Document:

exv10w2

Exhibit 10.2

FORM OF

OMNIBUS AGREEMENT

among

TETRA TECHNOLOGIES, INC.,

COMPRESSCO PARTNERS GP INC.,

and

COMPRESSCO PARTNERS, L.P.

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE I 

DEFINITIONS

	 
	 	 	 	 
	1.1 Definitions

	 	 	1	 
	 
	 	 	 	 
	ARTICLE II 

SERVICES

	 
	 	 	 	 
	2.1 Services and Personnel Provided to the Partnership Group

	 	 	5	 
	2.2 Subcontract Services Provided between the Partnership Entities and TETRA Entities

	 	 	7	 
	 
	 	 	 	 
	ARTICLE III 

EQUIPMENT TRANSFERS

	 
	 	 	 	 
	3.1 Equipment Transfers between the Partnership Entities and TETRA Entities

	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV 

INDEMNIFICATION

	 
	 	 	 	 
	4.1 Environmental Indemnification

	 	 	8	 
	4.2 Additional Indemnification

	 	 	8	 
	4.3 Limitations Regarding Indemnification

	 	 	9	 
	4.4 Indemnification Procedures

	 	 	9	 
	 
	 	 	 	 
	ARTICLE V 

MISCELLANEOUS

	 
	 	 	 	 
	5.1 Choice of Law; Submission to Jurisdiction

	 	 	10	 
	5.2 Notice

	 	 	11	 
	5.3 Entire Agreement

	 	 	11	 
	5.4 Termination

	 	 	11	 
	5.5 Effect of Waiver or Consent

	 	 	11	 
	5.6 Amendment or Modification

	 	 	12	 
	5.7 Assignment; Third Party Beneficiaries

	 	 	12	 
	5.8 Counterparts

	 	 	12	 
	5.9 Severability

	 	 	12	 
	5.10 Gender, Parts, Articles and Sections

	 	 	12	 
	5.11 Further Assurances

	 	 	12	 
	5.12 Withholding or Granting of Consent

	 	 	12	 
	5.13 Laws and Regulations

	 	 	13	 
	5.14 Negation of Rights of Limited Partners, Assignees and Third Parties

	 	 	13	 
	5.15 No Recourse Against Officers or Directors

	 	 	13	 
	 
	 	 	 	 
	SCHEDULES AND EXHIBITS

	 
	 	 	 	 
	Schedule 1.1 — Fixed Margin Amount Percentage
	 	 	 	 
	Schedule 2.1(c) — SG&A Services
	 	 	 	 

i 

 

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the Closing Date (as defined
herein), by and among TETRA Technologies, Inc., a Delaware corporation (“TETRA”), Compressco
Partners GP Inc., a Delaware corporation (the “General Partner”), and Compressco Partners, L.P., a
Delaware limited partnership (the “Partnership”). The above-named entities are sometimes referred
to in this Agreement singularly as a “Party” and collectively as the “Parties.”

RECITALS:

     The Parties desire by their execution of this Agreement to evidence their understanding:

     1. As more fully set forth in Article II, with respect to: (a) the reimbursement obligations
of the Partnership Group to: (i) the General Partner for all direct and indirect expenses incurred
by the General Partner in providing all personnel and services reasonably necessary to manage the
Partnership Entities’ operations and conduct the Partnership Group’s business and (ii) TETRA for
all direct and indirect expenses incurred by the TETRA Entities in providing all personnel and
services reasonably necessary to conduct the Partnership Group’s Mexico-based business and all
corporate and general and administrative services reasonably necessary to assist in the operation
of the business of the Partnership Group; and (b) subcontract services that may, from time to time,
be provided between any Partnership Entity and any TETRA Entity.

     2. As more fully set forth in Article III, with respect to the purchase and sale, lease or
like-kind exchange of PES Equipment between any Partnership Entity and any TETRA Entity as is
needed or desired by the entity obtaining such PES Equipment to meet its production enhancement
services obligations.

     3. As more fully set forth in Article IV, with respect to certain indemnification rights and
obligations among the Parties.

     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions.

          (a) Capitalized terms used herein but not defined shall have the meanings given them in the
Partnership Agreement.

          (b) As used in this Agreement, the following terms shall have the respective meanings set
forth below:

     “Affiliate” has the meaning given to such term in the Partnership Agreement.

 

 

     “Agreement” means this Omnibus Agreement, as it may be amended, modified or
supplemented from time to time in accordance with the terms hereof.

     “Business Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions in Oklahoma City, Oklahoma are authorized or are obligated by law, executive
order or governmental decree to be closed.

     “Change of Control” means, with respect to any Person (the “Applicable Person”), any of
the following events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the Applicable Person’s
assets to any other Person, unless immediately following such sale, lease, exchange or other
transfer such assets are owned, directly or indirectly, by the Applicable Person or such
Applicable Person owns or controls such other Person; (ii) the dissolution or liquidation of
the Applicable Person; (iii) the consolidation or merger of the Applicable Person with or
into another Person, other than any such transaction where (a) the outstanding Voting
Securities of the Applicable Person are changed into or exchanged for Voting Securities of
the surviving Person or its parent and (b) the holders of the Voting Securities of the
Applicable Person immediately prior to such transaction own, directly or indirectly, not
less than a majority of the outstanding Voting Securities of the surviving Person or its
parent immediately after such transaction; and (iv) a “person” or “group” (within the
meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or becoming the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all
of the then outstanding Voting Securities of the Applicable Person, except in a merger or
consolidation that would not constitute a Change of Control under clause (iii) above.

     “Closing Date” means the date of the closing of the initial public offering of Common
Units.

     “Common Unit” has the meaning given such term in the Partnership Agreement.

     “Compressco” means Compressco, Inc., a Delaware corporation.

     “Compressor Unit” means a wellhead compressor unit used by the Partnership to provide
natural gas wellhead compression-based production enhancement services, including GasJack®
compressor units and VJackTM compressor units.

     “Conflicts Committee” has the meaning given such term in the Partnership Agreement.

     “Contribution Agreement” means that certain Contribution, Conveyance and Assumption
Agreement, dated as of the Closing Date, by and among Compressco, Compressco Field Services,
Inc., Compressco Canada, Inc., Compressco de Mexico, S. de R.L. de C.V., the General
Partner, the Partnership, OPCO, Compressco Netherlands B.V., Compressco Holdings, LLC,
Compressco Netherlands Coöperatief U.A., MLP Sub, TETRA International Incorporated,
Production Enhancement Mexico, S. de R.L. de C.V. and TETRA Technologies Inc., together with
the additional conveyance documents and

2

 

instruments contemplated or referenced thereunder, as such may be amended, supplemented
or restated from time to time.

     “Covered Environmental Losses” has the meaning given to such term in Section 4.1(a).

     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders and ordinances, legally enforceable requirements and rules of common law
relating to protection of the environment including, without limitation, the federal
Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund
Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air
Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil
Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act and
other environmental conservation and protection laws, each as amended through and existing
on the Closing Date.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Fabricated Cost” means the total costs (other than any allocations of general and
administrative expenses) incurred in fabricating a particular item of PES Equipment, as
determined by the books and records of the Partnership, prepared in accordance with GAAP.

     “Fixed Margin Amount” means (a) with respect to newly fabricated PES Equipment, the
amount resulting from the product of (i) the Fabricated Cost and (ii) the percentage,
expressed as a decimal, set forth on Schedule 1.1 to this Agreement (the “Fixed
Margin Amount Percentage”), which Schedule may be amended from time to time with the
approval of the Conflicts Committee, and (b) with respect to previously fabricated PES
Equipment, the amount resulting from the product of (i) the Net Book Value and (ii) the
Fixed Margin Amount Percentage.

     “Fabricated Margin Amount Percentage” has the meaning given to such term in the
definition of the Fixed Margin Amount.

     “GAAP” means generally accepted accounting principles in the United States,
consistently applied.

