Exhibit 10.16

EXCHANGE AGREEMENT

This Exchange Agreement (“Agreement”) sets forth the terms and conditions upon
which Flotek Industries, Inc., a Delaware corporation (“Company”), will issue
the number of shares (the “Shares”) of Company’s Common Stock, par value $0.0001
per share (“Common Stock”), indicated on the signature page hereof to the holder
indicated on the signature page hereof (“Holder”), in exchange for the aggregate
principal amount of the Company’s debt securities (the “Exchanged Notes”)
identified on the signature page hereof.

SECTION 1. Exchange. Holder agrees to sell and transfer the Exchanged Notes to
Company and Company agrees to purchase the Exchanged Notes from Holder, in
consideration of and in exchange for the sale and transfer by Company to Holder
of the Shares. As promptly as reasonably practicable, but in no event later than
five business days after the execution of this Agreement, Holder shall deliver
the Exchanged Notes to Company by due and proper instruments of transfer
reasonably acceptable to Company and its legal counsel. Subject to and upon such
delivery of the Exchanged Notes, as promptly as reasonably practicable, but in
no event later than five business days after the execution of this Agreement,
Company shall deliver to Holder certificates or other appropriate documentation
for the Shares, duly registered in the name of the Holder.

SECTION 2. Representations And Warranties Of Holder. Holder represents and
warrants to the Company, as of the date hereof and as of the date of delivery of
the Exchanged Notes that:

(a) The execution, delivery and performance by Holder of this Agreement, and the
consummation of the transactions contemplated hereby are within the powers of
Holder and have been or will have been duly authorized by all necessary action
on the part of Holder, and that this Agreement constitutes a valid and binding
agreement of Holder, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement or creditors’ rights
generally or (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.

(b) The execution, delivery and performance by Holder of this Agreement and the
consummation of the transactions contemplated hereby require no order, license,
consent, authorization or approval of, or exemption by, or action by or in
respect of, or notice to, or filing or registration with, any governmental body,
agency or official on the part of Holder.

(c) The execution, delivery and performance by Holder and Company of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, do not and will not (i) violate the certificate of incorporation (or
similar constituent document) or bylaws of Holder, (ii) violate any material
agreement to which Holder is a party or by which Holder or any of its property
or assets is bound, or (iii) violate any law, rule, regulation, judgment,
injunction, order or decree applicable to Holder.

 

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(d) Holder is the beneficial owner of the Exchanged Notes, and upon the
consummation of the transactions contemplated hereby, Company will receive the
Exchanged Notes, in each case, free and clear of all encumbrances, liens,
equities or claims created by Holder.

(e) There is no investment banker, broker, finder or other intermediary which
has been retained by, will be retained by or is authorized to act on behalf of
Holder who might be entitled to any fee or commission from Company or Holder
upon consummation of the transactions contemplated by this Agreement.

(f) Holder did not purchase the Exchanged Notes with a view to, or for sale in
connection with, a distribution of the Shares issuable upon exchange of the
Exchanged Notes in such a manner that Holder would be deemed an underwriter of
the Shares under applicable law.

SECTION 3. Representations And Warranties Of Company. Company represents and
warrants to the Holder, as of the date hereof and as of the date of delivery of
the Shares, that:

(a) The execution, delivery and performance by Company of this Agreement, and
the consummation of the transactions contemplated hereby and thereby are within
the powers of Company and have been or will have been duly authorized by all
necessary action on the part of Company, and that this Agreement constitutes a
valid and binding agreement of Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement or creditors’ rights generally or (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.

(b) The execution, delivery and performance by Company of this Agreement and the
consummation of the transactions contemplated hereby require no order, license,
consent, authorization or approval of, or exemption by, or action by or in
respect of, or notice to, or filing or registration with, any governmental body,
agency or official on the part of Company.

(c) The execution, delivery and performance by Holder and Company of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, do not and will not (i) violate the certificate of incorporation or
bylaws of Company, (ii) violate any material agreement to which Company is a
party or by which Company or any of its property or assets is bound, or
(iii) violate any law, rule, regulation, judgment, injunction, order or decree
applicable to Company.

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(d) The Shares, when issued in exchange for the Exchanged Notes in accordance
with this Agreement, will be duly and validly authorized and issued, fully-paid
and non-assessable, free and clear of all encumbrances, liens, equities or
claims.

(e) There is no investment banker, broker, finder or other intermediary which
has been retained by, will be retained by or is authorized to act on behalf of
Company who might be entitled to any fee or commission from Company or Holder
upon consummation of the transactions contemplated by this Agreement.

(f) The exchange of the Exchanged Notes for the Shares hereby is exempt from
registration under Section 3(a)(9) of the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

SECTION 4. Survival; Indemnity. The representations and warranties of the
parties hereto contained in this Agreement shall survive the consummation of the
transactions contemplated hereby. Holder and Company agree to indemnify and
protect the other party, its employees, contractors, agents and attorneys and
its successors and assigns and hold them harmless from and against any and all
losses, liabilities, costs and expenses (including reasonable attorneys’ fees)
incurred as a result of the breach by Holder or Company, as applicable, of any
of its representations, warranties or covenants contained in this Agreement

SECTION 5. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission) and shall be
given,

if to Holder, as indicated on the signature page hereto,

if to Company to:

Flotek Industries, Inc.

2930 Sam Houston Parkway N., Suite 300

Houston, Texas 77043

Fax: (281) 715-4145

Attention: Chief Financial Officer

with a copy to:

Andrews Kurth LLP

600 Travis Street, Suite 4200

Houston, Texas 77002

Fax: 713-238-7111

Attention: W. Mark Young

or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice. All such notices,
requests

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and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is a business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding business day in the place of receipt.

SECTION 6. Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 7. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto.

SECTION 8. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of New York.

SECTION 9. Jurisdiction; WAIVER OF JURY TRIAL. Each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any Federal or
state court located in the Borough of Manhattan in The City of New York, New
York in the event any dispute arises out of this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement in any court other than a Federal or state
court located in the Borough of Manhattan in The City of New York, New York.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 10. Counterparts; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement shall confer upon any person other than the parties
hereto any rights or remedies hereunder.

 

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SECTION 11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.

SECTION 12. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.

[Signature Page Follows]

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If the foregoing is acceptable to you, please acknowledge your agreement by
signing below in the space provided for your signature and returning an original
copy hereof.

 

DATE:                                          Flotek Industries, Inc. By:  

 

  Name:   Title:

 

THE FOREGOING IS AGREED TO AND ACKNOWLEDGED BY: [Noteholder full name]

 

Name: Title:

Address for Notices to Holder pursuant to Section 5:

[street] [city, state] Fax:                                      Attention:
[name]

Title of debt securities (“Exchanged Notes”):

5.25% Convertible Senior Notes due 2028, CUSIP No. 343389AAO

Original Principal amount of Exchanged Notes:

$                                                   

Number of shares of Common Stock to be issued in exchange: