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flotekindustriesinc-regi

  Exhibit 10.2  Execution Version  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc           REGISTRATION RIGHTS AGREEMENT   by and among   FLOTEK INDUSTRIES, INC.   and   THE PURCHASERS PARTY HERETO   FEBRUARY 2, 2022    

 

Table of Contents    Page    Flotek Industries Inc. - Registration Rights Agreement (PIPE  - 2022) (3)....doc  i     ARTICLE I DEFINITIONS ........................................................................................................................................ 1  Section 1.1 Definitions ........................................................................................................................ 1  Section 1.2 Registrable Securities ....................................................................................................... 3  ARTICLE II REGISTRATION RIGHTS ................................................................................................................... 3  Section 2.1 Shelf Registration ............................................................................................................. 3  Section 2.2 Piggyback Registration ..................................................................................................... 5  Section 2.3 Sale Procedures ................................................................................................................. 6  Section 2.4 Cooperation by Holders .................................................................................................... 9  Section 2.5 Restrictions on Public Sale by Holders of Registrable Securities ..................................... 9  Section 2.6 Expenses ........................................................................................................................... 9  Section 2.7 Indemnification ............................................................................................................... 10  Section 2.8 Rule 144 Reporting ......................................................................................................... 11  Section 2.9 Transfer or Assignment of Registration Rights .............................................................. 12  Section 2.10 Aggregation of Registrable Securities ............................................................................ 12  ARTICLE III MISCELLANEOUS ........................................................................................................................... 12  Section 3.1 Communications ............................................................................................................. 12  Section 3.2 Successors and Assigns .................................................................................................. 13  Section 3.3 Assignment of Rights ..................................................................................................... 13  Section 3.4 Recapitalization, Exchanges, Etc. Affecting the Registrable Securities ......................... 13  Section 3.5 Specific Performance ...................................................................................................... 13  Section 3.6 Counterparts .................................................................................................................... 13  Section 3.7 Headings ......................................................................................................................... 13  Section 3.8 Governing Law, Submission to Jurisdiction ................................................................... 13  Section 3.9 Waiver of Jury Trial ........................................................................................................ 14  Section 3.10 Severability of Provisions ............................................................................................... 14  Section 3.11 Entire Agreement ............................................................................................................ 14  Section 3.12 Term; Amendment .......................................................................................................... 14  Section 3.13 No Presumption .............................................................................................................. 14  Section 3.14 Obligations Limited to Parties to Agreement ................................................................. 14  Section 3.15 Interpretation .................................................................................................................. 15  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  1  REGISTRATION RIGHTS AGREEMENT  THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of  February 2, 2022 by and between Flotek Industries, Inc., a Delaware corporation (the “Company”), and the other  parties hereto (each, a “Purchaser” and, collectively, the “Purchasers”).   WHEREAS, this Agreement is made in connection with the closing of the issuance and sale of the  Purchased Securities pursuant to the Note Purchase Agreement, dated as of February 2, 2022, by and between the  Company and the Purchasers (the “Purchase Agreement”); and   WHEREAS, the Company has agreed to provide the registration and other rights set forth in this  Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement.   NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for  good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto,  the parties hereby agree as follows:   ARTICLE I  DEFINITIONS   Section 1.1 Definitions. The terms set forth below are used herein as so defined:   “Affiliate” means, with respect to a specified Person, any other Person directly or indirectly controlling,  controlled by, or under direct or indirect common control with, such specified Person. For purposes of this  definition, “control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common  control with”) means the power to direct or cause the direction of the management and policies of such Person,  directly or indirectly, whether through the ownership of voting securities, by contract, or otherwise.   “Agreement” has the meaning specified therefor in the Preamble of this Agreement.   “Business Day” means any day other than a Saturday, Sunday, any federal legal holiday or day on which  banking institutions in the State of New York or State of Texas are authorized or required by law or other  governmental action to close.   “Common Stock” means the common stock, par value $0.0001 per share, of the Company.   “Commission” means the United States Securities and Exchange Commission.   “Effective Date” means the initial date of effectiveness of a Shelf Registration Statement.   “Effectiveness Period” has the meaning specified therefor in Section 2.1(a) of this Agreement.   “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules  and regulations of the Commission promulgated thereunder.    “Holder” means the record holder of any Registrable Securities.   “Included Registrable Securities” has the meaning specified therefor in Section 2.2(a) of this Agreement.   “Law” shall have the meaning set forth in the Purchase Agreement.   “Losses” has the meaning specified therefor in Section 2.7(a) of this Agreement.   “Managing Underwriter” means, with respect to any Underwritten Offering, the left lead book running  manager of such Underwritten Offering.  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  2  “Other Holder” has the meaning specified in Section 2.2(b).   “Person” means any individual, corporation, company, voluntary association, partnership, joint venture,  trust, limited liability company, unincorporated organization, government or any agency, instrumentality, or political  subdivision thereof, or any other form of entity.   “Piggyback Opt-Out Notice” has the meaning specified therefor in Section 2.2(a) of this Agreement.   “Piggyback Registration” has the meaning specified therefor in Section 2.2(a) of this Agreement.   “Pre-Funded Warrants” means the Pre-Funded Warrants of the Company issued to the Purchasers pursuant  to the Purchase Agreement and/or issued pursuant to any of the Purchased Securities.  “Purchase Agreement” has the meaning specified therefor in the Recitals of this Agreement.   “Purchased Securities” means (i) the 10% Convertible PIK Notes to be issued and sold to the Purchasers  pursuant to the Purchase Agreement, and (ii) the 10% Convertible PIK Notes to be issued and sold in connection  with the execution and delivery of that certain Chemical Products Supply Agreement, dated February 2, 2022, by  and between Flotek Chemistry, LLC, and ProFrac Services, LLC (whether issued to ProFrac Services, LLC or to an  Affiliate thereof).   “Purchaser” or “Purchasers” has the meaning set forth in the Preamble of this Agreement.   “Registrable Securities” means, subject to Section 1.2 of this Agreement, as of any date of determination,  (i) the shares of Common Stock issued or issuable pursuant to the Purchased Securities in accordance with the terms  of the Purchased Securities, (ii) the shares of Common Stock issued or issuable pursuant to the Pre-Funded Warrants  in accordance with the terms of the Pre-Funded Warrants, and (iii) any shares of Common Stock issued as (or  issuable upon the conversion, redemption, or exercise of any warrant, option, right, or other security that is issued  as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any such shares of  Common Stock described in clause (i) or (ii), the Purchased Securities, or the Pre-Funded Warrants. The number of  Registrable Securities held by any Holder shall mean the number of Registrable Securities such Holder would hold  after the full conversion, redemption, or exercise of any security held by such Holder that is convertible into or  redeemable or exercisable for Registrable Securities (including the Purchased Securities and the Pre-Funded  Warrants) and the value of such Registrable Securities for purposes of determining whether any threshold set forth  in this Agreement shall be calculated by multiplying such fully diluted number of shares of Registrable Securities by  the average of the closing price on each securities exchange or nationally recognized quotation system on which the  Common Stock is then listed for the ten (10) trading days preceding the date on which such value is being  determined.  “Registration” means any registration pursuant to this Agreement, including pursuant to the Shelf  Registration Statement or a Piggyback Registration.   “Registration Expenses” has the meaning specified therefor in Section 2.6(a) of this Agreement.   “Resale Opt-Out Notice” has the meaning specified therefor in Section 2.1(b) of this Agreement.   “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and  regulations of the Commission promulgated thereunder.   “Selling Expenses” has the meaning specified therefor in Section 2.6(a) of this Agreement.   “Selling Holder” means a Holder who is selling Registrable Securities pursuant to a Registration.   “Shelf Registration Filing Deadline” means 120 days from the date of this Agreement.  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  3  “Shelf Registration Statement” means a registration statement under the Securities Act to permit the public  resale of the Registrable Securities from time to time as permitted by Rule 415 of the Securities Act (or any similar  provision then in force under the Securities Act).   “Transfer Agent” means the transfer agent for the Common Stock.  “Underwriter” means a securities dealer that purchases any Registrable Securities as principal in an  Underwritten Offering and not as part of such dealer’s market-making activities.  “Underwritten Offering” means an offering (including an offering pursuant to a Shelf Registration  Statement) in which Common Stock is sold to an underwriter on a firm commitment basis for reoffering to the  public or an offering that is a “bought deal” with one or more investment banks.   “WKSI” means a well-known seasoned issuer (as defined in Rule 405 under the Securities Act).   Section 1.2 Registrable Securities. Any Registrable Security will cease to be a Registrable Security  (and the Company shall not be required to maintain the effectiveness of any, or file any, registration statement  hereunder with respect thereto) at the earliest of the following: (a) when a registration statement covering such  Registrable Security has been declared effective by the Commission and such Registrable Security has been sold or  disposed of pursuant to such effective registration statement; (b) when such Registrable Security is held by the  Company or one of its subsidiaries; (c) when such Registrable Security has been sold in a private transaction in  which the transferor’s rights under this Agreement are not assigned to the transferee of such securities; (d) the date  on which such Registrable Security has been sold pursuant to any section of Rule 144 under the Securities Act (or  any similar provision then in force under the Securities Act, “Rule 144”) or any other exemption from the  registration requirements of the Securities Act as a result of which the legend on any certificate or book-entry  notation representing such Registrable Security restricting transfer of such Registrable Security has been removed;  and (e) when such Registrable Security becomes eligible for resale without volume or manner-of-sale restrictions  and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect,  delivered to and reasonably acceptable to the Transfer Agent.   ARTICLE II  REGISTRATION RIGHTS   Section 2.1 Shelf Registration.   (a) Shelf Registration. The Company shall use its commercially reasonable efforts to prepare  and file an initial Shelf Registration Statement under the Securities Act covering resales of the Registrable  Securities on or before the Shelf Registration Filing Deadline. The Company shall use its commercially  reasonable efforts to cause such initial Shelf Registration Statement to become effective no later than four  months following the initial filing of the Shelf Registration Statement. The Company will use its  commercially reasonable efforts to cause such initial Shelf Registration Statement filed pursuant to this  Section 2.1(a) to be continuously effective under the Securities Act until the earliest of (i) all Registrable  Securities covered by the Shelf Registration Statement have been distributed in the manner set forth and as  contemplated in such Shelf Registration Statement, and (ii) such Registrable Securities cease to be  Registrable Securities (the “Effectiveness Period”). Notwithstanding the foregoing, if the Commission  informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415  of the Securities Act, be registered for resale as a secondary offering on a single registration statement, the  Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable  efforts to file amendments to the applicable Shelf Registration Statement as required by the Commission,  covering the maximum number of Registrable Securities permitted to be registered by the Commission;  provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent  efforts to advocate with the Commission for the registration of all of the Registrable Securities in  accordance with applicable Commission guidance, including without limitation, Compliance and  Disclosure Interpretation 612.09. In the event that such an amendment is required, the Company shall  subsequently file, as promptly as allowed by the Commission or any guidance provided by the Commission  to the Company, one or more additional Shelf Registration Statements to register for resale those  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  4  Registrable Securities that were not registered for resale on the initial Shelf Registration Statement, as  amended. The Company shall cause each such additional Shelf Registration Statement to be continuously  effective under the Securities Act during the Effectiveness Period. The Company will use its commercially  reasonable efforts to cause such amendment to the initial Shelf Registration Statement or subsequent Shelf  Registration Statement, as applicable, to be continuously effective under the Securities Act during the  Effectiveness Period. A Shelf Registration Statement filed pursuant to this Section 2.1(a) shall be on such  appropriate registration form of the Commission as shall be selected by the Company. A Shelf Registration  Statement when declared effective (including the documents incorporated therein by reference) will comply  as to form in all material respects with all applicable requirements of the Securities Act and the Exchange  Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be  stated therein or necessary to make the statements therein not misleading (in the case of any prospectus  contained in such Shelf Registration Statement, in the light of the circumstances under which a statement is  made). As soon as practicable following the date that a Shelf Registration Statement becomes effective, but  in any event within five (5) Business Days of such date, the Company shall provide the Holders with  written notice of the effectiveness of a Shelf Registration Statement.   (b) Resale Registration Opt-Out. At least five (5) Business Days before the initial filing of  the Shelf Registration Statement required by Section 2.1(a), the Company shall provide advance written  notice to each Holder that it plans to file a Shelf Registration Statement. Any Holder may deliver advance  written notice (a “Resale Opt-Out Notice”) to the Company requesting that such Holder not be included in  a Shelf Registration Statement prior to its initial filing. Following delivery of a Resale Opt-Out Notice from  a Holder, the Company shall not be required to include the Registrable Securities of such Holder in such  Shelf Registration Statement.   (c) Delay Rights. Notwithstanding anything to the contrary contained herein, the Company  may, upon written notice to any Selling Holder whose Registrable Securities are included in a Shelf  Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the Shelf  Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable  Securities pursuant to the Shelf Registration Statement) if (i) the Company is pursuing an acquisition,  merger, reorganization, disposition, financing, securities offering, or other similar transaction and the  Company determines in good faith that the Company’s ability to pursue or consummate such a transaction  would be adversely affected by any required disclosure of such transaction in the Shelf Registration  Statement, (ii) the Company has experienced some other material non-public event the disclosure of which  at such time, in the good faith judgment of the Company, would adversely affect the Company, or (iii)  render the Company unable to comply with the requirements of the Securities Act or Exchange Act;  provided, however, that in no event shall the Selling Holders be suspended from selling Registrable  Securities pursuant to the Shelf Registration Statement for a period of ninety (90) consecutive days or an  aggregate of one-hundred and eighty (180) days in any 365-day period. Upon disclosure of such  information or the termination of the condition described above, the Company shall provide prompt notice  to the Selling Holders whose Registrable Securities are included in a Shelf Registration Statement, and  shall promptly terminate any suspension of sales it has put into effect and shall take such other actions  necessary or appropriate to permit registered sales of Registrable Securities as contemplated in this  Agreement.   (d) Renewal. If, by the third anniversary of the initial effective date of a Shelf Registration  Statement filed pursuant to this Section 2.1 (the “Renewal Deadline”), any of the Registrable Securities  remain unsold by a Holder included on such Registration, and the Company has not received an opinion of  counsel indicating that the Effectiveness Period will continue uninterrupted beyond the Renewal Deadline,  the Company shall file, if it has not already done so and is eligible to do so, a new Shelf Registration  Statement covering the Registrable Securities included on the prior Shelf Registration Statement and shall  use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective  within 180 days after the Renewal Deadline; and the Company shall take all other action necessary or  appropriate to permit the public offering and sale of the Registrable Securities to continue as contemplated  in the expired Shelf Registration Statement. References herein to a Shelf Registration Statement shall  include such new shelf registration statement.  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  5  Section 2.2 Piggyback Registration.   (a) Participation. If at any time the Company proposes to file (i) at a time when the Company  is not a WKSI, a registration statement and such Holder has not previously included its Registrable  Securities in a Shelf Registration Statement contemplated by Section 2.1(a) of this Agreement that is  currently effective, or (ii) a prospectus supplement to an effective “automatic shelf registration statement”  (as defined in Rule 405 under the Securities Act), so long as the Company is a WKSI at such time or,  whether or not the Company is a WKSI, so long as the Registrable Securities were previously included in  the underlying Shelf Registration Statement or are included in an effective Shelf Registration Statement, or  in any case in which Holders may participate in such offering without the filing of a post-effective  amendment, in each case, for the sale of Common Stock in an Underwritten Offering for its own account  and/or another Person, other than (a) a registration relating solely to employee benefit plans, (b) a  registration on a registration statement on Form S-8, (c) a registration relating solely to a Rule 145  transaction, or (d) a registration statement on any registration form which does not permit secondary sales,  then the Company shall give not less than ten (10) Business Days advance notice (including, but not limited  to, notification by e-mail; such notice, a “Piggyback Notice”) of such proposed Underwritten Offering to  each Holder, and such notice shall offer such Holder the opportunity to participate in such Underwritten  Offering and to include in such Underwritten Offering such number of Registrable Securities (the  “Included Registrable Securities”) as each such Holder may request in writing (a “Piggyback  Registration”); provided, however, that the Company shall not be required to include the Registrable  Securities of the Holders in such Registration to the extent that the Company has been advised by the  Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders  and any other applicable Persons will have an adverse effect on the offering price, material terms or  conditions, timing, or probability of success of the distribution of the Common Stock in the Underwritten  Offering; and provided, further, that to the extent consistent with the advice of the Managing Underwriter  referred to in the preceding proviso, the amount of Registrable Securities to be offered for the accounts of  Holders (if any) shall be determined based on the provisions of Section 2.2(b). Each Piggyback Notice shall  be provided to Holders on a Business Day pursuant to Section 3.1 hereof and confirmation of receipt of  such notice shall be requested in the notice. The Holder will have five (5) Business Days after notice has  been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If  no request for inclusion from a Holder is received within the specified time, such Holder shall have no  further right to participate in such Piggyback Registration. If, at any time after giving written notice of its  intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the  Company shall determine for any reason not to undertake or to delay such Underwritten Offering, the  Company may, at its election, give written notice of such determination to the Selling Holders and, (x) in  the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation  to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and  (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering  any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any  Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling  Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Company of  such withdrawal up to and including the time of pricing of such offering. Any Holder may deliver written  notice (a “Piggyback Opt-Out Notice”) to the Company requesting that such Holder not receive notice from  the Company of any proposed Underwritten Offering; provided, however, that such Holder may later  revoke any such Piggyback Opt-Out Notice in writing within five (5) Business Days from the date of the  Piggyback Opt-Out Notice. Following receipt of a Piggyback Opt-Out Notice from a Holder (unless  subsequently revoked), the Company shall not be required to deliver any notice to such Holder pursuant to  this Section 2.2(a) and such Holder shall no longer be entitled to participate in Underwritten Offerings by  the Company pursuant to this Section 2.2(a), unless such Piggyback Opt-Out Notice is revoked by such  Holder.   (b) Priority of Piggyback Registration. If the Managing Underwriter or Underwriters of any  proposed Underwritten Offering of shares of Common Stock included in a Piggyback Registration advises  the Company that the total shares of Common Stock which the Selling Holders and any other applicable  Persons intend to include in such offering exceeds the number which can be sold in such offering without  being likely to have an adverse effect on the offering price, material terms or conditions, timing, or  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  6  probability of success of the distribution of the Common Stock offered or the market for the Common  Stock, then the Piggyback Notice provided by the Company pursuant to Section 2.2(a) shall include  notification of such determination or, if such determination is made after the Piggyback Notice has been  given, then the Company shall furnish notice in writing (including by e-mail) to the Holders (or those who  have timely elected to participate in such Underwritten Offering), and the Common Stock to be included in  such Underwritten Offering shall include the number of shares of Common Stock that such Managing  Underwriter or Underwriters advises the Company can be sold without having such adverse effect, with  such number to be allocated: (i) if such Piggyback Registration was initiated by the Company, (A) first, to  the Company, (B) second, pro rata among the Selling Holders and any other Persons who have been or  after the date hereof are granted registration rights on parity with the registration rights granted under this  Agreement (the “Other Holders”) who have requested participation in the Piggyback Registration (based,  for each such Selling Holder or Other Holder, on the percentage derived by dividing (1) the number of  shares of Common Stock proposed to be sold by such Selling Holder or such Other Holder in such offering,  by (2) the aggregate number of shares of Common Stock proposed to be sold by all Selling Holders and all  Other Holders in the Piggyback Registration), and (C) third, if applicable, to any other holder of shares of  Common Stock with registration rights that are subordinate to the rights of the Holders hereunder; and (ii)  if such Piggyback Registration was not initiated by the Company, (A) first, to the Persons initiating such  Registration, (B) second, pro rata among the Selling Holders and any Other Holders who have requested  participation in the Piggyback Registration (based, for each such Selling Holder or Other Holder, on the  percentage derived by dividing (1) the number of shares of Common Stock proposed to be sold by such  Selling Holder or such Other Holder in such offering, by (2) the aggregate number of shares of Common  Stock proposed to be sold by all Selling Holders and all Other Holders in the Piggyback Registration other  than the Persons initiating such Registration), and (C) third, if applicable, to any other holder of shares of  Common Stock with registration rights that are subordinate to the rights of the Holders hereunder.    Section 2.3 Sale Procedures.   (a) General Procedures. In connection with any Underwritten Offering under Section 2.2 of  this Agreement, the Company shall be entitled to select the Managing Underwriter or Underwriters. In  connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder  participates, each Selling Holder and the Company shall be obligated to enter into an underwriting  agreement with the Managing Underwriter or Underwriters which contains such representations, covenants,  indemnities, and other rights and obligations as are customary in underwriting agreements for firm  commitment offerings of equity securities. No Selling Holder may participate in such Underwritten  Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such  underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities,  and other documents reasonably required under the terms of such underwriting agreement. If any Selling  Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom  by notice to the Company and the Managing Underwriter; provided, however, that such withdrawal must be  made at least two Business Days prior to the time of pricing of such Underwritten Offering to be effective.  No such withdrawal or abandonment shall affect the Company’s obligation to pay Registration Expenses.   (b) In connection with its obligations under this Article II, the Company will:   (i) As expeditiously as possible, prepare and file with the Commission such  amendments and supplements to the Shelf Registration Statement and the prospectus used in  connection therewith as may be necessary to keep a Shelf Registration Statement effective for the  Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act  with respect to the disposition of all Registrable Securities covered by a Shelf Registration  Statement;   (ii) if a prospectus supplement will be used in connection with the marketing of an  Underwritten Offering from a Shelf Registration Statement and the Managing Underwriter at any  time shall notify the Company in writing that, in the sole judgment of such Managing Underwriter,  the inclusion of detailed information to be used in such prospectus supplement is of material  importance to the success of the Underwritten Offering of such Registrable Securities, the  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  7  Company shall use its commercially reasonable efforts to include such information in the  prospectus supplement;   (iii) furnish to each Selling Holder (A) a reasonable period before filing a Shelf  Registration Statement or any other registration statement contemplated by this Agreement or any  supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such  documents proposed to be filed (including exhibits and each document incorporated by reference  therein to the extent then required by the rules and regulations of the Commission if such exhibits  and documents are not otherwise available on the Commission’s EDGAR filing system (or any  successor system)), and provide each such Selling Holder the opportunity to object to any  information pertaining to such Selling Holder and its plan of distribution that is contained therein  and make the corrections reasonably requested by such Selling Holder with respect to such  information prior to filing such Shelf Registration Statement or such other registration statement  and the prospectus included therein or any supplement or amendment thereto, and (B) such  number of copies of such Shelf Registration Statement or such other registration statement and the  prospectus included therein and any supplements and amendments thereto as such Persons may  reasonably request in order to facilitate the public sale or other disposition of the Registrable  Securities covered by such Shelf Registration Statement or other registration statement;   (iv) if applicable, use its commercially reasonable efforts to register or qualify the  Registrable Securities covered by a Shelf Registration Statement or any other registration  statement contemplated by this Agreement under the securities or blue sky laws of such  jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing  Underwriter, shall reasonably request, provided that Flotek will not be required to qualify  generally to transact business in any jurisdiction where it is not then required to so qualify or to  take any action which would subject it to general service of process in any such jurisdiction where  it is not then so subject;  (v) promptly notify each Selling Holder and each underwriter, at any time when a  prospectus relating thereto is required to be delivered under the Securities Act, of: (A) the filing of  a Shelf Registration Statement or any other registration statement contemplated by this Agreement  or any prospectus included therein or any amendment or supplement thereto (other than any  amendment or supplement resulting from the filing of a document incorporated by reference  therein), and, with respect to such Shelf Registration Statement or any other registration statement  or any post-effective amendment thereto, when the same has become effective; and (B) the receipt  of any written comments from the Commission with respect to any filing referred to in clause (A)  and any written request by the Commission for amendments or supplements to such Shelf  Registration Statement or any other registration statement or any prospectus or prospectus  supplement thereto;    (vi)  immediately notify each Selling Holder and each underwriter, at any time when  a prospectus relating thereto is required to be delivered under the Securities Act, of: (A) the  happening of any event as a result of which the prospectus contained in a Shelf Registration  Statement or any other registration statement contemplated by this Agreement or any supplemental  amendment thereto, includes an untrue statement of a material fact or omits to state any material  fact required to be stated therein or necessary to make the statements therein not misleading in the  light of the circumstances then existing; (B) the issuance or threat of issuance by the Commission  of any stop order suspending the effectiveness of such Shelf Registration Statement or any other  registration statement contemplated by this Agreement, or the initiation of any proceedings for that  purpose; or (C) the receipt by the Company of any notification with respect to the suspension of  the qualification of any Registrable Securities for sale under the applicable securities or blue sky  laws of any jurisdiction. Following the provision of such notice, the Company agrees to as  promptly as practicable amend or supplement the prospectus or prospectus supplement or take  other appropriate action so that the prospectus or prospectus supplement does not include an  untrue statement of a material fact or omit to state a material fact required to be stated therein or  necessary to make the statements therein not misleading in the light of the circumstances then  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  8  existing and to take such other action as is necessary to remove a stop order, suspension, threat  thereof, or proceedings related thereto;  (vii) upon request and subject to appropriate confidentiality obligations, furnish to  each Selling Holder copies of any and all transmittal letters or other correspondence with the  Commission or any other governmental agency or self-regulatory body or other body having  jurisdiction (including any domestic or foreign securities exchange) relating to such offering of  Registrable Securities;  (viii) in the case of an Underwritten Offering, furnish upon request, (A) an opinion of  counsel for the Company, dated the effective date of the applicable registration statement or the  date of any amendment or supplement thereto (other than any amendment or supplement resulting  from the filing of a document incorporated by reference therein), preliminary or prospectus  supplement, and a letter of like kind dated the date of the closing under the underwriting  agreement, and (B) a “comfort” letter, dated the pricing date of such Underwritten Offering and a  letter of like kind dated the date of the closing under the underwriting agreement, in each case,  signed by the independent public accountants who have certified the Company’s financial  statements included or incorporated by reference into the applicable registration statement, and  each of the opinion and the “comfort” letter shall be in customary form and covering substantially  the same matters with respect to such registration statement (and the prospectus included therein  and any supplement thereto) and as are customarily covered in opinions of issuer’s counsel and in  accountants’ letters delivered to the underwriters in underwritten offerings of securities, such other  matters as such underwriters may reasonably request;  (ix) otherwise use its commercially reasonable efforts to comply with all applicable  rules and regulations of the Commission and make available to its security holders, as soon as  reasonably practicable, an earnings statement covering the period of at least 12 months, but not  more than 18 months, beginning with the first full calendar month after the effective date of such  registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the  Securities Act and Rule 158 promulgated thereunder;  (x) make available to the appropriate representatives of the underwriters access to  such information and the Company personnel as is reasonable and customary to enable such  parties and their representatives to establish a due diligence defense under the Securities  Act; provided that the Company need not disclose any non-public information to any such  representative unless and until such representative has entered into a confidentiality agreement  with the Company;  (xi) cause all such Registrable Securities registered pursuant to this Agreement to be  listed on each securities exchange or nationally recognized quotation system on which such  securities issued by the Company are then listed;   (xii) use its commercially reasonable efforts to cause the Registrable Securities to be  registered with or approved by such other governmental agencies or authorities as may be legally  required by virtue of the business and operations of the Company to enable the Selling Holders to  consummate the disposition of such Registrable Securities;  (xiii) provide a transfer agent and registrar for all Registrable Securities covered by  such registration statement; and  (xiv) enter into customary agreements and take such other actions as are reasonably  requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the  disposition of such Registrable Securities.   

