Document:

Third Amendment to Credit and Security Agreement

 Exhibit 10.1 
 THIRD AMENDMENT 
 TO 

CREDIT AND SECURITY AGREEMENT 
 THIS THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT (the “Third Amendment”) dated             ,
20     is entered into by and between PINNACLE DATA SYSTEMS, INC., an Ohio corporation, (“Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), acting through its Wells
Fargo Business Credit operating division. 
 RECITALS 
 Company and Wells Fargo are parties to a Credit and Security Agreement dated April 3, 2009, as amended (“Credit Agreement”). Capitalized terms used in these recitals have the meanings given
to them in the Credit Agreement unless otherwise specified. 
 The Company has requested that certain amendments be made to the Credit
Agreement, which Wells Fargo is willing to make pursuant to the terms and conditions set forth herein. 
 NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows: 
 1. Section 5.2(a)
and Section 5.2(b) are hereby amended to read as follows: 
 (a) Minimum Book Net Worth. Based upon Company’s submitted
projections, Company shall maintain, at the end of each fiscal quarter described below, its non-cumulative Book Net Worth, determined as of the end of each fiscal quarter in an amount not less than the amount set forth below (numbers appearing
between “< >” are negative): 
  

					
	 Fiscal Quarter Ending
	 	Minimum Book
Net Worth	 
	March 31, 2011	 	$	8,300,000.00	  
	June 30, 2011	 	$	8,700,000.00	  
	September 30, 2011	 	$	9,100,000.00	  
	December 31, 2011	 	$	9,600,000.00	  

 (b) Minimum Net Income. Based upon 75% of the Company’s submitted projected Net Income (or 100%
of the Company’s projected net loss), Company shall achieve for each fiscal quarter described below, non-cumulative Net Income of not less than the amount set forth for each such fiscal quarter (numbers appearing between “< >”
are negative): 
  

					
	 Fiscal Quarter Ending
	 	Minimum Net
Income	 
	December 31, 2010	 	$	446,000.00	  
	March 31, 2011	 	$	104,000.00	  
	June 30, 2011	 	$	239,000.00	  
	September 30, 2011	 	$	304,000.00	  
	December 31, 2011	 	$	391,000.00	  

 2. No Other Changes.
Except as explicitly amended by this Third Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any advance thereunder. 
 3. Conditions Precedent. This Third Amendment shall be effective when Wells Fargo shall have received an executed original hereof, together with each of the following, each in substance and form
acceptable to Wells Fargo in its sole discretion: 
 (a) A Certificate of the Chief Financial Officer of the Company certifying as to
(i) the resolutions of the board of directors of the Company approving the execution and delivery of this Third Amendment, (ii) the fact that the articles of incorporation and bylaws of the Company, which were certified and delivered to
Wells Fargo pursuant to the Certificate of Authority of the Company’s secretary dated April 3, 2009 (“Certificate of Authority”) continue in full force and effect and have not been amended or otherwise modified except as set
forth in the Certificate to be delivered, and (iii) certifying that the officers and agents of the Company who have been certified to Wells Fargo, pursuant to the Certificate of Authority as being authorized to sign and to act on behalf of the
Company continue to be so authorized or setting forth the sample signatures of each of the officers and agents of the Company authorized to execute and deliver this Third Amendment and all other documents, agreements and certificates on behalf of
the Company. 
 (b) Such other matters as Wells Fargo may require. 

