Exhibit 10.2

 

 

 

LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT

dated as of

March 31, 2010,

among

WHITEBOX ADVISORS LLC,

as Credit Facilities Collateral Agent,

U.S. BANK NATIONAL ASSOCIATION

as Note Collateral Agent

and

FLOTEK INDUSTRIES, INC.

and the other Grantors named herein

 

 

 

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LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of March 31, 2010,
between WHITEBOX ADVISORS LLC, as collateral agent for the Credit Facility
Secured Parties referred to herein; U.S. BANK NATIONAL ASSOCIATION, as
collateral agent for the Note Secured Parties referred to herein; FLOTEK
INDUSTRIES, INC.; and the other Grantors named herein.

Reference is made to (a) the Credit Agreement (such term, and each other
capitalized term used and not otherwise defined herein, having the meaning
assigned to it in Article I), under which the Lenders referred to therein have
extended and agreed to extend credit to the Company, and (b) the Note Indenture,
under which the Company proposes to issue the Notes. The issuance of the Notes
and the creation of the Liens provided for in the Note Security Documents
require the execution and delivery of this Agreement. In consideration of the
amendment of the Credit Agreements to permit the issuance of the Notes, the
purchase of the Notes by the purchasers thereof, the mutual agreements herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the Credit Facilities Collateral Agent (for itself and on
behalf of the Credit Facilities Secured Parties), the Note Collateral Agent (for
itself and on behalf of the Note Secured Parties), the Company and the
subsidiaries of the Company named herein agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Construction; Certain Defined Terms. (a) The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified, (ii) any
reference herein to any person shall be construed to include such person’s
successors and assigns, but shall not be deemed to include the subsidiaries of
such person unless express reference is made to such subsidiaries, (iii) the
words “herein”, “hereof and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Articles and Sections shall be
construed to refer to Articles and Sections of this Agreement and (v) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

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(b) As used in this Agreement, the following terms have the meanings specified
below:

“Accession Agreement” means an accession agreement in substantially the form of
Annex I hereto under which a collateral agent or similar Representative of
Designated Senior Obligations shall become a party hereto and the Designated
Senior Obligations Collateral Agent for such Designated Senior Obligations
hereunder.

“Bankruptcy Code” means Title 11 of the U.S. Code.

“Collateral” means the Credit Facilities Collateral, the Designated Senior
Obligations Collateral and the Note Collateral.

“Collateral Agent” means any of the Credit Facilities Collateral Agent, any
Designated Senior Obligations Collateral Agent and the Note Collateral Agent.

“Company” means Flotek Industries, Inc., a Delaware corporation.

“Credit Agreement” means the Amended and Restated Credit Agreement dated as of
March 31, 2010, as amended, extended, renewed, restated, supplemented or
otherwise modified from time to time, among the Company, the Lenders party
thereto, and Whitebox Advisors LLC, as Administrative Agent.

“Credit Facilities Collateral” means all “Collateral”, as defined in the Pledge
and Security Agreement, securing any Credit Facilities Obligations, and any
other assets or properties of the Company or any subsidiaries of the Company now
or at any time hereafter subject to Liens securing any Credit Facilities
Obligations.

“Credit Facilities Collateral Agent” means Whitebox Advisors LLC, in its
capacity as Administrative Agent under the Credit Agreement and the Credit
Facilities Security Documents, and its successors and assigns in such capacity.

“Credit Facilities Obligations” means all “Obligations” as such term is defined
in the Credit Agreement.

 

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“Credit Facilities Secured Parties” means, at any time, each person that is a
“Secured Party” under and as defined in the Credit Agreement.

“Credit Facilities Security Documents” means the Pledge and Security Agreement,
the other “Security Documents”, as defined in the Credit Agreement, and any
other documents now existing or entered into after the date hereof that create
Liens on any assets or properties of the Company or any subsidiaries of the
Company to secure any Credit Facilities Obligations.

“Designated Senior Obligations” means all obligations of the Company or any
subsidiaries of the Company that shall have been designated as such in
accordance with Article III.

“Designated Senior Obligations Collateral” means any assets or properties of the
Company or any subsidiaries of the Company now or at any time hereafter subject
to Liens securing any Designated Senior Obligations.

“Designated Senior Obligations Collateral Agent” means, with respect to any
Designated Senior Obligations, any collateral agent or similar Representative
appointed to act on behalf of the applicable Designated Senior Obligations
Secured Parties with respect to the Designated Senior Obligations Collateral
securing such Designated Senior Obligations; provided, that if no such
collateral agent or other Representative shall have been so appointed by the
applicable Designated Senior Obligations Secured Parties, then the Designated
Senior Obligations Collateral Agent with respect to such Designated Senior
Obligations will be deemed to be such Designated Senior Obligations Secured
Parties.

“Designated Senior Obligations Governing Documents” means, as to any Designated
Senior Obligations, the credit agreement, note agreement, indenture or other
instrument or document under which such Designated Senior Obligations shall have
been issued or incurred.

“Designated Senior Obligations Secured Parties” means, at any time, each holder
of, or obligee in respect of, any Designated Senior Obligations outstanding at
such time.

“Designated Senior Obligations Security Documents” means any documents entered
into after the date hereof that create Liens on any assets or properties of the
Company or any subsidiaries of the Company to secure any Designated Senior
Obligations.

