Unassociated Document


    EXCLUSIVE
      LICENSE AGREEMENT

    


    This
      Exclusive License Agreement (“AGREEMENT”) is made and entered into as of the 3rd
      day of April, 2006, by and between:

    


    
      	(1)  	
              Total
                Well Solutions, LLC, a Wyoming limited liability company (the “LICENSOR”);
                

            


    

    


    
      	(2)  	
              USA
                Petrovalve, Inc., a Texas corporation (the “LICENSEE”);
                and

            


    

    


    
      	(3)  	
              Flotek
                Industries, Inc. a Delaware corporation and an AFFILIATE of the LICENSEE
                (“FLOTEK”).

            


    

    


    RECITALS

    


    
      	1.0  	
              The
                LICENSOR owns the right and title to the
                INVENTION.

            


    

    


    
      	2.0  	
              The
                PARTIES have entered into that certain Asset Purchase Agreement,
                dated the
                date hereof, 2006 pursuant to which, among other things, the LICENSEE
                has
                acquired certain assets of the LICENSOR in exchange for consideration
                from
                the LICENSEE, which consideration includes the obligations of the
                LICENSEE
                set forth in this AGREEMENT;

            


    

    


    
      	3.0  	
              The
                LICENSEE desires to obtain an exclusive license in the
                INVENTION.

            


    

    


    
      	4.0  	
              The
                LICENSOR is willing to grant such a license on terms and conditions
                recited below. 

            


    

    


    In
      consideration of the above-stated premises and the mutual promises and covenants
      contained in this AGREEMENT, the PARTIES agree as follows:

    


    AGREEMENT

    


    
      	1.0  	
              DEFINITIONS

            


    

    


    Each
      of
      the following terms shall, whenever found in this AGREEMENT, be used and
      understood in accordance with the corresponding definitions below:

    


    
      	1.1  	
              “LICENSED
                PATENT” shall mean and include the United States Letters Patent No.
                6,761,215 by James E. Morrison and Guy Morrison III, entitled “Downhole
                Separator and Method” (listed in SCHEDULE A) and all reissues or
                reexaminations thereof.

            


    

     

    
      	1.2  	
              “RELATED
                PATENTS” shall mean and include all United States or foreign patent
                applications and patents that claim priority from the LICENSED PATENT,
                including at least those listed in SCHEDULE A, and all divisions,
                continuations, continuations-in-part, extensions, renewals,
                patents-of-addition, reissues, reexaminations, supplementary protection
                certificates, or equivalents
                thereof.

            


    

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	1.3  	
              “INVENTION”
                shall mean the downhole separator and method, embodied in at least
                the
                LICENSED PATENT and the RELATED
                PATENTS.

            


    

    


    
      	1.4  	
              “CONTROL”
                and its derivatives mean the ownership or control, either directly
                or
                indirectly, of greater than fifty percent (50%) of the voting rights
                of an
                entity.

            


    

    


    
      	1.5  	
              “AFFILIATE”
                means an entity that, directly or indirectly, through one of more
                intermediaries, CONTROLS or is CONTROLLED by, or is under common
                CONTROL
                with, another entity.

            


    

    


    
      	1.6  	
              “PARTIES”
                collectively or “PARTY” individually means the LICENSOR, the LICENSEE, and
                FLOTEK.

            


    

    


    
      	1.7  	
              “TERRITORY”
                means worldwide.

            


    

    


    
      	1.8  	
              “LICENSED
                PRODUCTS” means downhole separators that fall within or are described by
                any claim or claims of the LICENSED PATENT and/or any of the RELATED
                PATENTS that have not been held invalid or unenforceable and have
                not
                expired or lapsed. 

            


    

    


    
      	1.9  	
              “QUARTERLY
                GROSS REVENUE” means revenue as determined under generally accepted
                accounting principles, consistently applied (“GAAP”). QUARTERLY GROSS
                REVENUE shall expressly exclude, by way of example and not by way
                of
                limitation, (i) sales tax or other taxes collected, and (ii) amounts
                received as reimbursement of costs, such as freight
                costs.

            


    

    


    
      	1.10  	
              “MARKET
                REPORT” shall mean a report that sets forth the computation of the
                ROYALTY.

