Document:

exv10w1

Exhibit 10.1

 

 

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

 

 

 

 

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	 

i 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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	 

ii 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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	 

iii 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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

iv 

 

          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.

 

 

          “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

2

 

(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

3

 

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.

4

 

          “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;

5

 

          (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

6

 

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.

7

 

          “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;

8

 

          (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

9

 

          (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

10

 

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

11

 

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.

12

 

          “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

13

 

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

14

 

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

15

 

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.

16

 

          “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:

17

 

          (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:

18

 

          (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

19

 

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

20

 

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.

21

 

          “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

36

 

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

37

 

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

39

 

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

40

 

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

41

 

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

42

 

          (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

43

 

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;

55

 

          (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

66

 

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]

67

 

          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 -

 

 

	 	 	 	 	 
	 	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 -

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/
J. Devin Mock	 
	 	 	Name:  	J. Devin Mock 	 
	 	 	Title:  	Vice President 	 
	 

- Signature Page to Credit Agreement -exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of June 28, 2011, between AMICUS
THERAPEUTICS, INC., a Delaware corporation having an office at 6 Cedar Brook Drive, Cranbury, New
Jersey 08512 (the “Company”), and JOHN F. CROWLEY, an individual residing at 15 Leonard Court,
Princeton, NJ 08540 (“Employee”).

PREAMBLE

WHEREAS, the Employee presently serves as the Executive Chairman of the Company; and

WHEREAS, the Company wishes to employ the Employee as Chief Executive Officer of the Company,
and the Employee wishes to serve as the Chief Executive Officer;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good
and valuable consideration, the sufficiency and receipt whereof is hereby acknowledged, the parties
agree as follows:

Section 1. Definitions. Unless otherwise defined herein, the following terms shall
have the following respective meanings:

“Cause” means for any of the following reasons: (i) willful or deliberate misconduct
by Employee that materially damages the Company; (ii) misappropriation of Company assets; (in)
Employee’s conviction of or a plea of guilty or “no contest” to, a felony; or (iv) any willful
disobedience of the lawful and unambiguous instructions of the Board of Directors of the Company;
provided that the Board of Directors has given Employee thirty (30) days written notice of such
disobedience or neglect and Employee has failed to cure such cause. For avoidance of doubt, a
termination of Employee’s employment hereunder due to Employee’s Disability (as defined below) will
not constitute a termination without Cause.

“Change in Control Event” means any of the following (i) any person or entity (except
for a current stockholder who was a stockholder prior to the Company’s initial public offering)
becomes the beneficial owner of greater than 50% of the then outstanding voting power of the
Company; (ii) a merger or consolidation with another entity where the voting securities of the
Company outstanding immediately before the transaction constitute less than a majority of the
voting power of the voting securities of the Company or the surviving entity outstanding
immediately after the transaction, or (iii) the sale or disposition of all or substantially all of
the Company’s assets.

“Good Reason” means (i) a material diminution in Employee’s authority, duties, or
responsibilities from those set forth in this Amended Agreement, or (ii) a material change in the
geographic location at which the Employee must perform the services, in each case without the
Employee’s consent. The Employee must provide the Company with notice of the Good Reason condition
within ninety (90) days of its initial existence, the Company shall have a period of thirty (30)
days within which it may remedy the condition and not be required to pay the
severance payment, and any Good Reason termination must occur within two (2) years of the
initial existence of the Good Reason condition.

 

 

 

Section 2. Employment.

Subject to the terms and conditions of this Agreement, Employee is hereby employed by the
Company to serve as its Chief Executive Officer, commencing August 15, 2011. Employee accepts such
employment, and agrees to discharge all of the duties normally associated with said positions, to
faithfully and to the best of his abilities perform such other services consistent with his
position as a senior executive officer as may from time to time be assigned to him by the Board of
Directors of the Company and to devote all of his business time, skill and attention to such
services. Notwithstanding the foregoing, however, Employee may serve on the boards of directors of
other companies, and in civic, cultural, philanthropic and professional organizations so long as
such service does not detract from the performance of Employee’s duties hereunder, such
determination to be made by the Board of Directors in its sole discretion. Employee may continue
service as an officer, U.S. Navy Reserve, and any periods of active duty service shall not result
in any reduction in compensation or benefits payable to Employee under Section 3 of this Amended
Agreement. At all times during which Employee remains Chief Executive Officer of the Company,
Employee shall serve as a member of the Company’s Board of Directors and, at the request of the
Company’s Board of Directors, as an officer or director of any Company affiliate, in each case
without additional remuneration therefor.

