Document:

Second Limited Waiver Agreement, dated November 1, 2012

 Exhibit 10.2 
 SECOND LIMITED WAIVER AGREEMENT 
 This SECOND LIMITED WAIVER
AGREEMENT (this “Agreement”), dated as of November 1, 2012, is entered into by and among LIFECARE HOLDINGS, INC. (the “Company”), each direct or indirect subsidiary of the Company that is a Guarantor (as defined in the
Indenture (as defined below)), and each Holder (as defined in the Indenture) of Notes (as defined below) signatory hereto (the “Waiving Noteholders”). Unless otherwise defined herein, capitalized terms used herein and defined in the
Indenture referred to below are used herein as therein defined. 

W I T N E S S E T 
H : 
 WHEREAS the Company (as successor in interest to Rainier Acquisition Corp.) and U.S. BANK
NATIONAL ASSOCIATION, as trustee (the “Trustee”), have entered into an Indenture, dated as of August 11, 2005 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Company
issued 9  1/4% Senior Subordinated Notes Due 2013 (the “Notes”); 
 WHEREAS the
Company acknowledges that a Default has occurred under the Indenture as a result of the Company’s failure to pay interest on the Notes pursuant to Section 301 of the Indenture and Section 1 of the Notes on August 15, 2012 (such
Default, the “Specified Event”); 
 WHEREAS, on September 14, 2012, the Company, the Guarantors and the Holders
party thereto entered into that certain Limited Waiver Agreement, dated as of September 14, 2012; 
 WHEREAS the Company
has requested that the Holders continue to waive, during the Limited Waiver Period (as defined herein), the Specified Event and any Event of Default arising from the Specified Event; and 

WHEREAS subject to the terms and conditions hereof, the Noteholders have agreed to such limited waiver, solely during the Limited Waiver
Period; 
 NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the
Company, the Guarantors and the Waiving Noteholders agree as follows: 
  

	A.	Defined Terms 

 1. As used
in this Agreement, the following terms shall have the meanings set forth below: 
 a. “Advisor Engagement
Letters” shall mean the fee reimbursement letter with Wachtell, Lipton, Rosen & Katz, counsel to the Waiving Noteholders, and the engagement letter of Houlihan Lokey Capital, Inc., financial advisor to the Waiving Noteholders.

 b. “Limited Waiver Agreement Default” shall mean (i) the
occurrence of any Event of Default other than an Event of Default resulting from the Specified Event, (ii) the failure of the Company or any Guarantor to timely comply with any term, condition or covenant set forth in this Agreement, or
(iii) the failure of any representation or warranty made by the Company or any Guarantor in this Agreement to be true and correct in any material respect as of the date when made. 

c. “Limited Waiver Period” shall mean the period (i) commencing on and including September 15, 2012,
(ii) continuing on the Agreement Effective Date (as defined herein), and (iii) ending on, but not including, the date that is the earlier to occur of (x) December 15, 2012 and (y) the date of occurrence of a Termination
Event. 
 d. “Secured Agent” shall mean JPMorgan Chase Bank, N.A., as administrative agent and
collateral agent for the Secured Lenders pursuant to the Secured Credit Agreement. 
 e. “Secured Credit
Agreement” shall mean that certain Credit Agreement, dated as of February 1, 2011, by and among the Company, LCI Holdco, LLC, the lenders from time to time party thereto and the Secured Agent, as such agreement has been amended,
supplemented or otherwise modified prior to the date of this Agreement. 
 f. “Secured Lenders” shall
mean the lenders from time to time party to the Secured Credit Agreement. 
 g. “Secured Limited Waiver
Agreement” shall mean that certain Limited Waiver and Second Amendment to Credit Agreement, dated as of November 1, 2012, by and among the Company, LCI Holdco, LLC, the Secured Agent and Secured Lenders constituting Required Lenders (as
defined in the Secured Credit Agreement), pursuant to which the Secured Agent and the Secured Lenders party thereto have agreed to waive, subject to the terms thereof, until no earlier than December 15, 2012, (i) any Default or Event of
Default (each such term as defined in the Secured Credit Agreement) arising under clause (f) or clause (g) of Article VII of the Secured Credit Agreement as a direct or indirect result of the occurrence of the Specified Event, and
(ii) any Default or Event of Default that may exist under clause (e) of Article VII of the Secured Credit Agreement as of the date of the Secured Limited Waiver Agreement. 

h. “Sponsor” shall mean TC Group, L.L.C., together with its Affiliates. 

i. “Termination Event” shall mean (i) the occurrence of a Limited Waiver Agreement Default and
(ii) the termination of the Waiver Period under the Secured Limited Waiver Agreement (as such term is defined therein) without taking into account any waiver of any termination event thereunder by the Secured Lenders. 