 

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“Discharge of Senior Obligations” means payment in full in cash of the principal
of and interest and premium, if any, on all Debt (as defined in the Credit
Agreement) (or any corresponding definition in any Designated Senior Obligations
Governing Documents) constituting Senior Obligations secured by any Collateral,
or, with respect to all obligations under each Hedging Arrangement (as defined
in the Credit Agreement) (or any corresponding definition in any Designated
Senior Obligations Governing Documents) constituting Senior Obligations secured
by any Collateral, delivery of cash collateral or backstop letters of credit in
respect thereof in compliance with the terms of such Senior Obligation, in each
case after or concurrently with termination of all commitments to extend credit
thereunder, and payment in full of any other obligations in respect of any
Senior Obligation secured by any Collateral that are due and payable or
otherwise accrued and owing at or prior to the time such principal, interest and
premium, if any, are paid.

“Grantor” means the Company and each subsidiary of the Company that shall have
created any Senior Lien or Junior Lien on its assets or properties to secure any
Senior Obligations or Note Obligations.

“Junior Collateral Agent” means the Note Collateral Agent.

“Junior Liens” means Liens created under Junior Obligations Security Documents
securing Junior Obligations.

“Junior Lien Pledge and Security Agreement” means the Junior Lien Pledge and
Security Agreement dated as of March 31, 2010, among the Company, certain
subsidiaries of the Company and the Note Collateral Agent, as amended, extended,
renewed, restated, supplemented or otherwise modified from time to time.

“Junior Obligations” means the Note Obligations.

“Junior Obligations Collateral” means the Note Collateral.

“Junior Obligations Secured Parties” means the Note Secured Parties.

“Junior Obligations Security Documents” means the Note Security Documents.

“Lien” means any pledge, security interest, mortgage or other lien or
encumbrance created to secure any indebtedness or other obligation.

 

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“Note Collateral” means the “Collateral”, as defined in the Note Indenture, and
any other assets or properties of the Company or any subsidiaries of the Company
now or at any time hereafter subject to Liens securing any Note Obligations.

“Note Collateral Agent” means U.S. Bank National Association, in its capacity as
Collateral Agent under the Note Indenture and the Note Security Documents, and
its successors and assigns in such capacity.

“Note Indenture” means the Indenture dated as of March 31, 2010, among the
Company, as Issuer, the Guarantors (as defined therein) party thereto and U.S.
Bank National Association, as Trustee, as amended and supplemented by the First
Supplemental Indenture dated as of March 31, 2010 among the Company, as Issuer,
the Guarantors (as defined therein) party thereto and U.S. Bank National
Association, as Trustee (the “First Supplemental Note Indenture”) and as further
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time.

“Note Obligations” means (a) the due and punctual payment of (i) the principal
of and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Notes, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) all other monetary obligations of the Company or any
subsidiaries of the Company to any of the Note Secured Parties under the Note
Indenture or any Note Security Document, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and (iii) all amounts due under any
guarantee of any of the foregoing, including any guarantee contained in the Note
Indenture, and (b) the due and punctual performance of all other obligations of
the Company or any subsidiaries of the Company to any of the Note Secured
Parties under the Note Indenture or any Note Security Document.

“Note Secured Parties” means, at any time, the Trustee, the Note Collateral
Agent and each other holder of, or obligee in respect of, any Note Obligations
outstanding at such time.

“Note Security Documents” means the Junior Lien Pledge and Security Agreement,
the other “Security Documents”, as defined in the First Supplemental Note
Indenture, and any other documents now existing or entered into after the date
hereof that create Liens on any assets or properties of the Company or any
subsidiaries of the Company to secure any Note Obligations.

 

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“Notes” means up to $36,004,000 aggregate principal amount of the Company’s
5.25% Convertible Senior Secured Notes due 2028, issued on or about the date of
this Agreement pursuant to the Note Indenture, and any other notes issued from
time to time under the Note Indenture.

“Pledge and Security Agreement” means the Amended and Restated Pledge and
Security Agreement dated as of March 31, 2010, among the Company, certain
subsidiaries of the Company and the Credit Facilities Collateral Agent, as
amended, extended, renewed, restated, supplemented or otherwise modified from
time to time.

“Representative” means (a) in the case of any Credit Facility Obligations, the
Administrative Agent under the Credit Agreement or the Credit Facilities
Collateral Agent, (b) in the case of the Note Obligations, the Trustee or the
Note Collateral Agent, and (c) in the case of any Designated Senior Obligations,
any administrative agent, trustee or similar representative designated pursuant
to Article III or the applicable Designated Senior Obligations Collateral Agent.

“Secured Parties” means the Credit Facilities Secured Parties, the Designated
Senior Obligations Secured Parties and the Note Secured Parties.

“Senior Collateral Agent” means the Credit Facilities Collateral Agent and each
Designated Senior Obligations Collateral Agent.

“Senior Obligations” means the Credit Facilities Obligations and the Designated
Senior Obligations.

“Senior Obligations Collateral” means the Credit Facilities Collateral and the
Designated Senior Obligations Collateral.

“Senior Obligations Secured Parties” means the Credit Facilities Secured Parties
and the Designated Senior Obligations Secured Parties.

“Senior Obligations Security Documents” means the Credit Facilities Security
Documents and the Designated Senior Obligations Security Documents.

“Senior Liens” means Liens created under Senior Obligations Security Documents
securing Senior Obligations.

