Document:

Exhibit
10.2

 

“FORM
OF” PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK

 

TARONIS
TECHNOLOGIES, INC.

 

	Warrant
    Shares: 	Initial
    Exercise Date: ___________, 2020
	 	Issue
    Date: ___________, 2020

 

THIS
PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, [                ] or its
assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after __________, 2020 (the “Initial Exercise Date”) and on or prior
to the close of business on until the date that all Warrant Shares have been exercised in full (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Taronis Technologies, Inc., a Delaware corporation (the “Company”),
up to [                ] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Exchange Agreement (the “Exchange Agreement”), dated March 31, 2020, among the Company and the Holder’s
signatory thereto.

 

Section
2. Exercise.

 

a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such
other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise
in the form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this
Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to
the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of
Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within
one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder,
the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face
hereof.

 

b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.01 per Warrant
Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other
than the nominal exercise price of $0.01 per Warrant Share) shall be required to be paid by the Holder to any Person to effect
any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid
aggregate Exercise Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have
been exercised prior to the Termination Date. The remaining unpaid exercise price per share of Common Stock under this Warrant
shall be $0.01, subject to adjustment hereunder (the “Exercise Price”).

 

    	 

    	 

    

 

c)
Mechanics of Exercise.

 

i.
Delivery of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent
to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is one (1) Trading Day after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon
delivery of the Notice of Exercise the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares; provided payment of the aggregate Exercise Price is received within two Trading Days of delivery of the Notice of Exercise.
If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue)
for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable.

 

ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant.

 

iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(c)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

v.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid
by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice
of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions)
required for same-day electronic delivery of the Warrant Shares.

 

    	 

    	 

    

 

vi.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.

 

d)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect
to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged
by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be
the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(d), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected
in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent
public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading
Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of
the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant.

 

e)
Principal Market Regulation. The Company shall not issue any shares of Common Stock pursuant to the terms of this Warrant
if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock that the Company may
issue upon exercise of the Warrants in compliance with the Company’s obligations under the rules or regulations of the Nasdaq
Capital Market (“Principal Market”) (the number of shares which may be issued without violating such rules
and regulations, the “Exchange Cap”), except that such limitation shall not apply in the event that the Company
(A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares
of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval
is not required, which opinion shall be reasonably satisfactory to the Holder. Until such approval or such written opinion is
obtained, the Holder shall not be issued in the aggregate shares of Common Stock upon the exercise of Warrants in an amount greater
than the product of (i) the Exchange Cap as of the issuance date multiplied by (ii) the quotient of (1) the aggregate number of
shares of Common Stock issued to such Holder pursuant to this Warrant on the Initial Exercise Date or any Subsequent Exercise
Date divided by (2) the aggregate number of shares of Common Stock issued to the Holder pursuant to this Warrant on the Initial
Exercise Date or any Subsequent Exercise Date (the “Exchange Cap Allocation”). In the event that any Holder
shall sell or otherwise transfer any of such Holder’s Warrants (or Common Stock), the transferee shall be allocated a pro
rata portion of such Holder’s Exchange Cap Allocation with respect to such portion of such Warrants (or Common Stock) so
transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange
Cap Allocation so allocated to such transferee.

 

    	 

    	 

    

 

Section
3. Certain Adjustments.

 

a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall adjust proportionately. Any adjustment made pursuant to this Section
3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination
or re-classification.

 

b)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common
Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would
have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the
Holder (without regard to any limitation in Section 2(d) on the exercise of this Warrant), the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(b).

 

    	 

    	 

    

 

c)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)
Notice to Holder.

 

i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment
and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party (except in the case of a merger for purposes of changing the Company’s domicile), any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its
last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least ten (10) calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights
or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice
to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

    	 

    	 

    

 

Section
4. Transfer of Warrant.

 

a)
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal
office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender
this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning
this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.

 

b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section
5. Miscellaneous.

 

a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i), except as expressly set forth
in Section 3.

 

b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next
succeeding Trading Day.

 

    	 

    	 

    

 

d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and
payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free
from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above
the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares
upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform
its obligations under this Warrant.

 

Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Exchange Agreement.

 

f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws.

 

g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding
the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with
any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

 

h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Exchange Agreement.

 

i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability
of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.

 

    	 

    	 

    

 

j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.

 

m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.

 

********************

 

(Signature
Page Follows)

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.

 

	 	TARONIS
    TECHNOLOGIES, INC.
	 	 	                      
	 	By:	 
	 	Name:	Scott
    Mahoney
	 	Title:	Chief
    Executive Officer 

 

    	 

    	 

    

 

NOTICE
OF EXERCISE

 

TO:
TARONIS TECHNOLOGIES, INC.

 

(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)
Payment shall take the form of lawful money of the United States.

 

(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The
Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

[SIGNATURE
OF HOLDER]

 

Name
of Investing Entity: ______________________________________________________________________

Signature
of Authorized Signatory of Investing Entity: ______________________________________________

Name
of Authorized Signatory: ________________________________________________________________

Title
of Authorized Signatory: _________________________________________________________________

Date:
____________________________________________________________________________________

 

    	 

    	 

    

 

EXHIBIT
B

 

ASSIGNMENT
FORM

 

(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 	 
	 	 	(Please
    Print)
	 	 	 
	Address:	 	 
	 	 	(Please
    Print)
	 	 	 
	Phone
    Number:	 	 
	 	 	 
	Email
    Address:	 	 
	 	 	 
	Dated:
    _______________ __, ______	 	 
	 	 	 
	Holder’s
    Signature:____________________	 	 
	 	 	 
	Holder’s
    Address:_____________________exhibit101

                                                                            Exhibit 10.1   Paycheck Protection Program Term Note    $4,788,100.00                                                            April 16, 2020    FOR  VALUE  RECEIVED,  FLOTEK  INDUSTRIES,  INC.  (the  “Borrower”),  with  an  address  at  10603  WEST SAM HOUSTON PARKWAY NORTH, SUITE 300, HOUSTON, TEXAS 77064, promises to pay to the  order  of PNC  BANK,  NATIONAL  ASSOCIATION (the  “Bank”),  in  lawful  money  of  the  United  States  of  America in immediately available funds at its offices located at 222 Delaware Avenue, Wilmington, Delaware  19801,  Attn:   Business  Banking,  or  at  such  other  location  as  the  Bank  may  designate  from  time  to  time,  the  principal  sum  of $4,788,100.00  (the  “Facility”),  together  with  interest  accruing  on  the  outstanding  principal  balance from the date hereof, all as provided below.  This Note is being issued pursuant to the Coronavirus Aid,  Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (the “Program”).     1.     Rate of Interest.  Amounts outstanding under this Note will bear interest at a rate per annum (“Fixed  Rate”) which is at all times equal to 1.00%.  Interest will be calculated based on the actual number of days that  principal  is  outstanding  over  a  year  of  360  days.   In  no  event  will  the  rate  of  interest  hereunder  exceed  the  maximum rate allowed by law.   2.    Structure; Payment Terms.  During the period (the “Deferral Period”) beginning on the date of this  Note and ending on the 6 month anniversary of the date of this Note (the “Deferral Expiration Date”), interest on the outstanding principal balance will accrue at the Fixed Rate, but neither principal nor interest shall be due and payable during the Deferral Period.  On the Deferral Expiration Date, the outstanding principal of the Facility that  is  not  forgiven  under  the  Program  (the  “Conversion Balance”)  shall  convert  to  an  amortizing  term  loan payable as set forth below.  On the 15th day of the 7th month following the date of this Note (the “First Payment Date”), all accrued interest  that is not forgiven under the Program shall be due and payable.  Additionally, on the First Payment Date, and  continuing  on  the  15th  day  of  each  month  thereafter  until  the  2nd  anniversary  of  the  date  of  this  Note  (the  “Maturity Date”), equal installments of principal shall be due and payable, each in an amount determined by  dividing the Conversion Balance by 18 (the “Monthly Principal Amount”).  Interest shall be payable at the same  times as the Monthly Principal Amount.  Any outstanding principal and accrued interest shall be due and payable  in full on the Maturity Date.     If any payment under this Note shall become due on a day other than a Business Day, such payment shall be made  on  the  next  succeeding  Business  Day  and  such  extension  of  time  shall  be  included  in  computing  interest  in  connection with such payment.  “Business Day” shall mean any day other than a Saturday or Sunday or a legal  holiday on which commercial banks are authorized or required by law to be closed for business in the State of  Delaware.  The Borrower hereby authorizes the Bank to charge the Borrower’s deposit account at the Bank for  any payment when due.  Payments received will be applied to charges, fees and expenses (including attorneys’  fees), accrued interest and principal in any order the Bank may choose, in its sole discretion.    3.     Forgiveness of the Facility.  The Borrower may apply to the Bank for forgiveness of the amount due on  this Facility in an amount based on the sum of the following costs incurred by the Borrower during the 8-week  period beginning on the date of first disbursement of this Facility: (a) payroll costs; (b) any payment of interest on  a covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered  mortgage obligation); (c) any payment on a covered rent obligation; and (d) any covered utility payment.   The amount of forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the   Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act   (CARES Act) (P.L. 116-136).   Not more than 25% of the amount forgiven can be attributable to non-payroll                                                                   PPP – Term Note April 2020

 

costs.  If the Borrower has received an EIDL (as defined in the attached Certification), the amount of such loan  shall be subtracted from the loan forgiveness amount.  4.    Late Payments; Default Rate.  If the Borrower fails to make any payment of principal, interest or other  amount coming due pursuant to the provisions of this Note within fifteen (15) calendar days of the date due and  payable, the  Borrower also  shall  pay  to  the  Bank  a late charge  equal  to  the lesser  of five  percent (5%)  of  the  amount of such payment or $100.00 (the “Late Charge”).  Such fifteen (15) day period shall not be construed in  any  way  to  extend  the  due  date  of  any  such  payment.   Upon  maturity,  whether  by  acceleration,  demand  or  otherwise,  and  at  the  Bank’s  option  upon  the  occurrence  of  any  Event  of  Default  (as  hereinafter  defined)  and  during the continuance thereof, each advance outstanding under this Note shall bear interest at a rate per annum  (based on the actual number of days that principal is outstanding over a year of 360 days) which shall be five  percentage points (5.00%) in excess of the interest rate in effect from time to time under this Note but not more  than the maximum rate allowed by law (the “Default Rate”).  The Default Rate shall continue to apply whether or  not judgment shall be entered on this Note.  Both the Late Charge and the Default Rate are imposed as liquidated  damages for the purpose of defraying the Bank’s expenses incident to the handling of delinquent payments, but  are in addition to, and not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under the other  Loan  Documents  (as  defined  below)  or  under  applicable  law,  and  any  fees  and  expenses  of  any  agents  or  attorneys which the Bank may employ.  In addition, the Default Rate reflects the increased credit risk to the Bank  of carrying a loan that is in default.  The Borrower agrees that the Late Charge and Default Rate are reasonable  forecasts  of just  compensation for  anticipated  and actual  harm  incurred  by  the Bank,  and  that  the  actual harm  incurred  by  the  Bank  cannot  be  estimated  with  certainty  and  without  difficulty.   As  used  in  this  Note,  “Loan  Documents” means, individually and collectively, this Note, together with all other agreements and documents  executed  and/or  delivered  in  connection  with  this  Note  or  referred  to  in  this  Note,  as  amended,  modified  or  renewed from time to time.   5.    Prepayment.  The Borrower shall have the right to prepay any amounts outstanding under this Note at  any time and from time to time, in whole or in part, without penalty.     6.    Increased  Costs;  Yield  Protection.   On  written  demand,  together  with  written  evidence  of  the  justification  therefor,  the  Borrower  agrees  to  pay  the  Bank  all  direct  costs  incurred,  any  losses  suffered  or  payments  made  by  the  Bank  as  a  result  of  any  Change  in  Law  (hereinafter  defined),  imposing  any  reserve,  deposit, allocation of capital or similar requirement (including without limitation, Regulation D of the Board of  Governors  of  the  Federal  Reserve  System)  on  the  Bank,  its holding  company  or  any  of their respective assets  relative  to  the  Facility.  “Change  in  Law”  means  the  occurrence,  after  the  date  of  this  Note,  of  any  of  the  following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule,  regulation  or  treaty  or  in  the  administration,  interpretation,  implementation  or  application  thereof  by  any  governmental authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not  having  the  force  of  law)  by  any  governmental  authority;  provided  that  notwithstanding  anything  herein  to  the  contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines  or  directives  thereunder  or  issued  in  connection  therewith  and  (y)  all  requests,  rules,  guidelines  or  directives  promulgated  by  the  Bank  for  International  Settlements,  the  Basel  Committee  on  Banking  Supervision  (or  any  successor  or  similar  authority)  or  the  United  States  or  foreign  regulatory  authorities,  in  each  case  pursuant  to  Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.   7.    Representations, Warranties and Covenants.           (a)  The Borrower hereby represents and warrants that, if not a natural person, the Borrower is duly  organized, validly existing and in good standing under the laws of the state of its incorporation or organization  and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be  carried  on,  and  is  duly  qualified,  licensed  and  in  good  standing  to  do  business  in  all  jurisdictions  where  its  ownership of property or the nature of its business requires such qualification or licensing.  The Borrower further  hereby represents and warrants that it was duly organized, validly existing and in good standing as of February                                           - 2 -                                                                 PPP - Term Note April 2020

