into in the ordinary course of business and
consistent with past practices, to the extent such provisions restrict the
transfer or assignment thereof, (ix) with respect to the sales, leases,
transfers or other dispositions of property in joint venture agreements and
other similar agreements entered into in the ordinary course of business, to the
extent that the Investment in such joint venture is permitted hereby, and
(x) restrictions on cash or other deposits required by utility, insurance,
surety or bonding companies, in each case, under contracts entered into in the
ordinary course of business.
          SECTION 6.11 Amendment of Certain Agreements. No Loan Party will, nor
will it permit any Subsidiary to, amend, modify or waive any of its rights under
(a) any agreement relating to any Subordinated

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Indebtedness, (b) its certificate of incorporation, by laws, operating,
management or partnership agreement or other organizational documents or (c) any
other agreement listed on Schedule 3.12 hereto (including any material agreement
entered into in accordance with the Omnibus Agreement), to the extent any such
amendment, modification or waiver (i) would materially and adversely affect the
ability of any Loan Party to operate its business in the ordinary course or the
rights of the Lender under the Loan Documents, or (ii) could reasonably be
expected to have a Material Adverse Effect.
          SECTION 6.12 Interest Coverage Ratio. The Borrowers will not permit
the Interest Coverage Ratio, determined for the twelve (12) month period ending
on each Relevant Date, to be less than 2.5 to 1.0 as of any Relevant Date.
“Relevant Date” means each of (i) the last day of the fiscal quarter ending
immediately preceding any date on which Availability (calculated without giving
effect to the Availability Block) is less than $5,000,000 and (ii) the last day
of each fiscal quarter from and after any date on which Availability (without
giving effect to the Availability Block) is less than $5,000,000 until
Availability (without giving effect to the Availability Block) has been greater
than $5,000,000 for a period of 90 consecutive days and there is no Default that
has occurred and is continuing.
ARTICLE VII
Events of Default
          If any of the following events (“Events of Default”) shall occur:
          (a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
          (b) the Borrowers shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
          (c) any representation or warranty made or deemed made by or on behalf
of any Loan Party or any Subsidiary in this Agreement or any other Loan Document
or any amendment or modification hereof or thereof or waiver hereunder or
thereunder, or in any report, certificate, or other document furnished pursuant
to or in connection with this Agreement or any other Loan Document or any
amendment or modification hereof or thereof or waiver hereunder or thereunder,
shall prove to have been materially incorrect when made or deemed made;
          (d) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a), 5.03 (with respect to a
Loan Party’s existence), 5.08 or 5.14 or in Article VI;
          (e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those which
constitute a default under another Section of this Article), and such failure
shall continue unremedied for a period of (i) 10 days after the earlier of any
Loan Party’s knowledge of such breach or notice thereof from the Lender if such
breach relates to terms or provisions of Section 5.01, 5.02 (other than
Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10 or 5.12 of this Agreement or
(ii) 30 days after the earlier of any Loan Party’s knowledge of such breach or
notice thereof from the Lender if such breach relates to terms or provisions of
any other provision of any Loan Document;
          (f) any Loan Party or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable (taking
into account any grace period);
          (g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof,

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prior to its scheduled maturity; provided that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness or the termination
of a Swap Agreement other than as a result of an event of default by a Loan
Party thereunder;
          (h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of a Loan Party or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Loan
Party or any Subsidiary of any Loan Party or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
          (i) any Loan Party shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for such Loan Party or Subsidiary of any Loan Party or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, or (v) make a general assignment for
the benefit of creditors;
          (j) any Loan Party shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;
          (k) (i) one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against any Loan Party, any
Subsidiary of any Loan Party or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any
Subsidiary of any Loan Party to enforce any such judgment; or (ii) any Loan
Party or any Subsidiary of any Loan Party shall fail within 30 days to discharge
one or more non-monetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which
judgments or orders, in any such case, are not stayed on appeal or otherwise
being Properly Contested;
          (l) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
          (m) a Change in Control shall occur;
          (n) the occurrence of any “default”, as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided;
          (o) the occurrence of any default under the Omnibus Agreement which
default could reasonably be expected to have a Material Adverse Effect or the
termination of the Omnibus Agreement for any reason, unless, prior to such
termination, arrangements reasonably satisfactory to the Lender have been made
for the services then being provided under the Omnibus Agreement and necessary
for the continued operation of the Loan Parties and their related businesses in
the ordinary course to continue to be provided (including by third parties or by
the personnel of the Loan Parties) after such termination;
          (p) the Loan Guaranty shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to
comply with any of the terms or provisions of the Loan Guaranty to which it is a
party, or any Loan Guarantor shall deny that it has any further liability under
the Loan Guaranty to which it is a party, or shall give notice to such effect;

