Unassociated Document


    ASSET
      PURCHASE AGREEMENT

     

    


    THIS
      ASSET PURCHASE AGREEMENT, dated as of June 6, 2006 (the “Agreement”),
      is by
      and among LifTech,
      LLC, a Wyoming limited liability company (the
      “Company”),
      Jason
      Taylor (“JT”),
      Toby
      Semlek (“TS”),
      and
      USA Petrovalve, Inc., a Texas corporation (“Buyer”)
      which
      is a wholly-owned subsidiary of Flotek Industries, Inc.

     

    WITNESSETH:

    


    WHEREAS,
      Buyer desires to purchase substantially all of the assets of the Company;
      and

    


    WHEREAS,
      JT and TS each have an ownership interest in the Company and thus would derive
      a
      substantial benefit from the consummation of the purchase transaction
      contemplated herein;

    


    NOW,
      THEREFORE, in consideration of the premises and the representations, warranties,
      covenants and agreements contained herein, the parties hereto, intending to
      be
      legally bound, agree as follows:

     

    ARTICLE
      I

    THE
      PURCHASE

    


    Section
      1.1. Purchase.
      On and
      subject to the terms and conditions of this Agreement, at the Closing, Buyer
      will purchase from the Company, and the Company will sell to Buyer, the
      following assets, rights, properties, and interests of the Company (the
“Acquired
      Assets”):
      

    


    (a)  The
      machinery, office equipment, tools, shop equipment, computers, office supplies,
      vehicles, furnishings and fixtures, and other items of tangible personal
      property of the Company, including specifically but not limited to the items
      described on Schedule 1.1(a) (the “Tangible
      Personal Property”);

    


    (b)  The
      leasehold rights of the Company with respect to the items of personal property
      which are described on Schedule 1.1(b) (the “Leased
      Assets”);

    


    (c)  The
      rights of the Company under the agreements listed on Schedule 1.1(c) (the
“Assigned
      Agreements”);

    


    (d)  All
      of
      the customer lists, customer files (including credit applications and reports,
      credit histories and applicable terms and conditions) books, records, ledgers,
      files, documents, correspondence, plans, studies, and drawings of the Company;
      

    


    (e)  The
      inventories of finished goods, tooling inventory, work in progress and raw
      materials of the Company as of the Effective Time (the “Purchased
      Inventory”),
      which
      shall specifically include, but shall not be limited to, the inventory listed
      on
      Schedule 1.1(e) (the “Scheduled
      Inventory”);

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)  The
      accounts receivable of the Company as of the Effective Time (the “Accounts
      Receivable”);

    


    (g)  The
      cash
      and other working capital of the Company as of the Effective Time (the
“Cash”);
      and

    


    (h)  All
      of
      the goodwill of the Company and all of the rights of the Company to use the
      tradename “LifTech” or any similar name (subject to the permitted use provided
      for in Section 5.7) (the “Tradename”).

    


    Section
      1.2. Excluded
      Assets. 
      Notwithstanding the foregoing, the Acquired Assets shall not include the assets
      listed on Schedule 1.2.

    


    Section
      1.3. Purchase
      Price for Acquired Assets. 
      As
      consideration for the sale to it of the Acquired Assets, Buyer
      shall:

    


    (a)  Pay
      cash
      at Closing in the aggregate amount of Seven Hundred Ninety-One Thousand Seven
      Hundred Four and No/100 Dollars ($791,704) (the “Cash
      Payment”)
      less
      any offset provided for in Section 1.10;

    


    (b)  Cause
      Flotek Industries, Inc. (“Flotek”)
      to
      issue to JT and TS, as additional purchase price for the Acquired Assets, an
      aggregate number of shares (the “Flotek
      Shares”)
      of the
      common stock of Flotek, .0001 par value per share (the “Flotek
      Common Stock”)
      determined by dividing Three Million Eight Hundred Fifty-Eight Thousand Five
      Hundred Twenty-Three and No/100 Dollars ($3,858,523) by the Share Value. The
      Flotek Shares shall be allocated to JT and TS as indicated on Schedule 1.3(b).
      For purposes herein, the term “Share
      Value”
shall
      mean the value of the Flotek Shares based on the average for the ten
      business
      days that precede June 6, 2006 of daily closing trading prices of the Flotek
      Common Stock on the American Stock Exchange; 

    


    (c)  Assume
      liability, up to a maximum aggregate assumed amount of $1,231,000, for the
      accounts payable of the Company (the “Accounts
      Payable”)
      set
      forth on the April 30, 2006 Financial Statements or arising subsequent to April
      30, 2006, in the ordinary course of business which are identified in the Closing
      Statement (as defined in Section 1.7) (collectively, the “Assumed
      Liabilities”);
      and

    


    (d)  Execute
      and deliver to the Company a Promissory Note in the amount of Five Hundred
      Fourteen Thousand Four Hundred Sixty-Nine and No/100 Dollars ($514,469) in
      the
      form of Exhibit 1.3(d).



    Section
      1.4. Assumption
      of Liabilities.
      Except
      as provided for in Section 1.3, Buyer has not and will not assume from the
      Company any liability or obligation.

    


    
      
        
        

      

      
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    Section
      1.5. Allocation.
      The
      parties will allocate for all purposes (including, but not limited to, financial
      accounting and tax purposes) the purchase price of the Acquired Assets as
      indicated on Schedule 1.5.

    


    Section
      1.6. Closing.
      The
      closing (the “Closing”)
      of the
      transactions contemplated by this Agreement (the “Purchase
      Transaction”)
      shall
      take place at the offices of the attorneys for Buyer in Houston, Texas as
      promptly as practicable (but in any event within five business days) following
      the date on which the last of the conditions set forth in Article VI is
      fulfilled or waived, or at such other time and place as Buyer and the Company
      shall agree. The date on which the Closing occurs is referred to in this
      Agreement as the “Closing
      Date.”
The
      Closing will be effective as of June 1, 2006 (the “Effective
      Time”).

    


    Section
      1.7. Transfer
      Documents.
      At the
      Closing, each of the parties hereto will perform such acts and deliver such
      documents as are required pursuant to the terms hereof to be delivered at
      Closing, including but not limited to:

    


    (a) the
      Company, JT and TS shall:

    


    (i) execute,
      acknowledge and deliver to Buyer all deeds, bills of sale, endorsements,
      assignments, and other good and sufficient instruments of conveyance, sale,
      transfer and assignment as shall be required to vest effectively in Buyer good
      and indefeasible title in and to the Acquired Assets, free and clear of all
      liens or encumbrances, including specifically, but not by way of limitation,
      an
      assignment, bill of sale and assumption agreement in the form of Exhibit 1.7(a)
      (the “Assignment”)
      and
      the Employment Agreements in the form of Exhibit 5.8 (the “Employment
      Agreements”);

    


    (ii) deliver
      or cause to be delivered to Buyer possession of all of the Acquired Assets
      capable of being physically delivered; and

    


    (iii) deliver
      to Buyer a closing statement, in a form reasonably satisfactory to Buyer,
      executed by both JT and TS setting forth the balances of Cash, Accounts
      Receivable, and Assumed Liabilities as of the Effective Time (the “Closing
      Statement”).