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  9  (c) Each Selling Holder, upon receipt of notice from the Company of the happening of any  event of the kind described in Section 2.3(b)(vi), shall forthwith discontinue disposition of the Registrable  Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus  contemplated by Section 2.3(b)(vi) or until it is advised in writing by the Company that the use of the  prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated  by reference in the prospectus, and, if so directed by the Company, such Selling Holder will, or will request  the Managing Underwriter or underwriters, if any, to deliver to the Company (at the Company’s expense)  all copies in their possession or control, other than permanent file copies then in such Selling Holder’s  possession, of the prospectus and any prospectus supplement covering such Registrable Securities current  at the time of receipt of such notice.   Section 2.4 Cooperation by Holders. The Company shall have no obligation to include Registrable  Securities of a Holder in the Shelf Registration Statement or in an Underwritten Offering under Article II of this  Agreement if such Selling Holder has failed to timely furnish such information which, in the opinion of counsel to  the Company, is reasonably required in order for the registration statement or prospectus supplement, as applicable,  to comply with the Securities Act.   Section 2.5 Restrictions on Public Sale by Holders of Registrable Securities. Each Holder of  Registrable Securities agrees that, in connection with any registered offering of the Common Stock or other equity  securities of the Company, and upon the request of the Managing Underwriter, such Holder shall not, during a  period of up to ninety (90) calendar days beginning on the date of a prospectus supplement filed with the  Commission with respect to the pricing of an Underwritten Offering, or other prospectus (including any free writing  prospectus) containing the terms of the pricing of such Underwritten Offering, (a) offer, pledge, sell, contract to sell,  grant any option or contract to purchase, purchase any option or contract to sell, hedge the beneficial ownership of,  or otherwise dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into,  exercisable for, or exchangeable for shares of Common Stock, or (b) enter into any swap or other arrangement that  transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether  any such transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or such other  securities, in cash, or otherwise; provided that (i) the Company gives written notice to such Holder of the date of the  commencement and termination of such period with respect to any such Underwritten Offering, and (ii) the duration  of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the  underwriters on the executive officers or directors or any other stockholder of the Company on whom a restriction is  imposed; and provided further that this Section 2.5 shall only be applicable to Holders of Registrable Securities who  (together with their Affiliates that hold Registrable Securities) own at least $5 million of Registrable Securities.   Section 2.6 Expenses.   (a) Certain Definitions. “Registration Expenses” means all expenses incident to the  Company’s performance under or compliance with this Agreement to effect the registration of Registrable  Securities in a Shelf Registration Statement pursuant to Section 2.1, a Piggyback Registration pursuant to  Section 2.2, and the disposition of such securities, including, without limitation, all registration, filing,  securities exchange listing and fees, all registration, filing, qualification, and other fees and expenses of  complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, transfer  taxes and fees of transfer agents and registrars, all word processing, duplicating, and printing expenses, all  roadshow expenses borne by it and the fees and disbursements of counsel and independent public  accountants for the Company, including the expenses of any “comfort” letters required by or incident to  such performance and compliance, and reasonable fees and expenses of one counsel to the Holders  reasonably acceptable to the Company and selected by the Holders that hold a majority of the Registrable  Securities to be included in such filing in connection with the filing or amendment of any Registration  Statement or Prospectus hereunder.  The Company shall not be responsible for, and Registration Expenses  shall not include, any “Selling Expenses,” which means all underwriting fees, discounts, and selling  commissions, and transfer taxes.   (b) Expenses. The Company will pay all reasonable Registration Expenses in connection  with a Shelf Registration Statement, a Piggyback Registration, or Underwritten Offering, whether or not  any sale is made pursuant to such Shelf Registration Statement, Piggyback Registration, or Underwritten  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  10  Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any  sale of its Registrable Securities hereunder.   Section 2.7 Indemnification.   (a) By the Company. In the event of a registration of any Registrable Securities under the  Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless each Selling  Holder thereunder, its directors, officers, employees, agents, and managers, and each underwriter, pursuant  to the applicable underwriting agreement with such underwriter, of Registrable Securities thereunder and  each Person, if any, who controls such Selling Holder or underwriter within the meaning of the Securities  Act and the Exchange Act, and its directors, officers, employees, agents, and managers, against any losses,  claims, damages, expenses, or liabilities (including reasonable attorneys’ fees and expenses) (collectively,  “Losses”), joint or several, to which such Selling Holder or underwriter or controlling Person or directors,  officers, employees, agents, or managers may become subject under the Securities Act, the Exchange Act  or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in  respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any  material fact (in the case of any prospectus, in light of the circumstances under which such statement is  made) contained in the Shelf Registration Statement or any other registration statement contemplated by  this Agreement, any preliminary prospectus or final prospectus contained therein, or any free writing  prospectus related thereto, or any amendment or supplement thereof, or arise out of or are based upon the  omission or alleged omission to state therein a material fact required to be stated therein or necessary to  make the statements therein (in the case of a prospectus, in light of the circumstances under which they  were made) not misleading, and will reimburse each such Selling Holder, its directors and officers, each  such underwriter and each such controlling Person and each such director, officer, employees, agent, or  manager for any legal or other expenses reasonably incurred by them in connection with investigating or  defending any such Loss or actions or proceedings; provided, however, that the Company will not be liable  in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or  alleged untrue statement or omission or alleged omission so made in conformity with information furnished  by such Selling Holder, such underwriter, or such controlling Person in writing specifically for use in the  Shelf Registration Statement or such other registration statement, or prospectus supplement, as applicable,  or information relating to such Selling Holder that was reviewed and expressly approved in writing by such  Selling Holder expressly for use in a registration statement, such prospectus supplement or in any  amendment or supplement thereto, as applicable.  Such indemnity shall remain in full force and effect  regardless of any investigation made by or on behalf of such Selling Holder or any such director, officer,  employee, agent, manager, or controlling Person, and shall survive the transfer of such securities by such  Selling Holder.   (b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to  indemnify and hold harmless the Company, its directors, officers, employees, and agents and each Person,  if any, who controls the Company within the meaning of the Securities Act or of the Exchange Act to the  same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to  information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder  expressly for inclusion in the Shelf Registration Statement, any other registration statement contemplated  by this Agreement or prospectus supplement relating to the Registrable Securities, or any amendment or  supplement thereto; provided, however, that the liability of each Selling Holder shall not be greater in  amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling  Holder from the sale of the Registrable Securities giving rise to such indemnification less the amount of  any damages that such Selling Holder has otherwise been required to pay by reason of such untrue or  alleged untrue statement or omission or alleged omission.    (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the  commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made  against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission  so to notify the indemnifying party shall not relieve it from any liability which it may have to any  indemnified party other than under this Section 2.7(c) except to the extent that the indemnifying party is  materially prejudiced by such failure. In any action brought against any indemnified party, it shall notify  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  11  the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to  participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel  reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such  indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party  shall not be liable to such indemnified party under this Section 2.7 for any legal expenses subsequently  incurred by such indemnified party in connection with the defense thereof other than reasonable costs of  investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party  has failed to assume the defense and employ counsel reasonably satisfactory to the indemnified party or (ii)  if the defendants in any such action include both the indemnified party and the indemnifying party and  counsel to the indemnified party shall have concluded that there may be reasonable defenses available to  the indemnified party that are different from or additional to those available to the indemnifying party, or if  the interests of the indemnified party reasonably may be deemed to conflict with the interests of the  indemnifying party or representation by both parties by the same counsel is otherwise inappropriate under  the applicable standards of professional conduct, then the indemnified party shall have the right to select a  separate counsel and to assume such legal defense and otherwise to participate in the defense of such  action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses  related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any  other provision of this Agreement, the indemnifying party shall not settle any indemnified claim without  the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on,  includes a complete release from liability of, and does not contain any admission of wrong doing by, the  indemnified party. An indemnifying party shall not be liable for any settlement of any action or claim  referred to in this Section 2.7 effected without its written consent (which shall not be unreasonably  withheld, conditioned, or delayed).  (d) Contribution. If the indemnification provided for in this Section 2.7 is held by a court or  government agency of competent jurisdiction to be unavailable to the Company or any Selling Holder or is  insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of  indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified  party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the  Company on the one hand and of such Selling Holder on the other in connection with the statements or  omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided,  however, that in no event shall such Selling Holder be required to contribute an aggregate amount in excess  of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of  Registrable Securities giving rise to such indemnification less the amount of any damages that such Selling  Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission  or alleged omission. The relative fault of the Company on the one hand and each Selling Holder on the  other shall be determined by reference to, among other things, whether the untrue or alleged untrue  statement of a material fact or the omission or alleged omission to state a material fact has been made by, or  relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to  information and opportunity to correct or prevent such statement or omission. The parties hereto agree that  it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro  rata allocation or by any other method of allocation which does not take account of the equitable  considerations referred to in the first sentence of this paragraph. The amount paid by an indemnified party  as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any  legal and other expenses reasonably incurred by such indemnified party in connection with investigating or  defending any Loss which is the subject of this paragraph. No person guilty of fraudulent misrepresentation  (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person  who is not guilty of such fraudulent misrepresentation.   (e) Other Indemnification. The provisions of this Section 2.7 shall be in addition to any other  rights to indemnification or contribution which an indemnified party may have pursuant to law, equity,  contract, or otherwise.   Section 2.8 Rule 144 Reporting. With a view to making available the benefits of certain rules and  regulations of the Commission that may permit the sale of the Registrable Securities to the public without  registration, the Company agrees to use its commercially reasonable efforts to:   

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  12  (a) Make and keep public information regarding the Company available, as those terms are  understood and defined in Rule 144, at all times from and after the date hereof;   (b) File with the Commission in a timely manner all reports and other documents required of  the Company under the Securities Act and the Exchange Act at all times from and after the date hereof;   (c) So long as a Holder, together with its Affiliates, owns any Registrable Securities, (i)  unless otherwise available at no charge by access electronically to the Commission’s EDGAR filing system  (or any successor system), furnish to such Holder forthwith upon request a copy of the most recent annual  or quarterly report of the Company, and such other reports and documents so filed as such Holder may  reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to  sell any such securities without registration, and (ii) to the extent accurate, furnish to such Holder upon  reasonable request a written statement of the Company that it has complied with the reporting requirements  of Rule 144; and   (d) Provide opinion(s) of counsel as may be reasonably necessary in order for a Holder to  avail itself of Rule 144 to allow such Holder to sell any Registrable Securities without registration, and  remove, or cause to be removed, the notation of any restrictive legend on such Holder’s book-entry account  maintained by the Company’s transfer agent, and bear all costs associated with the removal of such legend  in the Company’s books.   Section 2.9 Transfer or Assignment of Registration Rights. The rights to cause the Company to  register Registrable Securities granted to the Purchasers by the Company under this Article II may be transferred or  assigned by each Purchaser to one or more transferee(s) or assignee(s) of such Registrable Securities or securities  convertible, redeemable, or exchangeable for Registrable Securities (including the Purchased Securities), in each  case, who (a) (i) are Affiliates of such Purchaser, or (ii) hold, collectively with its or their Affiliates, after giving  effect to such transfer or assignment, at least $3 million of Registrable Securities or 1% of the Registrable Securities  as of the date hereof, and (b) who assume in writing responsibility for the obligations of such Purchaser under this  Agreement with respect to the securities so transferred. The Company shall be given written notice prior to any said  transfer or assignment, stating the name and address of each such transferee and identifying the securities with  respect to which such registration rights are being transferred or assigned.   Section 2.10 Aggregation of Registrable Securities. All Registrable Securities held or acquired by  Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability  of any rights under this Agreement. In addition, all other shares of Common Stock held by a Person and for which  such Person has similar registration rights pursuant to an agreement between such Person and the Company shall be  aggregated together for the purpose of determining such Person’s rights under this Agreement solely as such shares  relate to minimum quantity requirements contemplated herein; provided that, for the avoidance of doubt, such  Common Stock shall not otherwise be deemed Registrable Securities for any other purpose under this Agreement.   ARTICLE III  MISCELLANEOUS   Section 3.1 Communications. All notices and demands provided for hereunder shall be in writing and  shall be given by registered or certified mail, return receipt requested, e-mail, air courier guaranteeing overnight  delivery or personal delivery to the following addresses:   (a) If to a Purchaser, to such addresses indicated on the signature pages attached hereto.   (b) If to the Company:   Flotek Industries, Inc.   8846 N. Sam Houston Parkway W.  Houston, Texas 77064  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  13  Attention: Nicholas J. Bigney  Email: NBigney@flotekind.com  with a copy (which shall not constitute notice) to:  Norton Rose Fulbright US LLP   1301 McKinney, Suite 5100   Houston, Texas 77010-3095  Attention: Robert Morris; Brandon Byrne   Email: robert.morris@nortonrosefulbright.com; brandon.byrne@nortonrosefulbright.com  or, if to a transferee of a Purchaser, to the transferee at the address provided pursuant to Section 2.10 above. All  notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally  delivered; upon actual receipt if sent by certified or registered mail, return receipt requested, or regular mail, if  mailed; upon actual receipt of the e-mail, if sent via e-mail; and upon actual receipt when delivered to an air courier  guaranteeing overnight delivery.   Section 3.2 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon  the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to  the extent permitted herein.   Section 3.3 Assignment of Rights. All or any portion of the rights and obligations of any Purchaser  under this Agreement may be transferred or assigned by such Purchaser in accordance with Section 2.9 hereof.   Section 3.4 Recapitalization, Exchanges, Etc. Affecting the Registrable Securities. The provisions of  this Agreement shall apply to the full extent set forth herein with respect to any and all shares of capital stock of the  Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets, or  otherwise) which may be issued in respect of, in exchange for, or in substitution of, the Registrable Securities, and  shall be appropriately adjusted for combinations, recapitalizations, and the like occurring after the date of this  Agreement.   Section 3.5 Specific Performance. Damages in the event of breach of this Agreement by a party  hereto would be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition  to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable  relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and  provisions hereof, and each of the parties hereto hereby waives (a) any and all defenses it may have on the ground of  lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief or that a remedy  at law would be adequate and (b) any requirement under any law to post securities as a prerequisite to obtaining  equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and  remedies at law or in equity which such Person may have.   Section 3.6 Counterparts. This Agreement may be executed in any number of counterparts and by  different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall  be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same  Agreement.   Section 3.7 Headings. The headings in this Agreement are for convenience of reference only and  shall not limit or otherwise affect the meaning hereof.   Section 3.8 Governing Law, Submission to Jurisdiction. NOTWITHSTANDING THE PLACE  WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES  EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER  THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW  PROVISIONS OF SUCH JURISDICTION. Each of the parties hereto irrevocably agrees that any legal action or  proceeding with respect to this Agreement or the Transactions shall be brought and determined by courts of the State  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  14  of New York located in the Borough of Manhattan, New York City, and the federal courts of the United States of  America located in the State of New York, Sothern District, and each of the parties hereto irrevocably submits to the  exclusive jurisdiction of such courts solely in respect of any legal proceeding arising out of or related to this  Agreement.   Section 3.9 Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH HEREBY  WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR  CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH  OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS  AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW  EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR  OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT  ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT  TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL  COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF  THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.   Section 3.10 Severability of Provisions. Any provision of this Agreement which is prohibited or  unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or  unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or  enforceability of such provision in any other jurisdiction.   Section 3.11 Entire Agreement. This Agreement and the Purchase Agreement are intended by the  parties as a final expression of their agreement and intended to be a complete and exclusive statement of the  agreement and understanding of the parties hereto in respect of the subject matter contained herein or therein. There  are no restrictions, promises, warranties, or undertakings, other than those set forth or referred to herein or therein  with respect to the rights granted by the Company set forth herein or therein. This Agreement and the Purchase  Agreement supersede all prior representations, warranties, agreements, and understandings between the parties with  respect to such subject matter.   Section 3.12 Term; Amendment. This Agreement shall automatically terminate and be of no further  force and effect on the date on which there are no Registrable Securities. This Agreement may be amended only by  means of a written amendment signed by the Company and the Holders of a majority of the then outstanding  Registrable Securities; provided, however, that no such amendment shall materially and adversely affect the rights of  any Holder hereunder without the consent of such Holder; and, provided, further, that each Holder shall have the  right to, in its discretion and without consent from or notice to any other Holder, waive any or all of its rights  hereunder and negotiate with the Company in lieu thereof such other terms and conditions, if any, as they may agree  regarding the matters addressed hereby.   Section 3.13 No Presumption. In the event any claim is made by a party relating to any conflict,  omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by  virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.   Section 3.14 Obligations Limited to Parties to Agreement. Each of the parties hereto covenants,  agrees, and acknowledges that no Person other than the Purchasers, Selling Holders, their respective permitted  assignees, and the Company shall have any obligation hereunder and that, notwithstanding that one or more of the  Company and the Purchasers may be a corporation, partnership, or limited liability company, no recourse under this  Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had  against any former, current, or future director, officer, employee, agent, general or limited partner, manager,  member, stockholder, or Affiliate of any of the Company, the Purchasers, Selling Holders, or their respective  permitted assignees, or any former, current, or future director, officer, employee, agent, general or limited partner,  manager, member, stockholder, or Affiliate of any of the foregoing, whether by the enforcement of any assessment  or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and  acknowledged that no personal liability whatsoever shall attach to, be imposed on, or otherwise by incurred by any  former, current, or future director, officer, employee, agent, general or limited partner, manager, member,  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  15  stockholder, or Affiliate of any of the Company, the Purchasers, Selling Holders, or any of their respective  assignees, or any former, current, or future director, officer, employee, agent, general or limited partner, manager,  member, stockholder, or Affiliate of any of the foregoing, as such, for any obligations of the Company, the  Purchasers, Selling Holders or their respective permitted assignees under this Agreement or any documents or  instruments delivered in connection herewith or therewith or for any claim based on, in respect of, or by reason of  such obligation or its creation, except in each case for any assignee of the Purchasers or a Selling Holder hereunder.   Section 3.15 Interpretation. Article and Section references in this Agreement are references to the  corresponding Article and Section to this Agreement, unless otherwise specified. All references to instruments,  documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as  the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified.  The word “including” shall mean “including but not limited to.” Whenever any determination, consent or approval  is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion  unless otherwise specified.      [Signature Pages Follow]     

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement  IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above  written.  COMPANY:  FLOTEK INDUSTRIES, INC.  By: /s/ Nicholas J. Bigney  Name: Nicholas J. Bigney  Title: Senior Vice President, General Counsel &    Chief  Compliance Officer     [Signatures continue on following page.]  