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          (q) any Collateral Document shall for any reason fail to create a
valid security interest in any Collateral purported to be covered thereby, other
than as expressly permitted or contemplated by such Collateral Document or any
other Loan Agreement, or (ii) any Lien securing any Secured Obligation shall
cease to be a perfected, first priority Lien, subject only to Permitted
Encumbrances and Liens permitted by Section 6.02 that have priority as a matter
of law;
          (r) any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document; or
          (s) any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any Loan
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);
then, and in every such event (other than an event with respect to the Borrowers
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower
Representative, take either or both of the following actions, at the same or
different times: (i) terminate the Commitment, whereupon the Commitment shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and in case of any event with respect to the
Borrowers described in clause (h) or (i) of this Article, the Commitment shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers. Upon the occurrence and the continuance of an
Event of Default, the Lender may increase the rate of interest applicable to the
Loans and other Obligations as set forth in this Agreement and exercise any
rights and remedies provided to the Lender under the Loan Documents or at law or
equity, including all remedies provided under the UCC.
ARTICLE VIII
Miscellaneous
          SECTION 8.01 Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:

  (i)   if to any Loan Party, to the Borrower Representative at:        
Compressco Partners, L.P.
101 Park Avenue, Suite 1200
Oklahoma City, Oklahoma 73102
Attention: President
Facsimile No: (405) 702-9904         With a copy to:         TETRA Technologies,
Inc.
24955 Interstate 45 North
The Woodlands, Texas 77380
Attn: Mr. Bruce Cobb

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      Facsimile No: (281) 364-2270     (ii)   if to the Lender, to JPMorgan
Chase Bank, N.A. at:       2200 Ross Avenue, Floor 9
Mailcode TX1-2921
Dallas, Texas 75201
Attention: Portfolio Manager
Facsimile No: (214) 965-2594

          All such notices and other communications (i) sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received or (ii) sent by facsimile shall be
deemed to have been given when sent, provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient.
          (b) Notices and other communications to the Lender hereunder may be
delivered or furnished by electronic communications (including e-mail and
internet or intranet websites) pursuant to procedures approved by the Lender;
provided that the foregoing shall not apply to notices pursuant to Article II or
to compliance and no Event of Default certificates delivered pursuant to
Section 5.01(d) unless otherwise agreed by the Lender. The Lender or the
Borrower Representative (on behalf of the Loan Parties) may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. All such
notices and other communications (i) sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if not given
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (b)(i) of
notification that such notice or communication is available and identifying the
website address therefor.
          (c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.
          SECTION 8.02 Waivers; Amendments. (a) No failure or delay by the
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Lender hereunder and under any other Loan Document are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Lender may have had notice or knowledge of
such Default at the time.
          (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Lender, or (ii) in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
the Lender and the Loan Party or Loan Parties that are parties thereto.
          SECTION 8.03 Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay (i) all reasonable out-of-pocket expenses incurred by the Lender and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Lender (whether outside counsel or the allocated costs of its
internal legal department), in connection with the credit facilities provided
for herein, the preparation and administration of the

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Loan Documents or any amendments, modifications or waivers of the provisions of
the Loan Documents (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Lender in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Lender, including the fees,
charges and disbursements of any counsel for the Lender (whether outside counsel
or the allocated costs of its internal legal department), in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Borrowers under this Section include, without limiting the
generality of the foregoing, costs and expenses incurred in connection with:

  (i)   appraisals and insurance reviews;     (ii)   field examinations and the
preparation of Reports based on the fees charged by a third party retained by
the Lender or the internally allocated fees for each Person employed by the
Lender with respect to each field examination (currently charged at a rate of
$125 per hour per examiner plus out of pocket expenses); provided, that, unless
a Default shall have occurred and be continuing, the Borrowers will reimburse
such costs and expenses for up to two such field examinations per calendar year;
    (iii)   background checks regarding senior management and/or key investors,
as deemed necessary or appropriate in the sole discretion of the Lender;    
(iv)   taxes, fees and other charges for (A) lien and title searches and title
insurance (if applicable) and (B) filing financing statements and continuations,
and other actions to perfect, protect, and continue the Lender’s Liens;     (v)
  sums paid or incurred to take any action required of any Loan Party under the
Loan Documents that such Loan Party fails to pay or take;     (vi)   forwarding
loan proceeds, and, to the extent applicable, collecting checks and other items
of payment, and establishing and maintaining accounts and lock boxes costs; and
    (vii)   expenses of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrowers as Loans
or to another deposit account, all as described in Section 2.17(c).
          (b) The Borrowers shall, jointly and severally, indemnify the Lender,
and each Related Party of the Lender (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, penalties, incremental taxes, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of the Loan
Documents or any agreement or instrument contemplated thereby, the performance
by the parties hereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by any Borrower or any of their Subsidiaries, or any
Environmental Liability related in any way to any Borrower or any of their
Subsidiaries, (iv) the failure of the Borrowers to deliver to the Lender the
required receipts or other required documentary evidence with respect to a
payment made by the Borrowers for Taxes pursuant to Section 2.16, or (v) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be

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available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.WITHOUT LIMITATION OF THE
FOREGOING, IT IS THE INTENTION OF THE BORROWERS AND THE BORROWERS AGREE THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES,
CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT
LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY
OTHER) INDEMNITEE.This Section 8.03(b) shall not apply with respect to Taxes
other than any Taxes that represent losses or damages arising from any non-Tax
claim.
          (c) The relationship between any Loan Party on the one hand and the
Lender on the other hand shall be solely that of debtor and creditor. The Lender
(i) shall not have any fiduciary responsibilities to any Loan Party or (ii) does
not undertake any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party’s business or
operations. To the extent permitted by applicable law, no Loan Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
          (d) All amounts due under this Section shall be payable upon written
demand therefor.
          SECTION 8.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrowers may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrowers without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Lender) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
          (b) The Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that, except in
the case of an assignment to an Affiliate of the Lender or an Approved Fund that
in each case is organized under the laws of the United States or a state thereof
or the District of Columbia, the Borrowers must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld but which
may be conditioned on (i) in the case of an assignment that would result in
there being more than one Lender, amendments to the Loan Documents reasonably
satisfactory to the Borrower Representative to conform to customary agented
syndicated transactions, including providing for an administrative agent
reasonably satisfactory to the Borrower Representative to represent the Lenders,
and (ii) in the case of an assignment to a Person not organized under the laws
of the United State thereof or the District of Columbia, amendments to this
Agreement reasonably satisfactory to the Borrower Representative to incorporate
customary provisions relating to foreign lender, including provisions relating
to withholding tax payments and maintaining and evidencing exemptions
therefrom); and provided further that any consent of the Borrowers otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to notification of an assignment, the
assignee shall be a party hereto and, to the extent of the interest assigned,
have the rights and obligations of the Lender under this Agreement, and the
Lender shall, to the extent of the interest assigned, be released from its
obligations under this Agreement (and, in the case of an assignment covering all
of the Lender’s rights and obligations under this Agreement, the Lender shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 8.03). The Borrowers hereby agree to execute any
amendment and/or any other document that may be necessary to effectuate such an
assignment, including an amendment to this Agreement to provide for multiple
lenders and an administrative agent to act on behalf of such lenders. Any
assignment or transfer by the Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by the Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