 

	B.	Limited Waiver; Termination; Reservation of Rights 

 1. Upon the terms and conditions set forth in this Agreement, and so long as no Termination Event shall have occurred, the Waiving Noteholders hereby waive, solely for the duration of the Limited Waiver
Period, the occurrence of the Specified Event and of any Event 

  
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of Default arising from the Specified Event and the Company’s obligation to pay interest on the Notes, and agree to forbear, solely for the duration of the Limited Waiver Period, from
exercising the rights and remedies available to them as a direct result of the occurrence of any Event of Default arising from the Specified Event; provided, however, that the Company and each Guarantor shall comply with all
limitations, restrictions or prohibitions that would otherwise be effective or applicable under the Indenture or the Notes during the continuance of any Default or Event of Default; provided further that, notwithstanding the Waiving
Noteholders’ waiver of the Company’s obligation to pay interest on the Notes during the Limited Waiver Period, interest shall continue to accrue on the Notes in accordance with the terms of the Indenture during the Limited Waiver Period,
such interest shall be due and payable immediately upon the expiration of the Limited Waiver Period and the Company’s failure to pay such interest immediately upon the expiration of the Limited Waiver Period shall be an immediate Event of
Default under the Indenture. 
 2. Any Limited Waiver Agreement Default shall constitute an immediate Event of Default under the
Indenture and the Notes without the requirement of any demand, presentment, protest or notice of any kind to the Company or any Guarantor (all of which the Company and each Guarantor waive). 

3. Upon the expiry of the Limited Waiver Period, the agreement of the Waiving Noteholders hereunder to waive the Specified Event and the
Company’s obligation to pay interest on the Notes shall immediately terminate without the requirement of any demand, presentment, protest, or notice of any kind, all of which the Company and each of the Guarantors hereby unconditionally and
irrevocably waive and all of which rights and remedies are fully reserved by the Waiving Noteholders, subject to the provisions of the Indenture. The Company and each of the Guarantors agree that, subject to the provisions of the Indenture, any or
all of the Waiving Noteholders may at any time thereafter proceed to exercise any and all of their respective rights and remedies under the Indenture or the Notes, under any other document related thereto, under applicable law and/or at equity,
including, without limitation, their respective rights and remedies with respect to the Specified Event, none of which rights or remedies or the Specified Event is or shall be deemed to be waived in any respect. 

 

	C.	Covenants of the Company 

1. The Company shall promptly pay all fees and expenses of Wachtell, Lipton, Rosen & Katz and Houlihan Lokey Capital, Inc. in
accordance with the terms of the Advisor Engagement Letters. The Company shall otherwise comply with its obligations under the Advisor Engagement Letters; provided that, notwithstanding any other provision of this Agreement, the
Company’s failure to adhere to the provisions of the Advisor Engagement Letters (other than its obligation to pay the fees and expenses of Wachtell, Lipton, Rosen & Katz and Houlihan Lokey Capital, Inc.) shall not constitute a Limited
Waiver Agreement Default unless such failure is not cured within five (5) Business Days after the Company’s receipt of notice of such failure from any Waiving Noteholder. 

2. Notwithstanding any provision to the contrary in the Indenture or the Notes, the Company and each Subsidiary of the Company shall not
make any payment to the Secured Agent or any Secured Lender (a) as consideration for such party’s agreement to enter into the Secured Limited Waiver Agreement or (b) during the Limited Waiver Period, in each case other

  
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than principal, interest, fees and expenses required to be paid pursuant to the Secured Credit Agreement (as in effect on the date of this Agreement, as modified by the Secured Limited Waiver
Agreement); provided that, notwithstanding anything to the contrary contained in this Agreement, none of the Company and its Subsidiaries may make payments of any Additional Interest (as defined in the Secured Limited Waiver Agreement) under
the Secured Limited Waiver Agreement at a rate in excess of 1% per annum payable in cash and an additional 1% per annum payable in kind. 
 3. Notwithstanding any provision to the contrary in the Indenture or the Notes, during the Limited Waiver Period, the Company and each of the Guarantors shall not, and shall not permit any of their
respective Restricted Subsidiaries to, declare, pay or make any Restricted Payment or any other distribution on account of any of their respective Equity Interests (including, without limitation, any purchase, redemption, acquisition or retirement
for value of any such Equity Interests) or to the direct or indirect holders of any of their respective Equity Interests in their capacity as such, other than Restricted Payments paid to the Company or a Guarantor. 

4. Notwithstanding any provision to the contrary in the Indenture or the Notes, the Company and each of the Guarantors shall not, and
shall not permit any of their respective Restricted Subsidiaries to, (a) during the period commencing on and including the Agreement Effective Date and ending on the expiration of the Limited Waiver Period, make any payment or reimbursement of
fees to the Sponsor (other than reimbursement of fees, costs and expenses as required by the Management Agreement in an aggregate amount not to exceed $15,000) or to any other Affiliate (other than the Company and the Guarantors), (b) during
the Limited Waiver Period, make any loans or advances to employees in excess of $5,000 individually or $40,000 in the aggregate at any one time outstanding, or (c) during the Limited Waiver Period, make any other payment to any officer,
director or employee other than (1) base salary (excluding any bonus) paid in the ordinary course of business, consistent with past practice, (2) sign on bonuses to newly hired employees, consistent with past practice,
(3) compensation in exchange for vacation time in accordance with the Company’s “paid time off” program, consistent with past practice, and (4) with respect to employees who are not eligible for the existing key employee
retention plan, amounts owed under the existing management incentive plan. 
 5. Notwithstanding any provision in the Indenture
or the Notes to the contrary, during the Limited Waiver Period, the Company and each of the Guarantors shall not, and shall not permit any of their respective Restricted Subsidiaries to, (i) sell, lease, convey, transfer or otherwise dispose of
any assets or property of the Company, of the Guarantors or any of their respective Restricted Subsidiaries, (ii) issue or sell any Equity Interests or (iii) enter into any intellectual property licensing agreements, in each case outside
the ordinary course of business. 
  

