Document:

talo-ex1035_420.htm

Exhibit 10.35

 

 

Contract CNH-RO1-LO 1-A2/2015

SECOND AMENDMENT AGREEMENT TO

THE CONTRACT FOR THE EXPLORATION

AND EXTRACTION OF HYDROCARBONS

UNDER THE FORM OF SHARED

PRODUCTION

 

BETWEEN

THE NATIONAL

HYDROCARBONS COMMISSION

AND

HOKCHI ENERGY, S.A. DE C.V.,

SIERRA BLANCA P&D, S. DE R.L. DE C.V.,

TALOS ENERGY OFFSHORE MEXICO 2, S. 
DE R.L. DE C.V.

 

AND

PREMIER OIL EXPLORATION AND

PRODUCTION MEXICO, S.A DE C.V.

DECEMBER 20, 2018

CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

This Second Amendment Agreement to the Contract for the Exploration and Extraction of Hydrocarbons in the Form of Shared Production, CNH-R01-L01-A2/2015 (hereinafter the "Amendment Agreement"), is entered into on December 20, 2018, at 5:30 PM, between, on the one hand, the National Hydrocarbons Commission (hereinafter "CNH"), represented by Commissioner Alma América Porres Luna, standing in the absence of the Commissioner-President under the terms of Article 48 of the Rules of Procedure of the Commission National Hydrocarbons, Martín Álvarez Magaña, Director of the Procurement Unit for Exploration and Extraction Activities, and Fausto Álvarez Hernández, Director of the Technical Management Unit of Concessions and Contracts, with the validation of Ramón Antonio Massieu Arrojo, Director of the Legal Unit; and on the other hand, Hokchi Energy, S. A. de C.V. (hereinafter, "Hokchi Energy"), represented jointly by Fernando José Villarreal and by Vinicio Suro Pérez, in their capacities as legal representatives, Sierra Blanca P&D, S. de R. L. de C. V. (hereinafter, "Sierra Blanca P & D") represented by Alejandro Vázquez Morales in his capacity as legal representative, Talos Energy Offshore México 2, S. de R.L. de C.V. (hereinafter, "Talos Energy Offshore Mexico 2") represented by Patricio Alejandro Trad Cepeda, in his capacity as legal representative, and Premier Oil Exploration and Production México, S. A. de C. V. (hereinafter, "Premier Oil Exploration and Production Mexico") represented by John Gerard Tominey, in his capacity as legal representative, in accordance with the following Recitals, Statements, and Clauses:

R E C I T A L S

1.On July 22, 2015, the Official Gazette of the Federation published the Decision of International Competitive Bidding CNH-R01-L01/2014, where it was stated that Oil & Gas, S. de R.L. de C.V., in consortium with Talos Energy, LLC, and Premier Oil, PLC, was the winning bidder of the Contractual Area.

2.Whereas, under the terms of section III of the Bidding Rules, under item 22.3, Sierra Oil & Gas, S. de R.L. de C.V., in consortium with Talos Energy, LLC and Premier Oil, PLC, opted to establish specific-purpose companies called Sierra O&G Exploración and Producción, S. de R.L. de C.V. (hereinafter "Sierra O&G"), Talos Energy Offshore Mexico 2, and Premier Oil Exploration and Production Mexico.

3.On September 4, 2015, the CNH, Sierra O&G, Talos Energy Offshore Mexico 2, and Premier Oil Exploration and Production Mexico signed contract CNH-R01-L01-A2/2015 for the Exploration and Extraction of Hydrocarbons under the Form of Shared Production (hereinafter, the "Contract"), in which the aforementioned participating companies designated Talos Energy Offshore Mexico 2 as Operator.

4.On August 8, 2018, the first Amendment Agreement to the Contract was signed, with the purpose of assigning the full participating interest of Sierra O&G to Sierra Blanca P&D.

5.On October 9, 2018, Talos Energy Offshore Mexico 2 requested the Assignment of the Control of Operations to Hokchi Energy, with Sierra Blanca P&D and Premier Oil Exploration and Production Mexico in agreement.

6.On October 30, 2018, the Governing Body of the CNH, by means of Resolution CNH.E.58.007/18, authorized the assignment of a 25% (twenty-five percent) Participating Interest in Talos Energy Offshore Mexico 2 and the assignment of a 22.5% (twenty-two point five percent) Participating Interest in Sierra Blanca P&D, both to Hokchi Energy, which are both stated for the record in this Amendment Agreement.