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     For the purposes of this Section 8.04(b), the term “Approved Fund” has the
following meaning:
          “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) the Lender, (b) an Affiliate of the Lender or
(c) an entity or an Affiliate of an entity that administers or manages the
Lender.
          (c) The Lender may, without the consent of the Borrowers, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of the Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers shall
continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations under this Agreement. Subject to paragraph
(d) of this Section, the Borrowers agree that each Participant shall be entitled
to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were
the Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section; provided that such Participant (A) agrees to be subject to
the provisions of Sections 2.17 and 2.18 as if it were an assignee under
paragraph (b) of this Section; and (B) shall not be entitled to receive any
greater payment under Section 2.14 or 2.16, with respect to any participation,
than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation.
          To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 8.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.17(c) as though it were a
Lender.
          (d) The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
the Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Lender, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party
hereto.
          SECTION 8.05 Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Lender, the Lender or any Lender
may have had notice or knowledge of any Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitment has not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitment or the termination of this Agreement or any
provision hereof.
          SECTION 8.06 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Lender constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Lender and when the Lender shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile or other electronic

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transmission shall be effective as delivery of a manually executed counterpart
of this Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
          SECTION 8.07 Severability. Any provision of any Loan Document held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
          SECTION 8.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, the Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by the Lender or such Affiliate to or for the credit or the account of the
Borrowers or any Loan Guarantor against any of and all the Secured Obligations
held by the Lender, irrespective of whether or not the Lender shall have made
any demand under the Loan Documents and although such obligations may be
unmatured. The rights of the Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which the Lender may
have.
          SECTION 8.09 Governing Law; Jurisdiction; Consent to Service of
Process. (a) The Loan Documents (other than those containing a contrary express
choice of law provision) shall be governed by and construed in accordance with
the internal laws (and not the law of conflicts) of the State of Texas, but
giving effect to federal laws applicable to national banks.
          (a) Each Loan Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any U.S.
Federal or Texas State court sitting in Dallas, Texas in any action or
proceeding arising out of or relating to any Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such Texas State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.
          (b) Each Loan Party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (a) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
          (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
          SECTION 8.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT,

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IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
          SECTION 8.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
          SECTION 8.12 Confidentiality. The Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by Requirement of Law or by any subpoena
or similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrower Representative or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Lender on a non-confidential basis
from a source other than the Borrowers. For the purposes of this Section,
“Information” means all information received from the Borrowers relating to the
Borrowers or their business, other than any such information that is available
to the Lender on a non-confidential basis prior to disclosure by the Borrowers;
provided that, in the case of information received from the Borrowers after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
          SECTION 8.13 Nonreliance; Violation of Law. The Lender hereby
represents that it is not relying on or looking to any margin stock for the
repayment of the Borrowings provided for herein. Anything contained in this
Agreement to the contrary notwithstanding, the Lender shall not be obligated to
extend credit to the Borrowers in violation of any Requirement of Law.
          SECTION 8.14 USA PATRIOT Act. The Lender is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) and hereby notifies the Borrowers that
pursuant to the requirements of the Act, it is required to obtain, verify and
record information that identifies the Borrowers, which information includes the
names and addresses of the Borrowers and other information that will allow such
Lender to identify the Borrowers in accordance with the Act.
          SECTION 8.15 Disclosure. Each Loan Party hereby acknowledges and
agrees that the Lender and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with any of the
Loan Parties and their respective Affiliates.
          SECTION 8.16 Interest Rate Limitation.
          (a) It is the intention of the parties hereto to conform strictly to
usury laws applicable to such parties. Accordingly, if the transactions
contemplated hereby would be usurious under applicable law then, in that event,
notwithstanding anything to the contrary contained in this Agreement or in any
other agreement entered into in connection with this Agreement, it is agreed as
follows: the aggregate of all consideration that constitutes interest under law
applicable to each party hereto that is contracted for, taken, reserved, charged
or received under this Agreement or under any of the other aforesaid agreements
or otherwise in connection with this Agreement shall under no circumstances
exceed the maximum amount allowed by such applicable law (such maximum amount