 

15,  2020  and  had  employees  for  whom  it  paid  salaries  and  payroll  taxes  or  paid  independent  contractors,  as  reported on a Form 1099-MISC.         (b)   The Borrower certifies, acknowledges and agrees that the certifications contained in the Paycheck  Protection Program Certification and the Program application delivered to the Bank are true and correct, which  certifications are hereby incorporated herein by this reference as if set forth herein.          (c)  The Borrower covenants and agrees that the Borrower will do all things necessary to (i) maintain,  renew and keep in full force and effect its organizational existence and all rights, permits and franchises necessary  to enable it to continue its business as currently conducted; (ii) continue in operation in substantially the same  manner  as  at  present,  to  the  extent  permitted  by  applicable  law  (including  without  limitation  any  statute,  ordinance, rule or regulation relating to employment practices, pension benefits or environmental, occupational  and health standards and controls);  and (iii) comply with all laws applicable to the Borrower and to the operation  of  its  business  (including  without  limitation  any  statute,  ordinance,  rule  or  regulation  relating  to  employment  practices, pension benefits or environmental, occupational and health standards and controls).         (d)   The Borrower covenants and agrees that, without the Bank’s prior written consent, the Borrower  shall  not  make  or  permit  any  change  in  (i)  the  composition  of  its  current  executive  management;   (ii)  its  ownership or equity structure; or (iii) its form of organization, including a division into two or more entities.  The  Borrower will not make any distribution of company assets that would adversely affect its financial condition, or  transfer (including pledging) or dispose of any assets, except in the ordinary course of business.         (e)  The Borrower represents and warrants that (i) the Borrower has full power and authority to enter  into the transactions provided for in this Note and the other Loan Documents; (ii) all necessary action to authorize  the execution and delivery of this Note and the other Loan Documents has been properly taken; (iii) this Note and  the  other  Loan  Documents,  when  executed  and  delivered  by  the  Borrower,  will  constitute  the  legal,  valid  and  binding  obligations  of  the  Borrower  enforceable  in  accordance  with  their  terms;  (iv)  the  Borrower  is  and  will  continue  to  be  duly  authorized  to  perform  all  of  the  terms  and  provisions  of  this  Note  and  the  other  Loan  Documents; (v) there does not exist, either before or after giving effect to the terms of this Note, any default or  violation  by  the  Borrower  of  or  under  any  of  the  terms,  conditions  or  obligations  of  any  of  its  governing  documents; and (vi) the Borrower does not require the consent of any party with respect to this Note, the other  Loan Documents or the Facility except for such consents that have been obtained.         (f)   The Borrower covenants and agrees to take all such additional actions and promptly provide to  the Bank all additional documents, statements and information as the Bank may require from time to time, in its  discretion,  in  connection  with  the  SBA’s  requirements  or  requests  under  or  in  respect  of  the  Program  or  the  general standard operating procedures of the SBA.         (g)   The  Borrower  authorizes  and  directs  the  Bank  to  disburse  the  proceeds  of  the  Facility  and  to  direct  payments  due  under  the  Facility  in  accordance  with  the  Disbursement  and  Payment  Authorization  Instructions attached to this Note as Exhibit A.   8.    Other Loan Documents.  Notwithstanding any provision to the contrary in any Loan Document or any  other  collateral  security  documents  that  may  have  been  or  may  in  the  future  be  executed  and  delivered  to  the  Bank, or an agent acting on behalf of the Bank, to secure any obligations of the Borrower to the Bank, this Note is  not intended to be secured by real property, and the applicability of any lien on such real property to secure this  Note is expressly disclaimed by the Bank.  9.    Events of Default.  The occurrence of any of the following events will be deemed to be an “Event of  Default” under this  Note:   (i) the  nonpayment  of  any  principal, interest  or  other indebtedness  under this  Note  when due; (ii) the occurrence of any event of default or any default and the lapse of any notice or cure period, or  the Borrower’s failure to observe or perform any covenant or other agreement, under or contained in any Loan  Document; (iii) the filing by or against the Borrower of any proceeding in bankruptcy, receivership, insolvency,                                           - 3 -                                                                 PPP - Term Note April 2020