     “General Partner” has the meaning given to such term in the preamble to this Agreement.

     “General Partner Services” has the meaning given to such term in Section 2.1(a).

     “Hazardous Substance” means (a) any substance that is designated, defined or classified
as a hazardous waste, hazardous material, pollutant, contaminant or toxic or hazardous
substance, or that is otherwise regulated under any Environmental Law, including, without
limitation, any hazardous substance as such term is defined under the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, (b) petroleum,
petroleum products, crude oil, gasoline, fuel oil, motor oil, waste oil,

3

 

diesel fuel, jet fuel and other petroleum hydrocarbons, whether refined or unrefined,
and (c) asbestos, whether in a friable or a non-friable condition, and polychlorinated
biphenyls.

     “Indemnified Party” means either the Partnership Group or the TETRA Entities, as the
case may be, each in its capacity as a party entitled to indemnification in accordance with
Article IV.

     “Indemnifying Party” means either the Partnership Group or the TETRA Entities, as the
case may be, each in its capacity as a party from whom indemnification may be required in
accordance with Article IV.

     “Losses” has the meaning given to such term in Section 4.2.

     “Mexico Services” has the meaning given to such term in Section 2.1(b).

     “Mexico-based TETRA Entities” has the meaning given to such term in Section 2.1.

     “MLP Sub” has the meaning given to such term in the definition of the Partnership
Group.

     “Net Book Value” means the net book value of a particular item of PES Equipment, as
determined by the books and records of the Partnership, prepared in accordance with GAAP.

     “OPCO” has the meaning given to such term in the definition of the Partnership Group.

     “Partnership” has the meaning given to such term in the preamble to this Agreement.

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of the Closing Date, as amended from time to time,
to which reference is hereby made for all purposes of this Agreement.

     “Partnership Assets” means the wellhead compression-based production enhancement
services and any related well monitoring and automated sand separation services contracts
(including any subcontracts for the provision of such services), manufacturing operations,
customer relationships, Compressor Units, well monitoring assets, automated sand separation
assets and other related equipment and assets, including leases of real property, directly
or indirectly conveyed, contributed or otherwise transferred to the Partnership Group as of
the Closing Date pursuant to the Contribution Agreement.

     “Partnership Entities” means the General Partner and each member of the Partnership
Group; and “Partnership Entity” means any of the Partnership Entities.

4

 

     “Partnership Group” means the Partnership, Compressco Partners Sub, Inc., a Delaware
corporation (“MLP Sub”), Compressco Partners Operating, LLC, a Delaware limited liability
company (“OPCO”) and any Subsidiary of the Partnership, MLP Sub or OPCO.

     “Party” or “Parties” have the meanings given to such terms in the preamble to this
Agreement.

     “Person” has the meaning given to such term in the Partnership Agreement.

     “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.

     “Services” has the meaning given to such term in Section 2.1(c).

     “SG&A Services” has the meaning given to such term in Section 2.1(c).

     “Subsidiary” has the meaning given to such term in the Partnership Agreement.

     “TETRA” has the meaning given to such term in the preamble to this Agreement.

     “TETRA Entities” means TETRA and any Person (other than the Partnership Entities)
controlled, directly or indirectly, by TETRA; and “TETRA Entity” means any one of the TETRA
Entities.

     “Transfer” has the meaning given to such term in Section 3.1.

     “Voluntary Cleanup Program” means a program of the United States or a state of the
United States enacted pursuant to Environmental Laws that provides for a mechanism for the
written approval of, or authorization to conduct, voluntary remedial action for the
clean-up, removal or remediation of contamination that exceeds actionable levels established
pursuant to Environmental Laws.

     “Voting Securities” of a Person means securities of any class of such Person entitling
the holders thereof to vote in the election of, or to appoint, members of the board of
directors or other similar governing body of the Person; provided, that if such Person is a
limited partnership, Voting Securities of such Person shall be the general partner interest
in such Person.

ARTICLE II

SERVICES

     2.1 Services and Personnel Provided to the Partnership Group. On and as of the Closing Date,
(i) all of Compressco’s U.S. employees will become employees of the General

5

 

Partner and be dedicated to managing the Partnership Entities’ operations and conducting the
Partnership Group’s business on a full-time basis and (ii) the Partnership Group’s operations in
Mexico will be supported on a part-time basis by the employees and consultants of Mexico-based
TETRA Entities (such TETRA Entities, the “Mexico-based TETRA Entities”). The Partnership will
reimburse the General Partner and TETRA for all direct and indirect expenses incurred by the
General Partner, the Mexico-based TETRA Entities and TETRA on the Partnership Group’s behalf on the
following terms:

     (a) The General Partner shall provide the Partnership Group with all personnel and
services reasonably necessary to manage the Partnership Entities’ operations and conduct the
Partnership Group’s business (such personnel and services, the “General Partner Services”).
The General Partner Services shall be substantially similar in nature and quality to the
services previously provided by Compressco’s U.S. employees to Compressco in connection with
Compressco’s management and operation of the Partnership Assets prior to the Closing Date
and no lower in quantity than is reasonably necessary to manage the Partnership Entities’
operations and conduct the Partnership Group’s business, even if greater in quantity than
previously provided prior to the Closing Date.

     (b) TETRA shall cause the Mexico-based TETRA Entities to provide the Partnership Group
with all personnel and services reasonably necessary to conduct the Partnership Group’s
Mexico-based business (such personnel and services, the “Mexico Services”). The Mexico
Services shall be substantially similar in nature and quality to the services previously
provided by the Mexico-based TETRA Entities’ personnel to Compressco in connection with
Compressco’s management and operation of the Partnership Assets prior to the Closing Date
and no lower in quantity than is reasonably necessary to conduct the Partnership Group’s
Mexico-based business, even if greater in quantity than previously provided prior to the
Closing Date.

     (c) TETRA shall provide the Partnership Entities with certain corporate and general and
administrative services reasonably necessary for the operation of the business of the
Partnership Group, which services may include (without limitation), at the Partnership’s
request, those services set forth on Schedule 2.1(c) (such services, collectively,
the “SG&A Services” and, together with the General Partner Services and the Mexico Services,
the “Services”). The SG&A Services shall be substantially similar in nature and quality to
the services previously provided by TETRA to Compressco in connection with Compressco’s
management and operation of the Partnership Assets prior to the Closing Date and no lower in
quantity than is reasonably necessary to assist in the operation of the business of the
Partnership Group, even if greater in quantity than previously provided prior to the Closing
Date.

     (d) In connection with providing the Services, the General Partner and TETRA shall be
entitled to allocate to the Partnership Group any costs and expenses incurred by the
General Partner, the Mexico-based TETRA Entities or TETRA, as the case may be, on any
reasonable basis determined by the General Partner or TETRA, as the case may be.

6

 

     (e) The Partnership hereby agrees to reimburse the General Partner and TETRA for all
costs and expenses allocated to the Partnership Group in accordance with Section 2.1(d).

     2.2 Subcontract Services Provided between the Partnership Entities and TETRA Entities.
Notwithstanding anything to the contrary in this Agreement, any Partnership Entity or any TETRA
Entity may, but shall be under no obligation to, perform for any TETRA Entity or any Partnership
Entity, respectively, and any TETRA Entity or any Partnership Entity may, but shall be under no
obligation to, obtain from any Partnership Entity or any TETRA Entity, respectively, such
production enhancement or other oilfield services on a subcontract basis as are needed or desired
by the entity obtaining such services, for such periods of time and in such amounts as may be
mutually agreed upon by TETRA and the General Partner; provided, however, that in any such case,
such services are performed on terms that are (i) approved by the Conflicts Committee, (ii) no less
favorable to the Partnership Group than those generally being provided to or available from
non-affiliated third parties, as determined by the General Partner, or (iii) fair and reasonable to
the Partnership Group, taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable or advantageous to the
Partnership Group), as determined by the General Partner.