            


    

    


    
      	2.0  	
              GRANT
                OF LICENSE 

            


    

    


    
      	2.1  	
              The
                LICENSOR hereby grants unto the LICENSEE an exclusive, transferable,
                and
                sublicensable license throughout the TERRITORY in and to the INVENTION,
                the LICENSED PATENT, and the RELATED PATENTS, such license including,
                but
                not limited to, the exclusive license
                to:

            


    

    


    
      	2.1.1  	
              Manufacture,
                use, import, offer to sell, sell, repair, and service the LICENSED
                PRODUCTS;

            


    

    


    
      	2.1.2  	
              Enforce
                the LICENSED PATENT and the RELATED PATENTS as set forth under the
                provisions of this AGREEMENT; and

            


    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	2.1.3  	
              Assign
                and/or sublicense the LICENSEE’s rights under this AGREEMENT.
                

            


    

    


    
      	2.2  	
              The
                LICENSOR does not grant or imply to grant any other, further, or
                different
                license.

            


    

    


    
      	2.3  	
              Except
                as expressly provided in this AGREEMENT, the LICENSOR does not grant
                or
                imply to grant any transfer of right or title in and to the INVENTION,
                the
                LICENSED PATENT, or any of the RELATED PATENTS to the
                LICENSEE.

            


    

    


    
      	2.4  	
              The
                LICENSOR covenants that it, its heirs, legal representatives, assigns,
                administrators, and executors will, at the expense of the LICENSOR,
                its
                successors, and assigns, execute all papers and perform such other
                acts as
                may be reasonably necessary to give the LICENSEE, its successors,
                and
                assigns the full benefit of this
                AGREEMENT.

            


    

    


    
      	2.5  	
              The
                LICENSOR retains no right to engage directly or indirectly in the
                TERRITORY in the manufacture, importation, distribution, promotion,
                or
                sale (either on its own account or for or on behalf of any other
                party) of
                any invention described and/or claimed in the LICENSED PATENT or
                RELATED
                PATENTS, nor engage in activities that would prejudice the performance
                of
                its obligations under this
                AGREEMENT.

            


    

     

    
      	3.0  	
              SALES
                AND PROMOTION

            


    

    


    
      	3.1  	
              The
                LICENSEE intends to use its best efforts regarding the manner in
                which it
                conducts its business with respect to the LICENSED PRODUCTS but shall
                not
                be held to any standard of conduct with respect to such business.
                

            


    

    


    
      	4.0  	
              MARKET
                REPORT/AUDIT

            


    

    


    
      	4.1  	
              The
                LICENSEE will on a quarterly basis provide to the LICENSOR a written
                MARKET REPORT for the preceding quarter. The LICENSOR shall keep
                such
                reports, and any information provided to it by the LICENSEE in connection
                with this AGREEMENT, confidential. 

            


    

    


    
      	4.2  	
              Upon
                reasonable notice and during regular business hours, the LICENSOR
                shall be
                permitted on an annual basis to have its independent auditors inspect
                and
                audit the books and records of the LICENSEE which relates to the
                determination of the ROYALTY. Such audit shall be at the expense
                of the
                LICENSOR, unless it is determined and agreed by the PARTIES that
                the
                ROYALTY has been underpaid by 10% or more, in which case the audit
                shall
                be at the expense of the LICENSEE.

            


    

    


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    
      	5.0  	
              ROYALTY

            


    

    


    
      	5.1  	
              During
                the term of this AGREEMENT and in consideration
                for the exclusive rights granted in this AGREEMENT, the LICENSEE
                and its
                AFFILIATE, FLOTEK, agree to pay to LICENSOR a
                royalty of 7.5% of the LICENSEE’s QUARTERLY GROSS REVENUE directly
                attributable to the LICENSED PRODUCTS that
                are sold by the LICENSEE in the TERRITORY (the
                “ROYALTY”), provided, however, that the Royalty shall not apply to
                QUARTERLY GROSS REVENUE attributable to any jurisdiction in which
                the
                LICENSED PRODUCTS are subject to competition from products whose
                cost,
                without the LICENSEE ROYALTY, is substantially the same to the LICENSED
                PRODUCTS.