    


    (b) Buyer
      shall:

    


    (i) deliver
      to the Company the Cash Payment, net of any offset provided for in Section
      1.10,
      in the form of bank check or wire transfer; 

    


    (ii) execute
      and deliver to the Company a Promissory Note and Guaranty in the form of Exhibit
      1.3(d); and

    


    (ii)  execute
      and deliver the Assignment and the Employment Agreements.

    


    
      
        
        

      

      
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    Section
      1.9. Property
      Taxes.
      Any
      general property and/or ad valorem tax assessed against or pertaining to the
      Acquired Assets for the taxable period that includes the date of the Closing
      shall be prorated between Buyer and the Company.

    


    Section
      1.10. Offsets.
      The
      Cash Payment shall be offset and reduced at Closing to reflect any Working
      Capital Deficit. The term “Working
      Capital Deficit”
means
      the excess, if any, of the balances of the following amounts as of Closing:
      (a)
      the Accounts Payable plus $1,000, over (b) the sum of the Cash and the Accounts
      Receivable. 

    


    Section
      1.11. Index.
      An
      index identifying the sections in which the definitions of certain terms are
      set
      forth in Exhibit A.

     

    ARTICLE
      II

    REPRESENTATIONS
      AND

    WARRANTIES
      OF BUYER

    


    Buyer
      represents and warrants to the Company, JT and TS as follows:

    


    Section
      2.1. Organization
      and Qualification.
      Buyer
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Texas and has the requisite corporate power and authority
      to own, lease and operate its assets and properties and to carry on its business
      as it is now being conducted. Flotek is a corporation duly organized, validly
      existing and in good standing under the laws of the State of Delaware and has
      the requisite corporate power and authority to own, lease and operate its assets
      and properties and to carry on its business as it is now being
      conducted.

    


    Section
      2.2. Authority;
      Non-Contravention; Approvals.

    


    (a) Buyer
      and
      Flotek each have full corporate power and authority to execute and deliver
      this
      Agreement to consummate the transactions contemplated hereby. Other than the
      approval by the Board of Directors of Buyer and Flotek, no corporate proceedings
      on the part of Buyer or Flotek are necessary to authorize the execution and
      delivery of this Agreement or the consummation by Buyer and Flotek of the
      transactions contemplated hereby. This Agreement has been duly executed and
      delivered by Buyer and Flotek, and, assuming the due authorization, execution
      and delivery hereof by the Company, JT and TS, constitutes a valid and legally
      binding agreement of Buyer and Flotek enforceable against each of them in
      accordance with its terms, except that such enforcement may be subject to (i)
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      affecting or relating to enforcement of creditors' rights generally and (ii)
      general equitable principles.

    


    (b) The
      execution and delivery of this Agreement by Buyer and Flotek and the
      consummation by Buyer and Flotek of the transactions contemplated hereby do
      not
      and will not violate or result in a breach of any provision of, or constitute
      a
      default (or an event which, with notice or lapse of time or both, would
      constitute a default) under, or result in the termination of, or accelerate
      the
      performance required by, or result in a right of termination or acceleration
      under, or result in the creation of any lien, security interest, charge or
      encumbrance upon any of the properties or assets of Buyer or Flotek under any
      of
      the terms, conditions or provisions of (i) the charter or bylaw of Buyer and
      Flotek, (ii) any statute, law, ordinance, rule, regulation, judgment, decree,
      order, injunction, writ, permit or license of any court or governmental
      authority applicable to Buyer or Flotek or any of their properties or assets
      or
      (iii) any note, bond, mortgage, indenture, deed of trust, license, franchise,
      permit, concession, contract, lease or other instrument, obligation or agreement
      of any kind to which Buyer or Flotek is now a party or by which Buyer or Flotek
      or any of its properties or assets may be bound or affected.

    


    
      
        
        

      

      
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    Section
      2.3. Reports.
      Flotek
      has previously made available or delivered to the Company, JT, and TS copies
      of
      the Form 10-KSB filed by it with the Securities and Exchange Commission for
      the
      period ended December 31, 2005 (the “SEC”)
      and
      its quarterly report filed with the SEC on Form 10-QSB for the period ending
      March 31, 2005 (“Flotek
      SEC Reports”).
      As of
      their respective dates, the Flotek SEC Reports did not contain any untrue
      statement of a material fact or omit to state any material fact required to
      be
      stated therein or necessary to make the statements therein, in the light of
      the
      circumstances under which they were made, not misleading. Neither Buyer nor
      Flotek has made any other representation to the Company, JT, or TS regarding
      the
      Flotek Shares. The Flotek Shares will be restricted stock which will not be
      tradable on the open market under the applicable securities laws.

    


    Section
      2.4. Brokers
      and Finders.
      Buyer
      has not entered into any contract, arrangement or understanding with any person
      or firm which may result in the obligation of Buyer to pay any finder's fees,
      brokerage or agent commissions or other like payments in connection with the
      transactions contemplated hereby. There is no claim for payment by Buyer of
      any
      investment banking fees, finder's fees, brokerage or agent commissions or other
      like payments in connection with the negotiations leading to this Agreement
      or
      the consummation of the transactions contemplated hereby.

    


    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE COMPANY AND JT AND TS

    


    The
      Company, JT and TS jointly and severally represent and warrant to Buyer
      that:

    


    Section
      3.1. Organization
      and Qualification.
      The
      Company is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the State of Wyoming and has the requisite
      power
      and authority to own, lease and operate its assets and properties and to carry
      on its business as it is now being conducted. The Company is duly qualified
      to
      do business and is in good standing in each jurisdiction in which the properties
      owned, leased, or operated by it or the nature of the business conducted by
      it
      makes such qualification necessary. True, accurate and complete copies of the
      Company’s organizational documents, as in effect on the date hereof, including
      all amendments thereto, have heretofore been delivered to Buyer.

    


    
      
        
        

      

      
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    Section
      3.2. Ownership.
      JT owns
      seventy percent (70%) of the issued and outstanding membership interest in
      the
      Company and TS owns thirty percent (30%) of the issued and outstanding
      membership interest in the Company. The only members of the Company are JT
      and
      TS.

    


    Section
      3.3. Other
      Entities.
      The
      Company does not own stock or other ownership interests in any other
      entity.