ARTICLE III

EQUIPMENT TRANSFERS

     3.1 Equipment Transfers between the Partnership Entities and TETRA Entities. Notwithstanding
anything to the contrary in this Agreement, any Partnership Entity or any TETRA Entity may, but
shall be under no obligation to, sell, lease or like-kind exchange (each such sale, lease or
exchange, for purposes of this Section 3.1, a “Transfer”) to any TETRA Entity or any Partnership
Entity, respectively, and any TETRA Entity or any Partnership Entity may, but shall be under no
obligation to, obtain from any Partnership Entity or any TETRA Entity, respectively, such newly
fabricated or previously fabricated PES Equipment as is needed or desired by the obtaining entity
to meet its production enhancement services obligations, in such amounts, in such conditions and
for such periods of time, if applicable, as may be mutually agreed upon by TETRA and the General
Partner; provided, however, that, in any such case, such Transfer is on terms that are (i) approved
by the Conflicts Committee, (ii) no less favorable to the Partnership Group than those generally
being provided to or available from non-affiliated third parties, as determined by the General
Partner, or (iii) fair and reasonable to the Partnership Group, taking into account the totality of
the relationships between the parties involved (including other transactions that may be
particularly favorable or advantageous to the Partnership Group), as determined by the General
Partner; provided, further, that, notwithstanding anything to the contrary in this Section 3.1, any
TETRA Entity may purchase from any Partnership Entity newly fabricated PES Equipment only for a
price that is not less than the Fabricated Cost plus the Fixed Margin Amount; and provided,
further, that, notwithstanding anything to the contrary in this Section 3.1, any TETRA Entity may
purchase from any Partnership Entity previously fabricated PES Equipment only for a price that is
not less than the Net Book Value plus the Fixed Margin Amount.

7

 

ARTICLE IV

INDEMNIFICATION

     4.1 Environmental Indemnification.

     (a) Subject to Section 4.3, TETRA shall indemnify, defend and hold harmless the
Partnership Group from and against any environmental claims, losses and expenses
(including, without limitation, court costs and reasonable attorney’s and expert’s fees) of
any and every kind or character suffered or incurred by the Partnership Group by reason of
or arising out of:

          (i) any violation of Environmental Laws associated with ownership or operation of the
Partnership Assets; or

          (ii) any event or condition associated with ownership or operation of the Partnership
Assets (including, without limitation, the presence of Hazardous Substances on, under, about
or migrating to or from the Partnership Assets or the disposal or release of Hazardous
Substances generated by operation of the Partnership Assets) including, without limitation,
(A) the cost and expense of any investigation, assessment, evaluation, monitoring,
containment, cleanup, repair, restoration, remediation, or other corrective action required
or necessary under Environmental Laws or to satisfy any applicable Voluntary Cleanup
Program, (B) the cost or expense of the preparation and implementation of any closure,
remedial, corrective action or other plans required or necessary under Environmental Laws or
to satisfy any applicable Voluntary Cleanup Program and (C) the cost and expense for any
environmental pre trial, trial or appellate legal or litigation support work; provided, in
the case of clauses (A) and (B) such cost and expense shall not include the costs of and
associated with project management and soil and ground water monitoring;

but only to the extent that such violation complained of under Section 4.1(a)(i) or such
events or conditions included under Section 4.1(a)(ii) occurred before or existed on the
Closing Date (collectively, “Covered Environmental Losses”).

     (b) The Partnership Group shall indemnify, defend and hold harmless the TETRA Entities
from and against any Covered Environmental Losses suffered or incurred by TETRA and its
Affiliates relating to the Partnership Assets (as well as any assets acquired by the
Partnership after the Closing Date) occurring on or after the Closing Date, except to the
extent that the Partnership Group is indemnified with respect to any of such Covered
Environmental Losses under Section 4.1(a).

     (c) Except for claims for Covered Environmental Losses made before the third
anniversary of the Closing Date, which shall not terminate, all indemnification obligations
in this Section 4.1 shall terminate on the third anniversary of the Closing Date.

     4.2 Additional Indemnification. In addition to and not in limitation of the indemnification
provided under Section 4.1(a), subject to Section 4.3, TETRA shall indemnify, defend and hold
harmless the Partnership Group from and against any claims, losses and

8

 

expenses (including, without limitation, court costs and reasonable attorney’s and expert’s
fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or
incurred by the Partnership Group (such claims, losses and expenses, together with the Covered
Environmental Losses, the “Losses”)) by reason of or arising out of:

          (a) failure to convey good and defensible title to the Partnership Assets to one or more
members of the Partnership Group to the extent any such failure renders the Partnership Group
unable to use or operate the Partnership Assets in substantially the same manner as they were
operated by the TETRA Entities immediately prior to the Closing Date; or

          (b) all federal, state and local income tax liabilities attributable to the operation of the
Partnership Assets prior to the Closing Date, including any such income tax liabilities of TETRA
that may result from the consummation of the formation transactions for the Partnership Entities;
or

          (c) the failure of the Partnership Group to have on the Closing Date any consent or
governmental permit necessary to allow the transfer of any of the Partnership Assets or any such
Partnership Assets to the extent any such failure renders the Partnership Group unable to use or
operate the Partnership Assets in substantially the same manner that the Partnership Assets were
owned or operated immediately prior to the Closing Date,

provided, however, that in the case of clause (a) and (c) above, such indemnification obligations
shall terminate on the third anniversary of the Closing Date; and that in the case of clause (b)
above, such indemnification obligations shall survive until 60 days after the termination of any
applicable statute of limitations.

     4.3 Limitations Regarding Indemnification.

     (a) The aggregate liability of TETRA under Section 4.1(a) shall not exceed $5.0
million.

     (b) No claims may be made against TETRA for indemnification pursuant to Sections
4.1(a) or 4.2 unless the aggregate dollar amount of the Losses suffered or incurred by the
Partnership Group exceeds $250,000, and thereafter TETRA shall be liable for the full
amount of such Losses, subject to the limitations of Section 4.3(a).

     (c) Notwithstanding anything herein to the contrary, in no event shall TETRA have any
indemnification obligations under Section 4.1(a) for claims made as a result of additions
to or modifications after the Closing Date of Environmental Laws existing as of the Closing
Date or new Environmental Laws promulgated after the Closing Date.

     4.4 Indemnification Procedures.

     (a) The Indemnified Party agrees that promptly after it becomes aware of facts giving
rise to a claim for indemnification under this Article IV, it will provide notice thereof
in writing to the Indemnifying Party, specifying the nature of and specific basis for such
claim.

9

 

     (b) The Indemnifying Party shall have the right to control all aspects of the defense
of (and any counterclaims with respect to) any claims brought against the Indemnified Party
that are covered by the indemnification under this Article IV, including, without
limitation, the selection of counsel, determination of whether to appeal any decision of
any court and the settling of any such matter or any issues relating thereto; provided,
however, that no such settlement shall be entered into without the consent of the
Indemnified Party (with the concurrence of the Conflicts Committee in the case of the
Partnership Group) unless it includes a full release of the Indemnified Party from such
matter or issues, as the case may be, and does not include the admission of fault,
culpability or a failure to act, by or on behalf of such Indemnified Party.

     (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with
respect to all aspects of the defense of any claims covered by the indemnification under
this Article IV, including, without limitation, the prompt furnishing to the Indemnifying
Party of any correspondence or other notice relating thereto that the Indemnified Party may
receive, permitting the name of the Indemnified Party to be utilized in connection with
such defense, the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers relevant to such
defense and the making available to the Indemnifying Party, at no cost to the Indemnifying
Party, of any employees of the Indemnified Party; provided, however, that in connection
therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact
thereof on the operations of the Indemnified Party and further agrees to endeavor to
maintain the confidentiality of all files, records and other information furnished by the
Indemnified Party pursuant to this Section 4.4. In no event shall the obligation of the
Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately
preceding sentence be construed as imposing upon the Indemnified Party an obligation to
hire and pay for counsel in connection with the defense of any claims covered by the
indemnification set forth in this Article IV; provided, however, that the Indemnified Party
may, at its own option, cost and expense, hire and pay for counsel in connection with any
such defense. The Indemnifying Party agrees to keep any such counsel hired by the
Indemnified Party informed as to the status of any such defense, but the Indemnifying Party
shall have the right to retain sole control over such defense.