7.On November 22, 2018, the Governing Body of the CNH, through Resolution CNH.E.66.011/18 authorized the Assignment of Control of Operations of Talos Energy Offshore Mexico 2 to Hokchi Energy and instructed that the Second Amendment Agreement will be entered into to record the aforementioned Assignment.

8.On December 6, 2018, Hokchi Energy, Talos Energy Offshore Mexico 2, Sierra Blanca P&D, and Premier Oil Exploration and Production Mexico entered into an agreement to assign the participating interest and total control of operations, stating the following for the record: (i) the assignment of a 25% (twenty-five percent) Participating Interest in Talos Energy Offshore Mexico 2 and the assignment of a 22.5% (twenty-two point five percent) Participating Interest in Sierra Blanca P&D, both to Hokchi Energy; and (ii) the Assignment of the Control of Operations of Talos Energy Offshore México 2 to Hokchi Energy.

 

			
	
 
	
1
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

S T A T E M E N T S

The National Hydrocarbons Commission states through its representatives that:

I.It is a Coordinated Regulatory Body on Energy Matters of the Centralized Federal Public Administration of the State, with its own legal personality and technical and management autonomy, in accordance with Articles 28, eighth paragraph, of the Political Constitution of the United Mexican States (hereinafter the "Constitution"), 2, Section I, and 3 of the Coordinated Regulatory Bodies on Energy Matters Act;

II.Pursuant to Articles 27, seventh paragraph, of the Constitution; 15 and 23 of the Hydrocarbons Act and 38, Section II, of the Coordinated Regulatory Bodies on Energy Matters Act, it has the legal capacity to on behalf of the State, enter into contracts with individuals or State-Owned Production Companies, through which the Nation carries out the strategic activities of Exploration and Extraction of Petroleum and other solid, liquid, or gaseous hydrocarbons within Mexican territory;

III.Its representatives are empowered to enter into this Amendment Agreement in accordance with Article 23, Section III of the Coordinated Regulatory Bodies on Energy Matters Act; 10, Sections II, III BIS, IV, and VII, 14, Sections XVI and XXV, 20 and 48 of the Rules of Procedure of the National Hydrocarbons Commission.

Hokchi Energy states through its representatives that:

I.It is an incorporated commercial company and legal personality in accordance with the laws of Mexico, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons and has the legal capacity to enter into and fulfill this Amendment Agreement;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration ID (Registro Federal de Contribuyentes) and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico as well as its regulations and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capabilities to fulfill its obligations under this Amendment Agreement;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act; and

VI.The legal capacity of Fernando José Villarreal and Vinicio Suro Pérez, as representatives to enter into this Amendment Agreement, is authorized by the power of attorney in notarial instrument No. 78,063, recorded in notarial book 1,903, executed before Notary Public No. 1 of Mexico City, Mr. Roberto Núñez Bandera, dated October 19, 2016.

 

			
	
 
	
2
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

Sierra Blanca P&D states through its representative that:

I.It is an incorporated commercial company with legal personality in accordance with the laws of Mexico, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons, and that has the legal capacity to enter into and fulfill this Amendment Agreement;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico, as well as its regulations, and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capabilities to fulfill its obligations under this Amendment Agreement;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act;

VI.The legal capacity of Alejandro Vázquez Morales to enter into this Amendment Agreement is authorized by the registered power of attorney in notarial instrument No. 82,418 (eighty-two thousand four-hundred eighteen), executed before Notary Public No. 94 of Mexico City, Mr. Erik Namur Campesino, dated August 2, 2018.

 

 

Talos Energy Offshore México 2 states through its representative that:

I.It is a commercial company incorporated and with a legal personality in accordance with the laws of Mexico, and in compliance with the stipulations in Section III, item 22.3 of the Terms of Reference for Awarding Shared Production Contracts for the Exploration and Extraction of Hydrocarbons in Shallow Waters, First Call for Tenders, Competitive Bidding CNH-R01-L01/2014, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons, and that has legal capacity to enter into and comply with this Amendment Agreement;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico, as well as its regulations and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capabilities to fulfill its obligations under this Amendment Agreement;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act, and

VI.The legal capacity of Patricio Alejandro Trad Cepeda as legal representative to enter into this Amendment Agreement is authorized by the registered power of attorney in notarial instrument No. 84,138 (eighty-four thousand one-hundred thirty-eight), executed before Notary Public No. 1 of Mexico City, Mr. Roberto Núñez y Bandera, dated August 6, 2018.