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement    PURCHASER:  ProFrac Holdings, LLC  By: /s/ Matthew Wilks  Name: Matthew Wilks  Title: President and Chief Financial Officer  Address:  333 Shops Blvd, Suite 301                                                  Willow Park, TX 75022  Attention: Rob Willette                                                  Email: robert.willette@profrac.com  with a copy to:                                                             Brown Rudnick LLP                                                        One Financial Center                                                   Boston, MA 02111                                                 Attention: Andreas Andromalos  Email: AAndromalos@brownrudnick.com                                                              

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement      PURCHASER:  Burlington Ventures Ltd.  By: /s/ Jason C. Callender  Name: Jason C. Callender  Title: Director  Address: 303 Shirley Street                                                        Box-N492                                                                              Nassau, Bahamas                                                                                                                                 Attention: James B. Avery                                                  Email: javery@tavistock.com                                                                              

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement    PURCHASER:  D3 Family Fund, LP  By: /s/ David Nierenberg  Name: David Nierenberg  Title: President of the GP  D3 Family Bulldog Fund, LP  By: /s/ David Nierenberg  Name: David Nierenberg  Title: President of the GP  Haredale Limited  By: /s/ David Nierenberg  Name: David Nierenberg  Title: Investment Manager  Address:                                                                          19605 NE 8th Street                                                                             Camas, WA 98607                                                                                                                                 Attention: David Nierenberg                                                                                             Email: david@d3familyfund.com  with a copy to: Christopher P. Davis                              Kleinberg, Kaplan, Wolff & Cohen, P.C.                          500 Fifth Avenue, New York, NY 10110  Attention: Christopher Davis                                        Email: cdavid@kkwc.com                      

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement  PURCHASER:  Trustee of the Eric B. Swergold and Dawn Dobras  Trust dated 2000  By: /s/ Eric B. Swergold  Name: Eric B. Swergold. Trustee    Address:  Firestorm Capital LLC                                                     507 Miller Ave                                                                 Mill Valley, CA 94941    Attention:   Email: eric@firestormcap.com  with a copy to: BTIG    Attention: Allan Lazaro  Email: Alazaro@BTIG.com                                

 

  Flotek Industries Inc. - Registration Rights Agreement (PIPE - 2022) (3)....doc  Signature Page to Registration Rights Agreement    PURCHASER:  North Sound Trading, LP.  By: /s/ Brian Miller  Name: Brian Miller                                                         Title: President of the General Partner     Address:  115 East Putnam Avenue                                                  Floor 2                                                                                      Greenwich, CT 06830     Attention: North Sound Management                                              Email: nsamanagers@northsoundmgt.com  with a copy to:     Attention:   Email:Document

Exhibit 10.3

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

CHEMICAL PRODUCTS SUPPLY AGREEMENT
 
This Chemical Products Supply Agreement (the “Agreement”) is made and entered this 2nd day of February 2022 (“Effective Date”), by and between Flotek Chemistry, LLC, an Oklahoma limited liability company (“Supplier”), and PROFRAC SERVICES, LLC, a Texas limited liability company (“Purchaser”). Supplier and Purchaser are individually referred to as a “Party” and collectively as the “Parties.”

WHEREAS, Purchaser requires chemical products for use in Purchaser’s hydraulic fracturing operations; 

WHEREAS, Supplier is in the business of selling such chemical products and is able to provide such chemical products to Purchaser; and

    WHEREAS, Purchaser desires to purchase from Supplier, and Supplier desires to sell to Purchaser, Purchaser’s requirements for the chemical products set forth on Exhibit “A” attached hereto (individually, the “Product” and collectively, the “Products”) under the terms and conditions set forth in this Agreement.

    NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows.

1.Term. This Agreement shall commence on the Effective Date and shall continue in effect for a period of three (3) years from the Supply Start Date (as defined below) (the “Term”), unless sooner terminated pursuant to the termination provisions in this Agreement. This Agreement may be extended beyond the Term upon mutual written agreement of the Parties.

2.Purchase and Sale; Purchase Orders; Shortfalls. 

(a)Minimum Purchase Obligation. Beginning on April 1, 2022 (the “Supply Start Date”) Supplier shall supply and Purchaser shall purchase and take (for itself and/or by or on behalf of its subsidiaries) from Supplier thirty-three percent (33%) of Purchaser’s and its subsidiary’s requirements for the Products during the Term (the “Minimum Purchase Obligation”), subject to the adjustments provided in this Agreement. Supplier shall be under no obligation to supply or sell Product above the Minimum Purchase Obligation, provided that if Supplier accepts a Purchase Order (hereafter defined) for Product above the Minimum Purchase Obligation, the terms of this Agreement shall apply and control such order. 
(b)Minimum Baseline. The Minimum Purchase Obligation is subject to the lower limit provided in this Section 2(b). Purchaser will calculate the quantity (“Baseline Quantity”) of Purchaser’s and its subsidiary’s total requirement of Product based on the first ten (10) fleets deployed during the Term. The Minimum Purchase Obligation shall be deemed to equal the higher of (i) thirty-three percent (33%) of Purchaser’s and its subsidiary’s actual requirements for Product aggregated over the Term or (ii) the Baseline Quantity.
(c)Purchase Orders. Purchaser will purchase Product from Supplier by submitting written purchase orders by email or hard copy to Supplier (“Purchase Order”). Purchaser will specify in each Purchase Order the (i) requested volume for each item of Product and (ii) the delivery schedule. Supplier shall timely deliver to Purchaser the Products described on each Purchase Order in accordance with the applicable delivery schedule. Supplier’s delivery of the Product shall constitute acceptance by Supplier of a Purchase Order and all its terms and conditions that are not otherwise superseded by this Agreement. This Agreement shall 

ProFrac Services, LLC - Supply Agreement1

govern all Purchase Orders, invoices, or other documents between the Parties, and supersedes all other written or oral proposals or agreements.
(d)Non-Binding Forecasts. Purchaser will provide by email to Supplier once per month a written forecast of its requirements of Products (“Estimate”) for the upcoming three months by the 15th day of the preceding month. Within five (5) business days of the sending of such Estimate, Supplier shall respond by email to Purchaser to confirm that Supplier will be able to supply such Estimate in full or in part. Estimates are for informational purposes only and do not create any binding obligations on behalf of either Party. 
(e)Order Shortfall. In the event that Purchaser fails to purchase at least the Minimum Purchase Obligation in any calendar year of the Term (as and to the extent it may be extended), Purchaser shall pay to Supplier as liquidated damages (“Order Shortfall Payment”) an amount equal to twenty-five percent (25%) of the difference between (i) the aggregate Purchase Price (hereafter defined) of the quantity of Products comprising the Minimum Purchase Obligation during such calendar year (as and to the extent it may be adjusted hereunder) calculated based on the average unit Purchase Price in effect during such calendar year, and (ii) the aggregate Purchase Price of the actual purchases of Product during the such calendar year calculated based on actual unit purchase Price for such purchases (the “Order Shortfall”). Supplier shall invoice Purchaser for the Order Shortfall. The Order Shortfall Payment, if any, will be payable within 30 days after the end of such calendar year. Supplier agrees that the Order Shortfall Payments are Purchaser’s sole liability and Supplier’s sole and exclusive remedy in the event that Purchaser fails to purchase any or all of the Minimum Purchase Obligation as provided in this Agreement. Notwithstanding the foregoing, if Supplier is in breach of any provision in this Agreement and/or if this Agreement is terminated by either Party pursuant to its rights hereunder, the Order Shortfall Payment shall not be due and Purchaser shall have no payment or other obligation with respect to any Order Shortfall after such date of termination.
(f)Supply Shortfall. Provided that Purchaser orders at least the Minimum Purchase Obligation during the Term, in the event that Supplier fails to supply any or all of the Product ordered by Purchaser, such quantity of Product ordered by Purchaser but that Supplier fails to supply shall be deducted from the Minimum Purchase Obligation. 

3.Non-Conforming Product; Rejection. Supplier warrants that Products shall conform strictly to the specifications contained in the applicable Purchase Order and to all criteria of Purchaser communicated to Supplier (the “Specifications”). Purchaser may reject any or all Products not meeting the Specifications (“Non-Conforming Product”). Purchaser shall inspect Products and notify Supplier of any Non-Conforming Products within 14 days of delivery of the Products.  If no such notification is made with such 14-day time period, the Products will be deemed accepted, but without prejudice to Purchaser’s remedies herein in the case of hidden or latent defects.  Purchaser may elect to have Supplier replace the Non-Confirming Product at Supplier’s sole expense, or, to the extent Purchaser has already paid for the Non-Conforming Product, reimburse Purchaser. If Purchaser elects replacement, Supplier shall (a) provide replacement Product at the facility designated by Purchaser for delivery (“Designated Facility”) by such date as Purchaser determines and at no additional charge to Purchaser, and (b) reimburse Purchaser for any reasonable and documented transport and disposal cost associated with any Non-Conforming Product. To the extent Purchaser rejects Products as non-conforming, defective, or otherwise, and elects not to have the Products replaced, the Minimum Purchase Obligation will be automatically reduced by the quantity of Non-Conforming Product, unless the parties otherwise agree. Neither payment for nor acceptance of delivery of any Products shall (a) constitute an acceptance thereof, (b) limit or impair Purchaser’s right to assert any legal or equitable remedy, or (c) relieve Supplier’s responsibility for any defects, latent or otherwise. Rejected Products may be held by Purchaser for disposition in accordance with Supplier’s instructions at Supplier’s risk. Furthermore, Supplier shall be solely responsible for any recall, replacement or repair of any Product, whether voluntarily initiated or ordered by any governmental authority or court.  

4.Remedies. 

ProFrac Services, LLC Supply Agreement2

(a)Each of Purchaser’s rights and remedies herein shall be cumulative and in addition to any other or further rights or remedies provided or available at law, in equity, in contract, or otherwise.  In the event this Agreement or any Purchase Order is not complied with by Supplier in any material respect, Purchaser, at its option and at Supplier’s expense, may exercise any one or more of the following: (i) require prompt replacement of the Products; (ii) recover all loss, damage and expense resulting from such failure by set-off or otherwise; (iii) return excess of early deliveries to Supplier; (iv) withhold payment for the applicable Products or Purchase Order, as applicable, until Supplier has fully complied with this Agreement and/or the Purchase Order, to Purchaser’s satisfaction; or (v) require delivery by any reasonable means. Supplier shall pay or otherwise be liable for any transportation, labor and/or other expense incurred in connection with the foregoing, including Purchaser’s attorneys’ fees, costs and other charges incurred in connection therewith. 

