Document:

Exhibit 10.1

 

Execution Version

 

WAIVER NO. 2

 

THIS WAIVER (this “Agreement”), dated as of June 12, 2018, is made among Synergy Pharmaceuticals Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors as from time to time party hereto, the Lenders listed on the signature pages hereof under the heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”), and CRG Servicing LLC, a Delaware limited liability company (“CRG Servicing”), as administrative agent and collateral agent for the Lenders (in such capacities, together with its successors and assigns, “Agent”).

 

The Obligors, the Lenders and Agent are parties to that certain Term Loan Agreement, dated as of September 1, 2017 (as amended by that certain Amendment, dated as of February 26, 2018, and as further amended, restated, modified or supplemented from time to time, the “Loan Agreement”).

 

The parties hereto desire to waive certain requirements set forth in the Loan Agreement on the terms and subject to the conditions set forth herein.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1.                       Definitions; Interpretation.

 

(a)                                 Terms Defined in Loan Agreement.  All capitalized terms used in this Agreement (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

 

(b)                                 Interpretation.  The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall be applicable to this Agreement and are incorporated herein by this reference.

 

SECTION 2.                       Waiver.

 

(a)                                 Subject to Section 3, the Lenders hereby waive the requirement, set forth in Section 6.02(a)(i) of the Loan Agreement, that the second Borrowing and related Borrowing Date under the Loan Agreement occur no later than June 30, 2018; provided that (i) the Borrower may not make such second Borrowing, and such related Borrowing Date may not occur, after August 29, 2018 and (ii) on the Borrowing Date of the second Borrowing, and solely to the extent that Borrower makes a second Borrowing, the Borrower shall pay to Agent, for the account of each Lender, an aggregate fee, in addition to any fees payable to Agent pursuant to the Fee Letter, in the amount of $500,000, which fee shall be paid via setoff from the Loan proceeds advanced to the Borrower on such Borrowing Date; and

 

(b)                                 The waiver set forth in Section 2(a) shall be limited precisely as written and relates solely to the date on or prior to which the Borrower must make its second Borrowing under the Loan Agreement.  Nothing in this Agreement shall be deemed to constitute a waiver of noncompliance or breach of any other term or provision in the Loan Agreement or the other Loan Documents, nor prejudice any right or remedy that the Lenders may now have or may have

 

 

in the future under or in connection with the Loan Agreement or the other Loan Documents.  Nothing contained herein shall be deemed a waiver or consent in respect of (or otherwise affect the Lenders’ ability to enforce) any condition not explicitly waived by Section 2(a).

 

SECTION 3.                       Conditions to Effectiveness.  The effectiveness of Section 2 shall be subject to the following conditions precedent:

 

(a)                                 The representations and warranties in Section 4 shall be true and correct on the date hereof.

 

SECTION 4.                       Representations and Warranties; Reaffirmation.  Each Obligor hereby represents and warrants to Agent and each Lender as follows:

 

(i)                                     Such Obligor has full power, authority and legal right to make and perform this Agreement and the Loan Agreement.  Each of this Agreement and the Loan Agreement is within such Obligor’s corporate powers and has been duly authorized by all necessary corporate and, if required, by all necessary shareholder action.  This Agreement has been duly executed and delivered by such Obligor and each of this Agreement and the Loan Agreement constitutes legal, valid and binding obligations of such Obligor, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  Each of this Agreement and the Loan Agreement (x) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any third party, except for such as have been obtained or made and are in full force and effect, (y) will not violate any applicable law or regulation or the charter, bylaws or other organizational documents of such Obligor and its Subsidiaries or any order of any Governmental Authority, other than any such violations that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (z) will not violate or result in an event of default under any material indenture, agreement or other instrument binding upon such Obligor and its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person.

 

(ii)                                  No Default has occurred or is continuing or will result after giving effect to this Agreement.

 

(iii)                               The representations and warranties made by or with respect to such Obligor in Section 7 of the Loan Agreement are true and correct in all material respects on the date hereof, except that such representations and warranties that refer to a specific earlier date were true and correct in all material respects on such earlier date.

 

(iv)                              There has been no Material Adverse Effect since the date of the Loan Agreement.