    


    Section
      3.4. Authority;
      Non-Contravention; Approvals.

    


    (a) The
      Company has full limited liability company power and authority to execute and
      deliver this Agreement and to consummate the transactions contemplated hereby.
      This Agreement has been approved by the managers of the Company and the members
      of the Company to the extent required to consummate this transaction in
      accordance with applicable law, including but not limited to the laws of the
      State of Wyoming. No further actions on the part of the Company are necessary
      to
      authorize the execution and delivery of this Agreement or the consummation
      by
      the Company of the transactions contemplated hereby. This Agreement has been
      duly executed and delivered by the Company, JT and TS, and, assuming the due
      authorization, execution and delivery hereof by Buyer, constitutes a valid
      and
      legally binding agreement of the Company and JT and TS, enforceable against
      the
      Company, JT and TS in accordance with its terms, except that such enforcement
      may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or
      other similar laws affecting or relating to enforcement of creditors' rights
      generally and (b) general equitable principles.

    


    (b) Except
      as
      set forth in the disclosure schedule attached to this Agreement (the
“Disclosure
      Schedule”),
      the
      execution and delivery of this Agreement by the Company, JT and TS and the
      consummation by the Company, JT and TS, of the transactions contemplated hereby
      do not and will not violate or result in a breach of any provision of, or
      constitute a default (or an event which, with notice or lapse of time or both,
      would constitute a default) under, or result in the termination of, or
      accelerate the performance required by, or result in a right of termination
      or
      acceleration under, or result in the creation of any lien, security interest,
      charge or encumbrance upon any of the properties or assets of the Company under
      any of the terms, conditions or provisions of (i) the organizational documents
      of the Company, (ii) any statute, law, ordinance, rule, regulation, judgment,
      decree, order, injunction, writ, permit or license of any court or governmental
      authority applicable to the Company or any of its properties or assets, or
      (iii)
      any note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
      concession, or any agreement to which the Company is now a party or by which
      the
      Company or any of its properties or assets may be bound or
      affected.

    


    Section
      3.5. Financial
      Statements.
      The
      Company has furnished Buyer with a balance sheet of the Company as of December
      31, 2004, December 31, 2005 and April 30, 2006, and the related statement of
      income for the calendar years then ended (including the notes thereto)
      (collectively, the "Financial
      Statements").
      The
      Financial Statements have been prepared in accordance with generally accepted
      accounting principles, consistently applied, and are accurate and complete
      and
      fairly present the financial condition and result of operations of the
      Company.

    


    
      
        
        

      

      
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    Section
      3.6. Absence
      of Undisclosed Liabilities.
      Except
      as disclosed in the Disclosure Schedule, the Company has not incurred any
      liabilities or obligations (whether absolute, accrued, contingent or otherwise)
      of any nature, except liabilities or obligations (a) which are provided for
      in
      the Financial Statements or reflected in the notes thereto, (b) which were
      incurred after April 30, 2006, and were incurred in the ordinary course of
      business and consistent with past practices, or (c) liabilities or obligations
      under this Agreement.

    


    Section
      3.7. Absence
      of Certain Changes or Events.
      Since
      April 30, 2006, the business of the Company has been conducted in the ordinary
      course of business consistent with past practices, and there has not been any
      event, occurrence, development or state of circumstances or facts which has
      had,
      or could reasonably be anticipated to have, individually or in the aggregate,
      a
      Material Adverse Effect. Specifically, but not by way of limitation, since
      April
      30, 2006, the Company has not engaged in or been subject to any of the actions
      described in Section 4.1. "Material
      Adverse Effect"
      means
      any event, occurrence, fact, condition, change, development, circumstance,
      or
      effect with respect to the business, assets (including intangible assets),
      liabilities, condition (financial or other), operations, properties (including
      intangible properties), results, or prospects of the Company with respect to
      which there is a substantial likelihood that the event, occurrence, fact etc.
      would have been viewed by a reasonable investor as having a significantly
      negative effect on the value of the consideration such reasonable investor
      would
      have been willing to pay for the purchase of the Company. 

    


    Section
      3.8. Accounts
      Receivable.
      The
      Accounts Receivable are valid, genuine and subsisting, arise out of bona fide
      sales and delivery of goods, performance of services or other business
      transactions in the ordinary course of business and are current and collectible.
      Each of the Accounts Receivable will be collected in full, without any set-off
      and without resort to litigation, within 120 days after the
      Closing.

    


    Section
      3.9. Tangible
      Assets.
      The
      Tangible Personal Property and the Leased Assets constitute all of the tangible
      personal property necessary for the conduct by the Company of its business
      as
      now conducted. The Company has good and indefeasible title to the Tangible
      Personal Property, free and clear of all mortgages, liens, pledges, charges,
      or
      encumbrance of any nature whatsoever. The Tangible Personal Property and Leased
      Assets are in good, serviceable condition and fit for the particular purposes
      for which they are used in the business of the Company, subject only to normal
      maintenance requirements and wear and tear reasonably expected in the ordinary
      course of business.

    


    Section
      3.10. Employee
      Benefits.
      The
      Disclosure Schedule contains a complete list of “employee welfare plans” (as
      that term is defined in Section 3(1) of the Employee Retirement Income Security
      Act of 1974 (“ERISA”))
      currently maintained by the Company or any person or trade or business under
      common control with the Company, or in which active or former employees of
      the
      Company (collectively, the “Affected
      Employees”)
      currently participate (which plans are hereinafter referred to as “Welfare
      Plans”).
      The
      Disclosure Schedule also contains a complete list of “employee pension benefit
      plans” as that term is defined in Section 3(2) of ERISA maintained by the
      Company or any person or trade or business under common control with the
      Company, or in which any such entity currently contributes or is required to
      contribute or in which Affected Employees currently participate (which plans
      are
      hereinafter referred to as “Pension
      Plans”).
      Neither the Company nor any of the Affected Employees participate or ever
      participated in any “multiemployer plan” (as that term is defined in Section
      3(37) of ERISA). The Welfare Plans and Pension Plans, and any other plans of
      the
      type described in the first two sentences of this Section previously applicable
      at any time to the Company, are collectively referred to as the “Company
      Plans”.
      Each
      Company Plan is or was in compliance with the provisions of all applicable
      laws,
      rules and regulations, including, without limitation, ERISA and the Code. None
      of the Pension Plans has incurred any “accumulated funding deficiency” (as
      defined in Section 412(a) of the Code). The Company has not incurred any
      liability to the Pension Benefit Guaranty Corporation under Section 4062, 4063
      or 4064 of ERISA, or any withdrawal liability under Title IV of ERISA with
      respect to any multiemployer plan. The Disclosure Schedule describes all bonuses
      and other compensation which will be payable to any of the employees of the
      Company as a result of the consummation of the Purchase Transaction, and any
      obligation to pay severance payments.