(b)The Parties agree that certain hidden or latent defects in material and/or workmanship of a Product may exist at the time such Product is accepted which may cause failure or malfunction, but which is not discoverable through reasonable inspection. As such, Supplier may recover any damages arising out of the latent defect, including damage to property and injury to personnel. Remedies for latent defects shall survive any warranty period.

(c)Notwithstanding anything herein to the contrary, Supplier’s maximum liability under any Purchase Order pursuant to this Section 4 shall be limited to an amount equal to two times the total cost of the Products under such Purchase Order.

5.Assignment and Subcontracting.  Supplier shall not assign or subcontract (in whole or in part) this Agreement or any Purchase Order without Purchaser’s prior written consent.
    
6.Independent Contractor.  Supplier shall be an independent contractor with respect to the provision of all Products, and neither Supplier nor anyone employed by Supplier shall be deemed for any purpose to be the employee, agent, servant, or representative of Purchaser. Purchaser shall have no direction or control over Supplier or its employees and agents except in the results to be obtained. If any work required under this Agreement is to be performed on Purchaser’s premises or on the premises of a Purchaser jobsite, Supplier agrees that all persons performing such work shall be deemed Supplier’s employees or independent contractors, and not agents of Purchaser, and Supplier shall be solely responsible for such work and shall release and indemnify Purchaser from and against all Losses arising in connection therewith.

7.Delivery.  All of the Product supplied by Supplier hereunder shall be delivered to Purchaser DAP (Incoterms 2010) at Designated Facility or as otherwise specified on a Purchase Order. Supplier shall delivery Products at the Designated Facility, in accordance with Purchaser’s written instructions provided in the applicable Purchase Order. The Products must be delivered in a single delivery and not in lots or installments, unless otherwise specified on a Purchase Order. Separate packing slips must be included in each shipment showing order number, quantity, part number (if applicable), and description of Products therein. Time is of the essence in this Agreement. No shipments may be made prior to the applicable specified delivery date unless Supplier is otherwise notified by Purchaser in writing or by verbal notice confirmed in writing. Purchaser reserves the right to withhold payment of invoices for materials shipped ahead of schedule without Purchaser’s prior express written approval. If delivery of Products or provision of Services is not completed at the time promised, Purchaser reserves the right, without liability, in addition to its other rights and remedies, to approve a revised shipment date; revise or terminate the Purchase Order; and/or purchase substitute items or services elsewhere.

8.Title; Risk of Loss.  Title and risk of loss or damage to any and all of the Products shall pass to Purchaser when Purchaser accepts the Products, which shall be indicated by written signature of an authorized representative of Purchaser on the appropriate invoice, receipt or otherwise acceptable method in the ordinary course of business. PURCHASER’S RECEIPT (WHETHER OR NOT ACKNOWLEDGED IN WRITING) OF DELIVERY OF PRODUCTS IS NOT AN ACCEPTANCE THEREOF BY PURCHASER.

ProFrac Services, LLC Supply Agreement3

9.No Claims of Indebtedness.  Supplier shall pay all claims for labor, materials, services and supplies in connection with Supplier’s performance hereunder, and shall allow no lien, encumbrance, claim, or charge to be fixed upon the property of Purchaser or upon the property of any of Purchaser’s customers. Supplier agrees to indemnify, protect, defend and hold harmless Purchaser Group from and against all such claims or indebtedness. Purchaser may pay any such claim or indebtedness out of any amount due or that becomes due to Supplier hereunder.

10.Intellectual Property; License. 

(a)To the fullest extent permitted by Applicable Law (defined below), SUPPLIER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS PURCHASER GROUP FROM AND AGAINST ANY AND ALL LOSSES (DEFINED BELOW) INVOLVING ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY IN CONNECTION WITH THE MANUFACTURE, USE, OR DISPOSITION OF ANY PRODUCT, ARTICLE, MATERIAL, OR SERVICE SUPPLIED BY SUPPLIER, EXCEPT TO THE EXTENT THAT SUCH PRODUCT, ARTICLE, MATERIAL OR SERVICE IS MODIFIED BY PURCHASER OTHER THAN AS DIRECTED BY PURCHASER. Purchaser shall notify Supplier of any such Losses with reasonable promptness. 

(b)    Nothing herein shall grant, convey, or assign to Supplier or any of Supplier Group (defined below), or to anyone else, any right, title, interest, or license in or to any intellectual property rights in or to the Confidential Information or other intellectual property of Purchaser existing on the date hereof, including any revisions, improvements, or modifications thereof, all of which are expressly reserved by Purchaser (the “Purchaser Intellectual Property”). Nothing herein shall grant, convey, or assign to Purchaser or any of Purchaser Group (defined below), or to anyone else, any right, title, interest, or license in or to any intellectual property rights in or to the Confidential Information or other intellectual property of Purchaser existing on the date hereof, including any revisions, improvements, or modifications thereof, all of which are expressly reserved by Purchaser, except to the extent inventions or work product are designated “work made for hire” in the Purchase Order (the “Supplier Intellectual Property”). Supplier agrees to provide all reasonable assistance to Purchaser if Purchaser wishes to file appropriate documents for the perfection of Purchaser’s interests in any such “work made for hire.”  To the extent that intellectual property is developed jointly between the Parties hereunder and not designated as “work made for hire,” ownership of such intellectual property shall be (i) with Purchaser, to the extent such new intellectual property is based on or derivative of Purchaser Intellectual Property, (ii) with Supplier, to the extent such new intellectual property is based on or derivative of Supplier Intellectual Property, and (iii) with both Parties jointly, to the extent such new intellectual property that neither (i) or (ii) apply.

(c)     Supplier hereby grants to Purchaser a worldwide, irrevocable, perpetual, royalty-free, fully-paid license (with right to sublicense) to sell, modify or use the Products for the purposes of using the Products as contemplated under this Agreement, without further consideration. The obligations under this section shall survive the termination of this Agreement.

11.Price.  

(a)Purchase Price. The prices Purchaser shall pay for each of the respective Products supplied hereunder shall be as specified in Exhibit “A,” as it may be modified from time to time by the agreement of the Parties and in accordance with Section 11(b) (“Purchase Price” or “Price”).  The Parties agree that the Prices in Exhibit A may be modified once per calendar quarter by Supplier, but subject at all times to the provisions of Section 11(b) below.  No increase in the Price is effective, whether due to increased material, labor, transportation costs, or otherwise, without the prior written consent of Purchaser.

(b)Price Requirements. Supplier warrants that the overall price discount for the Products sold to Purchaser in any calendar quarter shall not be less favorable than those extended to any other buyer for the same or like Products in such calendar quarter. In the event Supplier grants a greater overall discount for the Products to any other buyer during any calendar quarter during the Term, Supplier shall grant the same or greater 

ProFrac Services, LLC Supply Agreement4

discount to Purchaser accordingly, effective immediately. Supplier shall, without any action required by Purchaser, issue a refund to Purchaser for the amount paid by Purchaser in excess of the amount that should have been charged to Purchaser pursuant to this Section. If Supplier fails to meet the greater discount, Buyer, at its option, may terminate this Agreement without liability. At the conclusion of each calendar year during the Term, Supplier shall certify in writing that Supplier has complied with its obligations in this Section 11(b). 

12.Invoicing and Payment.

Supplier shall submit invoices to Purchaser for the Product sold and delivered hereunder. Invoices must be accurately prepared and may be returned for missing or inaccurate data. Purchaser shall pay the undisputed portion of each invoice within 45 days after the later of Purchasers receipt of the Products and receipt of such invoice. In the event Purchaser disputes any item in an invoice, Purchaser shall notify Supplier of the item under dispute. Purchaser may withhold payment of such item until settlement of the dispute. Purchaser shall have the right to deduct from any payments otherwise owing to Supplier hereunder any amounts Supplier owes Purchaser. Payments of invoices will not constitute acceptance of the Products and will be subject to adjustment for shortages, defects, or other failure of Supplier to meet the requirements of this Agreement. Purchaser shall have no obligation to pay any initial invoice submitted more than ninety (90) days after delivery of the Product subject of the applicable Purchase Order. Purchaser will make payment by wire transfer, automated clearing house (ACH), or such other method determined by Purchaser.

13.Warranties. 

(a)Supplier’s Warranties. Supplier warrants that all of the Products, free of defects in material and workmanship and shall conform strictly to the Specifications. At the time of delivery, Supplier warrants that it has good and marketable title to the Products and that the Products are free and clear of all liens, security interests, claims, charges, restrictions, or other encumbrances or claims of any third party. The Products shall be new and unused (unless otherwise specified). Supplier warrants that it has the right to use any and all patents and/or trade secrets related to the Products. Supplier will pass through to Purchaser all manufacturer-supplied end-user warranties on all Products, as applicable. 
(b)General. These warranties shall survive Purchaser’s inspection for a period of twelve (12) months following delivery to Purchaser of the applicable Product and shall run to Purchaser and to any of Purchaser’s customers or users of the Products. Supplier shall maintain information to support compliance of the Products with the warranties and other requirements of the applicable purchase order. No statements (oral or written) or any term in any document or instrument of Supplier that purports to disclaim any of the foregoing warranties, or that purports to disclaim liability for Supplier’s negligence, strict liability, or other fault, shall be effective against Purchaser, notwithstanding anything to the contrary in such statements, documents, or instruments. Should Purchaser incorporate the Products into a product that is in turn sold by Purchaser, Purchaser may irrevocably assign, transfer, and convey all warranties related to the Products directly to Purchaser’s customers as if such warranties passed through Purchaser directly to its customers. This Section 13 shall survive the termination and/or expiration of this Agreement.

14.Confidentiality.  Each Party warrants to the other that it has the right and authority to disclose its confidential information and that it is under no obligation of confidence to any third party with respect thereto.  Neither Party makes any other warranties with respect to the confidential information, which is disclosed “AS IS”.  Each Party acknowledges that any information disclosed to, or obtained by, it as a result of performance hereunder shall be deemed confidential and proprietary information (including this Agreement and its terms). Each Party shall treat as secret and confidential, and shall not disclose, distribute, publish, reproduce, sell, lend, or otherwise make use of (except for the purpose of performance hereunder), or permit use to be made of, such information without the other Party’s written consent. Supplier shall not advertise or publish the fact that Purchaser has contracted with Supplier, nor use Purchaser’s name in any advertisement, publication, brochure, or website, except as may be required by law or the rule of a stock exchange, or otherwise mutually agreed between the parties. The foregoing shall not apply to information that (i) can be shown to have been previously known to the disclosing Party at the 

ProFrac Services, LLC Supply Agreement5

time of disclosure, (ii) is independently developed without breach of this Agreement, (iii) is lawfully obtained from a third party without restriction on use or disclosure, or (iv) is or becomes part of the public domain through no fault of the disclosing Party. Each Party shall use the same degree of care to avoid unauthorized disclosure of the other Party’s information it employs with respect to its own confidential/proprietary information of like quality and nature, but employing no less than a reasonable standard of care.  Each Party acknowledges that the disclosure made by the other Party does not grant any right to such information, other than the limited right to use it in the course of performance hereunder.

15.Indemnity.  