	D.	Conditions to Effectiveness 

 This Agreement shall become effective as of the first date (the “Agreement Effective Date”) on or after November 1, 2012 upon which each of the conditions set forth below shall have been
fulfilled to the satisfaction of each of the Waiving Noteholders: 
 1. The Company, the Guarantors, and Waiving Noteholders
constituting the Holders of greater than 70% in outstanding principal amount of the Notes shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of telecopier or electronic
delivery) the same to the Trustee. 

  
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 2. The Waiving Noteholders shall have received reimbursement or other payment of all of the
respective reasonable out-of-pocket fees and expenses of Wachtell, Lipton, Rosen & Katz and Houlihan Lokey Capital, Inc. incurred in connection with the negotiation, preparation, execution and delivery of this Agreement and all other
documents to be delivered in connection herewith, to the extent invoiced at least one (1) Business Day prior to the date hereof. 
 3. All representations and warranties made by the Company and the Guarantors hereunder shall be true and correct in all material respects. 

4. The Company shall have furnished to the Waiving Noteholders (i) an executed copy of the Secured Limited Waiver Agreement and
(ii) an executed copy of the Secured Credit Agreement, each of which shall be in full force and effect and shall not have been further amended, supplemented or otherwise modified in any fashion (other than the amendment of the Secured Credit
Agreement by the Secured Limited Waiver Agreement). 
  

	E.	Miscellaneous Provisions 

1. In order to induce the Waiving Noteholders to enter into this Agreement, the Company and the Guarantors hereby represent and warrant
that (i) other than the Specified Event, there exists no Default or Event of Default under the Indenture or the Notes on the Agreement Effective Date, (ii) the Company and the Guarantors have the power and authority (a) to enter into
this Agreement and (b) to do all acts and things as are required or contemplated hereunder to be done, observed and performed by them and (iii) this Agreement has been duly authorized, validly executed and delivered by an authorized
officer of the Company and each Guarantor, and constitutes the legal, valid and binding obligation of the Company and each Guarantor, enforceable against it in accordance with its terms. 

2. By its signature below, the Company and each of the Guarantors hereby acknowledge and consent to this Agreement and the terms and
provisions hereof. The Company and each of the Guarantors hereby reaffirm the covenants and agreements contained in the Indenture (including, without limitation, any supplemental indenture to which it is a party) and the Notes. The Company and each
of the Guarantors further confirm that the Indenture (including, without limitation, any supplemental indenture to which it is a party) and the Notes are and shall continue to be in full force and effect and the same are hereby ratified and
confirmed in all respects. 
 3. The Company hereby agrees that it will take any action that from time to time may be reasonably
necessary to effectuate the agreements contemplated herein. 
 4. Except as expressly set forth herein, this Agreement shall not
by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Waiving Noteholders under the Indenture, the Notes or any other document related thereto, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Indenture, the Notes or any other document related thereto, all of which are ratified and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle the Company or any Guarantor to a consent to, 

  
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or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Indenture, the Notes or any other document related
thereto in similar or different circumstances. 
 6. This Agreement may be executed in any number of separate counterparts, each
of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopy
or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. 
 7. This Agreement
sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relative to such subject matter. 

8. This Agreement shall be binding upon and inure to the benefit of each of the Company, the Guarantors, the Waiving Noteholders, and
their respective successors and assigns; provided, that the Company shall not be entitled to delegate any of its duties hereunder and shall not assign any of its rights or remedies set forth in this Agreement without the prior written consent of
each of the Waiving Noteholders in their sole discretion. 
 9. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law; but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
 10. The
parties hereto agree that the running of all statutes of limitation or doctrine of laches applicable to all claims or causes of action that any Waiving Noteholder may be entitled to take or bring in order to enforce its rights and remedies against
the Company or any Guarantor shall be, to the fullest extent permitted by law, tolled and suspended during the Limited Waiver Period. 
 11. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF. 
 *    *    * 

  
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 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and
delivered as of the date first above written. 
  

			
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

 [Note Second Limited Waiver Agreement Signature Page] 

 
			
	GUARANTORS,
	
	CAREREHAB SERVICES, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	CRESCENT CITY HOSPITALS, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	NEXTCARE HOSPITALS/MUSKEGON, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	NEXTCARE SPECIALTY HOSPITAL OF DENVER, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	LIFECARE HOLDING COMPANY OF TEXAS, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF CHESTER COUNTY, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF DAYTON, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF FT. WORTH, L.P.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
					
	LIFECARE HOSPITALS OF MILWAUKEE, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF NEW ORLEANS, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF NORTH CAROLINA, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF NORTH TEXAS, L.P.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	LIFECARE HOSPITALS OF NORTHERN NEVADA, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF PITTSBURGH, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF SOUTH TEXAS, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE INVESTMENTS, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	LIFECARE MANAGEMENT SERVICES, L.L.C.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	SAN ANTONIO SPECIALTY HOSPITAL, LTD.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	LIFECARE HOSPITAL AT TENAYA, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF MECHANICSBURG, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE HOSPITALS OF SARASOTA, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE REIT 1, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	LIFECARE REIT 2, INC.
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	LIFECARE SPECIALTY HOSPITAL OF NORTH LOUISIANA, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel
	
	PITTSBURGH SPECIALTY HOSPITAL, LLC
		
	By:	 	 /s/ Erik C. Pahl

		 	Name: Erik C. Pahl
		 	Title: General Counsel

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	Highland Credit Opportunities CDO, Ltd.
	By: Highland Capital Management L.P., As Collateral Manager
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory
	
	Highland Crusader Offshore Partners, L.P.
	By: Highland Crusader Fund GP, L.P., its general partner
	By: Highland Crusader GP, LLC., its general partner
	By: Highland Capital Management L.P., its sole member
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory
	
	Highland Restoration Capital Partners Master, L.P.
	By: Highland Restoration Capital Partners GP, LLC, its General Partner
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory
	
	Highland Restoration Capital Partners, L.P.
	By: Highland Restoration Capital Partners GP, LLC, its General Partner
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory
	
	Longhorn Credit Funding, LLC
	By: Highland Capital Management, L.P., As Collateral Manager
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory

  
 [Note Second
Limited Waiver Agreement Signature Page] 

 
			
	Tunstall Opportunities Master Fund, LP
	By:	 	Tunstall GP, LLC, its general partner
		
	By:	 	 /s/ Carter Chism

		 	Name: Carter Chism
		 	Title: Authorized Signatory
	
	JLP Credit Opportunity Master Fund Ltd
		
	By:	 	 /s/ Robert Youree

		 	Name: Robert Youree
		 	Title: Chief Financial Officer
		 	Phoenix Investment Adviser LLC in its capacity as Investment Manager
	
	JLP Stressed Credit Fund LP
		
	By:	 	 /s/ Robert Youree

		 	Name: Robert Youree
		 	Title: Chief Financial Officer
		 	Phoenix Investment Adviser LLC in its capacity as Investment Manager
	
	SPNY MP II LLC - A
		
	By:	 	 /s/ Robert Youree

		 	Name: Robert Youree
		 	Title: Chief Financial Officer
		 	Phoenix Investment Adviser LLC in its capacity as Investment Manager

 [Note Second Limited Waiver Agreement Signature Page]Crude Oil Purchase Agreement

 Exhibit 10.4 
 *THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24B-2 OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, GRANTING
CONFIDENTIAL TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED BY “[REDACTED]”.

 Execution Version 
 Crude Oil Purchase Agreement 
 This CRUDE OIL PURCHASE AGREEMENT (the
“Agreement”) by and between Approach Operating, LLC and Approach Oil & Gas Inc. (each individually herein called “Approach”), and Wildcat Permian Services LLC
(“Wildcat”) covering the sale and delivery by Approach and the purchase and receipt by Wildcat of the hereinafter specified oil is entered into in accordance with the following terms and conditions. 

 

			
	1. TERM:	    	1.1 Except as otherwise provided in this Agreement, this Agreement shall be in effect for a period of time (“Term”) commencing September 12, 2012
(“Effective Date”), and continuing in effect, as to each of the Dedicated Interests (defined below), until (i) the termination, cancellation or expiration of the oil, gas and mineral lease, participating mineral interest or
agreement from which such Dedicated Interest is derived, or (ii) the expiration of a period of ten (10) years from the Effective Date, whichever occurs first. [REDACTED]*.
		
		    	1.2 Wildcat shall not amend, modify, supplement, waive or release any of the terms or provisions of any mutually satisfactory agreement entered into for the purchase of crude
oil from Approach (the term “TP CPA” (as defined below) shall be deemed to include any mutually satisfactory agreement), as so accepted by Approach, without the written consent of Approach which shall not be unreasonably withheld. Wildcat
shall not terminate the TP CPA without the express written consent of Approach, which consent may be withheld in its sole discretion. It is expressly agreed that Wildcat shall not increase the Committed Volume (as defined below) under any TP CPA
without Approach’s prior written approval.
		
		    	1.3 In the event this Agreement is terminated in accordance with the terms hereof, the parties shall take all actions, including but not limited to filing notice of said
termination in the applicable county records, to put third parties on notice that this Agreement has terminated and to release the Dedicated Area (defined below) from this Agreement.
		
	2. QUALITY &     CRUDE TYPE	    	West Texas Intermediate crude oil. Quality shall be consistent with, and at least sufficient to satisfy the requirements of, the applicable TP CPA pursuant to which such crude oil
is being sold.
		