    


    
      
        
        

      

      
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    Section
      3.11. Litigation.
      There
      are no claims, suits, actions, or proceedings pending or, to the Knowledge
      of
      the Company, threatened against or relating to the Company, before any court,
      governmental department, commission, agency, instrumentality or authority,
      or
      any arbitrator. The Company is not subject to any judgment, decree, injunction,
      rule or order of any court, governmental department, commission, agency,
      instrumentality or authority, or any arbitrator. For purposes of this Agreement,
      “Knowledge”
means
      actual or constructive knowledge of officers of the Company after reasonable
      inquiry.

    


    Section
      3.12. No
      Violation of Law.
      The
      Company is not in violation of or has been given notice or been charged with
      any
      violation of, any law, statute, order, rule, regulation, ordinance or judgment
      (including, without limitation, any applicable Environmental Law) of any
      governmental or regulatory body or authority. Except as disclosed in the
      Disclosure Schedule, as of the date of this Agreement, to the Knowledge of
      the
      Company, no investigation or review by any governmental or regulatory body
      or
      authority is pending or threatened, nor has any governmental or regulatory
      body
      or authority indicated an intention to conduct the same. The governmental
      permits or licenses of the Company (the “Permits”)
      are
      sufficient for the Company to conduct its business in the manner currently
      conducted, and the Company is not in violation of the terms thereof. The Company
      is not in violation of the terms of any of its Permits and is not required
      to
      possess any other permit, license, franchise, variance, exemption, order or
      other governmental authorization, consent or approval.

    


    Section
      3.13. Labor
      Matters.
      The
      Disclosure Schedule sets forth a list of each of the employees of the Company,
      and a description of the salaries and other compensation payable to such
      individuals. Except as set forth in the Disclosure Schedule, (a) there are
      no
      material controversies pending or, to the Knowledge of the Company, threatened
      between the Company on the one hand and any of its employees on the other,
      (b)
      the Company is not a party to a collective bargaining agreement of other labor
      union contract applicable to persons employed by the Company, nor does the
      Company have any Knowledge of any activities or proceedings of any labor union
      to organize any such employees, (c) the Company is not a party to any written
      agreement, memorandum, or understanding with respect to the employment of any
      individual, and (d) neither the Company, JT or TS are aware of any intention
      of
      any employee to terminate his or her employment with the Company, either as
      a
      result of the Purchase Transaction or otherwise.

    


    
      
        
        

      

      
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    Section
      3.14. Customer
      Relationships.
      The
      Disclosure Schedule lists all of the material customers of the Company. Except
      as set forth in the Disclosure Schedule, there has not been (a) any adverse
      change in the business relationship of the Company with any customer; or (b)
      any
      change in any term (including credit terms) of the agreements with any such
      customer. The Company has not received any customer complaints concerning its
      products and services.

    


    Section
      3.15. Real
      Property.
      

     

    (a) The
      Company does not own and has never owned any interest of any kind (whether
      ownership, lease or otherwise) in any real property, except the real estate
      leased by it at 5608 South Winland, Gillette, Wyoming (the “Company
      Facilities”).

     

    (b) The
      Company Facilities are in good condition (reasonable wear and tear excepted),
      and are adequate for the operation of the Company's business as presently
      conducted. 

     

    (c) The
      Company’s use of the Company Facilities in the normal conduct of its business
      does not violate any applicable building, zoning or other law, ordinance or
      regulation affecting such real property, and no covenants, easements, rights
      of
      way or other such conditions of record impair the Company’s use of the Company
      Facilities in the normal conduct of its business.

     

    (d) The
      Company has not experienced any material interruption in the delivery of
      adequate quantities of any utilities or other public services to the Company
      Facilities required by the Company in the normal operation of its
      business.

     

    Section
      3.16. Environmental
      Matters.
      Except
      as set forth in the Disclosure Schedule:

    


    (a) no
      notice, demand, request for information, citation, summons or order has been
      received, no complaint has been served, no penalty has been assessed, and no
      investigation, action, claim, suit, proceeding or review is pending or, to
      the
      Knowledge of the Company, is threatened by any governmental entity or other
      person relating to or arising out of any environmental law;

    


    (b) the
      Company is and has been in compliance with all environmental laws and
      environmental permits; and

    


    (c) there
      are
      no liabilities of or relating to the Company of any kind whatsoever, whether
      accrued, contingent, absolute, determined, determinable or otherwise, arising
      under or relating to any environmental law and there are no facts, conditions,
      situations or set of circumstances which could reasonable be expected to result
      in or be the basis for any such liability.

    


    
      
        
        

      

      
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    Section
      3.17. Material
      Contracts.
      Schedule 1.1(c) lists all agreements, leases, commitments, contracts,
      undertakings or understandings, to which the Company is a party, including
      but
      not limited to service agreements, manufacturing agreements, purchase or sale
      agreements, master service agreements, supply agreements, distribution or
      distributor agreements, real estate leases, purchase orders, license agreements,
      customer orders and equipment rental agreements. Each Operating Agreement is
      a
      valid, binding and enforceable agreement of the Company and, to the Knowledge
      of
      the Company, the other parties thereto. There has not occurred any breach or
      default under any Operating Agreement on the part of the Company or, to the
      Knowledge of the Company, any other parties thereto. No event has occurred
      which
      with the giving of notice or the lapse of time, or both, would constitute a
      default under any Operating Agreement on the part of the Company, or, to the
      Knowledge of the Company, any of the other parties thereto. There is no dispute
      between the parties to any Operating Agreement as to the interpretation thereof
      or as to whether any party is in breach or default thereunder, and no party
      to
      any Operating Agreement has indicated its intention to, or suggested it may
      evaluate whether to, terminate any Operating Agreement. 

    


    Section
      3.18. Inventory.
      The
      Purchased Inventory consists of items that are usable and saleable in the
      ordinary course of business by the Company. All items of Purchased Inventory
      are
      owned by the Company free and clear of any lien or encumbrance, and are in
      good
      condition. No items of Purchased Inventory are held by the Company on
      consignment from others. As of the Effective Time the Scheduled Inventory is
      located on the premises of the Company as the Effective Time as determined by a
      physical count conducted by the Company.

    


    Section
      3.19. Solvency.
      The
      Company will not be insolvent as of the Closing and will not be rendered
      insolvent by the Purchase Transaction. After giving effect to the consummation
      of the Purchase Transaction, the Company will be able to pay its liabilities
      as
      they become due.