 

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“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which are consolidated with those of the parent in the parent’s
consolidated financial statements in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by, or (b) that is, as
of such date, otherwise subject to the control by (through possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such person, whether through the ability to exercise voting
power, by contract or otherwise), the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.

ARTICLE II

Subordination of Junior Liens

SECTION 2.01. Subordination of Junior Liens. (a) All Junior Liens in respect of
any Collateral are expressly subordinated and made junior in right, priority,
operation and effect to any and all Senior Liens in respect of such Collateral,
notwithstanding anything contained in this Agreement, the Note Indenture, any
Junior Obligations Security Document or any other agreement or instrument to the
contrary, and irrespective of the time, order or method of creation, attachment
or perfection of such Junior Liens and Senior Liens or any defect or deficiency
or alleged defect or deficiency in any of the foregoing.

(b) It is acknowledged that (i) the aggregate amount of the Senior Obligations
may be increased as provided in Article III or through increases in the amounts
of the facilities established by the Credit Agreement or the Designated Senior
Obligations Governing Documents (subject to the limitations set forth in the
Note Indenture), (ii) a portion of the Senior Obligations consists or may
consist of Indebtedness that is revolving in nature, and the amount thereof that
may be outstanding at any time or from time to time may be increased or reduced
and subsequently reborrowed and (iii) the Senior Obligations may be extended,
renewed or otherwise amended or modified, or secured with additional Collateral,
from time to time, all without affecting the subordination of the Junior Liens
hereunder or the provisions of this Agreement defining the relative rights of
the Senior Obligations Secured Parties and the Junior Obligations Secured
Parties. The lien priorities provided for herein shall not be altered or
otherwise affected by any amendment, modification, supplement, extension,
increase, replacement, renewal, restatement or refinancing of either the Junior

 

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Obligations or the Senior Obligations, by the securing of any Senior Obligations
with any additional Collateral or guarantees, by the release of any Collateral
or Guarantees securing any Senior Obligations, by the failure of any person to
comply with any provision of this Agreement or any agreement evidencing,
governing or securing any Senior Obligation or Junior Obligation or by any
action that any Collateral Agent or Secured Party may take or fail to take in
respect of any Collateral.

(c) It is further acknowledged that the holders of Senior Obligations of one or
more classes may from time to time hereafter enter into agreements establishing
the relative priorities of such classes of Senior Obligations or of the Senior
Liens securing the same. It is agreed that the relative priorities of classes of
Senior Obligations shall be governed by the foregoing agreements or, to the
extent not determined by such agreements, by applicable law, and that nothing in
this Agreement shall affect such relative priorities of classes of Senior
Obligations or the related Senior Liens. It is further agreed that no agreements
establishing the relative priorities of Senior Obligations of one or more
classes or of the Senior Liens securing such Senior Obligations shall in any way
limit or affect the subordination of the Junior Liens provided for in this
Agreement or the provisions of this Agreement defining the relative rights of
the Senior Obligations Secured Parties and the Junior Obligations Secured
Parties.

(d) It is further acknowledged that (subject to the limitations set forth in the
Note Indenture) the Senior Obligations are or may in the future be secured by
Liens on collateral other than the Collateral subject to the Junior Liens. It is
agreed that no Senior Collateral Agent will have any obligation to proceed
against any such other collateral securing the Senior Obligations or to exercise
any other remedies available to them as a condition to obtaining the benefits of
this Article II.

(e) The Note Collateral Agent confirms that the Note Indenture and the Note
Security Documents contain provisions substantially to the effect set forth in
Annex II hereto under which the Note Secured Parties agree to, and subject their
rights to the provisions of, this Agreement.

SECTION 2.02. No Action With Respect to Junior Obligations Collateral Subject to
Senior Liens. No Junior Collateral Agent or other Junior Obligations Secured
Party shall commence or instruct the Junior Collateral Agent to commence any
judicial or nonjudicial foreclosure proceedings with respect to, seek to have a
trustee, receiver, liquidator or similar official appointed for or over, attempt
any action to take possession of, exercise any right, remedy or power with
respect to, or otherwise take any action to enforce its interest in or realize
upon, or take any other action available to it in respect of, any Junior

 

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Obligations Collateral under any Junior Obligations Security Document,
applicable law or otherwise, at any time when such Junior Obligations Collateral
shall be subject to any Senior Lien and prior to the Discharge of Senior
Obligations, it being agreed that only the applicable Senior Collateral Agent,
acting in accordance with the applicable Senior Obligations Security Documents,
shall be entitled to take any such actions or exercise any such remedies.
Notwithstanding the foregoing or anything to the contrary provided in
Section 2.06, the Junior Collateral Agent may, subject to Section 2.05, (i) take
all such actions as it shall deem necessary to continue the perfection of the
Junior Liens on any Junior Obligations Collateral, (ii) file a claim or
statement of interest with respect to the Junior Obligations in any bankruptcy,
insolvency or similar proceeding or (iii) take any other action not adverse to
the Senior Liens in order to preserve or protect its rights in the Junior Liens
on the Collateral for the benefit of the Junior Obligations Secured Parties.