Section 3. Compensation and Benefits.

3.1 Base Salary. During the Employment Term (as defined in Section 4 hereof), the
Company shall pay Employee a salary at the annual rate of $545,000 or such greater amount as the
Company’s Board of Directors may from time to time establish pursuant to the terms hereof (the
“Base Salary”). Such Base Salary shall be reviewed annually and may be increased, but not
decreased, by the Board of Directors of the Company in its sole discretion. The Base Salary shall
be payable in accordance with the Company’s customary payroll practices for its senior management
personnel.

3.2 Bonus. During the Employment Term, Employee shall be eligible to participate in
the Company’s bonus programs in effect with respect to senior management personnel. Employee shall
be eligible to receive an annual target bonus of up to 60% of the Base Salary in cash (the
“Bonus”). Any Bonus payment to which Employee becomes entitled hereunder shall be paid to Employee
in a lump sum on or before the 15th day of the third month following the end of the calendar year
in which the Bonus was earned.

3.3 Benefits

(a) Benefit Plans. During the Employment Term, Employee may participate, on the same
basis and subject to the same qualifications as other senior management personnel of the Company,
in any benefit plans (including health and medical insurance of Employee, Employee’s spouse and
Employee’s dependents) and policies in effect with respect to senior management personnel of the
Company, including any stock option plan.

 

2

 

(b) Reimbursement of Expenses. During the Employment Term, the Company shall pay or
promptly reimburse Employee, upon submission of proper invoices in accordance with the Company’s
normal procedures, for all reasonable out-of-pocket business, entertainment and travel expenses
incurred by Employee in the performance of his duties hereunder. Any taxable reimbursement of
business or other expenses as specified under this Amended Agreement shall be subject to the
following conditions: (1) the expenses eligible for reimbursement in one taxable year shall not
affect the expenses eligible for reimbursement in any other taxable year; (2) the reimbursement of
an eligible expense shall be made no later than the end of the calendar year after the year in
which such expense was incurred; and (3) the right to reimbursement shall not be subject to
liquidation or exchange for another benefit.

(c) Special Medical Expense Allowance. During the Employment Term, the Company will
pay to Employee a special bonus of $150,000 per month. This amount is intended to help defray the
substantial out-of-pocket medical expenses expected to be incurred by Employee, Employee’s spouse
and Employee’s dependents from and after January 1, 2011 ( “Medical Expenses”). This amount shall
be paid to Employee on the first day of each calendar month with respect to that calendar month and
will be subject to tax withholding when paid. Within fifteen (15) days after the end of each
calendar quarter, the Employee shall submit receipts evidencing the Medical Expenses incurred
during that calendar quarter to an auditing firm to be selected by the Company in its sole
discretion (the “Auditors”). The Auditors shall review such receipts to determine whether the
Medical Expenses meet the definition of “medical expenses” pursuant to the then applicable U.S.
Treasury regulations (“Allowable Expenses”) and provide the Company and the Employee with a report
detailing its conclusions (the “Auditors’ Report”) within forty-five (45) days of the end of such
quarter. The Auditors’ shall provide the Company and the Employee with an Auditors’ Report relating
to the previously-ended calendar year (“Year-End Auditors’ Report”) by March 1, which report will
detail the Allowable Expenses for that year. All reports of the Auditors shall be delivered to the
Chairman of the Company’s Audit Committee of the Board of Directors and the Company’s Chief
Accounting Officer. If the Allowable Expenses for the year are less than the amounts paid by the
Company for that year under this paragraph (net of taxes paid in respect of such amounts, which for
this purpose will be deemed to equal 46% of such amounts), then Employee will reimburse such
difference to the Company within thirty (30) days following the date of the Year-End Auditors’
Report.

(d) Vacation. During the Employment Term, Employee shall be entitled to up to four
(4) weeks of vacation in accordance with the policies of the Company applicable to senior
management personnel from time to time.

(e) Withholding. The Company shall be entitled to withhold from amounts payable or
benefits accorded to Employee under this Agreement all federal, state and local income, employment
and other taxes, as and in such amounts as may be required by applicable law.

Section 4. Employment Term. The term of this Agreement (the “Employment Term”) shall
begin on August 15, 2011 and end on the close of business on August 15, 2012. The Employment Term
shall be automatically extended for additional one-year periods (each a “Renewal Period”) unless,
at least sixty (60) days prior to the end of the expiration of the
Employment Term, Employee notifies the Board of Directors or the Board of Directors notifies
Employee that the notifying party does not wish to extend such Employment Term. Employee’s
employment hereunder shall be coterminous with the Employment Term, unless sooner terminated as
provided in Section 5.

 

3

 

Section 5. Termination; Severance Benefits.

5.1 Generally. Either the Board of Directors of the Company or Employee may terminate
Employee’s employment hereunder, for any reason, at any time prior to the expiration of the
Employment Term, upon sixty (60) days prior written notice to the other party. Upon termination of
Employee’s employment hereunder for any reason, Employee shall be deemed simultaneously to have
resigned as a member of the Board of Directors of the Company and from any other position or office
he may at the time hold with the Company or any of its affiliates. In addition, upon termination of
Employee’s employment hereunder for any reason, including without limitation expiration of the
Employment Term, the Company shall (i) reimburse the Employee for any expenses properly incurred
under Section 3.3 (b) and which have not previously been reimbursed as of the effective date of the
termination, (ii) pay Employee for any accrued, but unused, vacation time as of the effective date
of the termination, and (iii) pay Employee for any accrued and unpaid Base Salary through and
including the effective date of termination (collectively, the “Accrued Compensation”). The
Accrued Compensation will be paid in a lump sum on the first regularly scheduled payroll date
following the effective date of the termination of Employee’s employment with the Company.

5.2 Termination by Employee.

(a) No Reason. If, prior to the expiration of the Employment Term, Employee
voluntarily resigns from his employment, other than for Good Reason, Employee shall (i) receive no
further Base Salary or Bonus hereunder, other than the Accrued Compensation, and (ii) cease to be
covered under or be permitted to participate in or receive any of the benefits described in Section
3.3 hereof.

(b) Good Reason. If, prior to the expiration of the Employment Term, a condition
occurs which constitutes Good Reason and after Employee has complied with the applicable notice
period and the Company has failed to remedy such condition, Employee actually resigns (all as
described in detail in the definition of “Good Reason” in Section 1), Employee shall be entitled to
receive, subject to Sections 5.6 and 5.7(b) below, an amount equal to Employee’s then current Base
Salary, payable over 18 months, commencing upon the effective date of the termination of Employee’s
employment with the Company, in accordance with the Company’s customary payroll practices then in
effect for its senior management personnel (the “Severance Payment”), plus an amount equal to 1.5
(one and one-half) times the target Bonus for the year in which such termination occurs (such
amount being payable in a lump sum on the effective date of the termination of Employee’s
employment with the Company). In addition, the vesting of stock options held by Employee
immediately prior to such termination (“Options”) shall accelerate such that the portion of those
options that was otherwise scheduled to vest during the 12 month period immediately following such
termination (had Employee remained employed with the Company for that period) will become vested as
of the date of such termination. Further, if Employee elects COBRA continuation of his insured
group health
benefits, the Company will contribute an amount toward the monthly cost of such coverage equal
to the Company’s share of the monthly premiums (at the time of termination) for active employees
for a period of 18 months (or, if less, for the duration of such COBRA continuation). Finally, the
special medical expense allowance arrangement described in Section 3.3(c) will be continued for 18
months following Employee’s termination date.

 

4

 

5.3 Termination by the Company.

(a) Without Cause. If, prior to the expiration of the Employment Term, the Company
terminates Employee’s employment hereunder without Cause or if the Board of Directors of the
Company gives written notice pursuant to Section 4 hereof notifying Employee that the Board of
Directors does not wish to extend the Employment Term, then subject to Sections 5.6 and 5.7(b)
below, Employee will be entitled to the same payments, rights and benefits described above in
Section 5.2(b).

(b) For Cause. If, prior to the expiration of the Employment Term, the Company
terminates Employee’s employment hereunder for Cause, Employee shall (i) receive no further Base
Salary or Bonus hereunder, other than Accrued Compensation, and (ii) cease to be covered under or
be permitted to participate in or receive any of the benefits described in Section 3.3 hereof;
provided, however, that if Employee is terminated for Cause hereunder solely as a
result of being convicted of a felony, which conviction is ultimately reversed on appeal or
pardoned, Employee shall be deemed to have been terminated without Cause as of the date of such
termination for Cause.