    


    Section
      3.20. Brokers
      and Finders.
      Except
      as indicated in the Disclosure Schedule, the Company has not entered into any
      contract, arrangement or understanding with any person or firm which may result
      in the obligation of the Company or the Member to pay any finder's fees,
      brokerage or agent commissions or other like payments in connection with the
      transactions contemplated hereby. There is no claim for payment by the Company
      or the Member of any investment banking fees, finder's fees, brokerage or agent
      commissions or other like payments in connection with the negotiations leading
      to this Agreement or the consummation of the transactions contemplated
      hereby.

    


    Section
      3.21. Purchase
      for Own Account.
      The
      Flotek Shares are being or will be acquired by each of JT and TS for his own
      account and with no intention of distributing or reselling such securities
      or
      any part thereof in any transaction that would be in violation of the securities
      laws of the United States of America, or any state, without prejudice, however,
      to the rights of JT and TS at all times (subject to Section 9.4) to sell or
      otherwise dispose of all or any part of such securities under an effective
      registration statement under the Securities Act, or under an exemption from
      such
      registration available under the Securities Act of 1933 (the “Securities
      Act”).
      JT
      and TS are each experienced in evaluating companies such as Flotek and have
      such
      knowledge and experience in financial and business matters as to be capable
      of
      evaluating the merits and risks of their investment and has the ability to
      suffer the total loss of their investment. JT and TS each have had the
      opportunity to ask questions of and receive answers from executive officers
      of
      Flotek concerning the terms and conditions of the offering of the Flotek Shares
      and to obtain additional information to the satisfaction of JT and TS. JT and
      TS
      are each an “accredited investor” as that term is defined by Rule 501 of
      Regulation D promulgated under the Securities Act. The Flotek Shares will not
      be
      registered at the time of their issuance under the Securities Act for the reason
      that the sale provided for in this Agreement is exempt pursuant to Section
      4(2)
      of the Securities Act and that the reliance of Flotek on such exemption is
      predicated in part on the representations set forth herein. JT and TS will
      not
      sell or assign any Flotek Shares except pursuant to a valid registration
      statement filed pursuant to the Securities Act or pursuant to a valid exemption
      from the registration requirements thereof. 

    


    
      
        
        

      

      
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    Section
      3.22. Disclosure.
      No
      representation or warranty of the Company, JT or TS set forth hereunder or
      in
      the schedules attached hereto or in any certificate delivered pursuant to
      Section 6.2(a) contains any untrue statement of the material fact or omits
      to
      state a material fact necessary in order to make the statements contained herein
      or therein not misleading. 

     

    ARTICLE
      IV

    CONDUCT
      OF BUSINESS PENDING THE CLOSING

    


    Section
      4.1. Conduct
      of Business of the Company.
      Prior
      to the Effective Time, the Company shall operate its business in, and only
      in,
      the usual, regular and ordinary course of business in substantially the same
      manner as operated on the date of this Agreement. JT and TS will assure that
      the
      Company complies with the requirements of this Section. Without limiting the
      generality of the foregoing, during the period from the date of this Agreement
      to the Effective Time, the Company will not:

    


    (a) Sell,
      lease or otherwise dispose of, or agree to sell, lease or otherwise dispose
      of,
      any of its assets other than inventory in the ordinary course of business
      consistent with past practice; 

    


    (b) Adopt,
      amend or terminate any Company Plan;

    


    (c) Except
      as
      provided in Section 5.8, amend or terminate any Operating
      Agreement;

    


    (d) Enter
      into or modify any employment or severance agreement with any director, officer,
      or employee, or agree to increase the compensation of any officer, director
      or
      employee; and/or

    


    (e) Incur
      any
      indebtedness other than indebtedness incurred in the ordinary course of
      business.

    


    
      
        
        

      

      
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    Section
      4.2. Business
      Organization.
      Prior
      to the Effective Time, JT and TS shall use their respective best efforts to
      (a)
      preserve intact the business organization of the Company, (b) keep available
      the
      services of the officers and employees of the Company, (c) preserve the goodwill
      of the Company, (d) maintain and keep the properties and assets of the Company
      in as good a repair and condition as presently exists, and (e) maintain in
      full
      force and effect its insurance coverage of the Company.

    


    


    ARTICLE
      V

    ADDITIONAL
      AGREEMENTS

    


    Section
      5.1. Cooperation.
      The
      Company shall afford to Buyer and its accountants, counsel, financial advisors
      and other representatives reasonable access during normal business hours
      throughout the period prior to the Effective Time to all of its properties,
      books, contracts, personnel, representatives of or contacts with governmental
      or
      regulatory authorities, agencies or bodies, commitments, and records (including,
      but not limited to, tax returns and any and all records or documents which
      are
      within the possession of governmental or regulatory authorities, agencies or
      bodies, and the disclosure of which the Company can facilitate or control)
      and,
      such parties as its representatives may reasonably request. Any investigation
      pursuant to this Section shall be conducted in such manner as not to interfere
      unreasonably with the conduct of the business of the Company or with the
      performance of any of the employees of the Company. No investigation pursuant
      to
      this Section shall affect any representation or warranty made by any party.
      Each
      of the parties hereto shall use all reasonable efforts to take, or cause to
      be
      taken, all action and to do, or cause to be done, all things necessary, proper
      or advisable under applicable laws and regulations to consummate and make
      effective the transactions contemplated by this Agreement,

    


    Section
      5.2. Further
      Assurances.
      JT, TS
      and the Company shall execute, acknowledge and deliver or cause to be executed,
      acknowledged and delivered to Buyer such assignments or other instruments of
      transfer, assignment and conveyance, in form and substance satisfactory to
      counsel of Buyer, as shall be necessary to vest in Buyer all of the right,
      title
      and interest in and to the Acquired Assets, in each case free and clear of
      all
      liens, charges, encumbrances, rights of others, mortgages, pledges or security
      interests, and any other document reasonably requested by Buyer in connection
      with this Agreement.

    


    Section
      5.3. Expenses
      and Fees.
      All
      costs and expenses incurred in connection with this Agreement and the
      transactions contemplated hereby shall be paid by the party incurring such
      expenses, regardless of whether the Closing occurs.

    


    Section
      5.4. Public
      Statements.
      The
      parties shall consult with each other prior to issuing any press release or
      any
      written public statement with respect to this Agreement or the transactions
      contemplated hereby and shall not issue any such press release or written public
      statement prior to such consultation.

    


    
      
        
        

      

      
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    Section
      5.5. Notification
      of Certain Matters.
      Each of
      the parties agrees to give prompt notice to each other of, and to use their
      respective reasonable best efforts to prevent or promptly remedy, (a) the
      occurrence or failure to occur or the impending or threatened occurrence or
      failure to occur, of any event which occurrence or failure to occur would be
      likely to cause any of its representations or warranties in this Agreement
      to be
      untrue or inaccurate in any material respect (or in all respects in the case
      of
      any representation or warranty containing any materiality qualification) at
      any
      time from the date hereof to the Effective Time and (b) any material failure
      (or
      any failure in the case of any covenant, condition or agreement containing
      any
      materiality qualification) on its part to comply with or satisfy any covenant,
      condition or agreement to be complied with or satisfied by it
      hereunder.