SECTION 2.03. No Duties of Senior Collateral Agents. Each Junior Obligations
Secured Party acknowledges and agrees that no Senior Collateral Agent or other
Senior Obligations Secured Party shall have any duties or other obligations to
such Junior Obligations Secured Party with respect to any Senior Obligations
Collateral, other than to transfer to the Junior Collateral Agent any proceeds
of any such Collateral that constitutes Junior Obligations Collateral remaining
in its possession following any sale, transfer or other disposition of such
Collateral and the Discharge of Senior Obligations, or, if any Senior Collateral
Agent shall be in possession of all or any part of such Collateral after the
Discharge of Senior Obligations, such Collateral or any part thereof remaining,
in each case without representation or warranty on the part of such Senior
Collateral Agent or any Senior Obligations Secured Party (it being understood
that nothing herein shall prohibit any Senior Collateral Agent from transferring
Collateral or proceeds of Collateral to the holders of other Senior Obligations
secured by such Collateral or to another Senior Collateral Agent acting on their
behalf to the extent it is required to do so under the terms of any agreement).
In furtherance of the foregoing, each Junior Obligations Secured Party
acknowledges and agrees that until the Discharge of Senior Obligations, the
applicable Senior Collateral Agents shall be entitled, for the benefit of the
holders of such Senior Obligations, to sell, transfer or otherwise dispose of or
deal with such Collateral as provided herein and in the Credit Facilities
Security Documents or the Designated Senior Obligations Security Documents, as
the case may be, without regard to any Junior Lien or any rights to which the
holders of the Junior Obligations would otherwise be entitled as a result of
such Junior Lien. Without limiting the foregoing, each Junior Obligations
Secured Party agrees that no Senior Collateral Agent or other Senior Obligations
Secured Party shall have any duty or obligation first to marshall or realize
upon any type of Collateral (or any other collateral securing the Senior
Obligations), or to sell, dispose of or otherwise liquidate all or any portion
of the Collateral (or any other collateral securing the Senior Obligations), in
any manner that would

 

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maximize the return to the Junior Obligations Secured Parties, notwithstanding
that the order and timing of any such realization, sale, disposition or
liquidation may affect the amount of proceeds actually received by the Junior
Obligations Secured Parties from such realization, sale, disposition or
liquidation. Each of the Junior Obligations Secured Parties waives any claim
such Junior Obligations Secured Party may now or hereafter have against any
Senior Collateral Agent or other Senior Obligations Secured Party (or their
representatives) arising out of (i) any actions which any Senior Collateral
Agent or the Senior Obligations Secured Parties take or omit to take (including,
without limitation, actions with respect to the creation, perfection or
continuation of Liens on any Collateral, actions with respect to the foreclosure
upon, sale, release or depreciation of, or failure to realize upon, any of the
Collateral and actions with respect to the collection of any claim for all or
any part of the Senior Obligations from any account debtor, guarantor or any
other party) in accordance with the respective Senior Obligations Security
Documents or any other agreement related thereto or to the collection of the
Senior Obligations or the valuation, use, protection or release of any security
for the Senior Obligations, (ii) any election by any Senior Collateral Agent or
Senior Obligations Secured Parties, in any proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code
and/or (iii) any borrowing of any Grantor as debtor-in-possession, or any
related grant of a security interest or administrative expense priority under
Section 364 of the Bankruptcy Code.

SECTION 2.04. No Interference; Payment Over; Reinstatement. (a) Each Junior
Obligations Secured Party agrees that (i) it will not take or cause to be taken
any action the purpose or effect of which is, or could be, to make any Junior
Lien pari passu with, or to give such Junior Obligations Secured Party any
preference or priority relative to, any Senior Lien with respect to the
Collateral subject to such Junior Lien or any part thereof, (ii) it will not
challenge or question in any proceeding the validity or enforceability of any
Senior Obligations or Senior Obligations Security Document, or the validity,
attachment, perfection or priority of any Senior Lien, or the validity or
enforceability of the priorities, rights or duties established by or other
provisions of this Agreement, (iii) it will not interfere, hinder or delay, in
any manner, whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral subject to such Junior Lien by any holders
of Senior Obligations secured by such Collateral or any Senior Collateral Agent
acting on their behalf, (iv) it shall have no right to (A) direct any Senior
Collateral Agent or any holder of Senior Obligations to exercise any right,
remedy or power with respect to the Collateral subject to any Junior Lien or
(B) consent to the exercise by any Senior Collateral Agent or any holder of
Senior Obligations of any right, remedy or power with respect to the Collateral
subject to any Junior Lien, (v) it will not institute any suit or assert in any
suit, bankruptcy, insolvency or other proceeding any claim against any Senior
Collateral Agent or any holder of Senior Obligations seeking damages from or
other relief by way of specific performance,

 

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instructions or otherwise with respect to, and neither any Senior Collateral
Agent nor any holder of Senior Obligations shall be liable for, any action taken
or omitted to be taken by such Senior Collateral Agent or any such holder of
Senior Obligations with respect to any Collateral securing such Senior
Obligations that is subject to any Junior Lien, (vi) it will not seek, and
hereby waives any right, to have any Senior Obligations Collateral subject to
any Junior Lien or any part thereof marshaled upon any foreclosure or other
disposition of such Collateral and (vii) it will not attempt, directly or
indirectly, whether by judicial proceedings or otherwise, to challenge the
enforceability of any provision of this Agreement.