 

(b)                                 Each Obligor hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the Loan Documents to which it is a party and agrees that the Loan Documents remain in full force and effect, undiminished by this Agreement, except as expressly provided

 

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herein.  By executing this Agreement, each Obligor acknowledges that it has read, consulted with its attorneys regarding, and understands, this Agreement.

 

SECTION 5.                       Governing Law; Submission To Jurisdiction; Waiver Of Jury Trial.

 

(a)                                 Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.

 

(b)                                 Submission to Jurisdiction.  Each Obligor agrees that any suit, action or proceeding with respect to this Agreement or any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment.  This Section 5 is for the benefit of the Lenders only and, as a result, no Lender shall be prevented from taking proceedings in any other courts with jurisdiction.  To the extent allowed by applicable Laws, the Lenders may take concurrent proceedings in any number of jurisdictions.

 

(c)                                  Waiver of Jury Trial.  Each Obligor and each Lender hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any suit, action or proceeding arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby.

 

SECTION 6.                       Miscellaneous.

 

(a)                                 No Waiver.  Except as expressly set forth in Section 2, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties.  Except as expressly stated herein, the Lenders reserve all rights, privileges and remedies under the Loan Documents (including, without limitation, all such rights, privileges and remedies with respect to any Default, Event of Default or Material Adverse Effect, whether communicated or not to the Lenders or Agent).  Except as amended hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect.

 

(b)                                 Severability.  In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

(c)                                  Headings.  Headings and captions used in this Agreement (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

 

(d)                                 Integration.  This Agreement constitutes a Loan Document and, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the

 

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subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

 

(e)                                  Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

(f)                                   Controlling Provisions.  In the event of any inconsistencies between the provisions of this Agreement and the provisions of any other Loan Document, the provisions of this Agreement shall govern and prevail.

 

(g)                                  Loan Document.  This Agreement is a Loan Document.

 

[Remainder of page intentionally left blank]

 

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

 

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
SYNERGY PHARMACEUTICALS INC.
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
SUBSIDIARY GUARANTORS:
    
	
 
    	
 
    
	
 
    	
SYNERGY ADVANCED PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
ADMINISTRATIVE AGENT:
    	
 
    
	
 
    	
 
    
	
CRG SERVICING LLC
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
LENDERS:
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS III L.P.
    	
 
    
	
By CRG PARTNERS   III GP L.P., its General Partner
    	
 
    
	
By CRG PARTNERS   III GP LLC, its General Partner
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS III — PARALLEL FUND “A” L.P.
    	
 
    
	
By CRG PARTNERS III — PARALLEL   FUND “A” GP L.P., its General Partner
    	
 
    
	
By CRG PARTNERS III — PARALLEL   FUND “A” GP LLC, its General Partner
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS III PARALLEL FUND “B” (CAYMAN) L.P.
    	
 
    
	
 
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP L.P.,   its General Partner
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP LLC,   its General Partner
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Witness:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
					

 

 

	
CRG PARTNERS III (CAYMAN) LEV AIV L.P.
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP L.P.,   its General Partner
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP LLC,   its General Partner
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Witness:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P.
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP L.P.,   its General Partner
    	
 
    
	
By CRG PARTNERS III (CAYMAN) GP LLC,   its General Partner
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Witness:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 