5.4 Termination in Connection with a Change in Control Event. If, prior to the
expiration of the Employment Term, (i) a condition occurs which constitutes Good Reason and after
Employee has complied with the applicable notice period and the Company has failed to remedy such
condition, Employee actually resigns (all as described in detail in the definition of “Good Reason”
in Section 1), (ii) the Company terminates Employee’s employment hereunder without Cause, or (iii)
if the Board of Directors of the Company gives written notice pursuant to Section 4 hereof
notifying Employee that the Board of Directors does not wish to extend the Employment Term, in each
case within: (a) three (3) months prior to, or (b) 12 months following, the occurrence of a Change
in Control Event, then in lieu of any other payments, rights or benefits under Section 5.2(b) or
5.3(a), as applicable, Employee will be entitled to receive an amount equal to two (2.0) times
Employee’s then current Base Salary, payable over 24 months, commencing upon the effective date of
the termination of Employee’s employment with the Company, in accordance with the Company’s
customary payroll practices for its senior management personnel (the “Change in Control Severance
Payment”), plus an amount equal to two (2.0) times the target Bonus for the year in which such
resignation or termination occurs (such amount being payable in a lump sum on such effective date
of termination). In addition, the Options and any restricted stock grants held by Employee
immediately prior to his termination shall vest in full. Further, if Employee elects COBRA
continuation of his insured group health benefits, the Company will contribute an amount toward the
monthly cost of such coverage equal to the Company’s share of the monthly premiums (at the time of
termination) for active employees for a period of 18 months (or, if less, for the duration of such
COBRA continuation). Finally, the special medical expense allowance arrangement
described in Section 3.3(c) will be continued for 24 months following Employee’s termination
date. All payments made under this section shall be subject to Sections 5.6 and 5.7(b) below.

 

5

 

5.5 Termination upon Death or Disability. Employee’s employment hereunder shall
terminate upon death of Employee. The Company may terminate Employee’s employment hereunder in the
event Employee is disabled and such disability continues for more than 180 days. “Disability”
shall be defined as the inability of Employee to render the services required of him, with or
without a reasonable accommodation, under this Amended Agreement as a result of physical or mental
incapacity. In the event of death or termination by the Company due to disability of Employee, the
special medical expense allowance arrangement described in Section 3.3(c) will be continued for 12
months following Employee’s termination date. In addition, if Employee elects COBRA continuation
of his insured group health benefits, the Company will contribute an amount toward the monthly cost
of such coverage equal to the Company’s share of the monthly premiums (at the time of termination)
for active employees for a period of 12 months (or, if less, for the duration of such COBRA
continuation).

5.6 Release Required. As a condition precedent to the receipt of any right, payment
or benefit under Sections 5.2(b), 5.3(a) and/or 5.4, Employee must execute and deliver to the
Company a release, the form and substance of which are acceptable to the Company, and such release
must become irrevocable, within 45 days following the effective date of termination of Employee’s
employment. Any such right, payment or benefit that would otherwise be paid before such release
becomes irrevocable will instead be delayed and paid to Employee in a lump sum within 15 days after
such release becomes irrevocable (and the remaining payments will be made as otherwise scheduled in
the ordinary course). Notwithstanding the foregoing, if the 60 day period immediately following
the effective date of termination of Employee’s employment overlaps two calendar years, then any
such right, payment or benefit that would otherwise be paid before the later of (i) the date such
release becomes irrevocable, or (ii) the last day of the year in which such termination occurs
(such later date, the “Applicable Date”) will instead be delayed and paid to Employee in a lump sum
on the first regularly scheduled payroll date following the Applicable Date (and the remaining
payments will be made as otherwise scheduled in the ordinary course). If the release has not
become irrevocable within 45 days following the effective date of the termination of Employee’s
employment, Employee will forfeit any right, payment or benefit otherwise due under Section 5.2(b),
5.3(a) or 5.4, as applicable.