(b) The Junior Collateral Agent and each other Junior Obligations Secured Party
hereby agrees that if it shall obtain possession of any Senior Obligations
Collateral, or shall realize any proceeds or payment in respect of any such
Collateral, whether pursuant to any Junior Obligations Security Document or by
the exercise of any rights available to it under applicable law or in any
bankruptcy, insolvency or similar proceeding or otherwise, at any time prior to
the Discharge of Senior Obligations, then it shall hold such Collateral,
proceeds or payment in trust for the applicable Senior Obligations Secured
Parties and transfer such Collateral, proceeds or payment, as the case may be,
to the applicable Senior Collateral Agent. Each Junior Obligations Secured Party
agrees that if, at any time, all or part of any payment with respect to any
Senior Obligations previously made shall be rescinded for any reason whatsoever,
such Junior Obligations Secured Party shall promptly pay over to the applicable
Senior Collateral Agent any payment received by it in respect of any Collateral
subject to any Senior Lien securing such Senior Obligations and shall promptly
turn any Collateral subject to any such Senior Lien then held by it over to the
applicable Senior Collateral Agent, and the provisions set forth in this
Agreement shall be reinstated as if such payment had not been made, until the
Discharge of Senior Obligations.

SECTION 2.05. Automatic Release of Junior Liens. The Junior Collateral Agent and
each other Junior Obligations Secured Party agrees that, in the event of a sale,
transfer or other disposition of Senior Obligations Collateral subject to any
Junior Lien to a person or entity that is not the Company or a subsidiary of the
Company, such Junior Lien on such Collateral (but not on the proceeds thereof,
except to the extent such proceeds are applied to repay any Senior Obligations)
shall terminate and be released automatically and without further action if the
applicable Senior Liens on such Collateral are released. Each Junior Collateral
Agent agrees to execute and deliver all such releases and other instruments as
shall reasonably be requested by any applicable Senior Collateral Agent to
evidence and confirm any release of Junior Obligations Collateral provided for
in this Section.

SECTION 2.06. Certain Agreements With Respect to Bankruptcy or Insolvency
Proceedings. In the event a proceeding under the Bankruptcy Code or any other
Federal,

 

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state or foreign bankruptcy, insolvency, receivership or similar law shall be
commenced by or against any Grantor, each Junior Collateral Agent and the other
Junior Obligations Secured Parties shall not, prior to the Discharge of Senior
Obligations, (a) seek in respect of any part of the Collateral or proceeds
thereof or any Lien which may exist thereon any relief from or modification of
the automatic stay as provided in Section 362 of the Bankruptcy Code or seek or
accept any form of adequate protection under either or both Sections 362 and 363
of the Bankruptcy Code with respect thereto except replacement liens junior to
the Senior Liens and the accrual (but not the current payment) of interest and
the current payment of out-of-pocket expenses, including fees and disbursements
of counsel and other professional advisors, incurred by the Junior Collateral
Agents (which the Junior Obligations Secured Parties agree will constitute
adequate protection of their claims and interests), (b) oppose or object to any
adequate protection sought by or granted to any Senior Obligations Secured Party
in connection with the use of cash collateral or post-petition financing under
Section 362, 363 or 364 of the Bankruptcy Code, (c) oppose or object to the use
of cash collateral by a Grantor, (d) oppose or object to any post-petition
financing (including any debtor-in-possession financing) provided by any of the
Senior Obligations Secured Parties or provided by a third party pursuant to
Section 364 of the Bankruptcy Code (including on a priming basis), (e) oppose or
object to or withhold consent from the disposition of assets by any Grantor
under Section 363(b) or (f) of the Bankruptcy Code, (f) oppose, object to, or
vote against any plan of reorganization or disclosure statement the terms of
which are consistent with the rights of the Senior Obligations Secured Parties
under the Senior Obligations Security Documents and the rights of the Senior
Obligations Secured Parties and the Junior Obligations Secured Parties under
this Agreement, (g) make an election pursuant to Section 1111(b) of the
Bankruptcy Code or oppose any election pursuant to Section 1111(b) by any Senior
Obligations Secured Parties, (h) oppose or object to the determination of the
extent of any Liens held by any of the Senior Obligations Secured Parties or the
value of any claims of Senior Obligations Secured Parties under Section 506(a)
of the Bankruptcy Code, or (i) oppose or object to the payment of interest and
expenses as provided under Sections 506(b) and (c) of the Bankruptcy Code to any
Senior Obligations Secured Parties. In any proceeding described in this Section,
until the Discharge of Senior Obligations, each Junior Obligations Secured Party
hereby authorizes and empowers (without imposing an obligation on) the holders
of such Senior Obligations or any Senior Collateral Agent or other
Representative acting on their behalf to vote such Junior Obligations Secured
Party’s share of the Junior Obligations secured by such Junior Lien, insofar as
any such voting right arises from or relates to such Junior Lien or to the
Collateral subject thereto, in connection with any resolution, arrangement, plan
of reorganization, compromise or settlement relating to such Collateral, so long
as the proposal is consistent with the rights of the Senior Obligations Secured
Parties under the Senior Obligations Security Documents and the rights of the
Senior Obligations Secured Parties and the Junior Obligations Secured Parties
under this Agreement. Notwithstanding the foregoing, any Junior Collateral Agent
may take the actions contemplated by the last sentence of Section 2.02 hereof.

 

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SECTION 2.07. Reinstatement. In the event that any of the Senior Obligations
shall be paid in full and such payment or any part thereof shall subsequently,
for whatever reason (including, but not limited to, an order or judgment for
disgorgement of a preference under Title 11 of the United Stated Code, or any
similar law, or the settlement of any claim in respect thereof), be required to
be returned or repaid, the terms and conditions of this Article II shall be
fully applicable thereto until all such Senior Obligations shall again have been
paid in full in cash.