ELEVENTH AMENDMENT TO AMENDED AND RESTATED 

REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT 

THIS ELEVENTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT (this “Amendment”) is made
and entered into effective June 13, 2018 (the “Effective Date”), by and among FLOTEK INDUSTRIES, INC., a corporation organized under the laws of the State of Delaware (“Holdings”), FLOTEK CHEMISTRY, LLC, a
limited liability company organized under the laws of the State of Oklahoma (“Flotek Chemistry”), CESI MANUFACTURING, LLC, a limited liability company organized under the laws of the State of Oklahoma (“CESI
Manufacturing”), MATERIAL TRANSLOGISTICS, INC., a corporation organized under the laws of the State of Texas (“MTI”), TELEDRIFT COMPANY, a corporation organized under the laws of the State of Delaware
(“Teledrift”), TURBECO, INC., a corporation organized under the laws of the State of Texas (“Turbeco”), USA PETROVALVE, INC., a corporation organized under the laws of the State of Texas (“USA
Petrovalve”), FLORIDA CHEMICAL COMPANY, INC., a corporation organized under the laws of the State of Delaware (“Florida Chemical”), SITELARK LLC, a limited liability company organized under the laws of the State of Texas
(“Sitelark”), FLOTEK ECUADOR MANAGEMENT LLC, a limited liability company organized under the laws of the State of Texas (“Ecuador Management”), FLOTEK ECUADOR INVESTMENTS LLC, a limited liability company organized
under the laws of the State of Texas (“Ecuador Investments”), FLOTEK EXPORT, INC., a corporation organized under the laws of the State of Texas (“Export”), ECLIPSE IOR SERVICES, LLC, a limited liability company
organized under the laws of the State of Texas (“EOGA”), FRACMAX ANALYTICS, LLC, a limited liability company organized under the laws of the State of Texas (“Fracmax”), FC PRO, LLC, a limited liability company
organized under the laws of the State of Delaware (“FC PRO”), FLOTEK HYDRALIFT, INC., a corporation organized under the laws of the State of Texas (“Hydralift”; and together with Holdings, Flotek Chemistry, CESI
Manufacturing, MTI, Teledrift, Turbeco, USA Petrovalve, Florida Chemical, Sitelark, Ecuador Management, Ecuador Investments, Export, EOGA, Fracmax and FC PRO, collectively, the “Borrowers” and each individually, a
“Borrower”), the financial institutions which are now or which hereafter become a party thereto (collectively, the “Lenders” and each individually a “Lender”), and PNC BANK, NATIONAL ASSOCIATION
(“PNC”), as a Lender and as agent for Lenders (in such capacity, “Agent”). 
 PRELIMINARY STATEMENTS

 A. Borrowers, Lenders and Agent are parties to that certain Amended and Restated Revolving Credit, Term Loan and Security Agreement
dated May 10, 2013, as amended by that certain First Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of December 31, 2013, that certain Second Amendment to Amended and Restated Revolving
Credit, Term Loan and Security Agreement, dated as of December 5, 2014, that certain Third Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of June 19, 2015, that certain Fourth Amendment to
Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of July 21, 2015, that certain Fifth Amendment to Amended and Restated Revolving Credit, Term Loan and Security 

 
Agreement, dated as of March 31, 2016, that certain Sixth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of November 2, 2016, that
certain Seventh Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement and Sixth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, effective as of March 31, 2017, that certain
Eighth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, effective as of June 7, 2017, that certain Ninth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of
July 1, 2017, and that certain Tenth Amendment to Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated as of September 29, 2017 (as it may be further amended, restated, supplemented, or otherwise modified from
time to time, the “Credit Agreement”); and 
 B. Borrowers have requested that Agent and the Lenders make certain
amendments to the Credit Agreement; and 
 C. Subject to the terms and conditions set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Agent and the Lenders are willing to make certain amendments to the Credit Agreement, all as set forth herein. 

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: 
 ARTICLE I 

DEFINITIONS 
 1.01
Capitalized terms used in this Amendment are defined in the Credit Agreement, as amended hereby, unless otherwise stated. 

ARTICLE II  

AMENDMENT 
 2.01
Amendments to Section 1.2 – Amended Definitions. Effective as of the Effective Date, the references to “Section 2.1(a)(y)(iv)” in the definitions of “Eligible Inventory” and “Undrawn Availability”
are hereby deleted and replaced with references to “Sections 2.1(a)(y)(v)”.  
 2.02 Amendment to Section 1.2
– Restated Definitions. Effective as of the Effective Date, the definitions of “Adjusted EBITDA” and “CapEx Trigger Period” set forth in Section 1.2 are hereby restated in their entirety as follows:

 “CapEx Trigger Period” shall mean the period (x) commencing on the date that Borrowers’ Undrawn
Availability is less than $15,000,000 and (y) ending on the date that Borrowers’ Undrawn Availability is greater than $25,000,000 for six consecutive months (measured at month end for purposes of these clauses (x) and (y)); provided,
however, the operation of clause (iv) in the calculation of the Formula Amount shall be disregarded for purposes of calculating Undrawn Availability in this definition. 

