LONG-TERM DEBT AND OTHER BORROWINGS

We believe TETRA's capital structure and CCLP's capital structure should be considered separately, as there are no cross default provisions, cross collateralization provisions, or cross guarantees between CCLP's debt and TETRA's debt.

Long-term debt consists of the following:



		December 31, 2017		December 31, 2016
		(In Thousands)
TETRA	Scheduled Maturity
Bank revolving line of credit facility (presented net of the unamortized deferred financing costs of $2.3 million as of December 31, 2016)	September 30, 2019	$	—	$	3,229
11.0% Senior Note, Series 2015 (presented net of the unamortized discount of $3.9 million as of December 31, 2017 and $4.4 million as of December 31, 2016 and net of unamortized deferred financing costs of $3.4 million as of December 31, 2017 and $4.2 million as of December 31, 2016)	November 5, 2022	117,679		116,411
TETRA total debt		117,679		119,640
Less current portion		—		—
TETRA total long-term debt		$	117,679	$	119,640

CCLP
CCLP Bank Credit Facility (presented net of the unamortized deferred financing costs of $4.0 million as of December 31, 2017 and $4.5 million as of December 31, 2016)	August 4, 2019	223,985		217,467
CCLP 7.25% Senior Notes (presented net of the unamortized discount of $2.8 million as of December 31, 2017 and $3.3 million as of December 31, 2016 and net of unamortized deferred financing costs of $5.0 million as of December 31, 2017 and $6.0 million as of December 31, 2016)	August 15, 2022	288,191		286,623
CCLP total debt		512,176		504,090
Less current portion		—		—
CCLP total long-term debt		512,176		504,090
Consolidated total long-term debt		$	629,855	$	623,730

Scheduled maturities for the next five years and thereafter are as follows:



	December 31, 2017
	(In Thousands)
	TETRA		CCLP		Consolidated
2018	$	—	$	—	$	—
2019	—		223,985		223,985
2020	—		—		—
2021	—		—		—
2022	117,679		288,191		405,870
Thereafter	—		—		—
Total maturities	$	117,679	$	512,176	$	629,855

As of December 31, 2017, TETRA (excluding CCLP) had no outstanding balance and had $5.0 million in letters of credit against its secured revolving credit facility with a borrowing capacity of up to $200 million (subject to certain conditions), leaving a net availability of $194.9 million. Because there was no outstanding balance on this Credit Agreement, associated deferred financing costs of $1.5 million as of December 31, 2017, were classified as other long-term assets on the accompanying consolidated balance sheet. As of December 31, 2017, CCLP had an outstanding balance of $228.0 million and had $7.2 million letters of credit outstanding against the CCLP Credit Agreement, leaving a net availability of $79.8 million, subject to a borrowing base limitation. Availability under each of the TETRA Credit Agreement and the CCLP Credit Agreement is subject to compliance with the covenants and other provisions in the respective credit agreements that may limit borrowings thereunder. See below for further discussion of the CCLP Credit Agreement.

As described below, we and CCLP are in compliance with all covenants of our respective credit agreements and senior note agreements as of December 31, 2017.

The following discussion is not a complete description of our or CCLP's long-term debt agreements or amendments and is qualified in its entirety by reference to the full text of the complete agreements and amendments, which are filed as an exhibit to our and CCLP's filings with the Securities and Exchange Commission ("SEC").

Our Long-Term Debt

Our Bank Credit Agreement. Under our credit agreement, as amended (the "Credit Agreement"), with a syndicate of banks including JPMorgan Chase Bank, N.A. as administrative agent, we have a secured revolving credit facility with a borrowing capacity of up to $200 million (subject to certain conditions) which matures on September 30, 2019. Borrowings generally bear interest at the British Bankers Association LIBOR rate plus 2.50% to 4.25%, depending on one of our financial ratios. We pay a commitment fee ranging from 0.35% to 1.00% on unused portions of the facility. All obligations under the Credit Agreement and the guarantees of such obligations are secured by first-lien security interests in substantially all of our assets and the assets of our subsidiaries other than CCLP and its subsidiaries (limited, in the case of foreign subsidiaries, to 66% of the voting stock or equity interests of first-tier foreign subsidiaries). Such security interests are for the benefit of the lenders of the Credit Agreement as well as the holder of our 11% Senior Note. In addition, the Credit Agreement includes limitations on aggregate asset sales, individual acquisitions, and aggregate annual acquisitions and capital expenditures.

Our Credit Agreement contains customary covenants and other restrictions, including certain financial ratio covenants based on our levels of debt and interest cost compared to a defined measure of operating cash flows ("EBITDA") over a twelve month period. Access to our revolving credit line is dependent upon our compliance with the financial ratio covenants set forth in the Credit Agreement. Consolidated net earnings under the credit facility is defined as the aggregate of our net income (or loss) and our consolidated restricted subsidiaries (which does not include CCLP), including cash dividends and distributions (not the return of capital) received from persons other than consolidated restricted subsidiaries (including CCLP) and after allowances for taxes for such period determined on a consolidated basis in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding certain items more specifically described therein. The Credit Agreement includes cross-default provisions relating to any other indebtedness (excluding indebtedness of CCLP) greater than a defined amount. Our Credit Agreement also contains a covenant that restricts us from paying dividends in the event of a default or if such payment would result in an event of default.

On July 1, 2016, we entered into an amendment (the "Fourth Amendment") of our Credit Agreement that replaced and modified certain covenants in the Credit Agreement. Pursuant to the Fourth Amendment, the interest charge coverage ratio covenant was deleted and replaced with a fixed charge coverage ratio covenant. The fixed charge coverage ratio may not be less than 1.25 to 1 as of the end of any fiscal quarter. The Fourth Amendment also amended the consolidated leverage ratio covenant, which was further amended in December 2016. The Fourth Amendment also resulted in additional modifications, including a requirement that all obligations under the Credit Agreement and the guarantees of such obligations be secured by first-lien security interests in substantially all of our assets and the assets of our subsidiaries (limited, in the case of foreign subsidiaries, to 66% of the voting stock or equity interests of first-tier foreign subsidiaries). Such security interests are for the benefit of the lenders of the Credit Agreement as well as the holder of our 11% Senior Note. Pursuant to the Fourth Amendment, bank fees and other financing costs of $0.8 million were deferred.

On December 22, 2016, we entered into an amendment (the "Fifth Amendment") of our Credit Agreement that replaced and modified certain covenants. Pursuant to the Fifth Amendment, the consolidated leverage ratio may not exceed (a) 5.00 to 1 at the end of fiscal quarters ending during the period from and including March 31, 2017 through and including December 31, 2017, (b) 4.75 to 1 at the end of fiscal quarters ending March 31, 2018 and June 30, 2018, (c) 4.50 to 1 at the end of fiscal quarters ending September 30, 2018 and December 31, 2018, and (d) 4.00 to 1 at the end of each of the fiscal quarters thereafter. In addition, the Fifth Amendment provides for the reduction of the maximum aggregate lender commitments from $225 million to $200 million, along with various other changes that can be found in the Fifth Amendment. Borrowings under our Credit Agreement following the Fifth Amendment generally bear interest at the British Bankers Association LIBOR rate, or an alternate base rate, in each case plus 2.50% to 4.25%, depending on our consolidated leverage ratio. We pay a commitment fee ranging from 0.35% to 1.00% on unused portions of the facility, also depending on our consolidated leverage ratio. Pursuant to the Fifth Amendment, bank fees and other financing costs of $0.8 million were deferred. As a result of the reduction of the aggregate lender commitments pursuant to the Fifth Amendment, unamortized deferred finance costs of $0.2 million were charged to interest expense during the year ended December 31, 2016.

At December 31, 2017, our consolidated leverage ratio was 1.66 to 1 (compared to a 5.00 to 1 maximum allowed under the Credit Agreement). Our fixed charge coverage ratio as of December 31, 2017 was 3.05 to 1 (compared to a 1.25 to 1 minimum required under the Credit Agreement).

