Junior Lien Patent and Trademark Security Agreement dated as of March 31, 2010


 Exhibit 10.4 
 JUNIOR LIEN PATENT AND TRADEMARK SECURITY AGREEMENT 
 This Junior Lien Patent and Trademark Security Agreement dated as of March 31, 2010 (the “Patent and Trademark Security Agreement”) is made by Flotek Industries, Inc., a Delaware corporation (the
“Debtor”) and each subsidiary of the Debtor signatory hereto (together with the Debtor, the “Grantors” and individually, a “Grantor”), in favor of U.S. Bank National Association, as Collateral Agent
(in such capacity, together with its successors and assigns, the “Collateral Agent”) for the benefit of the Secured Parties (as defined herein). 
 Preliminary Statement 
 Pursuant to that certain Exchange Agreement dated
as of March 31, 2010 (as amended or otherwise modified from time to time, the “Exchange Agreement”) among Debtor, the other Grantors and Whitebox Hedged High Yield Partners, LP (“WHHY”), IAM Mini-Fund 14 Limited
(“IAM”), Pandora Select Partners, LP (“Pandora”), Whitebox Special Opportunities Fund, LP – Series B (“WSOB”), Whitebox Combined Partners, LP (“WCP”), Whitebox Convertible Arbitrage Partners, LP
(“WCAP”), Whitebox Intermarket Partners LP (“WIP”), ECF Value Fund, L.P. (“ECF”), ECF Value Fund II, L.P. (“ECF II”) and ECF Value Fund International Ltd. (“ECF International”, together with WHHY,
IAM, Pandora, WSOB, WCP, WCAP, WIP, ECF and ECF II, collectively, the “Exchanging Noteholders”), the Debtor is issuing to the Exchanging Noteholders up to $36,004,000 in aggregate principal amount of the Company’s 5.25% Convertible
Senior Secured Notes due 2028 (together with any notes issued in substitution or exchange therefor, and as the same may be amended, restated, supplemented or otherwise modified from time to time, collectively, the “Notes”).

 Grantors own the patents, patent registration, patent applications, trademarks, trademark registrations, and trademark
applications, and are parties to the patent and trademark licenses listed on Schedule I attached hereto and by this reference incorporated herein. 
 In connection with the Exchange Agreement, the Grantors entered into a Junior Lien Pledge and Security Agreement of even date herewith (as amended or otherwise modified from time to time, the
“Pledge and Security Agreement”) in favor of the Collateral Agent for the benefit of the Secured Parties (as defined in the Pledge and Security Agreement), pursuant to which the Grantors have granted to the Collateral Agent a
security interest in all right, title and interest of the Grantors in and to the Intellectual Property Collateral, as such term is defined in the Pledge and Security Agreement, including, without limitation, all right, title and interest of
Grantors, in, to, and under all now owned and hereafter acquired Patent Collateral and Trademark Collateral (each as defined in the Pledge and Security Agreement), set forth on Schedule I attached hereto, to secure the prompt payment,
performance and observance of the Secured Obligations (as defined in the Pledge and Security Agreement). 
 Agreement 

 NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Grantors do hereby further
confirm, and put on the public record, their grant to the Collateral Agent of a security interest in, to, and under the following, whether presently existing or hereafter created or acquired (collectively, the “Patent and Trademark
Collateral”); 






 (a) (i) all inventions and discoveries, whether patentable or not, all letters patent
and applications for letters patent throughout the world, including but not limited to all the property set forth as “Patents” on Schedule I hereto, and any patent applications in preparation for filing, (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (i), and (iii) all patent licenses, and other agreements providing any Grantor with the right to use
any items of the type referred to in clauses (i) and (ii) above; 
 (b) (i) all trademarks, trade
names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos and other source or business identifiers, and all goodwill of the business associated
therewith, now existing or hereafter adopted or acquired, including but not limited to all of the property set forth as “Trademarks” on Schedule I hereto, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States
of America, or any State thereof or any other country or political subdivision thereof or otherwise, and all common-law rights relating to the foregoing, (ii) the right to obtain all reissues, extensions or renewals of the foregoing,
(iii) all trademark licenses for the grant by or to any Grantor of any right to use any trademark, and (iv) all of the goodwill of the business connected with the use of, and symbolized by the items described in, clauses (i) and
(ii), and to the extent applicable clause (iii); and 
 (c) all products and proceeds of the foregoing, and
rights associated therewith, including, without limitation, licenses, royalties income, payments, claims, damages and proceeds of infringement suits, any claim by Grantors against third parties for past, present or future (i) infringement or
dilution of any patent, trademark, or patent or trademark registrations or licenses referred to herein, the patent or trademark registrations issued with respect to the patent or trademark applications referred to herein and the trademarks licensed
under any trademark license, or (ii) injury to the goodwill associated with any patent, trademark, patent or trademark registration, or patent or trademark licensed under any patent or trademark license. 
 This security interest is granted in conjunction with the security interests granted to Secured Parties pursuant to the Pledge and Security
Agreement. Grantors hereby acknowledge and affirm that the rights and remedies of Secured Parties with respect to the security interest in the Patent and Trademark Collateral made and granted hereby are more fully set forth in the Pledge and
Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. 
 [Signatures on following page] 
  

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 IN WITNESS WHEREOF, each of the parties hereto has caused this Junior Lien Patent and
Trademark Security Agreement to be duly executed and delivered by its authorized officer as of the date first above written. 
  

			
	GRANTORS:
	
	 FLOTEK INDUSTRIES, INC.

		
	By	 	 /s/ John Chisholm

		 	John Chisholm
		 	President
	
	 TELEDRIFT COMPANY
 FLOTEK PAYMASTER, INC.
 MATERIAL TRANSLOGISTICS, INC.
 PETROVALVE, INC.
 TURBECO, INC.
 USA PETROVALVE, INC.
 FLOTEK INTERNATIONAL, INC.
 PADKO INTERNATIONAL INCORPORATED
 FLOTEK ECUADOR MANAGEMENT, LLC
 FLOTEK ECUADOR INVESTMENTS, LLC

		
	By	 	 /s/ John Chisholm

		 	John Chisholm
		 	President
	
	 CESI CHEMICAL, INC.
 CESI MANUFACTURING, LLC
 SOONER ENERGY SERVICES, LLC

		
	By	 	 /s/ John Chisholm

		 	John Chisholm
		 	Chief Executive Officer
	
	 FLOTEK INDUSTRIES FZE

		
	By	 	 /s/ John Chisholm

		 	John Chisholm
		 	President


 Signature Page to
Junior Lien Patent and Trademark Security Agreement 






 SCHEDULE I 
 TO 
 JUNIOR LIEN PATENT AND TRADEMARK SECURITY
AGREEMENT 
  

	Item A.	Patent Collateral 

 Issued Patents 
  

									
	 Country
	 	 Serial No.
	 	 Filing Date
	 	 Inventor(s)
	 	 Title

					
	USA	 	6,533,034	 	3/18/2003	 	Troy Barger	 	Centralized Stop Collar for Floating Centralizer
					
	USA	 	5,829,952	 	11/3/1998	 	Darrel W. Shadden	 	Check Valve with Reversible Valve Ball and Seat
					
	Canada	 	2,017,405	 	2/21/1995	 		 	Ball and Seat-Type Valve for Downhole Rod Pump
					
	Canada	 	2,478,433	 	12/8/2009	 	John T. Pursley, David L. Holcomb and Glenn S. Penny	 	Composition and Process for Well Cleaning
					
	Venezuela	 	52500	 	10/7/1994	 		 	Ball and Seat-Type Valve for Downhole Rod Pump
					
	USA	 	6,761,215	 	7/13/2004	 	James Eric Morrison and Guy Morrison, III	 	Downhole Separator Method
					
	China (Peoples Republic)	 	ZL03824239.7	 	7/18/2007	 		 	Downhole Separator and Method
					
	Eurasian Patent Organization	 	007040	 	8/18/2006	 		 	Downhole Separator and Method

  

 Schedule I to Junior Lien Patent and Trademark Security Agreement 








									
	 Country
	 	 Serial No.
	 	 Filing Date
	 	 Inventor(s)
	 	 Title

					
	USA	 	7,122,509	 	10/17/2006	 	John Todd Sanner, Glenn S. Penny and Roger Padgham	 	High Temperature Foamer Formulations for Downhole Injection
					
	USA	 	7,544,639	 	6/9/2009	 	John T. Pursley, David L. Holcomb and Glenn S. Penny	 	Composition and Process for the Treatment of Hydrogen Sulfide
					
	USA	 	7,380,606	 	6/3/2008	 	John T. Pursley, David L. Holcomb and Glenn S. Penny	 	Composition and Process for Well Cleaning
					
	Australia	 	2003278716	 	1/8/2009	 		 	Downhole Separator and Method

 Pending Patent Applications 
  

									
	 Country
	 	 Serial No.
	 	 Filing Date
	 	 Inventor(s)
	 	 Title

					
	Patent Cooperation Treaty	 	PCTUS9602445	 	2/23/1996	 		 	Improved Valve Plunger for a Ball and Seat-Type Check Valve
					
	Canada	 	2,497,929	 	8/20/2003	 		 	Downhole Separator and Method

  

 Schedule I to Junior Lien Patent and Trademark Security Agreement 








									
	 Country
	 	 Serial No.
	 	 Filing Date
	 	 Inventor(s)
	 	 Title

					
	Patent Cooperation Treaty/European Patent Office	 	03716227.8	 	2/28/2003	 	John T. Pursley, David L. Holcomb and Glenn S. Penny	 	Composition and Process for Well Cleaning
					
	Patent Cooperation Treaty/Norwegian National	 	2004 4148	 	2/28/2003	 	John T. Pursley, David L. Holcomb and Glenn S. Penny	 	Composition and Process for Well Cleaning
					
	USA	 	 339,248
  
 Abandoned
	 	1/25/2006	 	Michael M. Brezinski	 	Method of Treating a Subterranean Formation in the Presence of Ferric Ions and/or Sulfide Ions
					
	USA	 	518,648	 	9/11/2006	 	Manoj Gopalan and Stephen B. Poe	 	Measurement While Drilling Apparatus and Method of Using the Same
					
	Patent Cooperation Treaty	 	Publication No. WO/2007/033126	 	9/12/2006	 		 	Measurement While Drilling Apparatus and Method of Using the Same
					
	USA	 	Application No. 12/156,201	 	5/30/2008	 		 	Process for Well Cleaning
					
	USA	 	Application No. 12/268,408	 	11/10/2008	 		 	Drag-Reducing Copolymer Compositions
					
	USA	 	Application No. 61/174,617	 	5/1/2009	 		 	Low Friction Centralizer

  

 Schedule I to Junior Lien Patent and Trademark Security Agreement 








									
	 Country
	 	 Serial No.
	 	 Filing Date
	 	 Inventor(s)
	 	 Title

					
	USA	 	 Application No. 12/618,535
  
 Priority No. 61/114,125
	 	11/13/2009	 		 	Water-in-Oil Microemulsions for Oilfield Applications

 Patent Applications in Preparation 
 NONE. 
  

	Item B.	Trademark Collateral 

 Trademarks 
  

							
	 Country
	 	 Trademark
	 	 Registration No.
	 	 Issue Date

				
	USA	 	STIMLUBE	 	3,620,715	 	5/12/2009

 Trademark Applications in
Preparation 
  

			
	 Country
	 	 Trademark

		
	USA	 	FLOTEK
		
	USA	 	PETROVALVE
		
	USA	 	CESI
		
	USA	 	“OPEN CIRCLE” SYMBOL

  

 Schedule I to Junior Lien Patent and Trademark Security Agreement