  
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 “Adjusted EBITDA” shall mean for any period the sum of (a) EBITDA, plus
(b) non-cash income reduction adjustments derived from or related to stock-based compensation, plus (c) transaction costs and expenses related to the negotiation and execution of the Eleventh Amendment and actually incurred or expensed
within ninety (90) days of the Eleventh Amendment Effective Date. 
 2.03 Amendment to Section 1.2 – New
Definitions. Effective as of the Effective Date, the following new definitions of “Collateral Block Amount”, “Eleventh Amendment”, “Eleventh Amendment Effective Date” and “Financial Covenant Trigger
Event” shall be added to Section 1.2 in the proper alphabetic order:  
 “Collateral Block
Amount” shall mean an amount equal the sum of (i) $10,000,000 minus (ii) Suppressed Availability Amount, if any, minus (iii) to the extent not included in the calculation of the Suppressed Availability Amount, Suppressed
Inventory Amount, if any. For purposes of this definition: (A) “Suppressed Availability Amount” means an amount by which the sum Section 2.1(a)(y)(i) plus Section 2.1(a)(y)(ii) exceeds the Maximum Revolving Advance Amount;
and (B) “Suppressed Inventory Amount” means an amount by which the result of Section 2.1(a)(y)(ii) exceeds $52,000,000. 

“Eleventh Amendment” shall mean that certain Eleventh Amendment to Amended and Restated Revolving Credit, Term
Loan and Security Agreement dated as of the Eleventh Amendment Effective Date, by and among, Borrowers, Agent and Lender. 

“Eleventh Amendment Effective Date” shall mean June 13, 2018. 

“Financial Covenant Trigger Event” shall mean (i) a Default or Event of Default shall have occurred or
(ii) Undrawn Availability is less than $15,000,000 (as evidenced by a Borrowing Base Certificate and any supporting schedules, in form and substance satisfactory to Agent, calculated as of the last day of such calendar month); provided,
however, the operation of clause (iv) in the calculation of the Formula Amount shall be disregarded for purposes of calculating Undrawn Availability in this definition. 

2.04 Amendment to Section 2.1(a). Effective as of the Effective Date, Section 2.1(a) is hereby amended and
restated in its entirety to read as follows: 
 (a) Amount of Revolving Advances. Subject to the terms and
conditions set forth in this Agreement specifically including Section 2.1(b), each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s Revolving
Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount, less the outstanding amount of Swing Loans, less the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit or (y) an amount
equal to the sum of: 

  
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         (i) the sum of (a) up to
85%, subject to the provisions to Section 2.1(b) hereof (the “Receivables Advance Rate”), of Eligible Receivables, other than Eligible Insured Foreign Receivables, plus (b) the lesser of (x) up to the
Receivables Advance Rate times Eligible Insured Foreign Receivables and (y) $10,000,000, plus 

        (ii) up to the lesser of (A) seventy-percent (70%), subject to the
provisions to Section 2.1(b) hereof, of the Eligible Inventory, (B) eighty-five percent (85%), subject to the provisions to Section 2.1(b) hereof, of the value percentage of the appraised net orderly liquidation value of Eligible
Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its sole discretion exercised in good faith) and (C) $52,000,000 in the aggregate at any one time (“Inventory Advance Rate” and together with the
Receivables Advance Rate, collectively, the “Advance Rates”), minus 

        (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of
Credit, minus 
         (iv) the Collateral Block Amount, minus 

        (v) such reserves as Agent may deem proper and necessary in the exercise of its
Permitted Discretion from time to time. 
 The amount derived from the sum of (x) Sections 2.1(a)(y)(i) and (ii) minus
(y) Sections 2.1(a)(y)(iv) and (v) at any time and from time to time shall be referred to as the “Formula Amount”. Subject to the provisions of Section 2.1(b), the Formula Amount applicable at any time shall be
calculated as set forth in the Borrowing Base Certificate delivered pursuant to Section 9.2 and approved by Agent in its sole discretion. The Revolving Advances shall be evidenced by one or more secured promissory notes, substantially in the
form attached hereto as Exhibit 2.1(a) (as the same may be amended, amended and restated, renewed, replaced, supplemented and/or otherwise modified from time to time, collectively, the “Revolving Credit Note”). 

2.05 Amendment to Section 6.5(b). Effective as of the Effective Date, Section 6.5(b) is hereby deleted in its
entirety and replaced with the following: 
 Section 6.5 Financial Covenants. 