    


    Section
      5.6. Employee
      Matters.
      

    


    (a) Effective
      immediately following the Closing, Buyer shall offer employment to all of the
      employees of the Company, each of which who accepts a position shall hereinafter
      be referred to as a “Affected
      Employee”
and
      shall become an employee of Buyer, terminable at will. In order to facilitate
      the foregoing, the Company shall, effective immediately following the Closing,
      terminate the employment of all employees of the Company and take all
      appropriate steps necessary to comply with applicable law in connection with
      the
      termination of such employees.

    


    (b) Notwithstanding
      anything to the contrary contained in this Section, the parties acknowledge
      and
      agree that they do not intend to create any third-party beneficiary rights
      respecting any employee of the Company as a result of the provisions hereof
      and
      specifically hereby negate any intention to so create any third-party
      beneficiary rights.

    


    (c) With
      respect to employees, who accept employment with Buyer, the Company will remain
      responsible for medical expenses covered under their plans actually incurred
      prior to the Effective Time and Buyer will be responsible for all other medical
      expenses incurred on or after the Closing to the extent covered under their
      plans without the application of any waiting period for coverage generally
      applicable to newly hired employees. The Company shall make available, at such
      Affected Employee’s expense, medical coverage under the Consolidated Omnibus
      Budget Reconciliation Act of 1985, as amended, to the Affected Employees to
      the
      extent required by applicable law. The Company and Buyer shall cooperate and
      coordinate with each other to provide continuity of health, hospitalization,
      life, travel and accident insurance coverage for the Affected Employees. The
      cost of insurance coverage for the Affected Employees from and after the
      Effective Time shall be borne by Buyer and not the Company, based on the terms
      of the health insurance policies of the Buyer which are applicable from time
      to
      time with respect to employee premium contributions and other
      matters.

    


    (d) Buyer
      and
      the Company shall complete and furnish to each other any other employee data
      as
      shall be reasonably required from time to time for each party to perform and
      fulfill its obligations under this Section 5.6.

    


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (e) The
      Company agrees that it shall be solely responsible for all liability, costs
      and
      expenses (including attorneys’ fees) for all claims relating to their
      employment, including but not limited to arbitrations, unfair labor practice
      charges, employment discrimination charges, wrongful termination claims,
      workers’ compensation claims, any employment-related tort claim or other claims
      or charges (collectively, “Employment Claims”)
      by any
      employee or former employee of the Company which accrued prior to the Effective
      Time relating to arbitrations, unfair labor practice charges, employment
      discrimination charges, wrongful termination claims, workers’ compensation
      claims, any employment-related tort claim or other claims or charges of or
      by
      employees of the Company. Buyer agrees that it shall be responsible for all
      Employment Claims by any Affected Employee who accepts employment with Buyer
      which accrues after the Effective Time. The Disclosure Schedule sets forth
      a
      description of any known Employment Claims that have been filed or may be filed
      after the date hereof arising out of conditions, actions or events that occurred
      before the Effective Time.

    


    Section
      5.7. The
      Tradename.
      The
      Company will change its name to a name dissimilar to the Tradename within 10
      days of Closing. 

    


    Section
      5.8. Individual
      Agreements.
      At the
      Closing, JT and TS will each enter into with the Buyer employment agreements
      in
      the forms included on Exhibit 5.8.

    


    Section
      5.9. Prohibited
      Activities.
      Each of
JT
      and TS
      agree, severally and not jointly with any other person, that he will not, during
      the period beginning on the date hereof and ending on the second anniversary
      of
      the Closing Date, directly or indirectly, for any reason, for his own account
      or
      on behalf of or together with any other person:

     

    (a) engage
      as
      an officer, director or in any other managerial capacity or as an owner,
      co-owner or other investor of or in, whether as an employee, independent
      contractor, consultant or advisor, or as a sales representative, dealer or
      distributor of any kind, in the business of electric submersible pumps sales
      and
      service within the United States (the “Territory”);

    


    (b) call
      on
      or otherwise solicit any natural person who is at that time employed by the
      Company in any managerial capacity with the purpose or intent of attracting
      that
      person from the employ of the Company; or

    


    (c) call
      on,
      solicit or perform services for, either directly or indirectly, any person
      that
      at that time is, or at any time within two years prior to that time was, a
      customer of any of the Company within any Territory, for the purpose of
      soliciting or selling any product or service in competition with the Companies
      within that Territory.

    


    ARTICLE
      VI

    CONDITIONS
      TO CLOSING

    


    Section
      6.1. Conditions
      to Obligation of the Company to Effect the Purchase Transaction.
      Unless
      waived by the Company, the obligation of the Company to effect the Purchase
      Transaction shall be subject to the fulfillment at or prior to the Effective
      Time of the following additional condition:

    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    (a) Buyer
      shall have performed in all material respects (or in all respects in the case
      of
      any agreement containing any materiality qualification) its agreements contained
      in this Agreement required to be performed on or prior to the Closing Date
      and
      the representations and warranties of Buyer contained in this Agreement shall
      be
      true and correct in all material respects (or in all respects in the case of
      any
      representation or warranty containing any materiality qualification) on and
      as
      of the date made and on and as of the Closing Date as if made at and as of
      such
      date, and the Company shall have received a certificate executed on behalf
      of
      Buyer by the President or a Vice President of Buyer and on behalf of Buyer
      by
      the Chief Executive Officer of Buyer to that effect.

    


    Section
      6.2. Conditions
      to Obligations of Buyer to Effect the Purchase Transaction.
      Unless
      waived by Buyer, the obligations of Buyer to effect the Purchase Transaction
      shall be subject to the fulfillment at or prior to the Effective Time of the
      following additional conditions:

    


    (a) the
      Company, JT and TS, shall have performed in all material respects (or in all
      respects in the case of any agreement containing any materiality qualification)
      their respective agreements contained in this Agreement required to be performed
      on or prior to the Closing Date and the representations and warranties of the
      Company, JT and TS, contained in this Agreement shall be true and correct in
      all
      material respects (or in all respects in the case of any representation or
      warranty containing any materiality qualification) on and as of the date made
      and on and as of the Closing Date as if made at and as of such date, and Buyer
      shall have received a certificate executed on behalf of the Company by the
      President and Chief Executive Officer of the Company to that effect;


    


    (b) Except
      as
      stated in the Disclosure Statement, since April 30, 2006, there shall have
      been
      no changes that constitute, and no event or events shall have occurred which
      have resulted in or constitute, a Material Adverse Effect; and

    


    (c) the
      landlord of the Company’s facility located at 5608 S. Winland Drive, Gillette,
      Wyoming (the “Facility”) shall have entered into a written lease agreement
      acceptable to Buyer whereby Buyer leases the Facility for a period of one (1)
      year on the same terms and conditions as the Company presently leases the
      Facility.