 

			
	
 
	
3
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

Premier Oil Exploration and Production Mexico states through its representative that:

I.It is a commercial company incorporated and with a legal personality in accordance with the laws of Mexico, and in compliance with the stipulations in Section III, item 22.3 of the Terms of Reference for Awarding Shared Production Contracts for the Exploration and Extraction of Hydrocarbons in Shallow Waters, First Call for Tenders, Competitive Bidding CNH-R01-L01/2014, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons, and that has legal capacity to enter into and comply with this Amendment Agreement;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico, as well as its regulations, and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capabilities to fulfill its obligations under this Amendment Agreement;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act, and

VI.The legal capacity of John Gerard Tominey as legal representative to enter into this Amendment Agreement is authorized by the registered power of attorney in notarial instrument No. 68,015 (sixty-eight thousand fifteen), executed before Notary Public No. 223 of Mexico City, Ms. Rosamaría López Lugo acting as alternate in the notarial record book of Notary Public No. 173 of Mexico City, Mr. Francisco Xavier Arredondo Galván, dated July 16, 2018.

Pursuant to the foregoing, in accordance with Clause 27 of the Contract, the CNH, Hokchi Energy, Premier Oil Exploration and Production Mexico, Sierra Blanca P&D, and Talos Energy Offshore México 2 (collectively, the "Parties") agree to the following:

 

 

			
	
 
	
4
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

CLAUSES

CLAUSE 1
DEFINITIONS

Any term with capital letters not defined in this Amendment Agreement shall have the meaning attributed to it in the Contract.

CLAUSE 2

PURPOSE OF THE AMENDMENT AGREEMENT

The Parties agree, in order to record the assignments of Participating Interests and the Assignment of the Control of Operations of Talos Energy Offshore Mexico 2 to Hokchi Energy, to amend Statements and Clauses 1, 2, and 30 of the Contract, to be as follows:

“S T A T E M E N T S

The National Hydrocarbons Commission states that:

(...)

Hokchi Energy states that:

It is a commercial company incorporated and with a legal personality in accordance with the laws of Mexico, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons, and that has the legal capacity to enter into and comply with this Contract;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico, as well as its regulations, and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capabilities to fulfill its obligations under this Contract;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act;

VI. The legal capacity of Fernando José Villarreal and Vinicio Suro Pérez as representatives to enter into this Contract is authorized by the registered power of attorney in notarial instrument No. 78,063 (seventy-eight thousand sixty-three), executed before Notary Public No. 1 of Mexico City, Mr. Roberto Núñez Bandera, dated October 19, 2016.

 

			
	
 
	
5
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

Sierra Blanca P&D states that:

I.It is a commercial company incorporated and with a legal personality in accordance with the laws of Mexico, whose sole corporate purpose is the Exploration and Extraction of Hydrocarbons, and that has the legal capacity to enter into and comply with this Contract;

II.It has its tax residence in Mexico, has a Federal Taxpayer Registration and is not taxed in the optional tax regime for groups of companies referred to in Chapter VI of the Second Part of the Income Tax Act;

III.It is familiar with the laws of Mexico, as well as its regulations, and any other applicable provisions;

IV.It has the organization, experience, and technical, financial, and performance capacities to fulfill its obligations under this Contract;

V.It has carried out corporate transactions, obtained corporate or other authorizations, and complied with the applicable legal requirements to enter into and fulfill this Amendment Agreement, and neither it nor any third party associated with it is found under any of the assumptions of Article 26 of the Hydrocarbons Act,

VI.In accordance with Clause 24.4, subsection (a) of the Contract, it shall be jointly responsible for the fulfillment of all Contractor's obligations under the Contract, irrespective of whether such obligations have been incurred or generated prior to the date of entering into the assignment of the Participating Interest of Sierra O&G and,

VII.The legal capacity of Alejandro Vázquez Morales to enter into this Contract is authorized by the registered power of attorney in Notarial Instrument No. 82,418 (eighty-two thousand four-hundred eighteen), executed before Notary Public No. 94 of Mexico City, Mr. Erik Namur Campesino, dated August 2, 2018.

(...)

Talos Energy Offshore Mexico 2 states that:

(...)

Premier Oil Exploration and Production México states that:

(...)

 

 

			
	
 
	
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CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

CLAUSE 1
DEFINITIONS AND INTERPRETATION

1.1Definitions. For the purposes of this Contract, the following terms shall have the meanings listed below:

(...)

"Participating Companies" means Hokchi Energy, Premier Oil Exploration and Production Mexico, Sierra Blanca P&D, and Talos Energy Offshore Mexico 2 and their respective successors or assignees permitted under this agreement. If at any time the Contractor is made up of only one entity, any reference in this Contract to "each of the Participating Companies," "the Participating Companies," or similar references, shall be understood to mean "the Contractor."