Our 11% Senior Note. As of December 31, 2017, our senior note consists of the 11% Senior Note that was issued and sold in November 2015 pursuant to our 11% Senior Note Agreement with GSO Tetra Holdings LP ("GSO") whereby we issued and sold $125.0 million in principal amount of our 11% Senior Note (the "11% Senior Note"). The 11% Senior Note bears interest at the fixed rate of 11.0% and matures on November 5, 2022. Interest on the 11% Senior Note is due quarterly on March 15, June 15, September 15, and December 15 of each year. We may prepay the 11% Senior Note, in whole or in part at a prepayment price equal to (i) prior to November 20, 2018, 100% of the principal amount so prepaid, plus accrued and unpaid interest and a “make-whole” prepayment amount, (ii) during the period commencing on November 20, 2018, and ending on November 19, 2019, 104% of the principal amount so prepaid, plus accrued and unpaid interest, (iii) during the period commencing on November 20, 2019 and ending on November 19, 2020, 102% of the principal amount so prepaid, plus accrued and unpaid interest, (iv) during the period commencing on November 20, 2020, and ending on November 19, 2021, 101% of the principal amount so prepaid, plus accrued and unpaid interest, and (v) on or after November 20, 2021, 100% of the principal amount so prepaid, plus accrued and unpaid interest.

The 11% Senior Note is guaranteed by substantially all of our wholly owned U.S. subsidiaries. The 11% Senior Note Agreement contains customary covenants that limit our ability and the ability of certain of our restricted subsidiaries to, among other things: incur or guarantee additional indebtedness; incur or create liens; merge or consolidate or sell substantially all of our assets; engage in a different business; enter into transactions with affiliates; and make certain payments. In addition, the 11% Senior Note Agreement requires us to maintain certain financial ratios, including a maximum leverage ratio (ratio of debt and letters of credit outstanding to a defined measure of earnings). The maximum leverage ratio is further defined in our 11% Senior Note Agreement. Consolidated net earnings under the 11% Senior Note Agreement is the aggregate of our net income (or loss) and our consolidated restricted subsidiaries, including cash dividends and distributions (not the return of capital) received from persons other than consolidated restricted subsidiaries (such as CCLP) and after allowances for taxes for such period determined on a consolidated basis in accordance with U.S. GAAP, excluding certain items more specifically described therein. CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under our 11% Senior Note Agreement.

The 11% Senior Note Agreement includes cross-default provisions relating to other indebtedness (excluding CCLP) greater than a defined amount. Upon the occurrence and during the continuation of an event of default under the 11% Senior Note Agreement, the 11% Senior Note may become immediately due and payable, either automatically or by declaration of holders of more than 50% in principal amount of the 11% Senior Note at the time outstanding.

On July 1, 2016, we entered into an Amended and Restated Note Purchase Agreement (the "Amended and Restated 11% Senior Note Agreement") with GSO to amend and replace the previous note purchase agreement. The Amended and Restated 11% Senior Note Agreement contains customary default provisions, as well as cross-default provisions. In addition, the Amended and Restated 11% Senior Note Agreement required a minimum fixed charge coverage ratio at the end of any fiscal quarter of 1.1 to 1. The Amended and Restated 11% Senior Note Agreement also amended the consolidated leverage ratio covenant, which was further amended in December 2016 (see discussion below). Pursuant to the Amended and Restated 11% Senior Note Agreement, the 11% Senior Note is secured by first-lien security interests in substantially all of our assets and the assets of our subsidiaries. See the above discussion of our Credit Agreement for a description of these security interests. The 11% Senior Note is pari passu in right of payment with all borrowings under the Credit Agreement and rank at least pari passu in right of payment with all other outstanding indebtedness. The Amended and Restated 11% Senior Note Agreement contains customary covenants that limit our ability to, among other things; incur or guarantee additional indebtedness; incur or create liens; merge or consolidate or sell substantially all of our assets; engage in a different business; enter into transactions with affiliates; and make certain payments as set forth in the Amended and Restated 11% Senior Note Agreement. Pursuant to the Amended and Restated 11% Senior Note Agreement, lender fees and other financing costs of $1.3 million were deferred, netting against the carrying value of the amount outstanding.