ARTICLE III

Designated Senior Obligations

SECTION 3.01. Designation. The Company may from time to time, subject to any
limitations contained in the Credit Agreement, any then existing Designated
Senior Obligations Governing Documents and the Note Indenture, designate
additional obligations that are, or are to be, secured by Liens on any assets or
properties of the Company or any subsidiaries of the Company as Designated
Senior Obligations by delivering to each Collateral Agent a notice:

(i) describing the obligations being designated as Designated Senior
Obligations, and including a statement of the maximum aggregate outstanding
principal amount of such obligations;

(ii) listing the Designated Senior Obligations Governing Documents under which
such Designated Senior Obligations are issued or incurred and the Designated
Senior Obligations Security Documents securing such Designated Senior
Obligations, and attaching copies of such Designated Senior Obligations
Governing Documents and Designated Senior Obligations Security Documents;

(iii) identifying the Designated Senior Obligations Collateral Agent with
respect to such Designated Senior Obligations, and any other Representative of
the holders of such Designated Senior Obligations;

(iv) certifying that the incurrence of such Designated Senior Obligations, the
creation of the Liens securing such Designated Senior Obligations and the
designation of such Designated Senior Obligations as Designated Senior
Obligations hereunder do not violate or result in a default under any provision
of any Credit Agreement, any then existing Designated Senior Obligations
Governing Document or the Note Indenture;

 

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(v) certifying that the Designated Senior Obligations Governing Document
governing such Designated Senior Obligations contains provisions under which the
related Designated Senior Obligations Secured Parties agree, or are deemed to
agree, to be bound by the provisions of this Agreement; and

(vi) attaching a fully executed Accession Agreement under which the Designated
Senior Obligations Collateral Agent with respect to such Designated Senior
Obligations shall become a party to and a Collateral Agent under this Agreement
(unless such Designated Senior Obligations Collateral Agent shall already be a
party hereto).

Upon the delivery of such notice and the related attachments as provided above,
the obligations designated in such notice shall become Designated Senior
Obligations for all purposes of this Agreement. Notwithstanding any other
provision contained in this Section or elsewhere in this Agreement, no
obligation shall constitute a Designated Senior Obligation if the incurrence of
such obligation, the creation of the Liens securing such obligation or the
designation of such obligation as a Designated Senior Obligation hereunder would
violate or result in a default under any provision of any Credit Agreement, any
existing Designated Senior Obligations Governing Document or the Note Indenture.

Each Senior Collateral Agent agrees that if it shall at any time hold a Senior
Lien on any Junior Obligations Collateral that can be perfected by the
possession or control of such Collateral or of any account in which such
Collateral is held, and if such Collateral or any such account is in fact in the
possession or under the control of such Senior Collateral Agent, such Senior
Collateral Agent will serve as sub-agent for each Junior Collateral Agent for
the sole purpose of perfecting the Junior Lien of such Junior Collateral Agent
in such Collateral. It is agreed that the obligations of the applicable Senior
Collateral Agent and the rights of the Junior Collateral Agents and the other
Junior Secured Parties in connection with any such sub-agency arrangement will
be in all respects subject to the provisions of Article II. The Senior
Collateral Agent will be deemed to make no representation as to the adequacy of
the steps taken by it to perfect the Junior Lien on any such Collateral and
shall have no responsibility to any Junior Collateral Agent or other Junior
Secured Party for such perfection, it being understood that the sole purpose of
this Article is to enable the Junior Secured Parties to obtain a perfected
Junior Lien in such Collateral to the extent, if any, that such perfection
results from the possession or control of such Collateral or any such account by
the Senior Collateral Agent. Upon the Discharge of Senior Obligations with
respect to Senior Obligations secured by the Senior Lien of any Senior
Collateral Agent, such Senior

 

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Collateral Agent shall take all such actions in its power as shall reasonably be
requested by the Junior Collateral Agent to transfer possession or control of
such Collateral or any such account to the Junior Collateral Agent; provided,
that if any such Collateral or any such account shall be subject to any other
Senior Lien, then such Senior Collateral Agent shall instead transfer such
possession or control of such Collateral or such account to the Senior
Collateral Agent holding such Senior Lien. The Junior Collateral Agent agrees
that if it shall obtain possession or control of any Collateral or any account
pursuant to the foregoing provisions and such Collateral or account shall
thereafter become subject to any Senior Lien, it will take all such actions in
its power as shall reasonably be requested by the Senior Collateral Agent
holding such Senior Lien to transfer possession or control of such Collateral or
such account to such Senior Collateral Agent.

ARTICLE V

Existence and Amounts of Liens and Obligations

Whenever any Collateral Agent shall be required, in connection with the exercise
of its rights or the performance of its obligations hereunder, to determine the
existence or amount of any Senior Obligations or Junior Obligations, or the
existence of any Lien securing any such obligations, or the Collateral subject
to any such Lien, it may request that such information be furnished to it in
writing by the Representative of such Senior Obligations or Junior Obligations
and shall be entitled to make such determination on the basis of the information
so furnished; provided, however, that if, notwithstanding the request of such
Collateral Agent, such Representative shall fail or refuse reasonably promptly
to provide the requested information, such Collateral Agent shall be entitled to
determine such existence or amount by such method as it may, in the exercise of
its good faith judgment, determine, including by reliance upon a certificate of
the Company. Each Collateral Agent may rely conclusively, and shall be fully
protected in so relying, on any determination made by it in accordance with the
provisions of the preceding sentence (or as otherwise directed by a court of
competent jurisdiction) and shall have no liability to the Company or any of its
subsidiaries, any Secured Party or any other person as a result of such
determination.