	3. QUANTITY:	    	 3.1 An amount equal to actual crude oil produced (“Dedicated Oil”) from the rights or interests (“Dedicated Interests”)
that are owned or controlled by Approach to dispose of crude oil from all or any portion of Approach’s Crockett County acreage shaded in yellow on Exhibit “D” attached hereto and made a part hereof (the “Dedicated
Area”); provided that (i) Approach shall designate to Wildcat the monthly volume(s) which Approach desires Wildcat to request as committed volumes under any applicable third party contract pursuant to which Wildcat will sell Dedicated
Oil (a “TP CPA”), which contemplates such committed volumes, from time to time at such times as such committed volumes are to be designated under each such TP CPA (such amount as designated by Approach and accepted by the purchaser
under a TP CPA from time to time, the “Committed Volume”), (ii) on or before the 10th day of each month occurring after the date the Initial Facilities are operationally ready and able to transport oil, Approach shall designate
to Wildcat the volumes of crude oil Approach desires Wildcat to schedule for delivery in the next succeeding month, if applicable, which shall not be less than the Committed Volume(s) previously designated for such month (the “Nominated
Amount”) and (iii) Wildcat shall not be obligated to purchase from

			
		    	Approach volumes of crude oil during any month in excess of the Committed Volume for such month except to the extent the designated purchaser has available capacity to take delivery
of such excess amounts at the delivery point under the applicable TP CPA (a “TP Purchaser”).
		
		    	3.2 If Approach designates to Wildcat any volumes to be requested as committed volumes under any TP CPA, Approach’s designation shall be in accordance with such TP CPA.
If the monthly volume designated by Approach as the Nominated Amount pursuant to clause (ii) of Section 3.1 is the current Committed Volume for such month under the applicable TP CPA, Wildcat shall purchase such volumes and resell such
volumes under the applicable TP CPA.
		
		    	3.3 If at any time Approach designates to Wildcat a Nominated Amount in excess of a Committed Volume, Wildcat shall notify Approach in writing upon Wildcat’s receipt of
notice from a TP Purchaser that such TP Purchaser does not have the capacity to purchase any portion of such Nominated Amount in excess of the Committed Volume for such month (the “Excess Amounts”).
[REDACTED]*.
		
	4. DELIVERY:	    	Unless otherwise agreed by the parties, delivery shall be made by Approach at the initial receipt points on Wildcat’s transportation facilities as illustrated on
Exhibit “D” or any additional receipt points established pursuant to Exhibit “D” (collectively, the “Receipt Points”); provided that, if Approach connects any well to Wildcat’s transportation facilities
pursuant to the Well Connection provisions of the Special Provisions of Exhibit “B,” deliveries shall be made at the point of the interconnection between the facilities of Approach and Wildcat.
		
	5. PRICE:	    	5.1 Subject to the other provisions of this Paragraph 5, Wildcat shall pay Approach a price per barrel as set forth on Exhibit “A.”
		
		    	5.2 Either party may require that both parties negotiate in good faith in an attempt to agree upon new pricing provisions to be effective as of the first anniversary of the
Effective Date or any succeeding anniversary of the Effective Date by giving the other party written notice at least thirty (30) days’ notice prior to the anniversary upon which such renegotiated price is to be effective. If the parties
fail to agree upon new pricing provisions as the result such negotiations, the existing pricing provisions shall continue in effect.
		
		    	 5.3    [REDACTED]*

		
		    	 (a)    [REDACTED]*

		
		    	 (b)    [REDACTED]*.

		
		    	 5.4    [REDACTED]*

		
		    	 (a)    [REDACTED]*

		
		    	 (b)    [REDACTED]*.

		
		    	However, Section 5.4 shall not (i) require Wildcat to agree to such modifications or enter into such third-party purchase agreement unless Wildcat receives a fee of not
less than the T&M fee as then in effect, (ii) impose any costs on Wildcat or require Wildcat to commit to or incur any capital expenditure not otherwise required under this Agreement or other agreement between the parties,
(iii) adversely affect Wildcat’s ability to purchase, transport and sell any volumes of crude oil other than Approach’s volumes or

  
 2 

			
		    	otherwise perform its obligations under any then existing contracts with TP Sellers or (iv) change or affect the current regulatory classification or regulation of
Wildcat’s assets and/or transportation facilities.
		
	6. PAYMENT:	    	Wildcat shall pay Approach by wire transfer on or about the twenty-fifth (25th) day of the month following the month of delivery. In the event the payment due date falls
on a Saturday or a bank holiday other than a Monday, payment shall be due on the last preceding business day. Should the payment due date fall on a Sunday or a Monday bank holiday, payment shall be due on the following business day.
	
	7. PAYMENT SECURITY:
		
		    	All proceeds received by Wildcat from the purchaser from Wildcat of the Dedicated Oil purchased by Wildcat under this Agreement shall be delivered by such purchaser into a separate
account (the “Lockbox Account”) of Wildcat, which Lockbox Account will be used solely to receive such proceeds and distribute such proceeds in accordance with Sections 5 and 6. All monies held in the Lockbox Account shall be
deemed to be Wildcat funds. The Lockbox Account will be established and maintained with signatory authority as set forth in Exhibit “B”.
	