EACH PARTY SHALL DEFEND, INDEMNIFY AND HOLD THE OTHER PARTY AND ITS AND THEIR RESPECTIVE PARENTS, SUBSIDIARIES, AFFILIATES, CO-LESSEES, CO-VENTURERS, JOINT-INTEREST OWNERS, CUSTOMERS, AND CONTRACTORS, AND EACH OF THEIR RESPECTIVE OWNERS, OFFICERS, DIRECTORS, MEMBERS, MANAGERS, PARTNERS, SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES, INVITEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, “PURCHASER GROUP” AS PERTAINING TO PURCHASER, AND “SUPPLIER GROUP” AS PERTAINING TO SUPPLIER) HARMLESS AGAINST ANY CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, PROCEEDINGS, ORDERS, AWARDS, DAMAGES, LOSSES, FINES, PENALTIES, COSTS, EXPENSES, AND LIABILITIES, INCLUDING LITIGATION COSTS AND REASONABLE ATTORNEY’S FEES (COLLECTIVELY, “LOSSES”), DUE TO DEATH, ILLNESS OR INJURY, OR PROPERTY LOSS OR DAMAGE, ONLY TO THE EXTENT CAUSED BY (I) THE NEGLIGENT OR WILLFUL ACT OR OMISSION OF SUCH PARTY OR ANY OF ITS EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AGENTS, INVITEES, OR SUBCONTRACTORS UNDER THIS AGREEMENT OR ANY PURCHASE ORDER ACCEPTED BY SUPPLIER, OR (II) SUCH PARTY’S BREACH OF ITS OBLIGATIONS, WARRANTIES, OR REPRESENTATIONS IN THIS AGREEMENT. THIS SECTION 15 SHALL SURVIVE TERMINATION AND/OR EXPIRATION OF THIS AGREEMENT.

16.Insurance.   

(a)Before commencing any work and at all times during the course of this Agreement Supplier shall maintain the following policies of insurance, in the identified minimum amounts and on an occurrence basis, and provide Purchaser with certificates of insurance, reasonably satisfactory to Purchaser’s Group establishing that (1) the identified insurance is in full force and effect; (2) Purchaser Group is named as an additional insured on all policies for ongoing and completed operations (except Worker’s Compensation) on a primary and non-contributory basis, to the extent of Supplier’s liability assumed hereunder; (3) Supplier’s insurers have waived their right of subrogation (equitable or by assignment, express or implied, loan receipt or otherwise) against Purchaser Group, to the extent of Supplier’s liability assumed hereunder; and  (4) Certificate Holder to be identified as ProFrac Services, LLC and Purchaser Group per contract: 

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	General Liability
(Bodily Injury & Property Damage)
	$1,000,000 OCC
($2,000,000 General Aggregate and $2,000,000 products/completed operations)

	Sudden & Accidental Pollution Liability 
	

$1,000,000 OCC

	Automobile Liability
(Bodily Injury & Property Damage)
(Including Any, All Owned, Hired and Non-Owned Comprehensive and Collision Coverage)
	$1,000,000
(Including MCS-90 and CA9948 endorsements, or acceptable substitutes.

	Umbrella or Excess Liability
(follow form in excess of the primary policy[ies] listed above)
	

$10,000,000 OCC

	

Worker’s Compensation
	Statutory
(Including alternate employer or borrowed servant endorsement)

	Employer’s Liability	$1,000,000
	Cargo Legal Liability (as applicable)
	$100,000

Supplier may only cancel or materially change such insurance with 30 days prior written notice to Purchaser.

(b)Insurance Provisions for Texas Only.
Texas Oilfield Anti-Indemnity Act.  For any Work to which Chapter 127 of the Texas Civil Practice and Remedies Code, as the same may be amended from time to time, is applicable, the Parties shall each support their respective mutual indemnity obligations by furnishing liability insurance coverage (or qualified self-insurance) of the types set forth above, obtained by each of the Parties for the benefit of the other Party and its respective Group.  The Parties shall each support their respective unilateral indemnity obligations by furnishing liability insurance coverage (or qualified self-insurance) of the types set forth above, obtained by each of the Parties for the benefit of the other Party and its respective Group.  Each Party agrees that the maximum amount of such supporting insurance shall be the lower of the maximum amount carried by either Party.  To the extent that the foregoing provisions do not meet the criteria for either a mutual or unilateral indemnity obligation under Chapter 127 of the Texas Civil Practice and Remedies Code, then the same shall be deemed modified to the extent necessary to so comply. 
(c)Insurance Provisions for Louisiana Only. 
Louisiana Oilfield Anti-Indemnity Act.  For any Work to which the Louisiana Oilfield Anti-Indemnity Act, La. R.S. 9:2780 as the same may be amended from time to time is applicable, Purchaser may on behalf of the Purchaser Group, pay the actual cost of any premium due for the extension of Supplier’s insurance, as required in this Agreement (Section 16. Insurance) including but not limited to, contractual liability coverage and, where applicable, umbrella coverage, to cover the Purchaser Group (as additional insureds, waiver of subrogation, and primary status) to the extent of the liabilities assumed by Supplier in this Agreement and any Work Order.  Purchaser shall pay Supplier’s insurer or agent directly for any additional premium, and such amount shall be independent of the consideration paid or to be paid by Purchaser for the services provided by Supplier under this Agreement or any Work Order.  Supplier is obligated to provide timely notice of any additional premium for such coverage to Purchaser, including any renewal or replacement thereof, and to supply satisfactory documentation of such premium from Supplier’s insurer.  Supplier represents and covenants that it has communicated with its insurer(s) regarding this obligation.  

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Notwithstanding the general notice provisions of Section 22.8, all invoices and notices regarding such coverage shall be sent to Purchaser’s insurance contact.

If Supplier does not notify Purchaser of any additional premium charged for such coverage, it shall be conclusively presumed that there is no additional premium for such coverage.

It is expressly acknowledged and agreed to by the Parties that the provisions of this Section 16 c) are intended to comply with Marcel v. Placid Oil Co., 11 F.3rd 563 (5th Cir. 1994), and the provisions herein shall be interpreted in such a manner as to comply therewith.

Purchaser as Louisiana Statutory Employer.  Notwithstanding any provision in this Agreement to the contrary, in all cases where Supplier’s employees (including, without limitation, direct, borrowed, special, or statutory employees) are covered by the Louisiana Workers’ Compensation Act, the Parties acknowledge and agree that all Work performed by Supplier and its employees pursuant to the Agreement is an integral part of, and is essential to, the ability of Purchaser to generate Purchaser’s goods, products, or services.  Without limiting the foregoing, Purchaser and Supplier agree that Supplier is, and shall be deemed, a statutory employer of Supplier’s employees for purposes of La. R.S. 23:1061, as the same may be amended from time to time.  Irrespective of Purchaser’s status as the statutory employer or special employer (as defined in La. R.S. 23:1031[c]) of Supplier’s employees, Supplier agrees to remain primarily responsible for the payment of Louisiana Workers’ Compensation benefits to its employees and shall not be entitled to seek contribution for any such payments from Purchaser.  Further, Supplier agrees to defend, indemnify, and hold harmless Purchaser from any and all claims for compensation benefits by Supplier’s employees against Purchaser and hereby waives any right of Supplier or of Supplier’s insurers to seek reimbursement of any compensation benefits owed or paid.

17.Compliance with Policies; Laws; Permits.  In the event that Supplier enters onto Purchaser’s premises or a Purchaser jobsite, Supplier shall abide by all of Purchaser’s (or of Purchaser’s customer, as applicable) safety policies and policies prohibiting the use, possession, transportation, promotion or sale of alcohol, illegal drugs, contraband, or weapons on its premises, work sites, or its vehicles or equipment, and Supplier’s personnel may be required to undergo drug and/or alcohol testing (including the submission of urine and/or blood or hair samples) and searches of their persons and/or vehicles, to the extent legally permissible. Supplier shall comply with all applicable federal, state, local and foreign laws, regulations, rulings and executive orders, and any amendments thereof, and industry standards (collectively, “Applicable Law”), including: (a) the Wage Hour Act (40 U.S.C. § 324-326); (b) the Fair Labor Standards Act (29 U.S.C. § 201-219); (c) The Federal Occupational Safety and Health Act (Pub. L. 91-596); (d) Equal Employment Opportunity (Executive Order 11246, as amended by Executive Order 11375, and the rules, regulations, and relevant orders of the Secretary of Labor); (e) the Vietnam Era Veterans Readjustment Act of 1974 (Pub. L. 93-508 as it amends 38 U.S.C. § 2012); (f) the Rehabilitation Act of 1973, as amended (Pub. L. 93-112); (g) statutes, regulations and rules promulgated by the Environmental Protection Agency, the Department of the Interior, and any and all state agencies equivalent thereto; (h) the Immigration Reform and Control Act of 1986; (i) the U.S. Foreign Corrupt Practices Act of 1977, as amended; and (j) all relevant export laws, rules, orders and regulations of the United States, including International Traffic in Arms Regulations, Export Administration Regulations, Toxic Substance Control Act, Foreign Trade Regulations, and Office of Foreign Assets Control, as applicable.  Supplier also agrees to be governed by the laws of the country or territory in which the deliverables are provided pursuant to this Agreement, if other than in the United States or its territories. Unless a written waiver is obtained from Purchaser prior to the provision of any Products or Services, Supplier shall obtain and maintain at all times during the term of this Agreement, at its sole cost and expense, all necessary permits, licenses and inspection clearances, and other authorizations, that Supplier is required by Applicable Law to possess to enable its lawful operation and supply of Products. When requested, Supplier shall provide Purchaser with certificates evidencing compliance with Applicable Laws. Supplier agrees to release, defend, indemnify, and hold harmless Purchaser Group against any Losses that arise from Supplier’s breach of this section.

ProFrac Services, LLC Supply Agreement8

18.Non-Disparagement.  (a) Subject to Supplier’s obligation to provide truthful and accurate information in legal proceedings, Supplier shall not make any disparaging remarks or statements, verbally or in writing, including via any social networking outlet or to the news media, about Purchaser or any of its directors, officers, or employees or any of its policies, products, equipment, services or procedures (past, present or future). (b) Supplier acknowledges and agrees that Purchaser would be damaged irreparably by any breach or threatened breach of the provisions of Sections 14 and/or 18, and that money damages would be an inadequate remedy for any such breach or threatened breach. Accordingly, Purchaser shall be entitled to injunctive relief (without posting any bond and without proof of actual damages) to prevent such breaches or threatened breaches, or to compel the specific performance of, Sections 14 and/or 18. 

19.Hazard Information.  When applicable, Supplier will provide Purchaser with copies of appropriate MATERIAL SAFETY DATA SHEETS (“MSDS”) and/or SAFETY DATA SHEETS (“SDS”), as applicable, with Supplier’s initial shipment to Purchaser, with the first shipment after an MSDS is updated for any reason (including a change in processes or material of the Product) and at any other time as may be requested by Purchaser. If the Products subject to this Agreement do not require an MSDS, Supplier shall provide Purchaser with a statement to that effect.  Supplier shall be in breach of this Agreement for any improper or mislabeled MSDS’s and/or SDS’s.

20.Applicable Law, Jurisdiction, Venue and Dispute Resolution.  This Agreement shall be governed by the laws of the State of Texas (excluding conflicts of law rules). Tarrant County, Texas shall be the exclusive jurisdiction and venue for the resolution of any dispute hereunder, or that is related hereto, or that arises out of the relationship between the Parties (a “Controversy”). In the event of a Controversy, the Parties agree that they will not resort to litigation until a collaborative process has been tried and failed. 