     (d) In determining the amount of any loss, cost, damage or expense for which the
Indemnified Party is entitled to indemnification under this Agreement, the gross amount of
the indemnification will be reduced by (i) any insurance proceeds realized by the
Indemnified Party and (ii) all amounts recovered by the Indemnified Party under contractual
indemnities from third Persons. The Partnership hereby agrees to use commercially
reasonable efforts to realize any applicable insurance proceeds or amounts recoverable
under such contractual indemnities.

ARTICLE V

MISCELLANEOUS

     5.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and
governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or

10

 

principle that might refer the construction or interpretation of this Agreement to the laws of
another state. Each Party hereby submits to the jurisdiction of the state and federal courts in
the State of Delaware and to venue in Delaware.

     5.2 Notice. All notices, requests or consents provided for or permitted to be given pursuant
to this Agreement must be in writing and must be given by depositing same in the United States
mail, addressed to the Person to be notified, postpaid, and registered or certified with return
receipt requested or by delivering such notice in person or by facsimile to such Party. Notice
given by personal delivery or mail shall be effective upon actual receipt. Notice given by
facsimile shall be effective upon actual receipt if received during the recipient’s normal business
hours, or at the beginning of the recipient’s next Business Day after receipt if not received
during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this
Agreement shall be sent to or made at the address set forth below or at such other address as such
Party may stipulate to the other Parties in the manner provided in this Section 5.2.

For notices to any of the TETRA Entities:

TETRA Technologies, Inc.

24955 Interstate 45 North

The Woodlands, TX 77380

Phone: 281-367-1983

Fax: 281-364-4398

Attention: General Counsel

For notices to any of the Partnership Entities:

Compressco Partners, L.P.

101 Park Avenue, Suite 1200

Oklahoma City, OK 73102

Phone: 405-677-0221

Fax: ____________

Attention: President

     5.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating
to the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

     5.4 Termination. This Agreement, other than the provisions set forth in Articles IV and V
hereof, shall terminate upon the earlier to occur of (i) a Change of Control of the General Partner
or TETRA or (ii) the third anniversary of the Closing Date.

     5.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to or
of any breach or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a Party to complain of any act of any Person or to

11

 

declare any Person in default, irrespective of how long such failure continues, shall not
constitute a waiver by such Party of its rights hereunder until the applicable statute of
limitations period has run.

     5.6 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of all the Parties; provided, however, that the Partnership may not,
without the prior approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that the General Partner determines will adversely affect the holders of Common
Units. Each such instrument shall be reduced to writing and shall be designated on its face an
“Amendment” or an “Addendum” to this Agreement.

     5.7 Assignment; Third Party Beneficiaries. Any Party shall have the right to assign its
rights under this Agreement without the consent of any other Party, but no Party shall have the
right to assign its obligations under this Agreement without the consent of the other Parties.
Subject to the limitations set forth in Section 5.14, each of the Parties hereto specifically
intends that each entity comprising the TETRA Entities and each entity comprising the Partnership
Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to assert
rights and remedies hereunder as third-party beneficiaries hereto with respect to those provisions
of this Agreement affording a right, benefit or privilege to any such entity.

     5.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, with the same effect as if all signatory Parties had signed the same
document. All counterparts shall be construed together and shall constitute one and the same
instrument.

     5.9 Severability. If any provision of this Agreement or the application thereof to any Person
or circumstance shall be held invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provision to other Persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

     5.10 Gender, Parts, Articles and Sections. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine and neuter, and the number of
all words shall include the singular and plural. All references to Article numbers and Section
numbers refer to Articles and Sections of this Agreement.

     5.11 Further Assurances. In connection with this Agreement and all transactions contemplated
by this Agreement, each Party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or appropriate to effectuate,
carry out and perform all of the terms, provisions and conditions of this Agreement and all such
transactions.

     5.12 Withholding or Granting of Consent. Except as otherwise expressly provided in this
Agreement, each Party may, with respect to any consent or approval that it is entitled to grant
pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled
discretion, for any reason, and subject to such conditions as it shall deem appropriate.

12

 

     5.13 Laws and Regulations. Notwithstanding any provision of this Agreement to the contrary,
no Party shall be required to take any act, or fail to take any act, under this Agreement if the
effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule
or regulation.

     5.14 Negation of Rights of Limited Partners, Assignees and Third Parties. The provisions of
this Agreement are enforceable solely by the Parties, and no shareholder, limited partner, member,
or assignee of TETRA, the General Partner or the Partnership or other Person shall have the right,
separate and apart from TETRA, the General Partner or the Partnership, to enforce any provision of
this Agreement or to compel any Party to comply with the terms of this Agreement.

     5.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the provisions of
this Agreement shall not give rise to any right of recourse against any officer or director of
TETRA or any Partnership Entity.

(Signature pages follow.)

13

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.

	 	 	 	 	 
	 	TETRA TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPRESSCO PARTNERS GP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMPRESSCO PARTNERS, L.P.

 	 
	 	By:  	Compressco Partners GP Inc., its general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Omnibus Agreement

 

 

SCHEDULE 1.1

Fixed-Margin Amount Percentage

0.25 (or 25.0%)

 

 

SCHEDULE 2.1(c)

SG&A Services

     Pursuant to Section 2.1(c) of this Agreement, TETRA shall provide the Partnership Entities
with corporate and general and administrative services reasonably necessary to assist in the
operation of the business of the Partnership Group, which services shall include, without
limitation, the following services:

	 	(a)	 	secretarial and general office services;
	 
	 	(b)	 	employee benefits administration services (including, without limitation,
equity plan administration services);
	 
	 	(c)	 	investor relations services;
	 
	 	(d)	 	human resources and payroll processing services;
	 
	 	(e)	 	financial services;
	 
	 	(f)	 	information and technology services;
	 
	 	(g)	 	audit services;
	 
	 	(h)	 	legal services;
	 
	 	(i)	 	engineering and technical services;
	 
	 	(j)	 	insurance and risk management services;
	 
	 	(k)	 	global supply chain and procurement services;
	 
	 	(l)	 	accounting services;
	 
	 	(m)	 	tax services;
	 
	 	(n)	 	health, safety and environmental (HSE) services;
	 
	 	(o)	 	facilities management services;
	 
	 	(p)	 	international business development; and
	 
	 	(q)	 	general sales/marketing services.exv10w3

Exhibit 10.3

FORM
OF COMPRESSCO PARTNERS, L.P.

2011 LONG TERM INCENTIVE PLAN

     SECTION 1. Purpose of the Plan.

     The Compressco Partners, L.P. 2011 Long Term Incentive Plan (the “Plan”) has been adopted by
Compressco Partners GP Inc. (the “Company”), the general partner of Compressco Partners, L.P., a
Delaware limited partnership (the “Partnership”). The Plan is intended to promote the interests of
the Company and the Partnership by providing to Employees, Consultants and Directors incentive
compensation awards based on Units to encourage superior performance. The Plan is also contemplated
to enhance the ability of the Company, the Partnership and their Affiliates to attract and retain
the services of individuals who are essential for the growth and profitability of the Company, the
Partnership and their Affiliates and to encourage them to devote their best efforts to advancing
the business of the Company, the Partnership and their Affiliates.

     SECTION 2. Definitions.

     As used in the Plan, the following terms shall have the meanings set forth below:

     “409A Award” means an Award that constitutes a “deferral of compensation” within the meaning
of the 409A Regulations, whether by design, due to a subsequent modification in the terms and
conditions of such Award or as a result of a change in applicable law following the date of grant
of such Award, and that is not exempt from Section 409A of the Code pursuant to an applicable
exemption.