(...)

CLAUSE 2
SUBJECT MATTER OF THE CONTRACT

(...)

2.3Participating Interests. The Participating Interests of the Participating Companies are as follows:

 

	
Participating Company
	
Participating Interest

	
 
	
 

	
Hokchi Energy
	
47.5  %

	
Sierra Blanca P&D
	
22.5  %

	
Talos Energy Offshore
	
 

	
Mexico 2
	
20  %

	
Premier Oil Exploration
	
 

	
and Production Mexico
	
10  %

 

 

No attempt to give in guarantee, assign, or transfer part or all of the Participating Interest shall be valid or shall be considered effective except as provided in Clause 24.

(...)

2.5Operator. Hokchi Energy has been designated by the participating companies with the approval of the CNH, as the Operator of this Contract that must comply with the Contractor's obligations arising from this Contract on behalf of and in representation of each of the Participating Companies. Notwithstanding the foregoing, it is understood that all operational aspects of Oil and Gas Activities will be carried out solely by the Operator on behalf of all Participating Companies. The non-performance by the Operator of its obligations to the Participating Companies will not relieve or release any of the Participating Companies of their joint liability provided for in this Contract. Each of the Participating Companies appoints the Operator in this act as their representative, with powers as broad as necessary to represent them before the CNH for any matter related to this Contract. It is understood that any matter agreed upon by the CNH with the Operator shall also oblige each of the Companies / Participants.

(...)

 

			
	
 
	
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CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

CLAUSE 30
NOTIFICATIONS

All notifications and other communication made under this agreement must be in writing and will be effective from the date the recipient receives them:

To the CNH:

Avenida Patriotismo 580,
Colonia Nonoalco,

Delegación Benito Juárez, Ciudad de México,
C.P. 03700.

To the Operator:

Hokchi Energy

Calzada Legaría 549, Torre 1, Piso 4,
Colonia 10 de Abril, Delegación Miguel Hidalgo,

Ciudad de México, México, C.P. 11250.

To the Contractor

Hokchi Energy

Calzada Legaría 549, Torre 1, Piso 4,
Colonia 10 de Abril, Delegación Miguel Hidalgo,

Ciudad de México, México, C.P. 11250.

Sierra Blanca P&D

Avenida Vasco de Quiroga 3000, Piso 8,
Colonia Santa Fe, Delegación Alvaro Obregón,

Ciudad de México, México, C.P. 01210.

Talos Energy Offshore Mexico 2

Av. Ejército Nacional 418, Piso 7,
Colonia Polanco, V Sección, Delegación Miguel Hidalgo,

Ciudad de México, México, C.P. 11520.

Premier Oil Exploration and Production Mexico

Av. Campos Elíseos 345, Piso 15,
Colonia Polanco, III Sección, Delegación Miguel Hidalgo,

Ciudad de México, México, C.P. 11560.

or at any other addresses, as notified by each Party to the other in the manner indicated above. It is understood that any notification made by the CNH to the Operator shall be deemed to be carried out to each of the Participating Companies for all purposes of this agreement."

 

			
	
 
	
8
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

CLAUSE 3

EFFECTS

3.1Structure of the Contractor. As of the date of this Amendment Agreement, Hokchi Energy, Premier Oil Exploration and Production Mexico, Sierra Blanca P&D, and Talos Energy Offshore Mexico 2 are responsible for the obligations inherent to the Contract and may enforce their Rights as Participating Companies.

3.2Operator. Hokchi Energy is designated by the Participating Companies, with the authorization of the CNH and is responsible for the obligations inherent to the Contract as Operator and may enforce its rights in terms of the Contract and the Applicable Regulations.

3.3Joint and Several Obligation. In accordance with Clause 24.4, subsection (b) of the Contract, both Talos Energy Offshore Mexico 2 and Sierra Blanca P&D, in their capacity as assignors, as Hokchi Energy in its capacity as assignee of the Participating Interests, are jointly and severally responsible for the fulfilment of the Contractor's obligations under the Contract, in an independent manner that these obligations have been incurred or have been generated prior to the date of the assignment of the Participating Interests and the assignment of the Control of the Operations, or thereafter.

3.4No effect on rights and obligations. This amending agreement does not imply novation, extension, or modification of any of the other contractual terms provided for in the Contract and, notwithstanding the provisions of Clause 31 of the Contract, is an integral part thereof.

CLAUSE 4
COUNTERPARTS

This Amendment Agreement is signed in four (4) equal counterparts with the same meaning and effect, and each one will be considered an original.