Each Party shall first engage in a face-to-face consultation between a manager or executive with the authority to settle the Controversy and who is at a higher level of management than the persons with direct responsibility for administration of this Agreement.  Either Party must give the other Party written notice of any Controversy not resolved in the normal course of business.  Within ten (10) days of delivery of the notice, the receiving Party shall submit to the other a written response.  The notice and the response shall include a statement of each Party’s position, a summary of arguments supporting that position, the name and title of the manager or executive who will represent that Party, and any other person who will accompany that person to a meeting between the Parties.  Within thirty (30) days after delivery of the disputing Party’s notice, the designated representative of both Parties shall meet at a mutually acceptable time and place and, thereafter, as often as they deem reasonably necessary, to attempt to resolve the dispute.  All negotiations pursuant to this section are confidential and shall be treated as compromise and settlement negotiations.

If the Controversy is not entirely resolved in this collaborative process, within thirty (30) days after reaching an impasse, the Parties shall then submit the Controversy before a court in Tarrant County, Texas.  Notwithstanding the foregoing, either Party may seek injunctive relief to prevent irreparable harm in any court of competent jurisdiction without first submitting such action to the collaborative process.

21.Waiver of Jury Trial. Neither Party to this Agreement shall seek a jury trial in any lawsuit with respect to any claim in any proceeding or other adjudication procedure based upon, or arising out, of this Agreement, any Purchase Order, or any related agreement or instrument.  No Party and no assignee, successor, or personal representative of a Party shall request or fail to oppose consolidation of any such action, in which a jury trial has been waived, with any other action or proceeding, in which a jury trial cannot be, or has not been waived.  The Parties have fully discussed this provision and agree that it shall not be subject to any exceptions.  No Party has in any way agreed with, or represented to, any other Party that this provision shall not be fully enforced in all instances. 

22.Force Majeure.  

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(a)“Force Majeure” shall mean an Act of God, war (declared or undeclared), insurrection, revolution, rebellion, civil strife, piracy, civil war or hostile action, terrorist acts, riots, acts of public enemies, governmental/regulatory actions, government moratorium issued by a state or federal government or any other cause that is beyond the reasonable control of the Party claiming Force Majeure. However, unavailability of parts or components, or lack or failure of transportation facilities, shall not constitute Force Majeure events, except to the extent that such events affect the oil and gas industry as a whole and not a Party individually.
(b)If either Party is rendered unable, in whole or in part, by reason of Force Majeure, to carry out its obligations (other than the payment of money) hereunder, the Party claiming Force Majeure shall give the other Party prompt notice of same as provided in this Section 22, and the obligations of the Parties, insofar as they are affected by the Force Majeure event, shall be suspended during, but no longer than, the continuance of the Force Majeure event. The Party claiming Force Majeure shall use reasonable diligence to remedy the Force Majeure event as quickly as possible; provided, however, that the foregoing shall not require a Party to settle labor disputes contrary to its wishes. Within forty-eight (48) hours after the commencement of the Force Majeure event, the Party claiming Force Majeure shall notify the other Party in writing of the occurrence of the event, the date of its commencement, the effects of the event on its ability to perform under this Agreement and/or affected Purchase Order, the anticipated duration of the event, and the efforts being made or proposed by that Party to remove or avoid such event. 
(c)Purchaser shall be free to purchase goods from third parties during any Force Majeure event or circumstance which impairs Supplier’s ability to supply the Products under this Agreement. After the Force Majeure event or circumstance is concluded, (i) Purchaser may, at its option, require Supplier to supply Products to make up any deficiency in the quantities of the Products procured by Purchaser during said Force Majeure event or circumstance and (ii) the Minimum Purchase Obligation shall be adjusted for any deficiency in the quantities of the Product procured by Purchaser from third-party suppliers during the Force Majeure.
23.Non-Circumvention. As consideration for Purchaser to enter into this Agreement, and in further consideration of any Confidential Information received by Supplier pertaining to Purchaser’s customers (each a “Customer Party”) including the identity thereof, the Parties agree that during the Term of the Agreement, Supplier shall not, directly or indirectly, except in collaboration with or with the express written consent of Purchaser, interfere with Purchaser’s contractual relations (“Interfering Activities”) with a Customer Party.  Interfering Activities include (each for the purpose, or having the effect, of circumventing or undermining the intent, purpose, or basis of this Agreement): (i) entering into any transaction with a Customer Party to provide all or a portion of the products of the nature of the Products subject of this Agreement that Purchaser provides to the Customer Party pursuant to an agreement with such Customer Party, or which otherwise could have the effect of preventing (a) Purchaser from receiving the full benefit of the transaction(s) for which it has contracted with the Customer Party or (b) Purchaser from meeting the Minimum Purchase Obligation under this Agreement; (ii) soliciting or inducing any Customer Party to enter into any such transaction; or (iii) inducing, soliciting, or otherwise encouraging employees or agents of a Customer Party to terminate, deviate from, alter, preempt, or diminish any written agreement it has with Purchaser.  

24.Term and Termination. This Agreement will remain in effect until terminated by either Party in accordance with this section. 

(a)Termination by Supplier. Supplier shall have the right to terminate this Agreement, by providing written notice to Purchaser, upon the occurrence of any of the following events: (i) Purchaser’s Bankruptcy; (ii) Purchaser fails to make payment of undisputed amounts to Supplier hereunder when due, and such failure continues for a period of thirty (30) days after written notice is sent to Purchaser by Supplier of such failure; or (iii) Purchaser is affected by Force Majeure, and such Force Majeure has not been remedied within thirty (30) days of the initial occurrence of such event.

ProFrac Services, LLC Supply Agreement10

(b)Termination by Purchaser. Purchaser shall have the right to terminate this Agreement, by providing written notice to Supplier, after the occurrence of any of the following events: (i) Supplier’s Bankruptcy; (ii) Supplier’s failure to produce and deliver the Product in accordance with the Specifications, or failure to timely deliver Product, and Supplier has been unable to cure such failure within a commercially reasonable period determined by Purchaser; (iii) Supplier fails to meet pricing requirements set forth in Section 11; or (iv) Supplier is affected by Force Majeure, and such Force Majeure has not been remedied within thirty (30) days of the initial occurrence of such event. 

(c)Other Breaches. Each Party each shall have the right to terminate this Agreement for any other material breach of this Agreement by the other Party that, if capable of being cured, is not cured within thirty (30) days after written notice thereof is given to such other Party, except as otherwise provided herein.

(d)Continuing Obligations. Upon termination of this Agreement, all obligations of the Parties arising from this Agreement shall terminate, except for any obligations that are expressly stated as surviving the termination or expiration of this Agreement; provided, that any such termination or expiration shall not relieve either Party from its obligation accruing prior thereto and shall be without prejudice to the rights and remedies of either Party with respect to any antecedent breach this Agreement. Upon any termination by either Party, neither Party shall be liable for any other payments to the other Party (except for payment for Products meeting Specifications and accepted by Purchaser), including the payment contemplated by Section 2(e), and whether directly or on account of any claims by either Party’s subcontractors, including for any loss of anticipated profit, unabsorbed overhead interest on claims, product development and engineering costs, rental, unamortized depreciation costs, or general and administrative burden charges arising from termination. The covenants of the Parties made herein, including indemnities, warranties, confidentiality, non-disparagement, non-solicitation, intellectual property, and insurance, shall survive termination. This Section 24(d) shall survive any expiration or termination of this Agreement
25.Miscellaneous.   

(a)Entire Agreement.  This Agreement, together with any exhibits, schedules and attachments, constitutes the entire agreement between the Parties with respect to the subject matter hereof.  This Agreement supersedes, and the terms of this Agreement govern, any prior agreements with respect to the subject matter hereof with the exception of any prior confidentiality agreements between the Parties.  All Purchase Orders are incorporated herein by reference.  Except as otherwise provided herein, this Agreement shall not be modified, superseded, or amended by the terms of a Purchase Order or other statements, documents, or instruments; provided, however, that any terms contained in a Purchase Order regarding the price (subject to provision set forth herein), quantity, delivery, or specifications of the Products will also be enforceable with respect to that particular Purchase Order or other statement, document, or instrument. In the event of a conflict between the provisions of this Agreement and any Purchase Orders, the provisions in this Agreement shall prevail. The Parties agree that there have been no material representations made to induce the other Party to enter into this Agreement, other than what is expressly set forth herein. 

(b)Modification. This Agreement may only be changed by the mutual written agreement of the Parties. No e-mail, SMS, MMS or IM from Either Party shall modify this Agreement, unless accompanied by an independent attachment containing a document signed by both Parties, specifically referencing this Agreement and the Parties’ mutual intent to so modify. No strike-through edits are valid amendments to this Agreement unless initialed by an authorized representative of each Party.

(c)Severability.  If any part of this Agreement is judicially declared invalid, unenforceable, or to be void because inconsistent with, violative of, or contrary to any Applicable Law, such declaration shall not affect any other part herein and the part so affected shall be reformed to the extent (and only to the extent) necessary to make this Agreement enforceable or, if necessary, the Agreement shall be deemed to be amended to delete the unenforceable part, and the remainder shall have the same force and effect as if such 

ProFrac Services, LLC Supply Agreement11

part had never been included herein. The invalidity or unenforceability of any part herein in any jurisdiction shall not affect the validity or enforceability of any such part in any other jurisdiction. 

(d)Records and Audit.  Supplier shall maintain a true and correct set of records pertaining to compliance with the terms of this Agreement, including insurance, Applicable Laws and invoicing, for a period of not less than three (3) years after the supply of Products under the applicable Purchase Order.  During such time, Purchaser may, upon reasonable prior request and during normal business hours, audit any and all records of Supplier relating to the aforementioned; provided, however, Supplier shall have the right to exclude any trade secrets, formulas or processes from such audit. 

(d)Consequential Damages. Neither Party will be liable to the other party for any indirect, special, consequential or incidental damages, including loss of business opportunity, loss of profit, loss of production, loss of data and loss of use.  

(e)Headings.  The headings in this Agreement are for purposes of ease of reference and shall not be considered a part of this Agreement or in any way modify, amend or affect its provisions. 

(f)Notices. Any notices regarding this Agreement shall be sent by certified mail return receipt requested or by courier with evidence of delivery to: 

Purchaser at:
ProFrac Services, LLC
Attn: Legal Dept.
333 Shops Blvd, Ste 301
Willow Park, Texas 76087 
with an email copy to: legal@profrac.com

Supplier at:
Flotek Industries, Inc.
8846 N. Sam Houston Parkway W., Suite 150
Houston, TX 77067
with a copy to legal@flotekind.com    

(g)Non-Solicitation. Supplier shall not directly or indirectly (by itself, through its employees or through a third party) solicit or recruit Purchaser’s employees during the term of this Agreement and for a period of one (1) year following the termination of this Agreement. 

(h)Execution.  This Agreement may be executed in multiple counterparts, each of which shall, for all purposes, be deemed an original, but that together shall constitute one and the same instrument. A scanned, executed Agreement may serve as an original document.
 
(i)Authority to Sign.  Each Party represents and warrants that the person signing on its behalf has authority to sign this Agreement and bind the Party thereto, as of the date first written above. 

[Signature Page to Follow]

ProFrac Services, LLC Supply Agreement12

PURCHASER: PROFRAC SERVICES, LLC    

Representative:    /s/ Matt Wilks
    

Print Name:        Matt Wilks                    

Print Title:        President & CFO                

        
        
SUPPLIER:  FLOTEK CHEMISTRY, LLC

Representative:    /s/ Ryan Ezell    

Print Name:    Ryan Ezell

Print Title:    President, Chemistry Technologies

ProFrac Services, LLC Supply Agreement13

EXHIBIT A
PRODUCTS & PRICING

[***]

ProFrac Services, LLC Supply Agreement14

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