     “409A Regulations” means the applicable Treasury regulations and other interpretive guidance
promulgated pursuant to Section 409A of the Code.

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. As used herein, the term “control” means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

     “Award” means a Restricted Unit, a Phantom Unit, a Unit Award, Option, Unit Appreciation
Right, an Other Unit-Based Award or a Substitute Award granted under the Plan, and includes any
tandem DERs granted with respect to Awards (other than Restricted Units and Unit Awards).

     “Award Agreement” means the written or electronic agreement by which an Award shall be
evidenced.

     “Board” means the Board of Directors of the Company.

     “Change of Control” means, and shall be deemed to have occurred upon, one or more of the
following events:

 

 

     (i) any transaction or series of transactions that results in any Person or group of Persons
other than the Company (or its successor or survivor by way of merger, consolidation, or some other
transaction, or a parent or subsidiary thereof) or an Affiliate of the Company acquiring an
ownership interest, directly or indirectly, in twenty-five percent (25%) or more of the Partnership
(or its successor or survivor by way of merger, consolidation, or some other transaction, or a
parent or subsidiary thereof);

     (ii) the limited partners of the Partnership approve, in one transaction or a series of
transactions, a plan of complete liquidation of the Partnership;

     (iii) the sale or other disposition by either the Company or the Partnership of all or
substantially all of its assets in one or more transactions to any Person other than the Company or
an Affiliate of the Company;

     (iv) a transaction resulting in a Person other than the Company (or its successor or survivor
by way of merger, consolidation, or some other transaction, or a parent or subsidiary thereof) or
an Affiliate thereof being the general partner of the Partnership (or its successor or survivor by
way of merger, consolidation, or some other transaction, or a parent or subsidiary thereof); or

     (v) any other event specified as a “Change of Control” in an applicable Award Agreement.

     Notwithstanding the foregoing, the Committee may elect in an Award Agreement to specify a
different definition of “Change of Control” for purposes of complying with Section 409A of the Code
or for any other reason as deemed appropriate by the Committee.

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

     “Committee” means the entity appointed by the Board to administer the Plan, which may be the
Board, any compensation committee of the Board, an Affiliate’s board of directors or a committee
thereof, or such other committee as may be appointed by the Board.

     “Consultant” means an individual who renders consulting services to the Company, the
Partnership or an Affiliate of either the Company or the Partnership.

     “Director” means a member of the Board who is not an Employee or a Consultant (other than in
that individual’s capacity as a Director).

     “Distribution Equivalent Right” or “DER” means a contingent right, granted in tandem with a
specific Award (other than a Restricted Unit or a Unit Award), to receive with respect to each Unit
subject to an Award an amount in cash, Units and/or Phantom Units, as determined by the Committee
in its sole discretion, equal in value to the distributions made by the Partnership with respect to
a Unit during the period such Award is outstanding.

     “Employee” means an employee of the Company, the Partnership or an Affiliate of either the
Company or the Partnership.

2

 

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Fair Market Value” means the closing sales price of a Unit on the principal national
securities exchange or other market in which trading in Units occurs on the most recent date on
which Units were publicly traded preceding the date with respect to which the Fair Market Value
determination is made as reported in The Wall Street Journal (or other reporting service approved
by the Committee). If Units are not traded on a national securities exchange or other market at the
time a determination of fair market value is required to be made hereunder, the determination of
fair market value shall be made by the Committee in good faith using a “reasonable application of a
reasonable valuation method” within the meaning of the 409A Regulations (specifically, Treasury
Regulation Section 1.409A-1(b)(5)(iv)(B)).

     “Option” means an option to purchase Units granted under the Plan.

     “Other Unit-Based Award” means an award granted pursuant to Section 6(c) of the Plan.

     “Participant” means an Employee, Consultant or Director granted an Award under the Plan.

     “Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, governmental agency or political
subdivision thereof or other entity.

     “Phantom Unit” means a notional Unit granted under the Plan that entitles the Participant to
receive, at the time of settlement, a Unit or an amount of cash equal to the Fair Market Value of a
Unit, as determined by the Committee in its sole discretion.

     “Restricted Period” means the period established by the Committee with respect to an Award
during which the Award remains subject to forfeiture and is either not exercisable by or payable to
the Participant, as the case may be.

     “Restricted Unit” means a Unit granted under the Plan that is subject to a Restricted Period.

     “Retirement” means termination of a Participant’s employment with or consulting services to
the Company and its Affiliates or membership as a Director, whichever is applicable, in each case,
under circumstances that constitute retirement as determined by the Committee.

     “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act or any successor
rule or regulation thereto as in effect from time to time.

     “SEC” means the Securities and Exchange Commission or any successor thereto.

     “Substitute Award” means an award granted pursuant to Section 6(g) of the Plan.

     “Unit Distribution Right” or “UDR” means a distribution made by the Partnership with respect
to a Restricted Unit.

3

 

     “Unit” means a common unit of the Partnership.

     “Unit Appreciation Right” means a contingent right granted under the Plan that entitles the
holder to receive, in cash or Units, as determined by the Committee in its sole discretion, an
amount equal to the excess of the Fair Market Value of a Unit on the exercise date of the Unit
Appreciation Right (or another specified date) over the exercise price of the Unit Appreciation
Right.

     “Unit Award” means a grant of a Unit that is not subject to a Restricted Period.

     SECTION 3. Administration.

     (a) Authority of the Committee. A majority of the Committee shall constitute a quorum, and
the acts of the members of the Committee who are present at any meeting thereof at which a quorum
is present, or acts unanimously approved by the members of the Committee in writing, shall be the
acts of the Committee. Subject to the following and any applicable law, the Committee, in its sole
discretion, may delegate any or all of its powers and duties under the Plan, including the power to
grant Awards under the Plan, to the then-current Chief Executive Officer of the Company, subject to
such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any
such delegation all references in the Plan to the “Committee,” other than in Section 7, shall be
deemed to include the Chief Executive Officer. Any such delegation shall not limit the Chief
Executive Officer’s right to receive Awards under the Plan; provided, however, the Chief Executive
Officer may not grant Awards to himself, a Director or any executive officer of the Company or an
Affiliate, or take any action with respect to any Award previously granted to himself, an
individual who is an executive officer or a Director. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii)
determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of
any Award, consistent with the terms of the Plan, which terms may include any provision regarding
the acceleration of vesting or waiver of forfeiture restrictions and any other condition or
limitation regarding an Award, based on such factors as the Committee shall determine, in its sole
discretion; (v) determine whether, to what extent, and under what circumstances Awards may be
vested, settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend,
or waive such rules and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (viii) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan
or an Award Agreement in such manner and to such extent as the Committee deems necessary or
appropriate, but in no event shall an action of the Committee materially reduce the rights or
benefits of a Participant with respect to an Award without the consent of such Participant. Unless
otherwise expressly provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, the Partnership, any Affiliate, any Participant, and any
beneficiary of any Award.

4

 

     (b) Limitation of Liability. The Committee and each member thereof shall be entitled to, in
good faith, rely or act upon any report or other information furnished to it, him or her by any
officer or employee of the Company, the Partnership or their Affiliates, the Company’s or the
Partnership’s legal counsel, independent auditors, consultants or any other agents assisting in the
administration of the Plan. Members of the Committee and any officer or employee of the Company,
the Partnership or any of their Affiliates acting at the direction or on behalf of the Committee
shall not be personally liable for any action or determination taken or made in good faith with
respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held
harmless by the Company with respect to any such action or determination.

      (c) Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of
any Awards to, or other transaction by, a Participant who is subject to Section 16 of the Exchange
Act shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or another
applicable exemption (except for transactions acknowledged by the Participant in writing to be
non-exempt). Accordingly, if any provision of the Plan or any Award Agreement does not comply with
the requirements of Rule 16b-3 or such other exemption as then applicable to any such transaction,
such provision shall be construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section
16(b) of the Exchange Act.