IN WITNESS WHEREOF, the Parties sign this Amending Agreement on the date mentioned at the beginning thereof.

 

	
ON BEHALF OF THE NATIONAL

HYDROCARBONS COMMISSION
	
 
	
ON BEHALF OF THE CONTRACTOR

	
/s/ Alma América Porres Luna
	
 
	
/s/ Fernando José Villarreal

	
ALMA AMÉRICA PORRES LUNA

COMMISSIONER

STANDING IN FOR THE PRESIDENT, UNDER THE TERMS OF ARTICLE 48 OF THE RULES OF PROCEDURE OF THE NATIONAL HYDROCARBONS COMMISSION.
	
 
	
FERNANDO JOSÉ VILLARREAL

LEGAL REPRESENTATIVE

HOKCHI ENERGY, S.A. DE C.V.

	
 
	
 
	
 

 

			
	
 
	
9
	
CONTRACTUAL AREA 2

 

 

			
	
 
	
 
	
Contract CNH-R01-L01-A2/2015

 

 

	
ON BEHALF OF THE NATIONAL

HYDROCARBONS COMMISSION
	
 
	
ON BEHALF OF THE CONTRACTOR

	
/s/ Martín Álvarez Magaña
	
 
	
/s/ Vinicio Suro Pérez

	
MARTÍN ÁLVAREZ MAGAÑA
DIRECTOR OF THE PROCUREMENT
UNIT FOR EXPLORATION AND
EXTRACTION ACTIVITIES
	
 
	
VINICIO SURO PÉREZ
LEGAL REPRESENTATIVE
HOKCHI ENERGY, S.A. DE C.V.

	
/s/ Fausto Álvarez Hernández
	
 
	
/s/ Alejandro Vazquez Morales

	
FAUSTO ÁLVAREZ HERNÁNDEZ
DIRECTOR OF THE TECHNICAL
MANAGEMENT UNIT OF
CONCESSIONS AND CONTRACTS
	
 
	
ALEJANDRO VAZQUEZ MORALES
LEGAL REPRESENTATIVE
SIERRA BLANCA P&D, S. DE R.L. DE C.V

	
/s/ Ramón Antonio Massieu Arrojo
	
 
	
/s/ Patricio Alejandro Trad Cepeda

	
RAMÓN ANTONIO MASSIEU ARROJO
DIRECTOR OF THE LEGAL UNIT
	
 
	
PATRICIO ALEJANDRO TRAD
CEPEDA
LEGAL REPRESENTATIVE
TALOS ENERGY OFFSHORE MEXICO 2,
S. DE R.L. DE C.V.

	
 
	
 
	
 

	
 
	
 
	
/s/ John Gerard Tominey

	
 
	
 
	
JOHN GERARD TOMINEY
LEGAL REPRESENTATIVE

 

 

			
	
 
	
10
	
CONTRACTUAL AREA 2EX-10.14

 Exhibit 10.14 

RATTLER MIDSTREAM LP 

LONG-TERM INCENTIVE PLAN 

FORM OF PHANTOM UNIT AGREEMENT 

THIS PHANTOM UNIT AGREEMENT (this “Agreement”) is made and entered into by and between Rattler Midstream GP
LLC, a Delaware limited liability company (the “General Partner”), and                      (“you”), effective as
of                          (the “Date of Grant”). 

WHEREAS, Rattler Midstream LP, a Delaware limited partnership (the “Partnership”), acting through the board of
directors of the General Partner (the “Board”), has adopted the Rattler Midstream LP Long-Term Incentive Plan, as it may be amended from time to time (the “Plan”), to, among other things, attract,
retain and motivate certain directors, employees and officers of the Partnership, the General Partner and their respective Affiliates (collectively, the “Partnership Entities”); and 

WHEREAS, the Board has authorized the grant of Phantom Units under the Plan to you as part of your compensation for services provided
to the Partnership Entities. 
 NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other valuable
consideration hereinafter set forth, the parties agree as follows: 
 1.    Grant of Phantom Units.
The General Partner hereby grants to you, effective as of the Date of Grant, the right (the “Award”) to receive an aggregate of Units (the “Phantom Units”) on the terms and conditions set forth herein
and in the Plan, which Plan is incorporated herein by reference as part of this Agreement. Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings given to such terms in the Plan, unless the context requires
otherwise. 
 2.    Phantom Units. Each Phantom Unit under the Award is a notional Unit granted
under Section 6.4 of the Plan, which upon vesting entitles you to receive, at the time of settlement (which may or may not be coterminous with the vesting schedule of the Award), a Partnership Unit. 