     

    


    ARTICLE
      VII

    INDEMNIFICATION

    


    Section
      7.1. Indemnification
      of Buyer.
      JT, TS
      and the Company shall jointly and severally indemnify Buyer, its affiliates,
      and
      their respective officers, directors, employees and agents against, and hold
      each of them harmless from and against, any and all claims, actions, causes
      of
      action, arbitrations, proceedings, losses, damages, liabilities, judgments
      and
      expenses (including, without limitation, reasonable attorneys' fees)
      ("Indemnified
      Amounts")
      incurred by the indemnified party as a result of (a) any error, inaccuracy,
      breach or misrepresentation in any of the representations and warranties made
      by
      or on behalf of the Company, JT or TS in this Agreement, (b) any violation
      or
      breach by the Company, JT or TS of or default by the Company, JT or TS under
      the
      terms of this Agreement, and/or (c) any event or occurrence relating to the
      business of the Company occurring prior to the Effective Time. The indemnified
      party shall be entitled to recover its reasonable and necessary attorneys'
      fees
      and litigation expenses incurred in connection with successful enforcement
      of
      its rights under this Section.

    


    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    Section
      7.2. Indemnification
      of JT, TS and the Company.
      Buyer
      shall indemnify JT, TS and the Company against, and hold each of them harmless
      from and against, any and all Indemnified Amounts incurred by JT, TS or the
      Company as a result of (a) any error, inaccuracy, breach or misrepresentation
      in
      any of the representations and warranties made by or on behalf of Buyer in
      this
      Agreement, (b) any violation or breach by Buyer of or default by Buyer under
      the
      terms of this Agreement, and/or (c) any event or occurrence relating to the
      business of the Company occurring after the Effective Time other than
      Indemnified Amounts arising from activity conducted by JT or TS on behalf of
      Buyer. The indemnified party shall be entitled to recover its reasonable and
      necessary attorneys' fees and litigation expenses incurred in connection with
      successful enforcement of his rights under this Section.

    


    Section
      7.3. Procedure.
      The
      defense of any claim, action, suit, proceeding or investigation subject to
      indemnification under this Article shall be conducted by the indemnifying party.
      If the indemnifying party fails to conduct such defense, the indemnified parties
      may retain counsel satisfactory to them and the indemnifying party shall pay
      all
      reasonable fees and expenses of such counsel for the indemnified parties
      promptly as statements therefor are received. The party not conducting the
      defense will use reasonable efforts to assist in the vigorous defense of any
      such matter, provided that such party shall not be liable for any settlement
      of
      any claim effected without its written consent, which consent, however, shall
      not be unreasonably withheld. Any indemnified party wishing to claim
      indemnification under this Article VII, upon learning of any such claim, action,
      suit, proceeding or investigation, shall notify the indemnifying party (but
      the
      failure so to notify a party shall not relieve such party from any liability
      which it may have under this Article VII except to the extent such failure
      materially prejudices such party). If the indemnifying party is responsible
      for
      the attorneys’ fees of the indemnified parties, then the indemnified parties as
      a group may retain only one law firm to represent them with respect to each
      such
      matter unless there is, under applicable standards of professional conduct,
      a
      conflict on any significant issue between the positions of any two or more
      indemnified parties.

    


    Section
      7.4. Express
      Negligence Rule.
      The
      indemnification obligations under this Article VII shall apply regardless of
      whether any suit or action results solely or in part from the passive or
      concurrent negligence of the indemnified party; provided, however, that the
      indemnity obligations of the parties under Section 7.1(c) shall not apply to
      the
      extent any suit or action results from the due diligence investigation by Buyer
      of the Company. The
      rights of the parties to indemnification under this Article VII shall not be
      limited due to any investigations heretofore or hereafter made by such parties
      or their representatives, regardless of negligence in the conduct of any such
      investigations. 

    


    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    ARTICLE
      VIII

    MISCELLANEOUS

    


    Section
      8.1. Termination.
      This
      Agreement may be terminated at any time prior to the Effective Time, as
      follows:

    


    (a) the
      Company shall have the right to terminate this Agreement:

    


    (i) if
      the
      representations and warranties of Buyer shall fail to be true and correct in
      all
      material respects (or in all respects in the case of any representation or
      warranty containing any materiality qualification) on and as of the date made
      or, except in the case of any such representations and warranties made as of
      a
      specified date, on and as of any subsequent date as if made at and as of the
      subsequent date and such failure shall not have been cured in all material
      respects (or in all respects in the case of any representation or warranty
      containing any materiality qualification) within 15 days after written notice
      of
      such failure is given to Buyer by the Company; 

    


    (ii) if
      the
      Purchase Transaction is not completed by June 30, 2006 (provided that the right
      to terminate this Agreement under this Section 8.1(a)(ii) shall not be available
      to the Company if the failure of the Company, JT or TS to fulfill any obligation
      to Buyer under or in connection with this Agreement has been the cause of or
      resulted in the failure of the Purchase Transaction to occur on or before such
      date); or

    


    (iii) if
      Buyer
      (A) fails to perform in any material respects any of its covenants (or in all
      respects in the case of any covenant containing any materiality qualification)
      in this Agreement and (B) does not cure such default in all material respects
      (or in all respects in the case of any covenant containing any materiality
      qualification) within 30 days after written notice of such default is given
      to
      Buyer by the Company.

    


    (b) Buyer
      shall have the right to terminate this Agreement:

    


    (i) if
      the
      representations and warranties of the Company shall fail to be true and correct
      in all material respects (or in all respects in the case of any representation
      or warranty containing any materiality qualification) on and as of the date
      made
      or, except in the case of any such representations and warranties made as of
      a
      specified date, on and as of any subsequent date as if made at and as of such
      subsequent date and such failure shall not have been cured in all material
      respects (or in all respects in the case of any representation or warranty
      containing any materiality qualification) within 15 days after written notice
      of
      such failure is given to the Company by Buyer;

    


    (ii) if
      the
      Purchase Transaction is not completed by June 30, 2006 (provided that the right
      to terminate this Agreement under this Section 8.1(b)(ii) shall not be available
      to Buyer if the failure of Buyer to fulfill any obligation to the Company under
      or in connection with this Agreement has been the cause of or resulted in the
      failure of the Purchase Transaction to occur on or before such date);
      or

    


    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (iii) if
      the
      Company, JT or TS (A) fails to perform in any material respect (or in all
      respects in the case of any covenant containing any materiality qualification)
      any of their covenants in this Agreement and (B) do not cure such default in
      all
      material respects (or in all respects in the case of any covenant containing
      any
      materiality qualification) within 30 days after notice of such default is given
      to the Company by Buyer.

