Exhibit


Exhibit 10.4


Execution Version
    
THIRD AMENDMENT TO MLP CREDIT AGREEMENT
THIS THIRD Amendment to MLP Credit Agreement (this “Amendment”) dated as of December 11, 2015 (the “Third Amendment Effective Date”) is among: PennTex Midstream Partners, LP, a Delaware limited partnership (the “Borrower”), Royal Bank of Canada as administrative agent (together with its successors and assigns in such capacity, the “Administrative Agent”), and the undersigned Lenders constituting the Required Lenders (as such terms are defined in the Credit Agreement referred to below).  Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings assigned to such terms in the Credit Agreement, as amended hereby.  
R E C I T A L S
A.The Borrower, the Administrative Agent and the Lenders are parties to that certain MLP Credit Agreement dated as of December 19, 2014, as amended by (i) that certain First Amendment to MLP Credit Agreement dated as of May 6, 2015 and (ii) that certain Second Amendment to MLP Credit Agreement dated as of October 23, 2015 (as further amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).


B.Pursuant to the Credit Agreement, the Lenders have made Loans to the Borrower and provided certain other credit accommodations to the Borrower.


C.The Borrower has requested that the Credit Agreement be amended to, among other things, (i) increase the maximum Consolidated Total Leverage Ratio that is permitted in the event that the Borrower and/or any of its Subsidiaries incur any Material Notes Indebtedness, (ii) make certain changes to the calculation of Annualized Consolidated EBITDA, Annualized Consolidated Interest Expense, Annualized Unadjusted Consolidated EBITDA, Consolidated Interest Coverage Ratio, Consolidated Senior Secured Leverage Ratio, and Consolidated Total Leverage Ratio, (iii) make certain changes to the definition of Rolling Period, (iv) increase certain baskets permitting Investments in Unrestricted Subsidiaries and Restricted Joint Ventures and (v) modify the borrowing conditions in Section 6.02 of the Credit Agreement, in each case as more particularly set forth herein.


A G R E E M E N T
In consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
Section 1.Amendments.  In reliance on the representations, warranties, covenants and agreements contained in this Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, the Credit Agreement shall be amended effective as of the Third Amendment Effective Date in the manner provided in this Section 1.


1.01    Amendment to Definition of “Annualized Consolidated EBITDA”.  Section 1.01 of the Credit Agreement shall be amended by deleting the reference to the date “March 31, 2016” appearing in the introductory clause of the definition of the term “Annualized Consolidated EBITDA” and replacing it with a reference to the date “June 30, 2016”.


1.02    Restatement of Definition of “Annualized Consolidated Interest Expense”.  Section 1.01 of the Credit Agreement shall be amended by amending and restating the definition of the term “Annualized Consolidated Interest Expense” set forth in such section to read in full as follows:

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“Annualized Consolidated Interest Expense” means: (a) with respect to the Rolling Period ending on June 30, 2015, the product of (x) Consolidated Interest Expense for such Rolling Period, multiplied by (y) 12; (b) with respect to the Rolling Period ending on September 30, 2015, the product of (x) Consolidated Interest Expense for such Rolling Period, multiplied by (y) 4; (c) with respect to the Rolling Period ending on December 31, 2015, the product of (x) Consolidated Interest Expense for such Rolling Period, multiplied by (y) 4; (d) with respect to the Rolling Period ending on March 31, 2016, the product of (x) Consolidated Interest Expense for such Rolling Period, multiplied by (y) 2; and (e) with respect to the Rolling Period ending on June 30, 2016, the product of (x) Consolidated Interest Expense for such Rolling Period, multiplied by (y) 4/3.
1.03    Restatement of Definition of “Annualized Unadjusted Consolidated EBITDA”.  Section 1.01 of the Credit Agreement shall be amended by amending and restating the definition of the term “Annualized Unadjusted Consolidated EBITDA” set forth in such section to read in full as follows:


“Annualized Unadjusted Consolidated EBITDA” means:
(a)    with respect to the Rolling Period ending on June 30, 2015, the product of (x) Unadjusted Consolidated EBITDA for such Rolling Period, multiplied by (y) 12;
(b)    with respect to the Rolling Period ending on September 30, 2015, the product of (x) Unadjusted Consolidated EBITDA for such Rolling Period, multiplied by (y) 4;
(c)    with respect to the Rolling Period ending on December 31, 2015, the product of (x) Unadjusted Consolidated EBITDA for such Rolling Period, multiplied by (y) 4; 
(d)    with respect to the Rolling Period ending on March 31, 2016, the product of (x) Unadjusted Consolidated EBITDA for such Rolling Period, multiplied by (y) 2; and
(e)    with respect to the Rolling Period ending on June 30, 2016, the product of (x) Unadjusted Consolidated EBITDA for such Rolling Period, multiplied by (y) 4/3.  
1.04    Amendment to Definition of “Consolidated Interest Coverage Ratio”.  Section 1.01 of the Credit Agreement shall be amended by deleting each reference to the date “March 31, 2016” appearing in the definition of the term “Consolidated Interest Coverage Ratio” and replacing each such reference with a reference to the date “June 30, 2016”.


1.05    Amendment to Definition of “Consolidated Senior Secured Leverage Ratio”.  Section 1.01 of the Credit Agreement shall be amended by deleting the reference to the defined term “March 2016 Delivery Date” appearing in the definition of the term “Consolidated Senior Secured Leverage Ratio” and replacing it with a reference to the date “June 30, 2016”.'

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1.05    Amendment to Definition of “Consolidated Total Leverage Ratio”.  Section 1.01 of the Credit Agreement shall be amended by deleting the reference to the defined term “March 2016 Delivery Date” appearing in the definition of the term “Consolidated Total Leverage Ratio” and replacing it with a reference to the date “June 30, 2016”.


1.06    Restatement of Definition of “Rolling Period”.  Section 1.01 of the Credit Agreement shall be amended by amending and restating the definition of the term “Rolling Period” set forth in such section to read in full as follows:
“Rolling Period” means, with respect to any fiscal quarter:
(a)    for the fiscal quarter ending on June 30, 2015, the calendar month of June, 2015;
(b)    for the fiscal quarter ending on September 30, 2015, the one fiscal quarter period ending on September 30, 2015;
(c)    for the fiscal quarter ending on December 31, 2015, the one fiscal quarter period ending on December 31, 2015;
(d)    for the fiscal quarter ending on March 31, 2016, the period of two fiscal quarters ending on March 31, 2016; 
(e)    for the fiscal quarter ending on June 30, 2016, the period of three fiscal quarters ending on June 30, 2016; and
(f)    for each fiscal quarter thereafter, the period of four fiscal quarters ending on the last day of such fiscal quarter.
1.08    Amendment to Definition of “September 2015 Delivery Date”.  Section 1.01 of the Credit Agreement shall be amended by changing the date “June 30, 2015” appearing in the definition of the term “September 2015 Delivery Date” to the date “September 30, 2015”.


1.09    Deletion of Definition of “March 2016 Delivery Date”.  Section 1.01 of the Credit Agreement shall be amended by deleting the definition of the term “March 2016 Delivery Date” from such section in its entirety.


1.10    Amendment to Borrowing Conditions.  Section 6.02 of the Credit Agreement shall be amended by deleting clause (e) of such section in its entirety. For the avoidance of doubt, the paragraph immediately following clause (e) of Section 6.02 beginning with the phrase “Each request for a Borrowing” shall not be deleted.


1.11    Amendment to Consolidated Total Leverage Covenant. Section 9.01(c)(i)(C) of the Credit Agreement shall be amended by increasing the ratio appearing immediately prior to the first semi-colon in such section from “5.00 to 1.00” to “5.25 to 1.00”.


1.12    Amendment to Investments in Unrestricted Subsidiaries. Section 9.05(k)(v) of the Credit Agreement shall be amended and restated in its entirety to read in full as follows:


(v)    the amount of all Investments under this clause (k) shall not exceed $50,000,000 in the aggregate at any time;

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1.13    Amendment to Investments in Restricted Joint Ventures. Section 9.05(l)(v) of the Credit Agreement shall be amended and restated in its entirety to read in full as follows:
(v)    the amount of all Investments under this clause (l) shall not exceed $50,000,000 in the aggregate at any time; and
Section 2.Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of each of the following conditions precedent:


2.01    Counterparts; Related Amendment.  The Administrative Agent shall have received counterparts of this Amendment duly executed by the Borrower and Lenders constituting the Required Lenders, counterparts of the attached consent and acknowledgment duly executed by each Guarantor, and a fully executed copy of a corresponding amendment to the PennTex Development Credit Facility, each in form and substance satisfactory to the Administrative Agent.