     SECTION 4. Units.

     (a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c), the
number of Units that may be delivered with respect to Awards under the Plan will not
exceed 1,537,122 Units.
Units withheld from an Award or surrendered by a Participant to either
satisfy the Company’s or an Affiliate’s tax withholding obligations with respect to the Award or
pay the exercise price of an Award (including the withholding of Units, where applicable) shall not
be considered to be Units delivered under the Plan for this purpose. If any Award is forfeited,
cancelled, exercised, paid, or otherwise terminates or expires without the actual delivery of Units
pursuant to such Award (the grant of Restricted Units is not a delivery of Units for this purpose),
the Units subject to such Award shall again be available for Awards under the Plan (including Units
not delivered in connection with the exercise of an Option or Unit Appreciation Right). There shall
not be any limitation on the number of Awards that may be paid in cash.

     (b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an Award shall
consist, in whole or in part, of Units acquired in the open market, from any Affiliate, the
Partnership or any other Person, Units otherwise issuable by the Partnership, or any combination of
the foregoing, as determined by the Committee in its discretion.

     (c) Anti-dilution Adjustments. With respect to any “equity restructuring” event that could
result in an additional compensation expense to the Company or the Partnership pursuant to the
provisions of FASB Accounting Standards Codification, Topic 718 if adjustments to Awards with
respect to such event were discretionary, the Committee shall equitably adjust the number and type
of Units covered by each outstanding Award and the terms and conditions, including the exercise
price and performance criteria (if any), of such Award to equitably reflect such restructuring
event and shall adjust the number and type of Units (or other securities or property) with respect
to which Awards may be granted after such event. With respect to any

5

 

other similar event that would not result in a FASB Accounting Standards Codification, Topic
718 accounting charge if the adjustment to Awards with respect to such event were subject to
discretionary action, the Committee shall have complete discretion to adjust Awards in such manner
as it deems appropriate with respect to such other event. In the event the Committee makes any
adjustment pursuant to the foregoing provisions of this Section 4(c), the Committee shall make a
corresponding and proportionate adjustment with respect to the maximum number of Units that may be
delivered with respect to Awards under the Plan as provided in Section 4(a) and the kind of Units
or other securities available for grant under the Plan.

     (d) Additional Issuances. Except as hereinbefore expressly provided, the issuance by the
Company of units for cash, property, labor or services, upon direct sale, or upon the conversion of
units or obligations of the Company convertible into such units, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to,
the number of Units subject to Awards theretofore granted pursuant to the Plan.

     SECTION 5. Eligibility.

     Any Employee, Consultant or Director shall be eligible to be designated a Participant by the
Committee and receive an Award under the Plan. Notwithstanding the foregoing, Employees,
Consultants and Directors that provide services to Affiliates that are not considered a single
employer with the Partnership under Section 414(b) of the Code or Section 414(c) of the Code shall
not be eligible to receive Awards which are subject to Section 409A of the Code until the Affiliate
adopts the Plan as a participating employer in accordance with Section 10. Further, if the Units
issuable pursuant to an Award are intended to be registered with the SEC on Form S-8, then only
Employees, Consultants, and Directors of the Partnership or a parent or subsidiary of the
Partnership (within the meaning of General Instruction A.1(a) to Form S-8) will be eligible to
receive such an Award.

     SECTION 6. Awards.

     (a) Restricted Units and Phantom Units. The Committee shall have the authority to determine
the Employees, Consultants and Directors to whom Restricted Units and Phantom Units shall be
granted, the number of Restricted Units or Phantom Units to be granted to each such Participant,
the Restricted Period, the conditions under which the Restricted Units or Phantom Units may become
vested or forfeited and such other terms and conditions as the Committee may establish with respect
to such Awards.

     (i) UDRs. To the extent provided by the Committee, in its discretion, a grant of
Restricted Units may provide that the distributions made by the Partnership with respect to
the Restricted Units shall be subject to the same forfeiture and other restrictions as the
Restricted Unit and, if restricted, such distributions shall be held, without interest,
until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the
same time, as the case may be. In addition, the Committee may provide that such
distributions be used to acquire additional Restricted Units for the Participant. Such
additional Restricted Units may be subject to such vesting and other terms as the Committee
may prescribe. Absent such a restriction on the UDRs in the Award

6

 

Agreement, UDRs shall be paid promptly to the holder of the Restricted Unit without
vesting restrictions.

     (ii) Forfeitures. Except as otherwise provided in the terms of the applicable Award
Agreement, upon termination of a Participant’s employment with or consulting services to the
Company and its Affiliates or membership as a Director, whichever is applicable, for any
reason during the applicable Restricted Period, all outstanding, unvested Restricted Units
and Phantom Units awarded the Participant shall be automatically forfeited on such
termination unless the Committee, in its discretion, waives in whole or in part such
forfeiture with respect to a Participant’s Restricted Units and/or Phantom Units, at which
time the Award would become vested to the extent the Committee provides.

     (iii) Lapse of Restrictions.

     (A) Phantom Units. During the ten day period immediately following vesting of
each Phantom Unit, subject to the provisions of Section 8(b), the Participant shall
be entitled to settlement of such Phantom Unit and shall receive from the Company
either one Unit or an amount in cash equal to the Fair Market Value of a Unit, as
determined by the Committee in its discretion.

     (B) Restricted Units. Upon the vesting of each Restricted Unit, subject to
satisfying the tax withholding obligations of Section 8(b), the Participant shall be
entitled to have the restrictions removed from his or her Award so that the
Participant then holds an unrestricted Unit.

     (b) Unit Awards. Unit Awards may be granted under the Plan to such Employees, Consultants
and/or Directors and in such amounts as the Committee, in its discretion, may select.

     (c) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to such
Employees, Consultants and/or Directors and in such amounts as the Committee, in its discretion,
may select. An Other Unit-Based Award shall be an Award denominated or payable in, valued in or
otherwise based on or related to Units, in whole or in part. The Committee shall determine the
terms and conditions of any such Other Unit-Based Award. Upon or as soon as reasonably practical
following vesting, an Other Unit-Based Award may be settled, as determined by the Committee in its
sole discretion, in cash, Units (including Restricted Units) or any combination thereof as provided
in the applicable Award Agreement.

     (d) Options. The Committee may grant Options that are intended to comply with Treasury
Regulation Section 1.409A-l(b)(5)(i)(A) only to Employees, Consultants or Directors performing
services for the Partnership or a corporation or other type of entity in a chain of corporations or
other entities in which each corporation or other entity has a “controlling interest” in another
corporation or entity in the chain, starting with the Partnership and ending with the corporation
or other entity for which the Employee, Consultant or Director performs services. For purposes of
this Section 6(d), “controlling interest” means (i) in the case of a corporation, ownership of
stock possessing at least 50% of total combined voting power of all classes of stock of such
corporation entitled to vote or at least 50% of the total value of shares of

7

 

all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at
least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a
sole proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or
estate, ownership of an actuarial interest (as defined in Treasury Regulation Section
1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate. The Committee may grant Options
that are otherwise exempt from or compliant with Section 409A of the Code to any eligible Employee,
Consultant or Director. The Committee shall have the authority to determine the number of Units to
be covered by each Option, the purchase price therefor and the Restricted Period and other
conditions and limitations applicable to the exercise of the Option, including the following terms
and conditions and such additional terms and conditions, as the Committee shall determine, that are
not inconsistent with the provisions of the Plan.

     (i) Exercise Price. The exercise price per Unit purchasable under an Option that does
not provide for the deferral of compensation under the 409A Regulations shall be determined
by the Committee at the time the Option is granted but, except with respect to Substitute
Awards, may not be less than the Fair Market Value of a Unit as of the date of grant of the
Option. The exercise price per Unit purchasable under an Option that does not provide for
the deferral of compensation by reason of satisfying the short-term deferral rule set forth
in the 409A Regulations or that is compliant with Section 409A of the Code shall be
determined by the Committee at the time the Option is granted.

     (ii) Time and Method of Exercise. The Committee shall determine the exercise terms and
the Restricted Period with respect to an Option grant, which may include, without
limitation, a provision for accelerated vesting upon the achievement of specified
performance goals or other events, and the method or methods by which payment of the
exercise price with respect thereto may be made or deemed to have been made, which may
include, without limitation, cash, check acceptable to the Company, withholding Units from
an Award, a “cashless-broker” exercise through procedures approved by the Committee, or any
combination of the above methods, having a Fair Market Value on the exercise date equal to
the relevant exercise price.

     (iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement,
upon termination of a Participant’s employment or service with the Company and its
Affiliates or membership on the Board, whichever is applicable, for any reason during the
applicable Restricted Period, all unvested Options shall be forfeited by the Participant.
The Committee may, in its discretion, waive in whole or in part such forfeiture with respect
to a Participant’s Options; provided that the waiver contemplated under this Section
6(d)(iii) shall be effective only to the extent that such waiver will not cause the
Participant’s Options that are designed to satisfy Section 409A of the Code to fail to
satisfy such section.

     (e) Unit Appreciation Rights. The Committee shall have the authority to determine the
Employees, Consultants and Directors to whom Unit Appreciation Rights shall be granted, the number
of Units to be covered by each grant, whether Units or cash shall be delivered upon exercise, the
exercise price therefor and the conditions and limitations applicable to the exercise of the Unit
Appreciation Rights, including the following terms and conditions and such

8

 

additional terms and conditions as the Committee shall determine, that are not inconsistent
with the provisions of the Plan.

     (i) Exercise Price. The exercise price per Unit Appreciation Right shall be determined
by the Committee at the time the Unit Appreciation Right is granted and may be more or less
than the Fair Market Value of a Unit as of the date of grant of the Award. Notwithstanding
the foregoing, the exercise price per Unit that may be acquired under a Unit Appreciation
Right that does not provide for the deferral of compensation under the 409A Regulations
shall not be less than the Fair Market Value of a Unit as of the date of grant of the Unit
Appreciation Right.

     (ii) Time of Exercise. The Committee shall determine the Restricted Period and the time
or times at which a Unit Appreciation Right may be exercised in whole or in part, which may
include, without limitation, accelerated vesting upon the achievement of specified
performance goals or other events.

     (iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement,
upon termination of a Participant’s employment with or service to the General Partner, the
Partnership and their Affiliates or membership on the Board, whichever is applicable, for
any reason during the applicable Restricted Period, all outstanding Unit Appreciation Rights
awarded to the Participant shall be automatically forfeited on such termination. The
Committee may, in its discretion, waive in whole or in part such forfeiture with respect to
a Participant’s Unit Appreciation Rights.

     (f) DERs. To the extent provided by the Committee, in its discretion, an Award (other than a
Restricted Unit or Unit Award) may include a tandem DER grant, which may provide that such DERs
shall be paid directly to the Participant, be credited to a bookkeeping account (with or without
interest in the discretion of the Committee) subject to the same vesting restrictions as the tandem
Award, or be subject to such other provisions or restrictions as determined by the Committee in its
discretion. Absent a contrary provision in the Award Agreement, DERs shall be paid to the
Participant without restriction at the same time as ordinary cash distributions are paid by the
Partnership to its unitholders. Notwithstanding the foregoing, DERs shall only be paid in a manner
that is either exempt from or in compliance with Section 409A of the Code.

     (g) Substitute Awards. Awards may be granted under the Plan in substitution of similar awards
held by individuals who become Employees, Consultants or Directors as a result of a merger,
consolidation or acquisition by the Partnership or an Affiliate of another entity or the assets of
another entity. Such Substitute Awards that are Options or Unit Appreciation Rights may have
exercise prices less than the Fair Market Value of a Unit on the date of the substitution if such
substitution complies with Section 409A of the Code and the 409A Regulations and other applicable
laws and exchange rules.

     (h) General.

     (i) Awards May Be Granted Separately or Together. Awards may, in the discretion of
the Committee, be granted either alone or in addition to, in tandem with, or

9

 

in substitution for any other Award granted under the Plan or any award granted under
any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem
with other Awards or awards granted under any other plan of the Company or any Affiliate may
be granted either at the same time as or at a different time from the grant of such other
Awards or awards.

     (ii) Limits on Transfer of Awards.

     (A) Each Option and Unit Appreciation Right shall be exercisable only by the
Participant during the Participant’s lifetime, or by the Person to whom the
Participant’s rights shall pass by will or the laws of descent and distribution.

     (B) No Award and no right under any such Award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant and
any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company, the Partnership or
any Affiliate.

     (iii) Issuance of Units. The Units or other securities of the Partnership delivered
pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in
its sole discretion, including, but not limited to, in the form of a certificate issued in
the name of the Participant or by book entry, electronic or otherwise, and shall be subject
to such stop transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of the SEC, any stock
exchange upon which such Units or other securities are then listed, and any applicable
federal or state laws, and the Committee may cause a legend or legends to be inscribed on
any such certificates or book entry to make appropriate reference to such restrictions.

     (iv) Consideration for Grants. Awards may be granted for such consideration, including
services, as the Committee shall determine.

     (v) Restrictions on Awards. The right of a Participant to exercise or receive a grant
or settlement of an Award, and the timing thereof, may be subject to service or performance
conditions as may be specified by the Committee. The Committee may use such individual or
business criteria or other measures of performance as it may deem appropriate in
establishing any such conditions, and it may exercise its discretion to reduce or increase
the amounts payable under any Award subject to such conditions.

     (vi) Delivery of Units or other Securities and Payment by Participant of Consideration.
Notwithstanding anything in the Plan or any Award Agreement to the contrary, delivery of
Units pursuant to the exercise, vesting and/or settlement of an Award may be deferred for
any period during which, in the good faith determination of the Committee, the Company is
not reasonably able to obtain Units to deliver pursuant to such Award without violating
applicable law or the applicable rules or regulations of any governmental agency or
authority or securities exchange. No Units or other securities shall be delivered pursuant
to any Award until payment in full of any amount required to

10

 

be paid pursuant to the Plan or the applicable Award Agreement (including, without
limitation, any exercise price or tax withholding) is received by the Company.

     SECTION 7. Amendment and Termination.

     Except to the extent prohibited by applicable law:

     (a) Amendments to the Plan and Awards. Except as required by applicable law or the rules of
the principal securities exchange, if any, on which the Units are traded, the Board or the
Committee may amend, alter, suspend, discontinue, or terminate the Plan in any manner, including
increasing the number of Units available for Awards under the Plan, without the consent of any
partner, Participant, other holder or beneficiary of an Award, or any other Person.
Notwithstanding the foregoing, the Committee may waive any conditions or rights under, amend any
terms of, or alter any Award theretofore granted, provided that no change, other than pursuant to
Section 7(b), 7(c), or 7(d) below, in any Award shall materially reduce the rights or benefits of a
Participant with respect to an Award without the consent of such Participant.

     (b) Recapitalizations. If the Company recapitalizes, reclassifies its equity securities, or
otherwise changes its capital structure (a “recapitalization”), the number and class of Units
covered by an Award theretofore granted shall be adjusted so that such Award shall thereafter cover
the number and class of Units and securities to which the holder would have been entitled pursuant
to the terms of the recapitalization if, immediately prior to the recapitalization, the holder had
been the holder of record of the number of Units then covered by such Award and the unit
limitations provided in Section 4 shall be adjusted in a manner consistent with the
recapitalization.

     (c) Award Adjustment. In the event of changes in the outstanding Units by reason of
recapitalization, reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in capitalization occurring after the date of the grant of any Award and not
otherwise provided for by this Section 7, any outstanding Awards and any agreements evidencing such
Awards shall be subject to adjustment by the Committee at its discretion as to the number and price
of Units or other consideration subject to such Awards. In the event of any such change in the
outstanding Units, the share limitations provided in Section 4 may be appropriately adjusted by the
Committee, whose determination shall be conclusive.