    


    Section
      8.2. Effect
      of Termination.
      In the
      event of termination of this Agreement by either Buyer or the Company pursuant
      to the provisions of Section 8.1, this Agreement shall forthwith become void
      and
      there shall be no further obligations on the part of the Company, Buyer, or
      its
      respective officers or directors, JT or TS to perform any covenant or provision
      of this Agreement which otherwise would be required to be performed after the
      date of termination (except as set forth in this Section 8.2 and in Sections
      5.3
      and 8.9, all of which shall survive the termination). Nothing in this Section
      8.2 shall relieve any party from liability for any breach of this
      Agreement.

    


    Section
      8.3. Remedies.
      If any
      legal action or other proceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresentation in connection with any of the provisions of this Agreement,
      the successful or prevailing party or parties shall be entitled to recover
      reasonable attorneys' fees and other costs incurred in that action or proceeding
      in addition to any other relief to which it or he may be entitled at law or
      equity.

    


    Section
      8.4. Notices.
      All
      notices, consents, demands or other communications required or permitted to
      be
      given pursuant to this Agreement shall be deemed sufficiently given: (i) when
      delivered personally during a business day to the appropriate location described
      below or telefaxed to the telefax number indicated below, or (ii) five (5)
      business days after the posting thereof by United States first class, registered
      or certified mail, return receipt requested, with postage fee prepaid and
      addressed:

     

    
 

    
      	 	If to Buyer:	
              7030 Empire Central Drive

              Houston, Texas 77040

              Telefax No. (713) 466-8386

            
	 	 	 
	 	With a copy to:	
              Casey W. Doherty

              
                Doherty
                  & Doherty LLP

                1717
                  St. James Place, Suite 520

                Houston,
                  Texas 77056

                Telefax
                  No. (713) 572-1001

              

            
	 	 	 
	 	
              If to the Company or

              JT and TS:

            	5608 South Winland Drive 
              Gillette,
                Wyoming 52717 

              Telefax
                No. (307) 685-3255

            
	 	 	 
	 	With a copy to:	Joseph E. Hallock
              Stevens,
                Edwards, Hallock, and Carpenter, P.C.

              P.O.
                Box 1148

              Gillette,
                WY 82717

            


    

    


    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    Section
      8.5. Successors.
      This
      Agreement shall be binding upon each of the parties upon their execution, and
      inure to the benefit of the parties hereto and their successors and assigns.
      

    


    Section
      8.6. Severability.
      In the
      event that any one or more of the provisions contained in this Agreement or
      in
      any other instrument referred to herein, shall, for any reason, be held to
      be
      invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
      or unenforceability shall not affect any other provision of this Agreement
      or
      any such other instrument.

    


    Section
      8.7. Section
      Headings.
      The
      section headings used herein are descriptive only and shall have no legal force
      or effect whatsoever. Except to the extent the context specifically indicates
      otherwise, all references to articles and sections refer to articles and
      sections of this Agreement, and all references to the exhibits and schedules
      refer to exhibits and schedules attached hereto, each of which is made a part
      hereof for all purposes.

    


    Section
      8.8. Gender.
      Whenever the context so requires, the masculine shall include the feminine
      and
      neuter, and the singular shall include the plural and conversely.

    


    Section
      8.9. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas, U.S.A., applicable to agreements and contracts executed and
      to
      be wholly performed there, without giving effect to the conflicts of law
      principles thereof.

    


    Section
      8.10. Multiple
      Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original. The parties agree to accept facsimile transmissions of
      signed counterparts of this Agreement, to be followed by delivery of signed
      original counterparts.

    


    Section
      8.11. Waiver.
      Any
      waiver by either party to be enforceable must be in writing and no waiver by
      either party shall constitute a continuing waiver.

    


    Section
      8.12. Entire
      Agreement.
      This
      Agreement and the other agreements referred to herein set forth the entire
      understanding of the parties hereto relating to the subject matter hereof and
      thereof and supersede all prior agreements and understandings among or between
      any of the parties relating to the subject matter hereof and
      thereof.

    


    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date and
      year first set forth above.

    
      	 	 	 
	 	
              THE
                COMPANY:

               

              
                LIFTECH,
                  LLC, a Wyoming limited liability company

              

            
	 
 	 
 	 
 
	
            	By:  	/s/ Jason
              Taylor
	 	
              
Name: Jason
              Taylor
	 	Title: Managing
              Member


    

     

     

    
      	 	 	 
	 	
              BUYER:

               

              USA PETROVALVE, INC., a Texas
                corporation

            
	 
 	 
 	 
 
	 	By:  	/s/ Jerry
              D.
              Dumas, Sr.
	 	
              
Jerry
              D. Dumas, Sr., President
	 	 


    

     

     

    
      	 	 	 
	 	THE
              MEMBERS:
	 
 	 
 	 
 
	 	By:  	/s/ Jason
              Taylor 
	 	
              
Jason
              Taylor
	 	 


    

     

     

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	            /s/ Toby
              Semlek   
	 	
              
Toby
              Semlek
	 	 


    

    


     

    
      
        -20-

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    



    EXHIBIT
      A

    


    INDEX
      OF DEFINITIONS

    


    


    
      	Accounts Payable	Section
              1.3(c)
	Accounts Receivable	Section
              1.1(f)
	Acquired Assets	Section
              1.1
	Affected Employee	Section
              5.6
	Affected Employees	Section 3.10
	Assumed Liabilities	Section
              1.3(c)
	Cash	Section
              1.1(g)
	Cash Payment	Section
              1.3
	Closing 	Section
              1.6
	Closing
              Date 	Section
              1.6
	Closing Statement	Section
              1.7
	Company Plans	Section
              3.10
	Disclosure Schedule 	Section
              3.4(b)
	Effective
              Time	Section
              1.6
	Financial
              Statements 	Section
              3.5
	Flotek	Section
              1.3(b)
	Flotek Common Stock	Section
              1.3(b)
	Flotek
              Shares	Section
              1.3(b)
	Indemnified Amounts 	Section
              7.1
	Knowledge	Section
              3.11
	Leased Assets 	Section
              1.1(b)
	Material Adverse Effect	Section
              3.7
	Purchase
              Transaction	Section
              1.6
	Purchased Inventory	Section 1.1(e) 
	Scheduled Inventory 	Section 1.1(f)
	Tangible Personal Property	Section
              1.1(a)
	Tradename 	Section
              1.1(h)