	8. RECORDING MEMORANDUMS:
		
		    	Approach and Wildcat agree to execute and deliver to each other counterparts of a memorandum in form for recording in the real property records of each county in which any portion
of the Dedicated Area is located in order to evidence the “Dedication” provision in Exhibit “B” to this Agreement.

 DIVISION ORDERS: If Division Orders have been issued to Approach by Wildcat and executed by Approach covering well(s) in
the Dedicated Area, the Division Orders are incorporated herein and made a part hereof. The provisions of this Agreement, including but not limited to those relating to term, rights of termination, price and otherwise, shall be applicable and
govern, notwithstanding any provision in the Division Orders to the contrary. 
 DAMAGES: Except in case of third party claims, both parties
expressly agree that neither party shall be liable for special, indirect, punitive, or consequential damages, whether arising under contract, tort, strict liability, or otherwise. In case of intentional or willful failure to deliver or accept crude
oil or make payment hereunder, the parties agree that the non-defaulting party’s actual damages shall include losses and costs incurred as a result of the non-defaulting party terminating, liquidating, obtaining or reestablishing any related or
associated hedge or related offset price position; provided that Wildcat shall not be liable for any damages to Approach for failure to accept crude oil from Approach that an applicable designated purchaser is not able or willing to purchase under a
TP CPA. 
 SPECIAL AND GENERAL PROVISIONS; ENTIRETY OF AGREEMENT: The special provisions set forth on Exhibit “B” hereto and the
general provisions set forth on Exhibit “C” are incorporated herein by reference and made a part hereof. This Agreement (including the exhibits hereto) contains the entire agreement between the parties with respect to the matters
contemplated herein, and supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein and therein. 
 ADDRESS FOR NOTICES: All invoices and notices given pursuant to this Agreement shall be in writing or faxed/emailed to the address show for such party below. 

  
 3 

 Notices, invoices and all other correspondence to Wildcat shall be mailed or faxed/emailed as follows:

  

			
	 	 	Wildcat Permian Services LLC
	 	 	8333 Douglas Avenue, Suite 300
	 	 	Dallas, Texas 75225
	 	 	Phone: 214.310.1213
	 	 	Fax/email: 214.310.1216
chris.rozzell@wildcatgas.com

Notices and all other correspondence to Approach shall be mailed or faxed/emailed as follows: 

 

			
	 	 	Approach Operating, LLC
	 	 	One  Ridgmar Centre
6500 West Freeway, Suite 800
Fort  Worth, Texas 76116
	 	 	Phone: 817.989.9000
	 	 	Fax/email: 817.989.9001
chenderson@approachresources.com

MULTIPLE COUNTERPARTS; FAX: This instrument may be executed in a number of identical counterparts, each of which for all purposes is to be deemed an
original, and all of which constitute collectively, one instrument. It is not necessary that each party hereto execute the same counterpart so long as identical counterparts are executed by each such party hereto. This instrument may be validly
executed and delivered by facsimile or other electronic transmission. 
 Executed by the parties hereto to be effective as of the Effective
Date. 
  

			
	WILDCAT PERMIAN SERVICES LLC
		
	By:	 	/s/ Chris D. Rozzell
	Name:	 	Chris D. Rozzell
	Title:	 	Executive Vice President

  

			
	APPROACH OIL & GAS INC.
		
	By:	 	/s/ Steven P. Smart
	Name:	 	Steven P. Smart
	Title:	 	EVP and Chief Financial Officer

  

			
	APPROACH OPERATING, LLC
		
	By:	 	/s/ Steven P. Smart
	Name:	 	Steven P. Smart
	Title:	 	EVP and Chief Financial Officer

  
 4 

 Exhibit A 
 Pricing Detail 
  

	A.	[REDACTED]*. 

  

	B.	

  

					
	                a. [REDACTED]*	 		    	
			
	                b. Year 1-10: 	 	[REDACTED]* barrels per day (“bopd”)	    	[REDACTED]* per barrel
		 	[REDACTED]*bopd	    	[REDACTED]*per barrel
		 	[REDACTED]*bopd	    	[REDACTED]*per barrel
		 	over [REDACTED]*bopd	    	[REDACTED]*per barrel
		 		    	

  
 A-1

 Exhibit B 
 Dedication, Receipt Points and Delivery Point 
 Approach dedicates and commits the Dedicated
Interest to this Agreement for the Term. Any transfer by Approach of any interest in the Dedicated Interest shall be subject to Wildcat’s rights under this Agreement. After the Operations Commencement Date, and so long as Wildcat is not in
material breach of this Agreement, Approach shall not deliver Dedicated Oil to any person other than Wildcat. The covenants of Approach in this Agreement shall be covenants attaching to and running with the Dedicated Interest and shall be binding on
the successors and assigns of Approach as to the Dedicated Interest, subject to the other provisions of this Agreement. 
 Well Connections