 4. Representations and Warranties. The Company hereby represents and warrants to Wells Fargo as
follows: 
 (a) The Company has all requisite power and authority to execute this Third Amendment and any other agreements or instruments
required hereunder and to perform all of its obligations hereunder, and this Third Amendment and all such other agreements and instruments has been duly executed and delivered by the Company and constitute the legal, valid and binding obligation of
the Company, enforceable in accordance with its terms. 
 (b) The execution, delivery and performance by the Company of this Third Amendment and
any other agreements or instruments required hereunder have been duly authorized by all necessary corporate action and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to the Company, or the articles of incorporation or by-laws
of the Company, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which the Company is a party or by which it or its properties may be bound or
affected. 
 (c) All of the representations, warranties and covenants contained in Article 4 and Article 5 of the Credit Agreement are correct
on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date. 
 5. References. All references in the Credit Agreement to “this Agreement” shall be deemed to refer to the Credit Agreement as amended hereby; and any and all references in the Security
Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby. 
 6. No Waiver. The execution of
this Third Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreement or a waiver of any breach, default or event of default
under any Security Document or other document held by Wells Fargo, whether or not known to Wells Fargo and whether or not existing on the date of this Third Amendment. 
 7. Release. The Company hereby absolutely and unconditionally releases and forever discharges Wells Fargo, and any and all participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind,
nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which the Company has had, now has or has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Third Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. 

 8. Costs and Expenses. The Company hereby reaffirms its agreement under the Credit Agreement to pay
or reimburse Wells Fargo on demand for all costs and expenses incurred by Wells Fargo in connection with the Loan Documents, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the
foregoing, the Company specifically agrees to pay all fees and disbursements of counsel to Wells Fargo for the services performed by such counsel in connection with the preparation of this Third Amendment and the documents and instruments incidental
hereto. The Company hereby agrees that Wells Fargo may, at any time or from time to time in its sole discretion and without further authorization by the Company, make a loan to the Company under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and expenses and the fee required under Paragraph 4 of this Third Amendment. 
 9. Miscellaneous. This Third Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken
together, shall constitute one and the same instrument. 
 IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed as of the date first above written. 
  

			
	Attest/Witness:	 	PINNACLE DATA SYSTEMS, INC.
	
	  

		
	By:	 	  

	Print Name:	 	NICHOLAS J. TOMASHOT
	Its:	 	Chief Financial Officer

  

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	By:	 	  

	Print Name:	 	SABATO MUTONE
	Its:	 	Vice President

 SUPPLEMENTAL CERTIFICATE 

I, NICHOLAS J. TOMASHOT, Chief Financial Officer of the Company (as defined in the Credit and Security Agreement dated April 3, 2009, as
amended), hereby certify that the Certificate of Authority of the Company dated April 3, 2009 remains in full force and effect and the resolutions of the board of directors then delivered have not been amended or otherwise modified, and that
the foregoing resolutions apply to and authorize the execution and delivery of the annexed Second Amendment to Credit and Security Agreement and Waiver of Defaults. I further certify that I remain authorized to sign and to act on behalf of the
Company pursuant to the resolutions of the Board of Directors delivered on April 3, 2009, which remain in full force and effect as of the date hereof. 
 IN WITNESS WHEREOF, I have hereunto subscribed by name this      day of             ,
20    . 
  

	
	  

	NICHOLAS J. TOMASHOT

  

	
	Attest by One Other Officer:
	
	  

	Print Name:
	Title:Consulting Agreement

 Exhibit 10.1 
 CONSULTING AGREEMENT 
 THIS CONSULTING AGREEMENT (this
“Agreement”) is made and entered into as of January 20, 2011, but effective as of January 1, 2011 (“Effective Date”), by and between DRIL-QUIP,
INC. (the “Company”) and LARRY E. REIMERT (“Consultant”). 
 W I T N E S S E T H: 
 WHEREAS, the Company and
Consultant entered into an employment agreement, as amended and restated, effective as of December 31, 2009 (the “Employment Agreement”), to be employed as the Company’s Co-Chief Executive Officer; and 

WHEREAS, Consultant’s employment with the Company and his Employment Agreement terminated as of December 31, 2010
(“Termination Date”); and 
 WHEREAS, the Company wishes to engage Consultant as an independent
contractor to assist with the transition of Consultant’s duties and responsibilities by reason of his termination on an “as needed basis” and to provide other advisory and consulting services to the Company immediately following
Consultant’s Termination Date during the term of this Agreement; and 
 WHEREAS, Consultant’s termination of
employment with the Company was a “separation from service” within the meaning of Section 409A of the Internal Revenue Code as of the Termination Date and, as of the Termination Date, the Company and Consultant reasonably anticipate
that the level of bona fide services Consultant will perform after the Termination Date will permanently decrease to no more than 20% of the annual average level of bona fide services performed by Consultant for the Company over the immediately
preceding 36-month period; 
 NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the
Company and Consultant enter into this Agreement and agree as follows: 
 1. Consultant Services. The
Company agrees to retain Consultant as an independent consultant, and Consultant agrees to render consulting services for the period described in Paragraph 2(a) hereof and upon the other terms and conditions herein provided. 