5.7 Section 409A.

(a) Purpose. This section is intended to help ensure that compensation paid or
delivered to the Employee pursuant to this Agreement either is paid in compliance with, or is
exempt from, Section 409A of the Internal Revenue Code of 1986, as amended and the rules and
regulations promulgated thereunder (collectively, “Section 409A”). However, the Company does not
warrant to the Employee that all compensation paid or delivered to him for his services will be
exempt from, or paid in compliance with, Section 409A.

 

6

 

(b) Amounts Payable On Account of Termination. For the purposes of determining when
amounts otherwise payable on account of the Employee’s termination of employment under this Amended
Agreement will be paid, which amounts become due because of his termination of employment,
“termination of employment” or words of similar import, as
used in this Amended Agreement, shall be construed as the date that the Employee first incurs
a “separation from service” for purposes of Section 409A on or following termination of employment.
Furthermore, if the Employee is a “specified employee” of a public company as determined pursuant
to Section 409A as of his termination of employment, any amounts payable on account of his
termination of employment which constitute deferred compensation within the meaning of Section 409A
and which are otherwise payable during the first six months following the Employee’s termination
(or prior to his death after termination) shall be paid to the Employee in a cash lump-sum on the
earlier of (1) the date of his death and (2) the first business day of the seventh calendar month
immediately following the month in which his termination occurs.

(c) Interpretative Rules. In applying Section 409A to amounts paid pursuant to this
Agreement, any right to a series of installment payments under this Agreement shall be treated as a
right to a series of separate payments.

(d) Deferred
Compensation Taxes. Notwithstanding any other provisions of this Agreement, in
the event that any payment or benefit under this Agreement received or to be received by the
Employee (the “Payment”) is determined to be subject (in whole or part) to the penalties imposed by
Section 409A of the Code (the “Additional Taxes”), then the Employee shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Employee
of the Additional Taxes, the Employee retains an amount equal to the Payment net of any applicable
taxes and withholdings other than Additional Taxes. All determinations required to be made under
this provision, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by the Company’s accountants or such other certified public accounting firm designated by the
Employee and reasonably acceptable to the Company. Any certified public accounting firm chosen by
the Employee shall provide detailed supporting calculations both to the Company and the Employee.
Any Gross-Up Payment due under this paragraph shall be paid to the Employee no later than December
31 of the calendar year following the calendar year in which the Employee remits the Additional
Taxes to the applicable authorities.

5.8 No Reduction of COBRA Rights. For avoidance of doubt, the Company’s payment under
Sections 5.2, 5.3 or 5.4 of applicable premiums for COBRA continuation coverage for Employee and/or
his eligible dependents will not limit or reduce the otherwise applicable duration of such COBRA
continuation coverage. For example, if Employee is eligible for 29 months of continuation coverage
under COBRA and the Company, in accordance with Section 5.4, pays a portion of the applicable
premiums for the first 18 months of such coverage, Employee will remain eligible for the remaining
11 months of continuation coverage to the extent provided by applicable law and will be solely
responsible for paying the applicable premiums for such remaining period of coverage.

 

7

 

Section 6. Federal Excise Tax.

6.1 General Rule. Employee’s payments and benefits under this Agreement and all other
arrangements or programs related thereto shall not, in the aggregate, exceed the maximum amount
that may be paid to Employee without triggering golden parachute penalties under Section 280G of
the Code, and the provisions related thereto with respect to such
payments. If Employee’s benefits must be cut back to avoid triggering such penalties,
Employee’s benefits will be cut back in the order that maximizes Employee’s net after-tax economic
position, as reasonably determined by the Company. If an amount in excess of the limit set forth
in this Section is paid to Employee, Employee must repay the excess amount to the Company upon
demand, with interest at the rate provided in Code Section 1274(b)(2)(B). Employee and the Company
agree to cooperate with each other reasonably in connection with any administrative or judicial
proceedings concerning the existence or amount of golden parachute penalties on payments or
benefits Employee receives.

6.2 Exception. Section 6.1 shall apply only if it increases the net amount Employee
would realize from payments and benefits subject to Section 6.1, after payment of income and excise
taxes by Employee on such payments and benefits.

6.3 Determinations. The determination of whether the golden parachute penalties under
Code Section 280G and the provisions related thereto shall be made by counsel chosen by Employee
and reasonably acceptable to the Company. All other determinations needed to apply this Section 6
shall be made in good faith by the Company’s independent auditors.

Section 7. General.