2.02    Amendment Fees.  The Administrative Agent and the Lenders shall have received all fees due and payable on or prior to the Third Amendment Effective Date under this Amendment or the Credit Agreement, including an amendment fee payable to each of the undersigned consenting Lenders executing this Amendment on or prior to the Third Amendment Effective Date (the “Consenting Lenders”) in an amount equal to 0.10% of such Consenting Lender’s outstanding Commitment (whether or not funded) as of the Third Amendment Effective Date.


2.03    No Material Litigation.  No material litigation, arbitration or similar proceeding shall be pending or threatened in writing that (a) calls into question the validity or enforceability of this Amendment, the Credit Agreement, the other Loan Documents or the transactions contemplated hereby or (b) has had, or could reasonably be expected to have, a Material Adverse Effect.


2.04    Representations and Warranties.  The representations and warranties set forth in Section 3 of this Amendment shall be true and correct as of the Third Amendment Effective Date.


2.05    Other Documents.  The Administrative Agent shall have received such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.


Section 3.Representations and Warranties.  To induce the Lenders and the Administrative Agent to enter into this Amendment, the Borrower and, by its execution of the attached consent and acknowledgment, each Guarantor hereby represent and warrant to the Lenders and the Administrative Agent as follows:


3.01    Reaffirmation of Existing Representations and Warranties.  After giving effect to this Amendment, each representation and warranty contained in the Credit Agreement and the other Loan Documents is true and correct in all material respects on the date hereof, except (a) to the extent any such representations and warranties are expressly limited to an earlier date, in which case such representations and warranties continue to be true and correct in all material respects as of such date and (b) to the extent that any such representation or warranty is qualified by “material” or “Material Adverse Effect” references therein, such representation or warranty is true and correct in all respects on the date hereof.


3.02    Due Authorization; No Conflict.  The execution, delivery and performance of this Amendment, and the performance of the Credit Agreement as amended hereby, (a) are within the Borrower’s limited partnership powers, have been duly authorized by all necessary general and limited partner action and, if required, equity owner action (including any action required to be taken by the General Partner or any class of directors, managers or equity holders of the General Partner, the Borrower or any other Person, whether interested or disinterested) in order to ensure the due authorization of this Amendment and the transactions contemplated hereby, (b) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including any class of directors, managers or equity holders of the General Partner, the Borrower or any other Person, 

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whether interested or disinterested,), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of this Amendment or the consummation of the transactions contemplated hereby, except such as have been obtained or made and are in full force and effect and other than those third party approvals or consents that, if not made or obtained, would not cause a Default, could not reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the enforceability of the Loan Documents, (c) will not violate any applicable Governmental Requirement or any Organization Documents of the General Partner, the Borrower or any other Loan Party, or any order of any Governmental Authority, (d) will not violate or result in a default under any indenture or other agreement regarding Indebtedness of the Borrower or any other Loan Party or give rise to a right thereunder to require any payment to be made by the Borrower or such Loan Party, (e) will not violate or result in a default under any Material Contract, or give rise to a right thereunder to require any payment to be made by the Borrower or such Loan Party, and (f) will not result in the creation or imposition of any Lien on any Property of the Borrower or any other Loan Party (other than the Liens created by the Loan Documents).


3.03    Validity and Enforceability.  The Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, subject to applicable Debtor Relief Laws 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.


3.04    No Default.  No Default has occurred that is continuing.


3.05    No Defense.  The Borrower acknowledges that no Loan Party has any defense to (a) Borrower’s obligations to pay the Secured Obligations when due or (b) the validity, enforceability or binding effect against any Loan Party of the Credit Agreement or any of the other Loan Document to which it is a party or any Liens intended to be created thereby.


3.06    No Material Adverse Change.  As of the Third Amendment Effective Date, no Material Adverse Change has occurred since December 31, 2014.


Section 4.Miscellaneous.


4.01    No Implied Consent or Waiver.  This Amendment shall not be construed as a consent to the departure from or a waiver of the terms and conditions of the Credit Agreement, except as expressly set forth herein.


4.02    Reaffirmation of Loan Documents.  Any and all of the terms and provisions of the Credit Agreement and the Loan Documents shall, except as amended and modified hereby, remain in full force and effect and are ratified and confirmed.  The amendments contemplated hereby shall not limit or impair any Liens securing the Secured Obligations, each of which are hereby ratified, affirmed and extended to secure the Secured Obligations.


4.03    Parties in Interest.  All of the terms and provisions of this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.