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herein after referred to as the “Maximum Rate”), and any such excess shall be
credited by the party receiving such interest on other amounts payable to such
party hereunder, with any remaining portion of such excess interest being
refunded to the party paying such excess interest. All sums paid or agreed to be
paid to any party hereto for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term over which such amounts
are payable so that the rate or amount of interest on account of any extensions
of credit evidenced hereby does not exceed any applicable usury limit.
          (b) Notwithstanding anything to the contrary herein or elsewhere, if
at any time the rate of interest contracted for, taken, reserve charged or
received hereunder or under any Loan Document (the “Stated Rate”) would exceed
the Maximum Rate, then for so long as the Maximum Rate would be so exceeded, the
rate of interest so contracted for, taken, reserved, charged or received shall
be equal to the Maximum Rate; provided, that if at any time thereafter the
Stated Rate is less than the Maximum Rate, the Borrowers shall, to the extent
permitted by law, continue to pay interest at the Maximum Rate until such time
as the total interest received is equal to the total interest which would have
been received had the Stated Rate been (but for the operation of this provision)
the interest rate payable. Thereafter, the interest rate payable shall be the
Stated Rate unless and until the Stated Rate again would exceed the Maximum
Rate, in which event this provision shall again apply.
          SECTION 8.17 Releases of Guarantees and Liens.
          (a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, at such time as the Loans and the other obligations
under the Loan Documents (other than contingent indemnification obligations and
obligations under or in respect of Swap Agreements and Bank Services
Obligations) shall have been irrevocably paid in full, the Commitment has been
terminated and no Letters of Credit shall be outstanding (other than Letters of
Credit that have been cash collateralized or otherwise backstopped in a manner
satisfactory to the Lender), the Collateral shall be released from the Liens
created by the Loan Documents, and the Collateral Documents and all obligations
(other than those expressly stated to survive such termination) of each Loan
Party under the Collateral Documents shall terminate, all without delivery of
any instrument or performance of any act by any Person; and
          (b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Borrower or any Subsidiary in a transaction not prohibited by
this Agreement, then the Lender, at the request and sole expense of any Borrower
or any Subsidiary, shall execute and deliver to such Borrower or such Subsidiary
at the Borrowers’ sole expense all releases or other documents reasonably
necessary or desirable for the release of the Liens created by the Collateral
Documents on such Collateral. At the request and sole expense of any Borrower, a
Loan Party shall be released from its obligations hereunder and under the other
Loan Documents in the event that all the Equity Interests of such Loan Party
shall be disposed of in a transaction not prohibited by this Agreement; provided
that, unless otherwise waived by the Administrative Agent, the Borrower
Representative shall have delivered to the Administrative Agent, at least five
(5) Business Days prior to the date of the proposed release, a written request
for release identifying the relevant Loan Party and the terms of the disposition
in reasonable detail, together with a certification by the Borrower
Representative stating that such transaction is in compliance with this
Agreement and the other Loan Documents.
          SECTION 8.18 Limitation of Liability. Compressco GP, as general
partner of Compressco Partners, shall not be liable for the obligations of any
Loan Party under this Agreement or any other Loan Document, including, without
limitation, by reason of any payment obligation imposed by governing state
partnership statutes and any provision of the applicable limited partnership
agreement of Compressco Partners or any other Loan Party that requires
Compressco GP to restore a capital account deficit; provided that nothing in
this Section 8.18 shall be construed so as to prevent the Lender from commencing
any action, suit or proceeding with respect to or causing legal papers to be
served upon Compressco GP for the purpose of (a) obtaining jurisdiction over
Compressco Partners or (b) obtaining any judgment, order or execution against
Compressco GP arising out of any fraud or intentional misrepresentation by
Compressco GP in connection with the Loan Documents or in order to recover
moneys received by Compressco GP in violation of the terms of this Agreement.