On December 22, 2016, we entered into a First Amendment to Amended and Restated 11% Senior Note Purchase Agreement (the “Amended and Restated 11% Senior Note Agreement Amendment”) with GSO. The Amended and Restated 11% Senior Note Agreement Amendment replaced and modified certain financial covenants in the Amended and Restated 11% Senior Note Agreement by providing that 1) the minimum fixed charge coverage ratio be increased to 1.25 to 1 as of the end of any fiscal quarter; 2) the ratio of consolidated funded indebtedness to EBITDA may not exceed (a) 5.00 to 1 at the end of fiscal quarters ending during the period from and including March 31, 2017 through and including December 31, 2017, (b) 4.75 to 1 at the end of fiscal quarters ending March 31, 2018 and June 30, 2018, (c) 4.50 to 1 at the end of fiscal quarters ending September 30, 2018 and December 31, 2018, and (d) 4.00 to 1 at the end of fiscal quarters ending thereafter. The Amended and Restated 11% Senior Note Agreement Amendment provides that no consolidated leverage ratio is applicable for the fiscal quarter ended December 31, 2016. Pursuant to the Amended and Restated 11% Senior Note Agreement Amendment, lender fees and other financing costs of $0.4 million were deferred, netting against the carrying value of the amount outstanding.

At December 31, 2017, our consolidated funded indebtedness to EBITDA ratio was 1.66 to 1 (compared to 5.00 to 1 maximum allowed under the Amended and Restated 11% Senior Note Agreement). There is no consolidated funded indebtedness ratio requirement as of December 31, 2017 as a result of the Amended and Restated 11% Senior Note Agreement. At December 31, 2017, our fixed charge coverage ratio was 3.05 to 1 (compared to a 1.25 minimum required under the Amended and Restated 11% Senior Note Agreement).

CCLP Long-Term Debt

CCLP Bank Credit Agreement. Under CCLP's credit agreement, as amended (the "CCLP Credit Agreement"), with a syndicate of banks including Bank of America, N.A. as administrative agent, CCLP has an asset-based revolving credit facility with a borrowing capacity of up to $315 million, subject to certain requirements, which matures August 4, 2019. The CCLP Credit Agreement is available to provide CCLP's working capital needs, letters of credit, and for general partnership purposes, including capital expenditures and potential future expansions or acquisitions. The CCLP Credit Agreement provides that CCLP can make distributions to holders of its common units, but only if there is no default or event of default under the facility and CCLP maintains excess availability of $30.0 million under the CCLP Credit Agreement. Borrowings under the CCLP Credit Agreement bear interest at a rate per annum equal to, at CCLP's option, either (a) LIBOR (adjusted to reflect any required bank reserves) for an interest period equal to one, two, three, or six months (as selected by CCLP), plus a leverage-based margin that ranges between 2.00% and 3.25% per annum or (b) a base rate plus a leverage-based margin that ranges between 1.00% and 2.25% per annum; such base rate shall be determined by reference to the highest of (1) the prime rate of interest per annum announced from time to time by Bank of America, N.A., (2) the Federal Funds rate plus 0.50% per annum, and (3) LIBOR (adjusted to reflect any required bank reserves) for a one month interest period on such day plus 1.00% per annum. In addition to paying interest on outstanding principal under the CCLP Credit Agreement, CCLP is required to pay a commitment fee ranging from 0.35% to 0.50% per annum in respect of the unutilized commitments. CCLP is also required to pay a customary letter of credit fee equal to the applicable margin on revolving credit LIBOR loans, fronting fees, and other fees, agreed to with the administrative agent and lenders.

Under the CCLP Credit Agreement, CCLP and CSI Compressco Sub Inc. are named as the borrowers, and all obligations under the CCLP Credit Agreement are guaranteed by all of CCLP's existing and future, direct and indirect, domestic restricted subsidiaries (other than domestic subsidiaries that are wholly owned by foreign subsidiaries). We are not a borrower or a guarantor under the CCLP Credit Agreement. The CCLP Credit Agreement includes customary covenants that, among other things, limit CCLP's ability to incur additional debt, incur, or permit certain liens to exist, or make certain loans, investments, acquisitions, or other restricted payments. The CCLP Credit Agreement includes a maximum credit commitment of $315 million and included within the maximum amount is availability for letters of credit (with a sublimit of $20.0 million) and swingline loans (with a sublimit of $60.0 million). The amount of borrowings under the CCLP Credit Agreement is subject to certain limitations, including a borrowing base calculation as described below and borrowing limitations as a result of financial covenants.