3.    Vesting of Phantom Units. Phantom Units shall be deemed “Nonvested Phantom
Units” unless and until they have become “Vested Phantom Units” in accordance with this Section 3. 

 (a)    Vesting Schedule. Subject to the other terms and
conditions set forth herein, the Phantom Units granted pursuant to this Agreement will become Vested Phantom Units in accordance with the following schedule, provided that you remain in Continuous Service with the Partnership Entities until the
applicable vesting dates: 
  

			
	 Date Phantom Units Become

Vested Phantom Units
	 	
Number of Phantom Units that

Become Vested Phantom Units

	
                 
   , 2020
	 	 
	
                 
   , 2021
	 	 
	
                 
   , 2022
	 	 
	
                 
   , 2023
	 	 
	
                 
   , 2024
	 	 

 (b)    Change of Control. Notwithstanding the above vesting schedule, upon
the occurrence of a Change of Control prior to the date all Phantom Units granted pursuant to this Agreement become Vested Phantom Units, all of Phantom Units subject to this Agreement will immediately become Vested Phantom Units. As used in this
Section 3(b), the term “Change of Control” means a Change of Control as defined in the Plan even if such Change of Control does not also constitute a “change in the ownership of a corporation,” a “change in the
effective control of a corporation,” or a “change in the ownership of a substantial portion of a corporation’s assets,” in each case, within the meaning of § 1.409A-3(i)(5) of the 409A
Regulations. 
 (c)    Termination of Employment. 

(i)    General. Except as provided in Section 3(c)(ii) below, notwithstanding anything to the
contrary in the foregoing provisions of this Section 3, in the event your Continuous Service with the Partnership Entities is terminated prior to the date all Phantom Units granted pursuant to this Agreement become Vested Phantom Units, then
all of your Nonvested Phantom Units will remain unvested, will become null and void and will be forfeited as of the date of such termination. 

(ii)    Death and Disability. If your Continuous Service with the Partnership Entities is terminated
due to death or Disability prior to the date all Phantom Units granted pursuant to this Agreement become Vested Phantom Units, then all Phantom Units subject to this Agreement will immediately become Vested Phantom Units as of your Continuous
Service termination date. As used in this Section 3(c)(ii), “Disability” means your inability to substantially perform your duties to the General Partner, the Partnership, or any Affiliate of either by reason of a
medically determinable physical or mental impairment that is expected to last for a period of six months or longer or to result in death. 

  
 2 

 4.    Settlement and Payment of Phantom Units. 

(a)    Time of Settlement. Subject to your satisfaction of the applicable tax withholding obligations of
Section 6 and the requirements Section 4(b) below, Vested Phantom Units will be settled upon the earlier to occur of: 

(i)    the following schedule: 
  

			
	Date Phantom Units are Settled	 	
Number of Phantom Units that

are Settled by Issuance of Units

	
                 
   , 2020
	 	 
	
                 
   , 2021
	 	 
	
                 
   , 2022
	 	 
	
                 
   , 2023
	 	 
	
                 
   , 2024
	 	 

 or 

(ii)    the date a Change in Control occurs (the earliest occurring of such events, the
“Settlement Date”). The term “Change of Control” means a Change of Control as defined in the Plan. 

(b)    Extension of Settlement Date. Notwithstanding the foregoing provisions of this Section 4, in the
event the issuance and delivery of Units on any Settlement Date would violate any applicable Federal, state, local or foreign law (including if, at the time of a proposed settlement, there shall be an effective registration statement registering
under the Securities Act of 1933, as amended (the “Securities Act”), the issuance of Units upon vesting of Awards under the Plan (the “Registration Statement”), and there shall have occurred an event
which makes any statement made in the Registration Statement, related prospectus or any document incorporated therein by reference untrue in any material respect or which requires the making of any changes in such Registration Statement, prospectus
or other documents so that they will not contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading), the General Partner may specify
another date, during a 30 day period beginning on the date the issuance and delivery of Units for your Vested Phantom Units, or any portion thereof, would first no longer violate an applicable federal, state, local or foreign law, as the Settlement
Date for your Vested Phantom Units, or portion thereof, but not later than two and one-half months after the end of the calendar year in which such Award becomes Vested Phantom Units. 