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ARTICLE IX
Loan Guaranty
          SECTION 9.01 Guaranty. Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and absolutely and unconditionally guarantees to the Lender the
prompt payment when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, of the Secured Obligations and all costs
and expenses including, without limitation, all court costs and attorneys’ and
paralegals’ fees (including allocated costs of in-house counsel and paralegals)
and expenses paid or incurred by the Lender in endeavoring to collect all or any
part of the Secured Obligations from, or in prosecuting any action against, any
Borrower, any Loan Guarantor or any other guarantor of all or any part of the
Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed in
whole or in part without notice to or further assent from it, and that it
remains bound upon its guarantee notwithstanding any such extension or renewal.
All terms of this Loan Guaranty apply to and may be enforced by or on behalf of
any domestic or foreign branch or Affiliate of any Lender that extended any
portion of the Guaranteed Obligations.
          SECTION 9.02 Guaranty of Payment. This Loan Guaranty is a guaranty of
payment and not of collection. Each Loan Guarantor waives any right to require
the Lender to sue any Borrower, any Loan Guarantor, any other guarantor, or any
other Person obligated for all or any part of the Guaranteed Obligations (each,
an “Obligated Party”), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.
          SECTION 9.03 No Discharge or Diminishment of Loan Guaranty. (a) Except
as otherwise provided for herein, the obligations of each Loan Guarantor
hereunder are unconditional and absolute and not subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of any Borrower or any other Obligated Party liable for any of the
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or
(iv) the existence of any claim, setoff or other rights which any Loan Guarantor
may have at any time against any Obligated Party, Lender, or any other person,
whether in connection herewith or in any unrelated transactions.
          (b) The obligations of each Loan Guarantor hereunder are not subject
to any defense or setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.
          (c) Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Lender
to assert any claim or demand or to enforce any remedy with respect to all or
any part of the Guaranteed Obligations; (ii) any waiver or modification of or
supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or
direct security for the obligations of any Borrower for all or any part of the
Guaranteed Obligations or any obligations of any other Obligated Party liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the
Lender with respect to any collateral securing any part of the Guaranteed
Obligations; or (v) any default, failure or delay, willful or otherwise, in the
payment or performance of any of the Guaranteed Obligations, or any other
circumstance, act, omission or delay that might in any manner or to any extent
vary the risk of such Loan Guarantor or that would otherwise operate as a
discharge of any Loan Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of the Guaranteed Obligations).
          SECTION 9.04 Defenses Waived. To the fullest extent permitted by
applicable law, each Loan Guarantor hereby waives any defense based on or
arising out of any defense of any Borrower or any Loan

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Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of
any Borrower or any Loan Guarantor, other than the indefeasible payment in full
in cash of the Guaranteed Obligations. Without limiting the generality of the
foregoing, each Loan Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against any Obligated Party, or any other Person.
Each Loan Guarantor confirms that it is not a surety under any state law and
shall not raise any such law as a defense to its obligations hereunder. The
Lender may, at its election, foreclose on any Collateral held by it by one or
more judicial or nonjudicial sales, accept an assignment of any such Collateral
in lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with
any Obligated Party or exercise any other right or remedy available to it
against any Obligated Party, without affecting or impairing in any way the
liability of such Loan Guarantor under this Loan Guaranty except to the extent
the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the
fullest extent permitted by applicable law, each Loan Guarantor waives any
defense arising out of any such election even though that election may operate,
pursuant to applicable law, to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of any Loan Guarantor against any
Obligated Party or any security.
          SECTION 9.05 Rights of Subrogation. No Loan Guarantor will assert any
right, claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification that it has against any Obligated
Party, or any collateral, until the Loan Parties and the Loan Guarantors have
fully performed all their obligations to the Lender.
          SECTION 9.06 Reinstatement; Stay of Acceleration. If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or otherwise, each Loan Guarantor’s obligations
under this Loan Guaranty with respect to that payment shall be reinstated at
such time as though the payment had not been made and whether or not the Lender
is in possession of this Loan Guaranty. If acceleration of the time for payment
of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy
or reorganization of any Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Lender.
          SECTION 9.07 Information. Each Loan Guarantor assumes all
responsibility for being and keeping itself informed of the Borrowers’ financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and
agrees that the Lender shall not have any duty to advise any Loan Guarantor of
information known to it regarding those circumstances or risks.
          SECTION 9.08 Termination. The Lender may continue to make loans or
extend credit to the Borrowers based on this Loan Guaranty until five days after
it receives written notice of termination from any Loan Guarantor.
Notwithstanding receipt of any such notice, each Loan Guarantor will continue to
be liable to the Lender for any Guaranteed Obligations created, assumed or
committed to prior to the fifth day after receipt of the notice, and all
subsequent renewals, extensions, modifications and amendments with respect to,
or substitutions for, all or any part of that Guaranteed Obligations.
          SECTION 9.09 Taxes. Each payment of the Guaranteed Obligations will be
made by each Loan Guarantor without withholding for any Taxes, unless such
withholding is required by law. If any Loan Guarantor determines, in its sole
discretion exercised in good faith, that it is so required to withhold Taxes,
then such Loan Guarantor may so withhold and shall timely pay the full amount of
withheld Taxes to the relevant Governmental Authority in accordance with
applicable law. If such Taxes are Indemnified Taxes, then the amount payable by
such Loan Guarantor shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section), the Lender receives the amount it would have received had
no such withholding been made.
          SECTION 9.10 Maximum Liability. The provisions of this Loan Guaranty
are severable, and in any action or proceeding involving any state corporate
law, or any state, federal or foreign bankruptcy, insolvency,