4.04    Legal Expenses.  The Borrower hereby agrees to pay on demand all reasonable fees and expenses of counsel to the Administrative Agent incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and all related documents.


        

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4.05    Counterparts.  This Amendment 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.  Images of signatures transmitted by facsimile or other electronic transmission (e.g. .pdf) shall be effective as originals.


4.06    Integration.  THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO 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.


4.07    Headings.  The headings, captions and arrangements used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.


4.08    Governing Law.  THIS Amendment SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
4.09    Loan Document.  The parties hereto agree that this Amendment shall constitute a Loan Document under and as defined in the Credit Agreement.




[Signature Pages Follow]







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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers on the date and year first above written.


BORROWER:


PENNTEX MIDSTREAM PARTNERS, LP


By:    PennTex Midstream GP, LLC,
its general partner




By:    /s/ Steven R. Jones
Name:    Steven R. Jones
Title:    Chief Financial Officer




    





Third Amendment to MLP Credit Agreement






Each of the undersigned (i) consents and agrees to this Amendment, and (ii) agrees that the Loan Documents to which it is a party (including, without limitation, the Guaranty and Collateral Agreement) shall remain in full force and effect and shall continue to be the legal, valid and binding obligation of the undersigned, enforceable against it in accordance with its terms.
CONSENTED, ACKNOWLEDGED AND AGREED TO BY:


GUARANTORS:




PENNTEX MIDSTREAM OPERATING, LLC
By: PennTex Midstream Partners, LP, its sole member
By: PennTex Midstream GP, LLC, its general partner
By:    /s/ Steven R. Jones
Name:    Steven R. Jones
Title:    Chief Financial Officer






PENNTEX NORTH LOUISIANA, LLC
By:    /s/ Steven R. Jones
Name:    Steven R. Jones
Title:    Chief Financial Officer






PENNTEX NORTH LOUISIANA OPERATING 3, LLC 
By:    /s/ Steven R. Jones
Name:    Steven R. Jones
Title:    Chief Financial Officer









Third Amendment to MLP Credit Agreement






ADMINISTRATIVE AGENT:
ROYAL BANK OF CANADA, 
as Administrative Agent




By:    /s/ Ann Hurley
Name:  Ann Hurley
Title:    Manager, Agency


ISSUING BANK AND LENDER:
ROYAL BANK OF CANADA,
as Issuing Bank and Lender




By:    /s/ Caleb Allen
Name:    Caleb Allen
Title:    Authorized Signatory


LENDER:
WELLS FARGO BANK, N.A.
By:    /s/ William Aldridge
Name:    William Aldridge
Title:    Vice President


LENDER:
BARCLAYS BANK PLC
By:    /s/ May Huang
Name:    May Huang
Title:    Assistant Vice President


LENDER:
CITIBANK, NATIONAL ASSOCIATION
By:    /s/ Eamon Baqui
Name:    Eamon Baqui
Title:    Vice President





Third Amendment to MLP Credit Agreement






LENDER:
SUNTRUST BANK
By:    /s/ Shannon Juhan
Name:    Shannon Juhan
Title:    Director


LENDER:
JPMORGAN CHASE BANK, N.A.
By:    /s/ Anson Williams
Name:    Anson Williams
Title:    Authorized Signatory


LENDER:
DEUTSCHE BANK AG NEW YORK BRANCH
By:    /s/ Chris Chapman
Name:    Chris Chapman
Title:    Director


By:    /s/ Shai Bandner
Name:    Shai Bandner
Title:    Vice President


LENDER:
CAPITAL ONE, NATIONAL ASSOCIATION
By:    /s/ Chris Kuna
Name:    Chris Kuna
Title:    Vice President


LENDER:
AMEGY BANK, NATIONAL ASSOCIATION
By:    /s/ Sam Trail
Name:    Sam Trail
Title:    Vice President


LENDER:
COMERICA BANK
By:    /s/ Jeff Treadway
Name:    Jeff Treadway
Title:    Senior Vice President



Third Amendment to MLP Credit Agreement






LENDER:
COMPASS BANK
By:    /s Les Werme
Name:    Les Werme
Title:    Director


LENDER:
CADENCE BANK, N.A.
By:    /s/ William W. Brown
Name:    William W. Brown
Title:    Senior Vice President
    
LENDER:
WHITNEY BANK
By:    /s/ Parker U. Mears
Name:    Parker U. Mears
Title:    Vice President



Third Amendment to MLP Credit Agreement