 

reorganization,  liquidation,  conservatorship  or  similar  proceeding  (and,  in  the  case  of  any  such  proceeding  instituted against the Borrower, such proceeding is not dismissed or stayed within 30 days of the commencement  thereof, provided that the Bank shall not be obligated to advance additional funds hereunder during such period);  (iv) any assignment by the Borrower for the benefit of creditors, or any levy, garnishment, attachment or similar  proceeding  is  instituted  against  any  property  of  the  Borrower  held  by  or  deposited  with  the  Bank;  (v)  the  commencement  of  any  foreclosure  or  forfeiture  proceeding,  execution  or  attachment  against  any  collateral  securing the obligations of the Borrower to the Bank; (vi) the entry of a final judgment against the Borrower and  the failure of the Borrower to discharge the judgment within ten (10) days of the entry thereof; (vii) any merger,  consolidation, division or other reorganization of, with or by the Borrower, or the sale or other transfer of all or  any  substantial  part  of  the Borrower’s  property  or  assets; (viii) any  change in the  Borrower’s  business, assets,  operations,  financial  condition  or  results  of  operations  or  equity  ownership  that  has  or  could  reasonably  be  expected to have any material adverse effect on the Borrower; (ix) the Borrower ceases doing business as a going  concern; (x) any representation or warranty made by the Borrower to the Bank in any Loan Document or any  other documents now or in the future evidencing or securing the obligations of the Borrower to the Bank, is false,  erroneous or misleading in any material respect; (xi) the death, incarceration, indictment or legal incompetency of  any individual Borrower or, if the Borrower is a partnership or limited liability company, the death, incarceration,  indictment or legal incompetency of any individual general partner or member; or (xii) failure of the Borrower to  notify the Bank within ten (10) days of any change of the Borrower’s address.   Upon the occurrence of an Event of Default:  (a) the Bank shall be under no further obligation to make advances  hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above shall occur, the outstanding principal  balance  and  accrued  interest  hereunder  together  with  any  additional  amounts  payable  hereunder  shall  be  immediately due and payable without demand or notice of any kind; (c) if any other Event of Default shall occur,  the outstanding principal balance and accrued interest hereunder together with any additional amounts payable  hereunder,  at  the  Bank’s  option  and  without  demand  or  notice  of  any  kind,  may  be  accelerated  and  become  immediately due and payable; (d) at the Bank’s option, this Note will bear interest at the Default Rate from the  date of the occurrence of the Event of Default; and (e) the Bank may exercise from time to time any of the rights  and remedies available under the Loan Documents or under applicable law.   The Borrower acknowledges that  upon the occurrence of an Event of Default, SBA, as defined below,  may be required to pay the Lender under the  SBA guarantee, and SBA may then seek recovery on the Facility (to the extent any balance remains after loan  forgiveness).   10.  Right of Setoff.  In addition to all liens upon and rights of setoff against the Borrower’s money, securities  or other property given to the Bank by law, the Bank shall have, with respect to the Borrower’s obligations to the  Bank  under  this  Note  and  to  the  extent  permitted  by  law,  a  contractual  possessory  security  interest  in  and  a  contractual  right  of  setoff  against,  and  the  Borrower  hereby  grants  the  Bank  a  security  interest  in,  and  hereby  assigns, conveys, delivers, pledges and transfers to the Bank, all of the Borrower’s right, title and interest in and  to, all of the Borrower’s deposits, moneys, securities and other property now or hereafter in the possession of or  on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial Services  Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or  whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts.  Every such  security interest and right of setoff may be exercised without demand upon or notice to the Borrower.  Every such  right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default  hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a  later time.   11.  Financial and Other Information.  Within forty five (45) days after the Bank’s request, the Borrower  agrees to deliver any financial and other business and ownership information concerning the Borrower that the  Bank  may  request  from  time  to  time,  such  as  annual  and  interim  financial  statements  (all  of  which  shall  be  prepared in accordance with generally accepted accounting principles), federal income tax returns.  The Borrower  also agrees to deliver to the Bank, promptly upon the Bank’s request, certification(s) of beneficial owners in the  form  requested  by  the  Bank  (as  executed  and  delivered  to  the  Bank  on  or  prior  to  the  date  of  this  Note  and  updated from time to time, the “Certification of Beneficial Owners”). If the Borrower was required to execute                                           - 4 -                                                                 PPP - Term Note April 2020

 

and deliver to the Bank a Certification of Beneficial Owners, (a) the Borrower represents and warrants, as of the  date of this Note and as of the date each updated Certification of Beneficial Owners is provided to the Bank, that  the  information  in  the  Certification  of  Beneficial  Owners  is  true,  complete  and  correct,  and  (b)  the  Borrower  agrees  to  provide  confirmation  of  the  accuracy  of  the  information  set  forth  in  the  Certification  of  Beneficial  Owners, or deliver a new Certification of Beneficial Owners in form and substance acceptable to the Bank, as and  when requested by the Bank and/or when any individual identified on the most recent Certification of Beneficial  Owners provided to the Bank as a controlling party and/or a direct or indirect individual owner has changed.  The  Borrower further agrees to provide such other information and documentation as may reasonably be requested by  the  Bank  from  time  to  time  for  purposes  of  compliance  by  the  Bank  with  applicable  laws  (including  without  limitation  the  USA  PATRIOT  Act  and  other  “know  your  customer”  and  anti-money  laundering  rules  and  regulations),  and  any  policy  or  procedure  implemented  by  the  Bank  to  comply  therewith.    Additionally,  the  Borrower  will  keep  books  and  records  in  a  manner  satisfactory  to  the  Bank  and  allow  the  Bank  and  SBA  to  inspect and audit books, records and papers relating to the Borrower’s financial or business condition.  12.  Anti-Money  Laundering/International  Trade  Law  Compliance.  The  Borrower  represents  and  warrants to the Bank, as of the date of this Note,  the date of each advance of proceeds under the Facility, the date  of any renewal, extension or modification of the Facility, and at all times until the Facility has been terminated  and all amounts thereunder have been indefeasibly paid in full, that: (a) no Covered Entity  (i) is a Sanctioned  Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned  Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions  with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced  by any Compliance Authority; (b) the proceeds of the Facility will not be used to fund any operations in, finance  any  investments  or  activities  in,  or,  make  any  payments  to,  a  Sanctioned  Country  or  Sanctioned  Person  in  violation of any law, regulation, order or directive enforced by any Compliance Authority; (c) the funds used to  repay the Facility are not derived from any unlawful activity; and (d) each Covered Entity is in compliance with,  and  no  Covered  Entity   engages  in  any  dealings  or  transactions  prohibited  by,  any  laws  of  the  United  States,  including but not limited to any Anti-Terrorism Laws.  Borrower covenants and agrees that it shall immediately  notify the Bank in writing upon the occurrence of a Reportable Compliance Event.    As  used  herein:  “Anti-Terrorism  Laws”  means  any  laws  relating  to  terrorism,  trade  sanctions  programs  and  embargoes,  import/export  licensing,  money  laundering,  or  bribery,  all  as  amended,  supplemented  or  replaced  from time to time; “Compliance Authority” means each and all of the (a) U.S. Treasury Department/Office of  Foreign  Assets  Control,  (b)  U.S.  Treasury  Department/Financial  Crimes  Enforcement  Network,  (c)  U.S.  State  Department/Directorate  of  Defense  Trade  Controls,  (d)  U.S.  Commerce  Department/Bureau  of  Industry  and  Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) U.S. Securities and Exchange  Commission; “Covered Entity” means the Borrower, its  affiliates and subsidiaries, all guarantors, pledgors of  collateral, all owners of the foregoing, and all brokers or other agents of the Borrower acting in any capacity in  connection  with  the  Facility;  “Reportable  Compliance  Event”  means  that  any  Covered  Entity  becomes  a  Sanctioned  Person,  or  is  indicted,  arraigned,  investigated  or  custodially  detained,  or  receives  an  inquiry  from  regulatory or law enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any  Anti-Terrorism  Law,  or  self-discovers  facts  or  circumstances  implicating  any  aspect  of  its  operations  with  the  actual  or  possible  violation  of  any  Anti-Terrorism  Law;  “Sanctioned  Country”  means  a  country  subject  to  a  sanctions  program  maintained  by  any  Compliance  Authority;  and  “Sanctioned  Person”  means  any  individual  person,  group,  regime,  entity  or  thing  listed  or  otherwise  recognized  as  a  specially  designated,  prohibited,  sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to  the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or  otherwise  subject  to,  or  specially  designated  under,  any  sanctions  program  maintained  by  any  Compliance  Authority.   13.  Indemnity.  The Borrower agrees to indemnify each of the Bank, each legal entity, if any, who controls,  is controlled by or is under common control with the Bank, and each of their respective directors, officers and  employees  (the  “Indemnified  Parties”),  and  to  defend  and  hold  each  Indemnified  Party  harmless  from  and  against any and all claims, damages, losses, liabilities and expenses (including all fees and charges of internal or                                           - 5 -                                                                 PPP - Term Note April 2020