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reorganization or other law affecting the rights of creditors generally, if the
obligations of any Loan Guarantor under this Loan Guaranty would otherwise be
held or determined to be avoidable, invalid or unenforceable on account of the
amount of such Loan Guarantor’s liability under this Loan Guaranty, then,
notwithstanding any other provision of this Loan Guaranty to the contrary, the
amount of such liability shall, without any further action by the Loan
Guarantors or the Lender, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Loan Guarantor’s
“Maximum Liability”). This Section with respect to the Maximum Liability of each
Loan Guarantor is intended solely to preserve the rights of the Lender to the
maximum extent not subject to avoidance under applicable law, and no Loan
Guarantor nor any other Person shall have any right or claim under this Section
with respect to such Maximum Liability, except to the extent necessary so that
the obligations of any Loan Guarantor hereunder shall not be rendered voidable
under applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations
may at any time and from time to time exceed the Maximum Liability of each Loan
Guarantor without impairing this Loan Guaranty or affecting the rights and
remedies of the Lender hereunder, provided that, nothing in this sentence shall
be construed to increase any Loan Guarantor’s obligations hereunder beyond its
Maximum Liability.
          SECTION 9.11 Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such
payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article IX, each Non-Paying Guarantor’s “Applicable Percentage”
with respect to any such payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has
not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Loan Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received
by such Loan Guarantors from the Borrowers after the date hereof (whether by
loan, capital infusion or by other means). Nothing in this provision shall
affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of
the Loan Guarantors covenants and agrees that its right to receive any
contribution under this Loan Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations. This provision is for the benefit of the Lender and the
Loan Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.
          SECTION 9.12 Liability Cumulative. The liability of each Loan Party as
a Loan Guarantor under this Article IX is in addition to and shall be cumulative
with all liabilities of each Loan Party to the Lender under this Agreement and
the other Loan Documents to which such Loan Party is a party or in respect of
any obligations or liabilities of the other Loan Parties, without any limitation
as to amount, unless the instrument or agreement evidencing or creating such
other liability specifically provides to the contrary.
ARTICLE X
The Borrower Representative
          SECTION 10.01 Appointment; Nature of Relationship. Compressco Partners
is hereby appointed by each of the Borrowers as its contractual representative
(herein referred to as the “Borrower Representative”) hereunder and under each
other Loan Document, and each of the Borrowers irrevocably authorizes the
Borrower Representative to act as the contractual representative of such
Borrower with the rights and duties expressly set forth herein and in the other
Loan Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Additionally, the Borrowers hereby appoint the Borrower Representative as their
agent to receive all of the proceeds of the Loans, at which time the Borrower