2. Terms and Responsibilities. 
 (a) Term of Service. The period of Consultant’s service under this Agreement shall commence on the Effective Date and shall expire on December 31, 2011 (the
“Term”), unless terminated sooner pursuant to Paragraph 6 hereof. 
 (b) Responsibilities of
Consultant. During the Term, Consultant shall devote such of his time and his efforts as may be required by the Company from time to time to perform his duties hereunder. Consultant may perform consultant services for other companies or
organizations, which, in the judgment of the Company will not present any conflict of interest with the Company or any of its subsidiaries or affiliates or divisions, materially affect the performance of Consultant’s duties pursuant to this
Agreement or breach the covenant not to compete obligation in his Employment Agreement. 

  
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 3. Duties. The Company hereby engages Consultant to provide during the
Term such services of a consulting or advisory nature to assist with the transition of Consultant’s former duties and responsibilities and to provide other advisory and consulting services as the Company may reasonably request with respect to
its business. Consultant shall devote his efforts and such time as shall be necessary to perform his duties and to advance the interests of the Company. Consultant shall act solely in a consulting capacity hereunder and in consequence shall not have
authority to act for the Company, or to give instructions, or orders on behalf of the Company, or otherwise to make commitments for, or on behalf of the Company. Consultant shall not be an employee of the Company during the term of this Agreement,
but shall act in the capacity of an independent contractor. The Company shall not exercise control over the detail, manner or methods of the performance of the services by Consultant under this Agreement. 

4. Remuneration. As full and complete compensation for any and all services which Consultant may render hereunder, the
Company shall pay Consultant at the rate of $290 per hour worked, prorated for partial hours. Consultant shall not receive nor be entitled to participate in any Company benefits or benefit plans with respect to the work done under this Agreement.
The total compensation that may be paid to Consultant under this Agreement during the Term shall not exceed $120,640.00. 
 5.
Terms of Payment. Consultant shall submit monthly invoices for charges due under this Agreement to Dril-Quip, Inc., Attention: Jerry Brooks, 13550 Hempstead Highway, Houston, Texas 77040 (or at such other address as may be substituted
by the Company in accordance with Paragraph 11(d)), not later than 30 days after the end of the applicable month for which the services are provided under this Agreement. Each invoice must (i) provide the hours (or partial hours) worked by
Consultant during the applicable month, (ii) list any reimbursable expenses incurred by Consultant in performing his obligation under this Agreement, along with the invoices or other documentation supporting such expenses in accordance with the
Company’s expense reimbursement practice, policy or program in effect during the Term; provided, however, that any such expenses must be approved by the Company prior to being incurred, and (iii) any other information the Company
may reasonably request. Payment for such invoiced amounts shall be payable by the Company within 10 days after receipt of a properly prepared and substantiated invoice (but in no event later than 60 days after the end of the month for which such
services and/or expenses are provided and/or incurred). Should the Company dispute any portion of the Consultant’s monthly invoice, the Company shall pay the undisputed portion of the invoice and advise the Consultant in writing of the disputed
portion. 
 6. Termination of Consultant Service. Consultant’s services and this Agreement may be terminated
for any or no reason (and with or without cause) by either party upon five days’ written notice to the other party. 
 7.
Tax Withholding. Consultant shall act in the capacity of an independent contractor and shall not be an employee of the Company during the Term. Accordingly, the Company will not withhold from any amounts payable under this Agreement
federal, state, city, employment or any other taxes. It is the responsibility of the Consultant to pay all such taxes that shall be required pursuant to any law or governmental regulation or ruling. If the Internal Revenue Service makes a claim,
which, if successful, would require the Company to make a payment or withhold any such taxes, Consultant agrees to cooperate in good faith with the Company concerning the contest of the claim. 