On May 25, 2016, CCLP entered into an amendment (the "CCLP Third Amendment") to the CCLP Credit Agreement that, among other things, modified certain financial covenants in the CCLP Credit Agreement. As discussed below, these financial covenants were further amended in November 2016. In addition, the CCLP Third Amendment provided for other changes related to the CCLP Credit Agreement including, among other amendments (i) reducing the maximum aggregate lender commitments from $400.0 million to $340.0 million, (ii) increasing the applicable margin by 0.25% with a range between 2.00% and 3.00% per annum for LIBOR-based loans and 1.00% to 2.00% per annum for base-rate loans, based on the applicable consolidated total leverage ratio, and (iii) imposing a requirement that CCLP uses designated consolidated cash and cash equivalent balances in excess of $35.0 million to prepay the loans. As a result of the reduction of the maximum lender commitment pursuant to the CCLP Third Amendment, unamortized deferred finance costs of $0.71 million were charged to interest expense during the year ended December 31, 2016. Pursuant to the CCLP Third Amendment, bank fees of $0.71 million were incurred during the year ended December 31, 2016 and were deferred, netting against the carrying value of the amount outstanding under the CCLP Credit Agreement. On November 3, 2016, CCLP entered into an additional amendment (the "CCLP Fourth Amendment") to the CCLP Credit Agreement that, among other changes, further modified certain covenants in the CCLP Credit Agreement. The CCLP Fourth Amendment converted the CCLP Credit Agreement from a secured revolving credit facility into an asset-based revolving credit facility ("ABL Facility"). Borrowings under the CCLP Credit Agreement, as amended, may not exceed a borrowing base equal to the sum of (i) 80% of the aggregate net amount of our eligible accounts receivable, plus (ii) 20% of the aggregate value of any eligible parts inventory, in the event we elect to include eligible parts inventory pursuant to a notice to the administrative agent, plus (iii) 80% of the net in-place eligible compressor equipment, decreased each month by the amount of associated depreciation expense, plus (iv) 80% of the cost of new eligible compressor equipment, and minus (v) the amount of any reserves established by the administrative agent in its discretion. In addition, the CCLP Fourth Amendment imposed other requirements, including requirements related to borrowing base reporting on a monthly basis and provisions to permit periodic appraisal and inspection of collateral assets. Pursuant to the CCLP Fourth Amendment, certain additional restrictive provisions ("cash dominion provisions") are imposed if an event of default has occurred and is continuing or excess availability under the ABL Facility falls below $30.0 million. In addition, the CCLP Fourth Amendment reduced the maximum aggregate lender commitments from $340.0 million to $315.0 million. As a result of the further reduction of the aggregate lender commitments pursuant to the CCLP Fourth Amendment, unamortized deferred finance costs of $0.3 million were charged to interest expense during the year ended December 31, 2016. Pursuant to the CCLP Fourth Amendment, bank fees of $0.8 million were incurred during the year ended December 31, 2016 and were deferred, netting against the carrying value of the amount outstanding under the CCLP Credit Agreement.

On May 5, 2017, CCLP entered into an amendment of the CCLP Credit Agreement (the "CCLP Fifth Amendment") that, among other things, modified certain financial covenants in the CCLP Credit Agreement, providing that (i) the consolidated total leverage ratio may not exceed (a) 5.95 to 1 as of March 31, 2017; (b) 6.75 to 1 as of June 30, 2017 and September 30, 2017; (c) 6.50 to 1 as of December 31, 2017 and March 31, 2018; (d) 6.25 to 1 as of June 30, 2018 and September 30, 2018; (e) 6.00 to 1 as of December 31, 2018; and (f) 5.75 to 1 as of March 31, 2019 and thereafter; and (ii) the consolidated secured leverage ratio may not exceed 3.25 to 1 as of the end of any fiscal quarter. The consolidated interest coverage ratio was not amended by the CCLP Fifth Amendment. In addition, the CCLP Fifth Amendment (i) increased the applicable margin by 0.25% in the event the consolidated total leverage ratio exceeds 6.00 to 1, resulting in a range for the applicable margin between 2.00% and 3.50% per annum for LIBOR-based loans and between 1.00% and 2.50% per annum for base-rate loans, depending on the consolidated total leverage ratio, and (ii) modified the appraisal delivery requirement from an annual requirement to a semi-annual requirement. In connection with the CCLP Fifth Amendment, the level of CCLP's cash distributions payable on its common units for the quarterly period ended June 30, 2017 will be limited to the current reduced level. The CCLP Fifth Amendment also included additional revisions that provide flexibility to CCLP for the issuance of preferred securities.