 In addition to the initial Receipt Points illustrated on the map below, Approach shall give Wildcat written notice (“Completion
Notice”) of the date (“Completion Date”) on which Approach reasonably believes that each well, in which Approach has a Dedicated Interest, will be completed and capable of producing and delivering crude oil. In the event
that Approach and Wildcat agree on mutually acceptable incremental economic terms, Wildcat shall construct all gathering lines, pipelines, pumps, terminals and related facilities (“Wellhead Receipt Facilities”) that are necessary to
receive crude oil from each such well on or before the date (“Connection Date”) which is later of (i) the Completion Date set forth in the Completion Notice for such well or (ii) [REDACTED]* days after the
Completion Notice is given by Approach to Wildcat for such well. Subject to the other provisions of this Agreement, Wildcat shall not be obligated to receive crude oil from any such well until it has constructed the Wellhead Receipt Facilities for
such well or such well is otherwise connected to Wildcat’s gathering system at the initial Receipt Points or as provided below. In the event that Wildcat agrees to construct a new Wellhead Receipt Facility in exchange for an additional fee,
then that Wellhead Receipt Facility shall be included as a future Receipt Point for purposes of this Agreement. If Wildcat has not constructed the Wellhead Receipt Facilities by the Connection Date, then, upon written notice to Wildcat at any time
thereafter until such facilities are constructed, Approach may construct, own and operate the facilities necessary to connect such well to any existing Receipt Point, and deliver the crude oil produced from such well to such Receipt Point. However,
as to any well that, as of the Operations Commencement Date, is already completed and capable of producing crude oil, Approach may construct, own and operate the facilities necessary to connect such well to any existing Receipt Point, and deliver
the crude oil produced from such well to such Receipt Point if Wildcat has not constructed the Wellhead Receipt Facilities within [REDACTED]*days of the Operations Commencement Date. 
 [REDACTED]* 
 [REDACTED]*.  

[REDACTED]* 
 [REDACTED]*.

 Lockbox Account 
 The Lockbox
Account will be established and maintained with signatory to [REDACTED]* designated personnel. 
 Assignment of Claims 

If (i) a party (or parties) that is a buyer under a TP CPA, breaches its obligation to purchase and/or pay for crude oil under such TP CPA, and
(ii) Approach gives Wildcat written notice that it desires to initiate legal proceedings against such buyer with respect to the quantities of crude oil that Wildcat is obligated to purchase from Approach and resell to such buyer under such TP
CPA, then Wildcat shall promptly assign Approach any and all claims and causes of action that Wildcat may have with respect to such quantities. 

  
 B-1

 Exhibit C 
 GENERAL PROVISIONS 
 1. SET-OFFS: In the event either party shall
fail to make timely delivery of any crude oil and/or condensate or other applicable products due and owing to the other party, or in the event that either party shall fail to make timely payment of any monies due and owing to the party, the other
party may set off any deliveries or payments due under this or any other agreement between the parties. “Party” for the purposes of this paragraph shall include for each party its affiliates (including, but not limited to, both parent and
subsidiary companies). It is the intent of the parties to this Agreement to treat each party hereto and its respective affiliates (including, but not limited to, both parent and subsidiary corporate entities) as a single legal entity for the
purposes of set-off regarding debts and claims. 
 2. RIGHT TO AUDIT: In the event the price of the crude oil or
condensate sold hereunder is based on an average acquisition cost, Approach agrees to maintain and retain all pertinent books, records and documents relating to the transactions hereunder for a period of not less than two (2) years following
termination of this Agreement, and Wildcat or its duly authorized representatives shall have access to such records, and the right to audit the same, at all reasonable times during the existence of this Agreement, and for such two (2) year
period following its termination. In the event the price of the crude oil or condensate sold hereunder is based on an weighted average resale price received by Wildcat upon the resale of the crude oil purchased hereunder, Wildcat agrees to maintain
and retain all pertinent books, records and documents relating to such resale transactions and transactions hereunder for a period of not less than two (2) years following termination of this Agreement, and Wildcat or its duly authorized
representatives shall have access to such records, and the right to audit the same, at all reasonable times during the existence of this Agreement, and for such two (2) year period following its termination. 