(a) Fixed Charge Coverage Ratio. (i) Beginning as of the Eleventh Amendment Effective Date and continuing through
December 31, 2018, following the occurrence of a Financial Covenant Trigger Event, cause to be maintained, a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, measured as of the last day of the fiscal quarter, in each case, for the
four (4) fiscal quarter period then ending and (ii) beginning March 31, 2019, cause to be maintained, a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00, (A) as of 

  
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March 31, 2019, for the one (1) fiscal quarter period then ending, (B) as of June 30, 2019, for the two (2) fiscal quarter period then ending, (C) as of
September 30, 2019, for the three (3) fiscal quarter period then ending and (D) as of December 31, 2019 and as of the last day of each quarter thereafter, for the four (4) quarter period then ending. For purposes of this
Section 6.5(a)(ii), Adjusted EBITDA shall be annualized for the following periods as follows: (i) with respect to the fiscal quarter ending March 31, 2019, Adjusted EBITDA for such fiscal quarter shall be multiplied by 4,
(ii) with respect to the fiscal quarter ending June 30, 2019, Adjusted EBITDA for the 2 consecutive fiscal quarters then ending shall be multiplied by 2, and (iii) with respect to the fiscal quarter ending September 30, 2019,
Adjusted EBITDA for the 3 consecutive fiscal quarters then ended shall be multiplied by 1 1/3. 
 (b) Leverage Ratio.
(i) beginning as of the Eleventh Amendment Effective Date and continuing through December 31, 2018, following the occurrence of a Financial Covent Trigger Event, cause to be maintained, a ratio of Funded Debt to Adjusted EBITDA, of not
greater than: (A) 3.50 to 1.00, measured as of June 30, 2018, for the four (4) fiscal quarter period then ending and (B) 3.00 to 1.00, measured as of September 30, 2018 and December 31, 2018, in each case, for the four
(4) fiscal quarter period then ending and (ii) beginning March 31, 2019, cause to be maintained, a ratio of Funded Debt to Adjusted EBITDA, of not greater than 3.00 to 1.00, (A) as of March 31, 2019, for the one
(1) fiscal quarter period then ending, (B) as of June 30, 2019, for the two (2) fiscal quarter period then ending, (C) as of September 30, 2019, for the three (3) fiscal quarter period then ending and (D) as
of December 31, 2019 and as of the last day of each quarter thereafter, for the four (4) quarter period then ending. For purposes of this Section 6.5(b)(ii), Adjusted EBITDA shall be annualized for the following periods as follows:
((i) with respect to the fiscal quarter ending March 31, 2019, Adjusted EBITDA for such fiscal quarter shall be multiplied by 4, (ii) with respect to the fiscal quarter ending June 30, 2019, Adjusted EBITDA for the 2 consecutive
fiscal quarters then ending shall be multiplied by 2, and (iii) with respect to the fiscal quarter ending September 30, 2019, Adjusted EBITDA for the 3 consecutive fiscal quarters then ended shall be multiplied by 1 1/3. 

ARTICLE III 

CONDITIONS PRECEDENT 

3.01 Conditions to Effectiveness. The effectiveness of this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by Agent: 
 (a) Agent shall have received the following documents or
items, each in form and substance satisfactory to Agent and its legal counsel: 

        (i) this Amendment duly executed by each Borrower; 

  
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         (ii) $90,000 amendment fee, which
shall be fully earned and nonrefundable as of the date hereof, which fee shall be distributed ratably amongst the Lenders; 

        (iii) all other documents Agent may reasonably request with respect to any
matter relevant to this Amendment or the transactions contemplated hereby; and 

        (iv) all other fees, costs and expenses owed to or incurred by Agent and
Lenders arising in connection with the Credit Agreement, the Other Documents, or this Amendment. 
 (b) The representations
and warranties contained herein and in the Credit Agreement and the Other Documents, as each is amended hereby, shall be true and correct as of the date hereof, as if made on the date hereof; and 

(c) No Default or Event of Default shall have occurred and be continuing. 