 

external  counsel  with  whom  any  Indemnified  Party  may  consult and  all  expenses  of  litigation  and preparation  therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any  person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the  Borrower), in connection with or arising out of or relating to the matters referred to in this Note or in the other  Loan Documents or the use of any advance hereunder, whether (a) arising from or incurred in connection with  any breach of a representation, warranty or covenant by the Borrower, or (b) arising out of or resulting from any  suit,  action,  claim,  proceeding  or  governmental  investigation,  pending  or threatened,  whether  based  on  statute,  regulation  or  order,  or  tort,  or  contract  or  otherwise,  before  any  court  or  governmental  authority;  provided,  however, that the foregoing indemnity agreement shall not apply to any claims, damages, losses, liabilities and  expenses  solely  attributable  to  an  Indemnified  Party's  gross  negligence  or  willful  misconduct.   The  indemnity  agreement  contained  in  this  Paragraph  shall  survive  the  termination  of  this  Note,  payment  of  any  advance  hereunder and the assignment of any rights hereunder.  The Borrower may participate at its expense in the defense  of any such action or claim.   14.  Miscellaneous.  All notices, demands, requests, consents, approvals and other communications required  or permitted hereunder (“Notices”) must be in writing (except as may be agreed otherwise above with respect to  borrowing requests or as otherwise provided in this Note) and will be effective upon receipt.  Notices may be  given in any  manner to which the parties may agree.  Without limiting the foregoing, first-class mail, postage  prepaid, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for  giving Notices.  In addition, the parties agree that Notices may be sent electronically to any electronic address  provided by a party from time to time.  Notices may be sent to a party’s address as set forth above or to such other  address  as  any  party  may  give  to  the  other  for  such  purpose  in  accordance  with  this  paragraph.   No  delay  or  omission on the Bank’s part to exercise any right or power arising hereunder will impair any such right or power  or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right  or  power.  The  Bank’s  rights  and remedies  hereunder  are  cumulative  and  not  exclusive  of  any  other  rights  or  remedies which the Bank may have under other agreements, at law or in equity.  No modification, amendment or  waiver of, or consent to any departure by the Borrower from, any provision of this Note will be effective unless  made in a writing signed by the Bank, and then such waiver or consent  shall be effective only in the specific  instance and for the purpose for which given.  Notwithstanding the foregoing, the Bank may modify this Note for  the  purposes  of  completing  missing  content  or  correcting  erroneous  content,  without  the  need  for  a  written  amendment, provided that the Bank shall send a copy of any such modification to the Borrower (which notice  may be given by electronic mail).  The Borrower agrees to pay on demand, to the extent permitted by law, all  costs and expenses incurred by the Bank in the enforcement of its rights in this Note and in any security therefor,  including without limitation reasonable fees and expenses of the Bank’s counsel.  If any provision of this Note is  found to be invalid, illegal or unenforceable in any respect by a court, all the other provisions of this Note will  remain in full force and effect.  The Borrower and all other makers and indorsers of this Note hereby forever  waive presentment, protest, notice of dishonor and notice of non-payment.  The Borrower also waives all defenses  based  on  suretyship  or  impairment  of  collateral.   If  this  Note  is  executed  by  more  than  one  Borrower,  the  obligations of such persons or entities hereunder will be joint and several.  This Note shall bind the Borrower and  its heirs, executors, administrators, successors and assigns, and the benefits hereof shall inure to the benefit of the  Bank and its successors and assigns; provided, however, that the Borrower may not assign this Note in whole or  in part without the Bank’s written consent and the Bank at any time may assign this Note in whole or in part.   This  Note  has  been  delivered  to  and  accepted  by  the  Bank  and  will  be  deemed  to  be  made  in  the  State  of  Delaware.  THIS NOTE  WILL  BE  INTERPRETED  AND  THE  RIGHTS  AND  LIABILITIES  OF  THE BANK  AND  THE  BORROWER DETERMINED IN ACCORDANCE WITH (I) FEDERAL REGULATIONS, AND (II) TO THE EXTENT NOT  PREEMPTED BY FEDERAL LAWS OR REGULATIONS, THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ITS  CONFLICT OF LAWS RULES, INCLUDING  WITHOUT LIMITATION THE ELECTRONIC TRANSACTIONS ACT (OR  EQUIVALENT) IN EFFECT IN THE STATE OF DELAWARE (OR, TO THE EXTENT CONTROLLING, THE LAWS  OF  THE UNITED STATES  OF AMERICA,  INCLUDING  WITHOUT  LIMITATION  THE ELECTRONIC SIGNATURES  IN  GLOBAL  AND NATIONAL COMMERCE  ACT). The  Borrower  hereby  irrevocably  consents  to  the  exclusive  jurisdiction of any state or federal court in the State of Delaware; provided that nothing contained in this Note will  prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the                                           - 6 -                                                                 PPP - Term Note April 2020