(c)    Delivery of Units. No fractional Units shall be issued with respect to Vested Phantom Units; rather,
you will receive a cash payment for such amount as is necessary to eliminate fractional Units and effect the issuance and acceptance of only whole Units. Unless and until a certificate or certificates representing such Units shall have been issued
by the Partnership to you or the transfer of such Units shall be entered in the Partnership’s ledger or otherwise properly reflected in the Partnership’s books and records, you shall not be or have any of the rights or privileges of a
unitholder of the Partnership with respect to Units acquirable upon vesting of the Award.    The Partnership will not have any obligation to settle the vesting of any Award by transfer of such Units unless and until the General
Partner receives the full amount of money as the General Partner may require to meet its withholding obligation under applicable tax laws or regulations and to satisfy the tax withholding obligations of Section 6 hereof. 

(d)    Distribution Equivalents. If the Partnership pays any cash distribution to its outstanding
Partnership Unit holders for which the record date occurs after the Date of Grant, the Administrator will pay you as of the distribution payment date an amount equal to the amount of the distribution paid by the Partnership with respect to a single
Partnership Unit multiplied by the number of Phantom Units under this Agreement that are unvested as of that record date and that are vested as of that record date but have not been settled under the payment

  
 3 

 
terms of Section 4 (“Distribution Equivalents”). Distribution Equivalents will vest and be paid to the Participant on the distribution payment date (but not later
than two and one-half months after the end of the year that includes the distribution record date) if Participant is in the employ of, or a service provider to, the Partnership Entities on the distribution
record date declared by the Partnership. 
 5.    Transferability. This Agreement and the Phantom
Units granted hereunder will not be transferrable or assignable by you other than by will or the laws of descent and distribution, except to the extent approved by the Committee in accordance with the terms of the Plan. Notwithstanding the
foregoing, if you are serving as a Designated Director of the General Partner, you may enter into a transfer agreement that transfers this Award and requires issuance of the Units in settlement of the Vested Phantom Units to an entity, including
without limitation a private equity or other investment fund that is an investor in the Partnership (an “Investor”), subject to compliance with all applicable securities laws. A “Designated Director”
is a Director of the General Partner who is an employee or partner of an Investor and who is treated as serving on behalf of such Investor because the services provided to the General Partner depend upon the exercise of expertise and are similar to
those that are performed for the Investor and the Investor has established a policy that provides that the Investor is entitled to the benefit of any compensation provided for services provided as a Director of any portfolio company. 

6.    Payment of Taxes. To the extent that the settlement of this Award or the disposition of Units
acquired by vesting of this Award results in compensation income or wages to you for federal, state or local tax purposes that are subject to withholding requirements, you shall deliver to the General Partner at the time of such settlement or
disposition such amount of money as the General Partner may require to meet its withholding obligation under applicable tax laws or regulations. You may satisfy such tax withholding obligation (i) in cash (including by certified check, bank
draft or money order, or wire transfer of immediately available funds); or (ii) in the Committee’s discretion and on such terms as the Committee approves: (A) by delivering or constructively tendering by means of attestation whereby
you identify for delivery specific duly endorsed Units having a Fair Market Value equal to the aggregate withholding obligation (provided that any Units used for this purpose must have been held by you for such minimum period of time, if any, as may
be established from time to time by the Committee), (B) by notice of net issuance including a statement directing the Partnership to retain from transfer the number of Units with a Fair Market Value equal to the aggregate withholding obligation, in
which case the Award will be surrendered and cancelled with respect to the number of Units retained by the Partnership, or (C) to the extent permissible under applicable law, through delivery of irrevocable instructions to a broker to sell a
sufficient number of the Units being settled to cover the aggregate withholding obligation and delivery to the General Partner on behalf of the Partnership (on the same day that the Units issuable upon vesting are delivered) of the amount of sale
proceeds required to pay the aggregate withholding obligation; or (iii) any combination of the foregoing. In the event the Committee subsequently determines that the amount paid or withheld as payment of any tax withholding obligations is
insufficient to discharge the tax withholding obligation, you will be required to pay to the General Partner, immediately upon the Committee’s request, the amount of that deficiency. No Units will be transferred to you pursuant to
Section 4(c) until the full amount of any required tax withholding obligation has been received by the General Partner. 

  
 4 

 7.    Nonqualified Deferred Compensation Rules. The
intent of the parties is that the Award and related rights under this Agreement will be exempt under Section 409A of the Code and the 409A Regulations as a short-term deferral and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith. In the event the Award is subject to Section 409A, the General Partner, the Partnership and you shall take commercially reasonable efforts to reform or amend any provision hereof to the extent
it is reasonably determined that such provision would or could reasonably be expected to cause you to incur any additional tax or interest under Section 409A or the 409A Regulations to try to comply with the requirements of Section 409A
and the 409A Regulations through good faith modifications, in any case, to the minimum extent reasonably appropriate to conform with such requirements; provided, that any such modification shall not increase the cost or liability to the General
Partner or the Partnership. To the extent that any provision hereof is modified in order to comply with Section 409A and the 409A Regulations, such modification shall be made in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit to the General Partner, the Partnership and you of the applicable provision without violating the provisions of Section 409A and the 409A Regulations. Notwithstanding the foregoing provisions of
this Section 7, you are responsible for any and all taxes (including any taxes imposed under Section 409A of the Code) associated with the grant or vesting of, or otherwise with respect to, the Award and matters related thereto. For
purposes of Section 409A of the Code, each payment or amount due under this Agreement shall be considered a separate payment. 

8.    Miscellaneous. 

(a)    No Right to Continued Service. This Award shall not be construed to confer upon you any right to
continue as an employee of or other service provider to the Partnership Entities. Any question as to whether and when there has been a termination of Continuous Service shall be determined by the Committee and its determination shall be final and
binding. Records of the Partnership Entities regarding your period of Continuous Service, termination of Continuous Service, leaves of absence and other matters shall be conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect. 
 (b)    Administration. This Agreement shall at all times be subject to the terms and
conditions of the Plan. The Committee shall have sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the Board or a majority of the members of the Committee designated to administer the Plan with
respect thereto and to this Agreement shall be final and binding upon you and the Partnership Entities. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control. 

(c)    No Liability for Good Faith Determinations. The Partnership Entities, the members of the Board and
the Committee, shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Award granted hereunder. 

(d)    No Guarantee of Interests. The Partnership Entities the members of the Board and the Committee, do
not guarantee the Units from loss or depreciation. 

  
 5 

 (e)    Severability. If any provision of this Agreement is
held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid
provision had never been included herein. 
 (f)    Binding Effect. This Agreement shall be binding upon
you, your legal representatives, heirs, legatees and distributees, and upon the Partnership Entities and their successors and assigns. 

(g)    Construction. The titles and headings of sections are included for convenience of reference only and
are not to be considered in construction of the provisions hereof. Words used in the masculine shall apply to the feminine where applicable and whenever the context of this Agreement dictates, the plural shall be read as the singular and the
singular as the plural. 
 (h)    Governing Law. All questions arising with respect to the provisions of
this Agreement shall be determined by application of the laws of the State of Delaware without regard to choice of law principles thereunder, except to the extent Delaware law is preempted by federal law. 

(i)    Amendment. This Agreement may be amended by the Committee; provided, however, that, unless otherwise
provided in the Plan, no such amendment may materially reduce your rights or benefits inherent in this Agreement prior to such amendment without your express written consent. For the avoidance of doubt, a cancellation of all or a part of this Award
where you receive a payment equal in value to the Fair Market Value of the vested Award will not constitute an impairment of your rights that requires your consent. 

(j)    Furnish Information. You agree to furnish to the General Partner or the Partnership all information
requested by them to enable the Partnership Entities to comply with any reporting or other requirements imposed upon them by or under any applicable statute or regulation. 

(k)    Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of Units or other
property to you, or to your legal representative, heir, legatee or distributee, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Committee may require you or your legal representative, heir, legatee
or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine. 

(l)    Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format,
you agree, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Partnership Entities may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award
notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Partnership. Electronic delivery may be via an electronic mail
system of the Partnership Entities or by reference to a location on a Partnership intranet to which you have access. You hereby consent to any and all procedures the Partnership Entities have established or may establish for an electronic signature
system for delivery and acceptance of any such documents that the Partnership Entities may be required to deliver, and agree that your electronic signature is the same as, and shall have the same force and effect as, your manual signature. 

[Signature page follows.] 

  
 6 

 IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by
its duly authorized agent effective as of the date first written above. 
  

							
		 		 	      RATTLER MIDSTREAM GP LLC

							
				
	Dated:	 		 	 By:
	 	  

 By your signature below and the signature of the General Partner’s representative above, you and the
General Partner agree to be bound by all of the terms and conditions of this Phantom Unit Agreement and the Plan (incorporated herein by this reference as if set forth in full in this document). By executing this Phantom Unit Agreement, you hereby
irrevocably elect to accept the Phantom Unit rights granted pursuant to this Phantom Unit Agreement and to receive the Award for Units of Rattler Midstream LP designated above subject to the terms of the Plan and this Phantom Unit Agreement. 

 

							
		 		 	AWARD RECIPIENT
			
	 Dated:
	 		 	  

 [Signature Page to Phantom Unit Award Agreement]

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