3. MEASUREMENTS AND TEST: Quantities of oil delivered hereunder shall be determined from tank gauges on 100% tank table basis or
by the use of mutually acceptable automatic measuring equipment. Volume and gravity of said quantities shall be corrected for temperature to 60 degrees Fahrenheit in accordance with the latest A.S.T.M.-I.P. Petroleum Measurement Tables. The oil
delivered hereunder shall be merchantable and acceptable to the carriers involved but not to exceed one percent (1%) S&W. Full deduction shall be made for all S&W content as determined by tests conducted according to the latest A.S.T.M.
standard method in effect. Tests for quality shall be made at regular intervals by Approach in accordance with generally accepted industry procedures. Each party shall have the right to have a representative or independent inspector (which cost
shall be shared equally between the parties hereto) present to witness all gauges, tests and measurements. 
 4.
WARRANTY: Approach warrants title, free and clear of all taxes, liens and encumbrances which are customarily paid by Approach prior to delivery, to the crude oil sold and delivered hereunder and warrants that said oil has been produced,
handled and transported to the Receipt Points in material compliance with the laws, rules and regulations of all local, state or federal authorities having jurisdiction thereof. In this regard, Approach agrees to provide Wildcat with any relevant
transaction documentation reasonably requested. 
 5. FORCE MAJEURE: Continued performance by either party of any
obligation except as to payment due hereunder, may be suspended immediately to the extent caused or contributed to by acts of God, fire, labor or trade disturbance, war, civil commotion or act of the public enemy, unavailability of transportation,
storage, manufacturing, refining or distributing facilities, compliance in good faith with any applicable foreign or domestic regulation or order, whether or not it later proves to be invalid, or any cause beyond the reasonable control of either
Wildcat or Approach whether similar or dissimilar to the enumeration contained herein, except inability to discharge financial obligations when due (a “Force Majeure”) (for clarity, if any TP Purchaser invokes a force majeure
event excusing performance under any TP CPA, such shall also constitute a Force Majeure for purposes of this Agreement to the extent crude oil purchased hereunder is to be sold under such TP CPA. The party suspending performance under this clause
shall give prompt notice and shall use all commercially reasonable efforts to cure promptly the cause for such suspension. Upon cessation of the cause for suspension, performance shall resume (or commence) immediately. [REDACTED]*. In the
event a Force Majeure condition interferes with Wildcat’s ability to provide an outlet to receive crude oil and/or condensate, Wildcat shall have the option to cure (a “Cure”) such Force Majeure condition by providing an
alternative commercial outlet for delivery of crude oil and/or condensate on economic terms no less favorable than current market terms (giving due consideration to applicable market 

  
 C-1

 
considerations). [REDACTED]*. If at any time Wildcat is the party suspending performance (in whole or in part) under this clause, then all Dedicated Oil that Wildcat does not purchase
in reliance on this clause shall not be deemed Dedicated Oil (and shall not be subject to this Agreement) for so long as such Dedicated Oil is not being purchased by Wildcat in reliance on this clause, but upon a Cure or cessation of reliance on
this clause such Dedicated Oil shall once again be deemed Dedicated Oil and subject to this Agreement. 
 6. TITLE AND
RISK OF LOSS: Title and risk of loss to crude oil delivered shall pass to Wildcat as the crude oil enters the Receipt Points, as defined in Section 4 of this Agreement or a point of interconnection established pursuant to Exhibit
“B”. 
 7. MODIFICATION, WAIVER, AND ASSIGNMENT: There shall be no modification or amendment of this Agreement
except by writing, signed by both parties hereto. Waiver of performance of any obligations by either party of default by the other hereunder shall not operate as a waiver of performance of any other obligation or a future waiver of the same
obligation or a waiver of any future default. Neither party shall assign this Agreement to a person or firm except upon written consent of the other party, such consent, however, shall not be unreasonably withheld. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties hereto. 
 8. EQUAL DAILY DELIVERIES: Except
for delivery by truck tanker, for the purpose of invoicing, any crude oil delivered hereunder shall be deemed to have been delivered in equal daily quantities during the calendar month in which deliveries occur. 

9. CHOICE OF LAW: This Agreement shall be constructed in accordance with, and governed by, the law of, and Wildcat and Approach
consent to the jurisdiction of the courts of, the State of Texas. 
 10. DEFAULT: In the event either party to this
Agreement shall materially breach or default in the performance of its obligations under this Agreement, the other party may, upon written notice to the breaching or defaulting party, suspend the performance of its obligation hereunder until such
breach or default is cured. If such material breach or default is not cured within thirty (30) days after written notice of such material breach or default is given, or ten (10) days in the event of payment default (such period, as
applicable, the “Cure Period”), the party not in material breach or default may terminate this Agreement at any time thereafter until such breach or default is cured upon written notice to the breaching or defaulting party; provided
the other party may not terminate this Agreement if the party alleged to be in breach or default (i) has cured such event giving rise to such alleged breach or default within such Cure Period or (ii) in the event the breach or default is
not capable of being cured within such Cure Period, commences to cure such alleged breach or default within such Cure Period and continues in good faith with such efforts and such alleged breach or default is cured within sixty (60) days after
expiration of such Cure Period. A party will not be considered to be in breach or default of its obligations under this Agreement to the extent that performance of such obligations or its efforts to cure are delayed or prevented, directly or
indirectly, due to Force Majeure as more particularly described in Section 5 of Exhibit “C” of this Agreement. As a result, the time periods set forth in this section in which a party may cure an alleged breach or default shall
be extended by any period of Force Majeure that occurs during any such period and affects the ability of a party to cure such breach or default. 
 11. NOTICE: Any notice required or permitted hereunder shall be deemed given when deposited in the U.S. Mail as registered or certified mail, return receipt requested, postage prepaid, and
addressed to the party to whom the notice is being given at the address set forth on the first page hereof (or such other address as is provided by written notice in accordance with this provision). Any notice given by fax or email shall be deemed
given when received at address set forth on the first page hereof (or such other address as is provided by written notice in accordance with this provision). During the term of this Agreement each party herein agrees to notify the other party
immediately in writing upon the notifying party’s corporate reorganization, merger, or acquisition by another, or any other similar corporate structural change. 

  
 C-2

 Exhibit D 
 Approach Dedicated Acreage 
 [REDACTED]* 

  
 D-1

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