 

 Borrower individually, against any security or against any property of the Borrower within any other county, state   or other foreign or domestic jurisdiction.  The Borrower acknowledges and agrees that the venue provided above   is the most convenient forum for both the Bank and the Borrower.  The Borrower waives any objection to venue   and any objection based on a more convenient forum in any action instituted under this Note.    15.  Commercial Purpose.  The Borrower represents that the indebtedness evidenced by this Note is being  incurred  by  the  Borrower  solely  for  the  purpose  of  acquiring  or  carrying  on  a  business,  professional  or  commercial activity, and not for personal, family or household purposes.   16.  USA  PATRIOT  Act  Notice.   To  help  the  government  fight  the  funding  of  terrorism  and  money  laundering activities, Federal law requires all financial institutions to obtain, verify and record information that  identifies each Borrower that opens an account.  What this means: when the Borrower opens an account, the Bank  will  ask  for  the  business  name,  business  address,  taxpayer  identifying  number  and  other  information  that  will  allow  the  Bank  to  identify  the  Borrower,  such  as  organizational  documents.  For  some  businesses  and  organizations, the Bank may also need to ask for identifying information and documentation relating to certain  individuals associated with the business or organization.   17.  Authorization to Obtain Credit Reports.  By signing below, each person, who is signing in his or her  individual capacity, requests and provides written authorization to the Bank or its designee (and any assignee or  potential  assignee  hereof)  to  obtain  such  individual’s  personal  credit  profile  from  one  or  more  national  credit  bureaus.  This authorization  extends to obtaining a credit profile in (i) considering an application for credit that is  evidenced,  guaranteed  or  secured  by  this  document,  (ii)  assessing  creditworthiness  and  (iii)  considering  extensions  of  credit,  including  on  an  ongoing  basis,  as  necessary  for  the  purposes  of  (a)  update,  renewal  or  extension of such credit or additional credit, (b)  reviewing, administering or collecting the resulting account and  (c) reporting  on  the  repayment  and  satisfaction  of  such  credit  obligations.   By  signing  below,  such  individual  further  ratifies  and  confirms  his  or  her  prior  requests  and  authorizations  with  respect  to  the  matters  set  forth  herein.  For the avoidance of doubt, this provision does not apply to persons signing below in their capacities as  officers or other authorized representatives of entities, organizations or governmental bodies.   18.  Electronic Signatures and Records.  Notwithstanding any other provision herein, the Borrower agrees  that this Note, the Loan Documents, any amendments thereto, and any other information, notice, signature card,  agreement or authorization related thereto (each, a “Communication”) may, at the Bank’s option, be in the form of an electronic record.  Any Communication may, at the Bank’s option, be signed or executed using electronic signatures.  For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use  or  acceptance  by  the  Bank  of  a  manually  signed  paper  Communication  which  has  been  converted  into electronic form (such as scanned into PDF format) for transmission, delivery and/or retention.  19.   Depository.  Unless the Bank otherwise agrees, the Borrower will establish and maintain with the Bank  the Borrower’s primary depository accounts.   20.  Federal Law.  When the U.S. Small Business Administration (“SBA”) is the holder, this Note will be  interpreted and enforced under federal law, including SBA regulations.  The Bank or SBA may use state or local  procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes.  By using  such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability.  As to this Note, the Borrower may not claim or assert against SBA any local or state law to deny any obligation,  defeat any claim of SBA, or preempt federal law.   21.  Non-Recourse.  The  Borrower  and  SBA  shall  have  no  recourse  against  any  individual  shareholder,  member or partner of the Borrower for non-payment of the Facility, except to the extent that such shareholder,  member or partner uses the loan proceeds for an unauthorized purpose.   22.  DISPUTE RESOLUTIONS.                                           - 7 -                                                                 PPP - Term Note April 2020

 

      (a)   WAIVER  OF  JURY  TRIAL.  FOR  ANY  DISPUTE  THAT  IS  NOT  ARBITRATED, AND TO THE  EXTENT PERMITTED BY APPLICABLE LAW,THE BORROWER AND THE BANK IRREVOCABLY WAIVES ANY AND  ALL RIGHTS THE BORROWER OR THE BANK MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR  CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS  NOTE  OR  ANY  TRANSACTION  CONTEMPLATED  IN  ANY  OF  SUCH  DOCUMENTS.  THE BORROWER  ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.         (b)   ARBITRATION OF DISPUTES.  The Borrower or the Bank may elect  to submit any and all  disputes  arising  out  of  or  relating  to  the  Loan  Documents  or  any  breach  thereof  (a  “Dispute”)  to  binding  arbitration                (i)   Arbitration.  Any arbitration shall be conducted pursuant to and in accordance with the        AAA Commercial Arbitration Rules and, where applicable, the Supplementary Rules for Large, Complex        Commercial  Disputes, and judgment  upon  the  award  rendered  by  the arbitrator  may  be  entered  in any        court having jurisdiction thereof.  Such arbitration shall be conducted in a mutually acceptable location.         Except  as  expressly  set  forth  below,  the  procedures  specified  herein  shall  be  the  sole  and  exclusive        procedures for the resolution of Disputes; provided, however, that the Borrower or the Bank may seek        provisional or ancillary remedies, such as preliminary injunctive relief, from a court having jurisdiction,        before, during or after the pendency of any arbitration proceeding.  The institution and maintenance of        any action for such judicial relief, or pursuit of provisional or ancillary remedies, shall not constitute a        waiver of the right or obligation of any party to submit any claim or dispute to arbitration.  Nothing herein        shall  in  any  way  limit  or  modify  any  remedies  available  to  the  Bank  under  the  Loan  Documents  or        otherwise at law or in equity.               (ii)  Motion  Practice.   In  any  arbitration  hereunder,  the  arbitrator(s)  shall  decide  any  pre-       hearing motions which are substantially similar to pre-hearing  motions to dismiss for failure to state a        claim or motions for summary adjudication.               (iii)  Discovery.   Discovery  shall  be  limited  to  the  pre-hearing  exchange  of  all  documents        which the Borrower and the Bank intend to introduce at the hearing and any expert reports prepared by        any expert who will testify at the hearing.               (iv)  Sequential Hearing Days.  At the administrative conference conducted by the AAA, the        Borrower  and  the  Bank  and  the  AAA  shall  determine  how  to  ensure  that  the  hearing  is  started  and        completed on sequential hearing days.  Potential arbitrators shall be informed of the anticipated length of        the hearing and they shall not be subject to appointment unless they agree to abide by the parties’ intent        that, absent exigent circumstances, the hearing shall be conducted on sequential days.               (v)   Award.  The award of the arbitrator(s) shall be accompanied by a statement of the reasons        upon which such award is based.                (vi)  Fees and Expenses.  The Borrower and the Bank shall each bear equally all fees and costs        and expenses of the arbitration, and each  shall bear its own legal fees and expenses and the costs of its        experts and witnesses; provided, however, that if the arbitration panel shall award to a party substantially        all relief sought by such party, then, notwithstanding any applicable governing law provisions, the other        party  shall  pay  all  costs,  fees  and  expenses  incurred  by  the  prevailing  party  and  such  costs,  fees  and       expenses shall be included in such award.               (vii)  Confidentiality of Disputes. The entire procedure shall be confidential  and none of the        parties nor arbitrator(s) may disclose the existence, content, or results of any arbitration hereunder without        the written consent of all parties to the Dispute, except (i) to the extent disclosure is required to enforce        any applicable arbitration award or may otherwise be required by law and (ii) that either party may make        such  disclosures  to  its  regulators,  auditors,  accountants,  attorneys  and  insurance  representatives.   No                                           - 8 -                                                                 PPP - Term Note April 2020

 

conduct, statements, promises, offers, views, or opinions of any party involved in an arbitration hereunder  shall  be  discoverable  or  admissible  for  any  purposes  in  litigation  or  other  proceedings  involving  the  parties to the Dispute and shall not be disclosed to anyone not an agent, employee, expert,  witness, or  representative for any of such parties.         (viii) CLASS  ACTION  WAIVER.   THE  BORROWER  HEREBY  WAIVES,  WITH RESPECT  TO  ANY  DISPUTE:  (I)  THE  RIGHT  TO  PARTICIPATE  IN  A  CLASS  ACTION,  PRIVATE  ATTORNEY  GENERAL  ACTION  OR  OTHER  REPRESENTATIVE  ACTION  IN  COURT  OR  IN  ARBITRATION,  EITHER  AS  A  CLASS  REPRESENTATIVE  OR  CLASS  MEMBER; AND (II) THE RIGHT TO JOIN OR CONSOLIDATE CLAIMS WITH CLAIMS OF  ANY OTHER PERSON.  The foregoing waiver is referred to herein as the “class action waiver”.  The  Bank and the Borrower agree that no arbitrator shall have authority to conduct any arbitration in violation  of the class action waiver or to issue any relief that applies to any person or entity other than the Borrower  and/or  the  Bank  individually.   The  parties  acknowledge  that  this  class  action  waiver  is  material  and  essential to the arbitration of any claims and is non-severable from this Dispute Resolution section.  If the  class action waiver is voided, found unenforceable, or limited with respect to any claim for which the  Borrower seeks class-wide relief, then this Dispute Resolution section (except for this sentence) shall be  null and void with respect to such claim, subject to the right to appeal the limitation or invalidation of the  class action waiver.  However, this Dispute Resolution section shall remain valid with respect to all other  claims and Disputes.  The parties acknowledge and agree that under no circumstances will a class action  be arbitrated.         (ix)  Applicability of Federal Arbitration Act.  This Note evidences transaction(s) in interstate commerce,  and  thus  the  Federal  Arbitration  Act  governs  the  interpretation  and  enforcement  of  this  Dispute Resolution section.              REMAINDER OF PAGE INTENTIONALLY LEFT BLANK                                     - 9 -                                                          PPP - Term Note April 2020

 

If the Borrower is a legal entity, the undersigned certifies to the Bank that the undersigned (individually  and collectively if more than one, the “Authorized Representative”) is and was authorized and directed to  (i) execute and deliver, including to electronically execute and deliver, in the name of and on behalf of the Borrower, this Note and any other documents executed in connection with this Note or the Facility, all in such form as may be requested by the Bank or required under the Program and any of which may contain a  provision  waiving  the  right  to  trial  by  jury;  (ii)  execute  and  deliver  to  or  in  favor  of,  including  to electronically execute and deliver to or in favor of, the Bank any amendments, modifications, renewals or supplements of or to any of the foregoing agreements, documents or instruments; (iii) take any other action requested, required or deemed advisable by the Bank in order to effectuate the foregoing; and (iv) delegate the foregoing duties to other representatives of the Borrower.  The undersigned further certifies that the Authorized Representative holds the office, title or status with the Borrower specified below the Authorized Representative’s signature.  The Borrower acknowledges that it has read and understands all the provisions of this Note, including the  waiver of jury trial, arbitration and class action waiver, and has been advised by counsel as necessary or  appropriate, or has elected not to seek the advice of counsel.   WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to  be legally bound hereby.                                             FLOTEK INDUSTRIES, INC.                                            By:                                                                               (SEAL)                                           Elizabeth Wilkinson, Chief Financial Officer                                             By:                                                                               (SEAL)                                           John W. Gibson, Chief Executive Officer                                            - 10 -                                                                PPP - Term Note April 2020

 