The weighted average interest rate on borrowings outstanding under the CCLP Credit Agreement as of December 31, 2017, was 5% per annum. At December 31, 2017, CCLP's consolidated total leverage ratio was 6.48 to 1 (compared to 6.50 to 1 maximum allowed under the CCLP Credit Agreement), its consolidated secured leverage ratio was 2.89 to 1 (compared to 3.25 to 1 maximum allowed under the CCLP Credit Agreement), and its consolidated interest coverage ratio was 2.55 to 1 (compared to a 2.25 to 1 minimum required under the CCLP Credit Agreement). The consolidated total leverage ratio and the consolidated secured leverage ratio, as both are calculated under the CCLP Credit Agreement, exclude the long-term liability for the CCLP Preferred Units in the determination of total indebtedness.

CCLP is in compliance with all covenants of the CCLP Credit Agreement as of December 31, 2017. CCLP has reviewed its financial forecasts as of March 2, 2018 for the subsequent twelve month period, which considers the current level of distributions to be paid on CCLP common units. CCLP believes that it will have adequate liquidity, earnings, and operating cash flows to fund its operations and debt obligations and maintain compliance with the covenants under its debt agreements through March 2, 2019.

CCLP 7.25% Senior Notes. The obligations under the CCLP 7.25% Senior Notes are jointly and severally, and fully and unconditionally, guaranteed on a senior unsecured basis by each of CCLP’s domestic restricted subsidiaries (other than CSI Compressco Finance) that guarantee CCLP’s other indebtedness (the "Guarantors" and together with the Issuers, the "Obligors"). The CCLP 7.25% Senior Notes and the subsidiary guarantees thereof (together, the "CCLP Securities") were issued pursuant to an indenture described below. As of December 31, 2017, $295.9 million in aggregate principal amount of CCLP 7.25% Senior Notes are outstanding.

The Obligors issued the CCLP Securities pursuant to the Indenture dated as of August 4, 2014, (the "Indenture") by and among the Obligors and U.S. Bank National Association, as trustee (the "Trustee"). The CCLP 7.25% Senior Notes accrue interest at a rate of 7.25% per annum. Interest on the CCLP 7.25% Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year. The CCLP 7.25% Senior Notes are scheduled to mature on August 15, 2022.

The Indenture contains customary covenants restricting CCLP’s ability and the ability of its restricted subsidiaries to: (i) pay dividends and make certain distributions, investments and other restricted payments; (ii) incur additional indebtedness or issue certain preferred shares; (iii) create certain liens; (iv) sell assets; (v) merge, consolidate, sell or otherwise dispose of all or substantially all of its assets; (vi) enter into transactions with affiliates; and (vii) designate its subsidiaries as unrestricted subsidiaries under the Indenture. The Indenture also contains customary events of default and acceleration provisions relating to such events of default, which provide that upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the CCLP 7.25% Senior Notes then outstanding may declare all amounts owing under the CCLP 7.25% Senior Notes to be due and payable.

During September and October 2016, CCLP repurchased on the open market and retired $54.1 million aggregate principal amount of its CCLP 7.25% Senior Notes for a purchase price of $50.9 million, at an average repurchase price of 94% of the principal amount of such notes, plus accrued interest, utilizing a portion of the net proceeds from the sale of the CCLP Preferred Units. In connection with the repurchase of these CCLP 7.25% Senior Notes, $1.4 million of early extinguishment net gain was credited to other expense during the year ended December 31, 2016, representing the difference between the repurchase price and the $54.1 million aggregate principal amount of the CCLP 7.25% Senior Notes repurchased, and $1.8 million of remaining unamortized deferred finance costs and discounts associated with the repurchased CCLP 7.25% Senior Notes.