3.02 Conditions Subsequent. The effectiveness of this Amendment shall also be subject to the Borrowers’ delivery to Lender
of the following items on or before the applicable date set forth below: 
 (a) within fifteen (15) days after
the Effective Date, or within such longer period as the Agent may agree at its sole option, original executed signature pages to this Amendment and any other document executed in connection with this Amendment and 

(b) within fifteen (15) days after the Effective Date, or within such longer period as the Agent may agree at its sole
option, the original Promissory Note dated June 7, 2017 in the principal amount of $398,000 and the original Promissory Note dated July 1, 2017 in the principal amount of $1,000,000, in each case, together with an allonge duly executed in
form and substance satisfactory to Agent and its legal counsel. 
 3.03 No Waiver. Nothing contained in this Amendment shall
be construed as a waiver by Agent or any Lender of any covenant or provision of the Credit Agreement (as amended hereby), the Other Documents, this Amendment, or of any other contract or instrument between any Borrower and Agent or any Lender, and
the failure of Agent or any Lender at any time or times hereafter to require strict performance by any Borrower of any provision thereof shall not waive, affect or diminish any right of Agent to thereafter demand strict compliance therewith. Agent
and each Lender hereby reserve all rights granted under the Credit Agreement, the Other Documents, this Amendment and any other contract or instrument between any Borrower, Lenders and Agent. 

ARTICLE IV 

RATIFICATIONS, REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS 

  
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 4.01 Ratifications. The terms and provisions set forth in this Amendment shall
modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and the Other Documents, and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the Other
Documents are ratified and confirmed and shall continue in full force and effect. Each Borrower hereby agrees that all liens and security interest securing payment of the Obligations under the Credit Agreement are hereby collectively renewed,
ratified and brought forward as security for the payment and performance of the Obligations. Each Borrower and Agent agree that the Credit Agreement and the Other Documents, as amended hereby, shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.  
 4.02 Representations and Warranties with respect to Other
Documents. Each Borrower hereby represents and warrants to Agent that (a) the execution, delivery and performance of this Amendment and any and all Other Documents executed and/or delivered in connection herewith have been authorized by
all requisite corporate action on the part of each Borrower and will not violate the Articles or Certificate of Incorporation or By-Laws or the Certificate of Formation or Operating Agreement of any Borrower; (b) the representations and
warranties contained in the Credit Agreement, as amended hereby, and the Other Documents are true and correct on and as of the date hereof and on and as of the date of execution hereof as though made on and as of each such date; (c) no Default
or Event of Default under the Credit Agreement, as amended hereby, has occurred and is continuing, unless such Default or Event of Default has been specifically waived in writing by Agent; and (d) each Borrower is in full compliance with all
covenants and agreements contained in the Credit Agreement and the Other Documents, as amended hereby. 
 ARTICLE V 

MISCELLANEOUS PROVISIONS 

5.01 Survival of Representations and Warranties. All representations and warranties made in the Credit Agreement or the Other
Documents, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the Other Documents, and no investigation by Agent or any closing shall affect the
representations and warranties or the right of Agent to rely upon them. 
 5.02 Reference to Credit Agreement. Each of
the Credit Agreement and the Other Documents, and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement, as amended hereby, are
hereby amended so that any reference in the Credit Agreement and such Other Documents to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby. 

5.03 Expenses of Agent. Each Borrower jointly and severally agrees to pay on demand all reasonable costs and expenses incurred
by Agent in connection with any and all amendments, modifications, and supplements to the Other Documents, including, without limitation, the costs and fees of Agent’s legal counsel, and all costs and expenses incurred by Agent in connection
with the enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any Other Documents, including, without, limitation, the costs and fees of Agent’s legal counsel. 

  
 7 

 5.04 Severability. Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 

5.05 Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of Agent, Lenders and each Borrower
and their respective successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of Agent. 

5.06 Counterparts. This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to
be an original, but all of which when taken together shall constitute one and the same instrument. 
 5.07 Effect of
Waiver. No consent or waiver, express or implied, by Lenders or Agent to or for any breach of or deviation from any covenant or condition by any Borrower shall be deemed a consent to or waiver of any other breach of the same or any other
covenant, condition or duty. 
 5.08 Headings. The headings, captions, and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this Amendment. 
 5.09 Applicable Law. THIS AMENDMENT AND ALL
OTHER AGREEMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. 

5.10 Final Agreement. THE CREDIT AGREEMENT AND THE OTHER DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE CREDIT AGREEMENT AND THE OTHER DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWERS AND
AGENT. 
 5.11 Release. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY ANY LOANS OR EXTENSIONS OF CREDIT FROM AGENT AND LENDERS TO
SUCH BORROWER 

  
 8 

 
UNDER THE CREDIT AGREEMENT OR THE OTHER DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDERS AND AGENT. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDERS, AGENT, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST
LENDERS AND AGENT, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY LOANS OR
EXTENSIONS OF CREDIT FROM LENDERS AND AGENT TO SUCH BORROWER UNDER THE CREDIT AGREEMENT OR THE OTHER DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE
HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT. 

5.12 Guarantors Consent, Ratification and Release. Each of the undersigned Guarantors hereby consents to the terms of this
Amendment, confirms and ratifies the terms of that certain Guaranty dated as of May 10, 2013 (the “FTK Guaranty”) executed by each of the undersigned in favor of Agent and the other Lenders. Each of the undersigned Guarantors
acknowledges that its Guaranty is in full force and effect and ratifies the same, acknowledges that such undersigned has no defense, counterclaim, set-off or any other claim to diminish such undersigned’s liability under such documents, that
such undersigned’s consent is not required to the effectiveness of the within and foregoing Amendment, and that no consent by any such undersigned is required for the effectiveness of any future amendment, modification, forbearance or other
action with respect to the Obligations, the Collateral, or any of the Other Documents. EACH OF THE UNDERSIGNED HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT AND LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT AND THIS CONSENT ARE EXECUTED, WHICH EACH SUCH UNDERSIGNED MAY NOW OR HEREAFTER HAVE AGAINST AGENT, DOCUMENTATION AGENT OR ANY LENDER, THEIR PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”, INCLUDING, WITHOUT LIMITATION, ANY

  
 9 

 
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE REVOLVING
CREDIT AND SECURITY AGREEMENT, AS AMENDED BY THIS AMENDMENT, OR THE OTHER DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT AND THIS CONSENT. 

[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE
PAGES FOLLOW.] 

  
 10 

 IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the Effective
Date. 
 BORROWERS: 
  

			
	 FLOTEK INDUSTRIES, INC., a Delaware

corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FLOTEK CHEMISTRY, LLC an Oklahoma

limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO
	
	 CESI MANUFACTURING, LLC, an

Oklahoma limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO
	
	 MATERIAL TRANSLOGISTICS, INC.,

a Texas corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 TELEDRIFT COMPANY, a Delaware

corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President

 [Signature Page] 

Eleventh Amendment to A&R Credit Agreement 

 
			
	TURBECO, INC., a Texas corporation
		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 USA PETROVALVE, INC., a Texas

corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FLORIDA CHEMICAL COMPANY, INC., a

Delaware corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 SITELARK LLC, a Texas limited liability

company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO
	
	 FLOTEK ECUADOR MANAGEMENT

LLC, a Texas limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FLOTEK ECUADOR INVESTMENTS

LLC, a Texas limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President

 [Signature Page] 

Eleventh Amendment to A&R Credit Agreement 

 
			
	 FLOTEK EXPORT, INC., a Texas

corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FLOTEK HYDRALIFT, INC., a Texas

corporation

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FRACMAX ANALYTICS, LLC, a Texas

limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	 FC PRO, LLC, a Delaware limited liability

company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO
	
	 ECLIPSE IOR SERVICES, LLC, a Texas

limited liability company

		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO

 [Signature Page] 

Eleventh Amendment to A&R Credit Agreement 

 GUARANTORS: 

 

			
	FLOTEK PAYMASTER, INC.
		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President
	
	FLOTEK INTERNATIONAL, INC.
		
	By:	 	/s/John Chisholm
	Name:	 	John Chisholm
	Title:	 	CEO and President

 [Signature Page] 

Eleventh Amendment to A&R Credit Agreement 

 
			
	 AGENT:
 PNC BANK,
NATIONAL ASSOCIATION

		
	By:	 	/s/Ron Zeiber
	Name:	 	Ron Zeiber
	Title:	 	Vice President

  

			
	 PNC Bank, National Association
 2100
Ross Avenue, Suite 1850
 Dallas, Texas 75201

	Attention:	 	Relationship Manager (Flotek)
	Telephone:	 	(214) 871-1256
	Facsimile:	 	(214) 871-2015
	
	 Revolving Commitment Percentage: 100%

Revolving Commitment Amount $75,000,000

 [Signature Page] 

Eleventh Amendment to A&R Credit Agreement

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