                                     EXHIBIT A                 TO PAYCHECK PROTECTION PROGRAM TERM NOTE             DISBURSEMENT AND PAYMENT AUTHORIZATION INSTRUCTIONS   Loan Disbursement Authorization:    Borrower authorizes and directs the Bank to disburse the proceeds of the Facility as directed below.  Each  authorized representative of the Borrower is authorized to make this request, the Bank is entitled to rely  conclusively on the below instructions to make disbursements in the amount and manner specified.    Disbursements  Disburse the proceeds of the Facility into the Borrower’s demand deposit account with PNC Bank, Account  No.    Automatic Payment Authorization Under Facility:   The Borrower irrevocably authorizes and directs the Bank to charge any deposit account identified above and  maintained at the Bank (or such other account at the Bank as the undersigned may designate to the Bank in  writing from time to time) for all payments of principal and interest due or fees on the Facility, and to debit such  account for the amount of such payments on the date each payment is due.  The Borrower acknowledges and  agrees that, to the extent there are insufficient funds in any such account to pay the required amounts when due,  the Borrower shall immediately pay to the Bank all sums remaining unpaid.  This authorization supplements, and  does not limit, the Bank’s rights under the promissory note(s) and other documents evidencing or securing the  Facility.  The Bank is entitled to rely conclusively on this authorization until this authorization is terminated by  the Bank or the Borrower, and the Bank has had a reasonable time to act thereon.                                             - 11 -                                                                 PPP - Term Note April 2020

 

                     Paycheck Protection Program Certification   April 16, 2020    FLOTEK INDUSTRIES, INC. (the “Borrower”) has applied to PNC Bank, National Association (the “Bank”)  for a Small Business Association (“SBA”) 7(a) Paycheck Protection Program loan (the “PPP Loan”).    The below signer understands  that the  statements  made  in  this certification are part of the  agreement  with the   Bank and that the Bank will rely on these statements when deciding whether or not to make the PPP Loan.    I certify, acknowledge and agree that I am an authorized officer of the Borrower and am authorized on behalf of   the Borrower to certify to the statements provided in this application, and that the following are true and correct   statements:       1. The Borrower was in operation on February 15, 2020 and, if Borrower is not a self-employed worker or        independent contractor, had employees for whom it paid salaries and payroll taxes or paid independent         contractors, as reported on a Form 1099-MISC.      2. The  uncertainty  of  current  economic  conditions  makes  necessary  the  PPP  Loan  request  to  support  the        ongoing operations of the Borrower.      3. The  proceeds of the  PPP Loan will  (a) solely  be  used to retain  workers and maintain  payroll  or  make        mortgage interest payments, lease payments, and utility payments (the “Permitted Loan Purpose”), and         (b) be allocated as set forth in the Borrower’s application for the PPP Loan.  At least 75 percent of the        proceeds  of  the  PPP  Loan  will  be  used  for  payroll  expenses.   If  the  funds  are  knowingly  used  for         unauthorized purposes, the federal government may hold the undersigned and the Borrower legally liable         such as for charges of fraud.      4. Documentation verifying the number of full-time equivalent employees on the Borrower's payroll as well        as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and         covered utilities for the eight week period following the disbursement of the PPP Loan will be provided to         the Bank.      5. The Borrower understands and agrees that loan forgiveness may be provided if the Borrower uses all of        the  loan proceeds  for  the Permitted  Loan  Purpose.   The actual amount  forgiven will be determined in         accordance  with  the  requirements  of  the  Program,  including  the  provisions  of  Section  1106  of  the         Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136),  and in no event may         more than 25 percent of the forgiven amount be attributable to non-payroll costs.      6. The Borrower does not have any other PPP Loan applications pending and will not apply for another PPP        Loan.  During the period beginning on February 15, 2020 and ending on December 31, 2020 Borrower         has not received and will not receive another PPP Loan.      7. The  Borrower  shall  notify the  Bank  if the  Borrower  received  an EIDL between January 31,  2020  and        April 3, 2020 and the proceeds of such EIDL were or are used to retain workers and maintain payroll; the         proceeds of the PPP Loan must be used to refinance any such EIDL.      8. The  information  provided  in  the  PPP  Loan  application  and  the  information  provided  in  all  supporting        documents  and  forms  is  true  and  accurate  in  all  material  respects.  The  Borrower  and  the  undersigned         understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable         under  the  law,  including  under  18  USC  1001  and  3571  by  imprisonment  of  not  more  than  five  years         and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a         fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by         imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.                                            - 1 -                                               Paycheck Protection Program Certification April 2020

 

9. The  Borrower  acknowledges  that  the  Bank  will  confirm  the  eligible  PPP  Loan  amount  using  the    Borrower’s  tax  information  that  it  has  submitted,  including  without  limitation,  tax  returns  and  tax    transcripts  (collectively,  the  “Tax  Information”).   The  Borrower  affirms  that  the  Tax  Information  is    identical  to  that  submitted  to  the  Internal  Revenue  Service.  The  Borrower  also  understands,    acknowledges, and agrees that the Bank can share the Borrower’s Tax Information with (i) the SBA’s    authorized representatives, including authorized representatives of the SBA Office of Inspector General,    (ii) the Bank’s affiliates, and its and their respective directors, officers, employees, agents and advisors    (the “Representatives”), and (iii) any actual or potential owners of a credit facility extended by the Bank    or  its  Representatives  to  the  Borrower,  any  acquirers  of  any  beneficial  or  other  interest  in  such  credit    facility, guarantor, servicers or service providers for such parties, and their successors and/or assigns (the    “Other Loan Participants”)  for the purpose of (w) compliance with SBA Loan Program Requirements    and all SBA reviews, (x) originating, maintaining, managing, monitoring, servicing, selling, insuring, and    securitizing  a  credit  facility;  (y)  enforcing  any  of  its  rights  or  remedies  under  the  loan  documents    applicable to such credit facility (including, without limitation, in connection with any collection action    related thereto) or (z) as otherwise permitted by applicable laws, including state and federal privacy and    data security laws, or if required to do so by legal process, regulation or law, or in defense of any claims    or causes of action against the Bank or any of its Representatives.                                         FLOTEK INDUSTRIES, INC.                                         By:                                                                            (SEAL)                                        Elizabeth Wilkinson, Chief Financial Officer                                          By:                                                                            (SEAL)                                        John W. Gibson, Chief Executive Officer                                         - 2 -                                           Paycheck Protection Program Certification April 2020

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