ARTICLE VI

Consent of Grantors

Each Grantor hereby consents to the provisions of this Agreement and the
intercreditor arrangements provided for herein and agrees (a) that no Collateral
Agent or other Secured Party shall have any liability to any Grantor as a result
of the performance of

 

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its obligations hereunder and (b) that the obligations of the Grantors under the
Senior Obligations Security Documents will in no way be diminished or otherwise
affected by the provisions or arrangements provided for herein. Each Grantor
also hereby confirms its respective guarantees, pledges and grants of security
interests, as applicable, under each of the Credit Facilities Security Documents
to which it is a party, and agrees that, notwithstanding the effectiveness of
the Note Security Documents, such guarantees, pledges and grants of security
interests shall continue to be in full force and effect and shall accrue to the
benefit of the Credit Facilities Secured Parties.

ARTICLE VII

Representations and Warranties

SECTION 7.01. Representations and Warranties of Each Party. Each party hereto
represents and warrants to the other parties hereto as follows:

(a) Such party is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to enter into and perform its obligations under this Agreement.

(b) This Agreement has been duly executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms.

(c) The execution, delivery and performance by such party of this Agreement
(i) do not require any consent or approval of, registration or filing with or
any other action by any governmental authority and (ii) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of such party or any order of any governmental authority or any
indenture, agreement or other instrument binding upon such party.

SECTION 7.02. Representations and Warranties of Each Collateral Agent. Each
Collateral Agent represents and warrants to the other parties hereto that it has
been authorized by the Secured Parties for which it serves as collateral agent
(or, in the case of the Credit Facilities Collateral Agent, by the Required
Lenders under and as defined in each Credit Agreement) to enter into this
Agreement.

 

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ARTICLE VIII

Miscellaneous

SECTION 8.01. Notices. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

(a) if to the Credit Facilities Collateral Agent, to Whitebox Advisors LLC, 3033
Excelsior Blvd., Ste 300, Minneapolis, Minnesota 55416, Attention of Jake Mercer
(Telecopy No. (612) 253-6149);

(b) if to the Note Collateral Agent, to U.S. Bank National Association, 5555 San
Felipe Street, Suite 1150, Houston, TX 77056, Attention: Corporate Trust
Services (Telecopy No. (713) 235-9213);

(c) if to any Designated Senior Obligations Collateral Agent, to it at the
address or telecopy number specified in the applicable Accession Agreement; and

(d) if to the Company, to it at Flotek Industries, Inc., 2930 W. Sam Houston
Parkway North, Suite 300, Houston, Texas 77043, Attention of Jempy Neyman
(Telecopy No. (713) 726-5363).

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (and for this
purpose a notice to the Company shall be deemed to be a notice to each Grantor).
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt.

SECTION 8.02. Waivers; Amendment. (a) No failure or delay on the part of any
party hereto in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereto are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on any party hereto in any case shall entitle
such party to any other or further notice or demand in similar or other
circumstances.

 

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(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by each Collateral Agent and the Company.

SECTION 8.03. Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of the parties hereto (including any Designated Senior
Obligations Collateral Agents becoming parties hereto as provided in
Section 8.04) and their respective successors and assigns, as well as the other
Credit Facilities Secured Parties, Note Secured Parties and Designated Senior
Obligations Secured Parties, all of whom are intended to be bound by, and to be
third party beneficiaries of, this Agreement.

SECTION 8.04. Accession of Designated Senior Obligations Collateral Agents. Upon
the execution and delivery by the collateral agent or similar Representative of
any Designated Senior Obligations of an Accession Agreement as provided in
Article III, such collateral agent or Representative shall become a party to
this Agreement as the Designated Senior Obligations Collateral Agent for such
Designated Senior Obligations and shall thenceforth have all the rights and
obligations applicable to it in such capacity hereunder.

SECTION 8.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by any party in this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement.

SECTION 8.06. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 8.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

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SECTION 8.08. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York state or
federal court sitting in New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York state or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party hereto may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 8.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 8.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE

 

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FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 8.10. Specific Performance. Each party hereto (a) agrees that any other
party hereto may demand specific performance of this Agreement and
(b) irrevocably waives any defense based on the adequacy of a remedy at law, and
any other defense, that might be asserted in opposition to the awarding of
specific performance in any action that may be brought by any other party
hereto.