  
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 8. Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes any prior employment or consulting agreement between the Company or any affiliate of the Company and Consultant; provided, however, that this Agreement shall not affect or operate to
reduce or otherwise modify or affect any benefits or compensation inuring to Consultant of any kind provided under the Employment Agreement or elsewhere provided and not expressly provided in this Agreement and shall not affect or otherwise modify
or terminate any of Consultant’s or the Company’s post-employment obligations under the Employment Agreement. 
 9.
Confidentiality. Consultant shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliates, and their respective businesses,
which shall have been obtained by Consultant during Consultant’s service during the Term and which shall not be or become public knowledge (other than by acts by Consultant or representatives of Consultant in violation of this Agreement),
regardless of the form of the information, including, without limitation, information in machine-readable form. Consultant shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Paragraph 9 constitute a basis for deferring or withholding
any amounts otherwise payable to Consultant under this Agreement. Within 30 days of the termination of Consultant’s services for any reason, Consultant shall return to Company all documents and other tangible items of or containing Company
information which are in Consultant’s possession, custody or control. 
 10. Assignment of Intellectual Property
Rights. Consultant shall disclose promptly to the Company any and all conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or not, which are conceived or made by Consultant solely or jointly with
any other individual, firm, corporation, partnership, limited liability company, association, trust, unincorporated organization or other entity during the Term and which pertain primarily to the material business activities of the Company, and
Consultant hereby assigns and agrees to assign all his interests therein to the Company or to its nominee; whenever requested to do so by the Company, Consultant shall execute any and all applications, assignments or other instruments which the
Company shall deem necessary to apply for and obtain Letters of Patent of the United States or any foreign country or to otherwise protect the Company’s interest therein. These obligations shall (i) continue beyond the termination of this
Agreement with respect to inventions, improvements and valuable discoveries, whether patentable or not, conceived, made or acquired by Consultant during the Term and (ii) be binding upon Consultant’s assigns, executors, administrators and
other legal representatives. 

  
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 11. General Provisions. 

(a) Non-Assignability. Neither this Agreement nor any right or interest hereunder shall be assignable by Consultant, his
beneficiaries, or legal representative without the Company’s prior written consent. 
 (b) No Attachment. Except as
required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, execution, attachment, levy, or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect such action shall be null, void and of no effect. 

(c) Binding Agreement. This Agreement shall be binding upon and inure to the benefit of Consultant and the Company and their
respective permitted successors and assigns. 
 (d) Notices. All notices required or permitted to be given under this
Agreement will be sufficient if furnished in writing by registered mail (i) if to the Company: Dril-Quip, Inc., 13550 Hempstead Highway, Houston, Texas 77040 Attention: Jerry Brooks; and (ii) if to Consultant, Larry E. Reimert, 211 Briar
Oaks Cove, Houston, Texas, 77056 or at such other address as may be substituted by either party by notice given as herein provided. 
 12. Modification and Waiver. 
 (a) Amendment of Agreement.
This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. 
 (b)
Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver
or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future or as to any act other than that specifically waived. 
 13. Severability. If, for any
reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in full force
and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all provisions of this Agreement,
shall to the full extent consistent with law continue in full force and effect. 
 14. Headings. The headings of
paragraphs herein are included solely for convenience and reference and shall not control the meaning or interpretation of any of the provisions of this Agreement. 

  
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 15. Governing Law. This Agreement has been executed and delivered in, and its
validity, interpretation, performance, and enforcement shall be governed by the laws of, the State of Texas. 
 IN WITNESS
WHEREOF, the parties have executed and delivered this Agreement as of the Effective Date. 
  

			
	DRIL-QUIP, INC.
		
	By:	 	             /S/
JERRY M. BROOKS

			
	Name:	 	         Jerry M.
Brooks

			
	Title:	 	           Vice President – Chief Financial
Officer

	
	CONSULTANT
	
	
                  
/S/ LARRY E. REIMERT

	Larry E. Reimert

  
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