     (d) Change of Control. Upon a Change of Control the Committee, acting in its sole discretion
without the consent or approval of any holder, may affect one or more of the following
alternatives, which may vary among individual holders and which may vary among Awards: (i) remove
any applicable forfeiture restrictions on any Award; (ii) accelerate the time at which the
Restricted Period shall lapse to a specific date, before or after such Change of Control, specified
by the Committee; (iii) require the mandatory surrender to the Company by selected holders of some
or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then
subject to a Restricted Period or other restrictions pursuant to the Plan) as of a date, before or
after such Change of Control, specified by the Committee, in which event the Committee shall
thereupon cancel such Awards and pay to each holder an amount of cash per unit equal to the amount
calculated in Section 7(e) (the “Change of Control Price”); or (iv) make such adjustments to Awards
then outstanding as the Committee deems appropriate to

11

 

reflect such Change of Control; provided, however, that the Committee may
determine in its sole discretion that no adjustment is necessary to Awards then outstanding.

     (e) Change of Control Price. The “Change of Control Price” shall equal the amount determined
in clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the per unit
price offered to Unit holders in any merger or consolidation, (ii) the per unit value of the Units
immediately before the Change of Control without regard to assets sold in the Change of Control and
assuming the Company has received the consideration paid for the assets in the case of a sale of
the assets, (iii) the amount distributed per Unit in a dissolution transaction, (iv) the price per
unit offered to Unit holders in any tender offer or exchange offer whereby a Change of Control
takes place, or (v) if such Change of Control occurs other than pursuant to a transaction described
in clauses (i), (ii), (iii), or (iv) of this Section 7(e), the Fair Market Value per unit of the
units that may otherwise be obtained with respect to such Awards or to which such Awards track, as
determined by the Committee as of the date determined by the Committee to be the date of
cancellation and surrender of such Awards. In the event that the consideration offered to
unitholders of the Company in any transaction described in this Section 7(e) or Section 7(d)
consists of anything other than cash, the Committee shall determine the fair cash equivalent of the
portion of the consideration offered which is other than cash.

     (f) Acceleration of Vesting and Lapse of Restrictions. Unless otherwise provided in an Award
Agreement, upon the Retirement of a Participant, or upon termination of a Participant’s employment
with or consulting services to the Company and its Affiliates or membership as a Director,
whichever is applicable, due to the Participant’s death or disability, the Committee, acting in its
sole discretion without the consent or approval of any holder, may affect either or both of the
following alternatives with respect to Awards held by such Participant, which may vary among
individual holders and which may vary among Awards: (i) remove any applicable forfeiture
restrictions on any Award; or (ii) accelerate the time at which the Restricted Period shall lapse
to a specific date, before or after such Retirement or termination, specified by the Committee;
provided, however, that no action shall be taken under this Section 7(f) with respect to a 409A
Award if such action would cause the Award to fail to comply with Section 409A of the Code and the
409A Regulations. Any action taken by the Committee pursuant to this Section 7(f) shall be in
writing specifying the effective date of such action.

     SECTION 8. General Provisions.

     (a) No Rights to Award. No Person shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of Participants. The terms and
conditions of Awards need not be the same with respect to each recipient.

     (b) Tax Withholding. Unless other arrangements have been made that are acceptable to the
Company, the Company or any Affiliate is authorized to deduct or withhold, or cause to be deducted
or withheld, from any Award, from any payment due or transfer made under any Award or from any
compensation or other amount owing to a Participant the amount (in cash, Units, Units that would
otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in
respect of the grant or settlement of an Award, its exercise, the lapse of restrictions thereon, or
any other payment or transfer under an Award or under the Plan and to

12

 

take such other action as may be necessary in the opinion of the Company to satisfy its
withholding obligations for the payment of such taxes.

     (c) No Right to Employment or Services. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or any Affiliate, to
continue consulting services or to remain as a Director, as applicable. Furthermore, the Company or
an Affiliate may at any time dismiss a Participant from employment or consulting free from any
liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award
Agreement or other agreement.

     (d) Governing Law. The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws of the State of
Delaware without regard to its conflicts of laws principles.

     (e) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed
or deemed amended without, in the determination of the Committee, materially altering the intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award
and the remainder of the Plan and any such Award shall remain in full force and effect.

     (f) Other Laws. The Committee may refuse to issue or transfer any Units or other
consideration under an Award if, in its sole discretion, it determines that the issuance or
transfer of such Units or such other consideration might violate any applicable law or regulation,
the rules of the principal securities exchange on which the Units are then traded, or entitle the
Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in connection with
the exercise of such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.

     (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between the Company or any
participating Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any participating Affiliate pursuant to an
Award, such right shall be no greater than the right of any general unsecured creditor of the
Company or any participating Affiliate.

     (h) No Fractional Units. No fractional Units shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other
securities, or other property shall be paid or transferred in lieu of any fractional Units or
whether such fractional Units or any rights thereto shall be canceled, terminated or otherwise
eliminated with or without consideration.

13

 

     (i) Headings. Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

     (j) Facility of Payment. Any amounts payable hereunder to any individual under legal
disability or who, in the judgment of the Committee, is unable to manage properly his financial
affairs, may be paid to the legal representative of such individual, or may be applied for the
benefit of such individual in any manner that the Committee may select, and the Company shall be
relieved of any further liability for payment of such amounts.

     (k) Participation by Affiliates. In making Awards to Employees employed by an entity other
than the Company, the Committee shall be acting on behalf of the Affiliate, and to the extent the
Partnership has an obligation to reimburse the Company for compensation paid for services rendered
for the benefit of the Partnership, such payments or reimbursement payments may be made by the
Partnership directly to the Affiliate, and, if made to the Company, shall be received by the
Company as agent for the Affiliate.

     (l) Gender and Number. Words in the masculine gender shall include the feminine gender, the
plural shall include the singular and the singular shall include the plural.

     (m) Compliance with Section 409A. Nothing in the Plan or any Award Agreement shall operate or
be construed to cause the Plan or an Award to fail to comply with the requirements of Section 409A
of the Code. The applicable provisions of Section 409A the Code and the regulations thereunder are
hereby incorporated by reference and shall control over any Plan or Award Agreement provision in
conflict therewith. To the extent that any Award shall be subject to Section 409A of the Code, it
shall be designed to comply with Section 409A of the Code.

     (n) Specified Employee under Section 409A. Subject to any other restrictions or limitations
contained herein, in the event that a “specified employee” (as defined under Section 409A of the
Code and the 409A Regulations) becomes entitled to a payment under an Award which is a 409A Award
on account of a “separation from service” (as defined under Section 409A of the Code and the 409A
Regulations), such payment shall not occur until the date that is six months plus one day from the
date of such separation from service. Any amount that is otherwise payable within the six month
period described herein will be aggregated and paid in a lump sum without interest.

     SECTION 9. Term of the Plan.

     The Plan shall be effective on the date on which the Plan is adopted by the Board and shall
continue until the earliest of (i) the date terminated by the Board, (ii) all Units available under
the Plan have been delivered to Participants, or (iii) the 10th anniversary of the date the Plan is
adopted by the Board. However, any Award granted prior to such termination, and the authority of
the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such
Award or to waive any conditions or rights under such Award, shall extend beyond such termination
date.

14

 

     SECTION 10. Adoption by Affiliates.

     With the consent of the Committee, any Affiliate that is not considered a single employer with
the Partnership under Section 414(b) of the Code or Section 414(c) of the Code may adopt the Plan
for the benefit of its Employees, Consultants or Directors by written instrument delivered to the
Committee before the grant to such Affiliate’s Employees, Consultants or Directors under the Plan
of any 409A Award.

15

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