SECTION 8.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

WHITEBOX ADVISORS LLC, as Credit Facilities Collateral Agent By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   Chief Legal Officer

[Signature Page to Lien Subordination and Intercreditor Agreement]

--------------------------------------------------------------------------------

U.S. BANK NATIONAL ASSOCIATION, as Note Collateral Agent By:  

/s/ Steven A. Finklea

Name:   Steven A. Finklea Title:   Vice President

[Signature Page to Lien Subordination and Intercreditor Agreement]

--------------------------------------------------------------------------------

FLOTEK INDUSTRIES, INC., as Grantor By:  

/s/ John Chisholm

Name:   John Chisholm Title:   President

[Signature Page to Lien Subordination and Intercreditor Agreement]

--------------------------------------------------------------------------------

TELEDRIFT COMPANY FLOTEK PAYMASTER, INC. MATERIAL TRANSLOGISTICS, INC.
PETROVALVE, INC. TURBECO, INC. USA PETROVALVE, INC. FLOTEK INTERNATIONAL, INC.
PADKO INTERNATIONAL INCORPORATED FLOTEK ECUADOR MANAGEMENT, LLC

FLOTEK ECUADOR INVESTMENTS, LLC,

    as Grantors

By  

/s/ John Chisholm

 

John Chisholm

 

President

SOONER ENERGY SERVICES, LLC CESI MANUFACTURING, LLC CESI CHEMICAL, INC.,
    as Grantors By  

/s/ John Chisholm

 

John Chisholm

 

Chief Executive Officer

FLOTEK INDUSTRIES FZE
    as Grantor By  

/s/ John Chisholm

 

John Chisholm

 

Chief Executive Officer

[Signature Page to Lien Subordination and Intercreditor Agreement]

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ANNEX I

ACCESSION AGREEMENT dated as of [    ], between [Representative] (the
“Representative”) and FLOTEK INDUSTRIES, INC. (the “Company”).

A. Reference is made to the Lien Subordination and Intercreditor Agreement dated
as of March 31, 2010 (as amended, restated, supplemented or otherwise modified
from time to time, the “Intercreditor Agreement”), among Whitebox Advisors LLC,
as Credit Facilities Collateral Agent, U.S. Bank National Association, as Note
Collateral Agent, Flotek Industries, Inc., the other Grantors named therein and
the other Designated Senior Obligations Collateral Agents from time to time
party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Intercreditor Agreement.

C. The Representative desires to become a Designated Senior Obligations
Collateral Agent under the Intercreditor Agreement.

Accordingly, the Company and the Representative agree as follows:

SECTION 1. Accession to Intercreditor Agreement. Upon the execution of this
Accession Agreement by the Representative and the Company and as of the date of
the delivery of this Accession Agreement to each Collateral Agent under the
Intercreditor Agreement as part of the notice required pursuant to Section 3.01
of the Intercreditor Agreement, the Representative hereby accedes to the
Intercreditor Agreement and shall thereafter be a party to and be bound by the
provisions of the Intercreditor Agreement and have all the rights and
obligations of a Designated Senior Obligations Collateral Agent with respect to
the Designated Senior Obligations described in the notice required pursuant to
Section 3.01 of the Intercreditor Agreement (of which this Accession Agreement
forms a part).

SECTION 2. Notices. All notices and other communications provided for in the
Intercreditor Agreement shall be given to the Representative as follows:

[Address]

[Telecopy Number]

SECTION 3. Counterparts. This Accession Agreement may be executed in multiple
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single agreement. Delivery of an executed
signature page to this Accession Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Accession
Agreement.

 

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SECTION 4. Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

[Name of Representative], By  

 

Name:   Title:   FLOTEK INDUSTRIES, INC. By  

 

Name:   Title:  

 

I-2

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ANNEX II

Provision for Junior Obligations Governing Document

Reference is made to the Lien Subordination and Intercreditor Agreement dated as
of March 31, 2010, among Whitebox Advisors LLC, as collateral agent for the
Credit Facility Secured Parties referred to therein; U.S. Bank National
Association, as collateral agent for the Note Secured Parties referred to
therein; Flotek Industries, Inc.; the other Grantors named therein; and the
Designated Senior Obligations Collateral Agents becoming parties thereto from
time to time (the “Intercreditor Agreement”). Each [holder of Junior
Obligations] (a) [hereby consents] [will be deemed to have consented] to the
subordination of the [Liens securing the Junior Obligations] on the terms set
forth in the Intercreditor Agreement, (b) [hereby agrees] [will be deemed to
have agreed] that it will be bound by and will take no actions contrary to the
provisions of the Intercreditor Agreement and (c) [hereby authorizes and
instructs] [will be deemed to have authorized and instructed] the [Junior
Obligations Collateral Agent] to enter into the Intercreditor Agreement and to
subject the [Junior Obligations] and the [Liens securing the Junior Obligations]
to the provisions thereof. The foregoing provisions are intended as an
inducement to the Senior Obligations Secured Parties (as defined in the
Intercreditor Agreement) to extend credit to Flotek Industries, Inc., and such
Senior Obligations Secured Parties are intended third party beneficiaries of
such provisions and the provisions of the Intercreditor Agreement.

Provision for Junior Obligations Security Document

Reference is made to the Lien Subordination and Intercreditor Agreement dated as
of March 31, 2010, among Whitebox Advisors LLC, as collateral agent for the
Credit Facility Secured Parties referred to therein; U.S. Bank National
Association, as collateral agent for the Note Secured Parties referred to
therein; Flotek Industries, Inc.; the other Grantors named therein; and the
Designated Senior Obligations Collateral Agents becoming parties thereto from
time to time (the “Intercreditor Agreement”). Notwithstanding any other
provision contained herein, this Agreement, the Liens created hereby and the
rights, remedies, duties and obligations provided for herein are subject in all
respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the Senior Obligations Security Documents (as defined in the
Intercreditor Agreement). In the event of any conflict or inconsistency between
the provisions of this Agreement and the Intercreditor Agreement, the provisions
of the Intercreditor Agreement shall control.

 

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