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Representative shall promptly disburse such Loans to the appropriate Borrower,
provided that, in the case of a Loan, such amount shall not exceed such
Borrower’s Availability. The Lender and its respective officers, directors,
agents or employees, shall not be liable to the Borrower Representative or any
Borrower for any action taken or omitted to be taken by the Borrower
Representative or the Borrowers pursuant to this Section 10.01.
          SECTION 10.02 Powers. The Borrower Representative shall have and may
exercise such powers under the Loan Documents as are specifically delegated to
the Borrower Representative by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Borrower Representative shall
have no implied duties to the Borrowers, or any obligation to the Lender to take
any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Borrower Representative.
          SECTION 10.03 Employment of Agents. The Borrower Representative may
execute any of its duties as the Borrower Representative hereunder and under any
other Loan Document by or through authorized officers.
          SECTION 10.04 Notices. Each Borrower shall immediately notify the
Borrower Representative of the occurrence of any Default or Event of Default
hereunder referring to this Agreement describing such Default or Event of
Default and stating that such notice is a “notice of default.” In the event that
the Borrower Representative receives such a notice, the Borrower Representative
shall give prompt notice thereof to the Lender. Any notice provided to the
Borrower Representative hereunder shall constitute notice to each Borrower on
the date received by the Borrower Representative.
          SECTION 10.05 Successor Borrower Representative. Upon the prior
written consent of the Lender, the Borrower Representative may resign at any
time, such resignation to be effective upon the appointment of a successor
Borrower Representative.
          SECTION 10.06 Execution of Loan Documents; Borrowing Base Certificate.
The Borrowers hereby empower and authorize the Borrower Representative, on
behalf of the Borrowers, to execute and deliver to the Lender the Loan Documents
and all related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Loan Documents, including
without limitation, the Borrowing Base Certificates and the Compliance
Certificates. Each Borrower agrees that any action taken by the Borrower
Representative or the Borrowers in accordance with the terms of this Agreement
or the other Loan Documents, and the exercise by the Borrower Representative of
its powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Borrowers.
          SECTION 10.07 Reporting. Each Borrower hereby agrees that such
Borrower shall furnish promptly after each fiscal month to the Borrower
Representative a copy of its Borrowing Base Certificate and any other
certificate or report required hereunder or requested by the Borrower
Representative on which the Borrower Representative shall rely to prepare the
Borrowing Base Certificates and Compliance Certificates required pursuant to the
provisions of this Agreement.
[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

            BORROWERS:

COMPRESSCO PARTNERS, L.P.
      By:   Compressco Partners GP Inc., its general partner             By:  
/s/ Gary A. McBride         Name:   Gary A. McBride        Title:   Chief
Financial Officer, Treasurer and Secretary        COMPRESSCO PARTNERS OPERATING,
LLC
      By:   Compressco Partners, L.P., its sole member             By:  
Compressco Partners GP Inc., its general partner             By:   /s/ Gary A.
McBride         Name:   Gary A. McBride        Title:   Chief Financial Officer,
Treasurer and Secretary        COMPRESSCO PARTNERS SUB, INC.
      By:   /s/ Gary A. McBride       Name:   Gary A. McBride        Title:  
Chief Financial Officer, Treasurer and Secretary        LOAN PARTIES:

COMPRESSCO HOLDINGS, LLC
      By:   Compressco Partners Operating, LLC, its sole member           By:  
Compressco Partners, L.P., its sole member             By:   Compressco Partners
GP Inc., its general partner             By:   /s/ Gary A. McBride        
Name:   Gary A. McBride        Title:   Chief Financial Officer, Treasurer and
Secretary     

- Signature Page to Credit Agreement -

 

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            COMPRESSCO LEASING, LLC
      By:   Compressco Partners Operating, LLC, its sole member           By:  
Compressco Partners, L.P., its sole member             By:   Compressco Partners
GP Inc., its general partner             By:   /s/ Gary A. McBride        
Name:   Gary A. McBride        Title:   Chief Financial Officer, Treasurer and
Secretary        COMPRESSCO FIELD SERVICES INTERNATIONAL, LLC
      By:   Compressco Partners Operating, LLC, its sole member           By:  
Compressco Partners, L.P., its sole member             By:   Compressco Partners
GP Inc., its general partner             By:   /s/ Gary A. McBride        
Name:   Gary A. McBride        Title:   Chief Financial Officer, Treasurer and
Secretary        COMPRESSCO INTERNATIONAL, LLC
      By:   Compressco Partners Operating, LLC, its sole member           By:  
Compressco Partners, L.P., its sole member             By:   Compressco Partners
GP Inc., its general partner             By:   /s/ Gary A. McBride        
Name:   Gary A. McBride        Title:   Chief Financial Officer, Treasurer and
Secretary     

- Signature Page to Credit Agreement -

 

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            JPMORGAN CHASE BANK, N.A.
      By:   /s/ J. Devin Mock       Name:   J. Devin Mock        Title:   Vice
President     

- Signature Page to Credit Agreement -