7.1 Confidentiality and Non-Competition Agreement. Employee and the Company hereby
ratify and re-affirm that certain Confidentiality and Non-Competition Agreement dated January 26,
2005 (the “Confidentiality Agreement”).

7.2 No Conflict. Employee represents and warrants that he has not entered, nor will
he enter, into any other agreements that restrict his ability to fulfill his obligations under this
Agreement and the Confidentiality Agreement.

7.3 Governing Law. This Agreement shall be construed, interpreted and governed by the
laws of the State of New Jersey, without regard to the conflicts of law rules thereof.

7.4 Binding Effect. This Agreement shall extend to and be binding upon Employee, his
legal representatives, heirs and distributees and upon the Company, its successors and assigns
regardless of any change in the business structure of the Company.

7.5 Assignment. Neither this Agreement nor any of the rights or obligations hereunder
shall be assigned or delegated by any party without the prior written consent of the other party.

7.6 Entire Agreement. This Agreement contains the entire agreement of the parties
with respect to the subject matter hereof. No waiver, modification or change of any provision of
this Agreement shall be valid unless in writing and signed by both parties. For avoidance of doubt,
this Agreement supersedes in all respects the Employment Agreement between the parties dated April
18, 2011, including but not limited to Section 3.4 thereof.

 

8

 

7.7 Waiver. The waiver of any breach of any duty, term or condition of this Agreement
shall not be deemed to constitute a waiver of any preceding or succeeding breach of the same or any
other duty, term or condition of this Agreement.

7.8 Severability. If any provision of this Agreement shall be unenforceable in any
jurisdiction in accordance with its terms, the provision shall be enforceable to the fullest extent
permitted in that jurisdiction and shall continue to be enforceable in accordance with its terms in
any other jurisdiction and the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

7.9 Conflicting Agreements. In the event of a conflict between this Agreement and any
other agreement between Employee and the Company, the terms and provisions of this Agreement shall
control.

7.10 Resolution of Disputes. Any claim or controversy arising out of, or relating to,
this Agreement, other than with respect to the Confidentiality Agreement, between Employee and the
Company (or any officer, director, employee or agent of the Company), or the breach thereof, shall
be settled by arbitration administrated by the American Arbitration Association under its National
Rules for the Resolution of Employment Disputes. Such arbitration shall be held in New Jersey (or
in such other location as the Company may at the time be headquartered). The arbitration shall be
conducted before a three-member panel. Within fifteen (15) days after the commencement of
arbitration, each party shall select one person to act as arbitrator and the two selected shall
select a third arbitrator within ten (10) days of their appointment.

If the arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be selected by the American Arbitration Association and
shall be a member of the bar of the State of New Jersey actively engaged in the practice of
employment law for at least ten years. The arbitration panel shall apply the substantive laws of
the State of New Jersey in connection with the arbitration and the New Jersey Rules of Evidence
shall apply to all aspects of the arbitration. The award shall be made within thirty days of the
closing of the hearing. Judgment upon the award rendered by the arbitrators(s) may be entered by
any Court having jurisdiction thereof.

7.11 Notices. All notices pursuant to this Agreement shall be in writing and shall be
sent by prepaid certified mail, return receipt requested or by recognized air courier service
addressed as follows:

	 	(i)	 	If to the Company to:

Amicus Therapeutics, Inc.

6 Cedar Brook Drive

Cranbury, New Jersey 08512

	 	(ii)	 	If to Employee to:

John F. Crowley

15 Leonard Court

Princeton, New Jersey 08540

 

9

 

or to such other addresses as may hereinafter be specified by notice in writing by either of the
parties, and shall be deemed given three (3) business days after the date so mailed or sent.

7.12 Compliance. If reasonably requested in writing, Employee agrees within fifteen
business days to provide the Company with an executed IRS Form 4669 (Statement of Payments
Received) with respect to any taxable amount paid to Employee by the Company.

7.13 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall together constitute one and the same agreement.

[Signature Page Follows]

 

10

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

	 	 	 	 	 	 	 	 	 
	 	 	/s/ John F. Crowley	 	 
	 	 	 	 	 
	 	 	JOHN F. CROWLEY	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AMICUS THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Donald J. Hayden, Jr.	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Donald J. Hayden, Jr.	 	 
	 

	 	 	 	Title:
	 	Lead Independent Director	 	 

 

11

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