            


    

    


    
      	5.2  	
              As
                long as the LICENSED PATENT has not been found invalid or unenforceable,
                and has not expired or lapsed, the LICENSEE will pay the LICENSOR,
                with
                respect to each calendar year (ending December 31st),
                a guaranteed minimum amount of ROYALTY pursuant to Section 5.1 equal
                to
                $400,000. The
                guaranteed minimum amount of ROYALTY shall only be paid should the
                ROYALTY
                payments described in Section 5.1 for the preceding calendar year
                amount
                to less than $400,000.00, in which case LICENSEE shall pay LICENSOR
                within
                45 days of the end of such period the amount required to cause the
                ROYALTY
                paid with respect to that complete 12 month period to equal such
                minimum
                amount. The minimum royalty for 2006 shall be pro rated to
                $300,000.

            


    

    


    
      	5.3  	
              The
                ROYALTY shall be offset by the costs of prosecution and maintenance
                of the
                LICENSED PATENT and the RELATED PATENTS as discussed below in Section
                10.0
                or the costs and expenses of any
                claim, suit, demand, action, or litigation
                as
                discussed below in Section 11.0.

            


    

    


    
      	5.4  	
              The
                ROYALTY due under this AGREEMENT shall be subject to offset for any
                losses, damages, liabilities, costs, expenses, attorneys’ fees or court
                costs suffered by the LICENSEE or its affiliates (“DAMAGES”) as a result
                of any breach by LICENSOR of the terms of the Asset Purchase Agreement
                by
                and
                among the LICENSOR, Total Energy Technologies, LLC, and the LICENSEE
                (the
                “APA”), including, but not limited to, any breach of the representations
                and warranties provided by the LICENSOR in the APA, provided that
                such
                breach is identified in a written notice provided by LICENSEE to
                LICENSOR,
                and remains uncured within one year of the date hereof (a “BREACH”). Upon
                the initiation of, and until the conclusion of, any claim, suit,
                demand,
                action, or litigation against the LICENSOR by the LICENSEE for an
                alleged
                BREACH (a “CLAIM”), all ROYALTY payments, including any minimum amount of
                ROYALTY, shall be paid into an escrow account (the “ESCROW ACCOUNT”) held
                by an independent third party pursuant to terms established by the
                LICENSOR with the independent third party in the reasonable discretion
                of
                the LICENSOR. The terms of such ESCROW ACCOUNT shall provide, among
                other
                things, that any amount held in the ESCROW ACCOUNT shall be released
                to
                the LICENSOR or returned to the LICENSEE upon the final, non-appealable
                conclusion of the CLAIM (a “DETERMINATION”) to the extent required for the
                LICENSEE to fully recover the DAMAGES. If the amount paid to the
                LICENSEE
                from the ESCROW ACCOUNT upon a DETERMINATION is not sufficient to
                fully
                offset and recover the DAMAGES, the LICENSEE shall be permitted to
                offset
                and reduce future ROYALTY payments until it has hereby recovered
                all
                DAMAGES. Once all DAMAGES have been recovered, the LICENSEE shall
                continue
                the ROYALTY payments under the terms above. The terms of this section
                set
                forth a non-exclusive remedy.

            


    

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	6.0  	
              TERMS
                OF PAYMENT

            


    

    


    
      	6.1  	
              The
                ROYALTY shall be payable as follows: (i) within thirty days after
                the end of each calendar quarter ending on March 31, June 30 and
                September
                30, LICENSEE shall pay the LICENSOR $100,000, and (ii) on or before
                February 15th,
                LICENSEE shall pay LICENSOR the amount of Royalty which remains unpaid
                with respect to the calendar year ending on the previous December
                31st.

            


    

    


    
      	6.2  	
              All
                determinations by the LICENSEE with respect to the calculation of
                the
                ROYALTY shall be deemed to be correct unless objection is made within
                thirty days and the LICENSOR is able to establish an error by a
                preponderance of the evidence. 

            


    

    


    Unless
      otherwise specified by the LICENSEE, all payments due by the LICENSEE to the
      LICENSOR hereunder shall be paid in US dollars by international wire transfer
      to
      the account specified in writing from time to time by the LICENSOR.

    


    
      	7.0  	
              CONFIDENTIALITY

            


    

    


    
      	7.1  	
              Any
                information acquired by any of the PARTIES in the course of this
                AGREEMENT
                regarding the affairs and business of the PARTIES and their affiliates
                shall, during the TERM of the AGREEMENT and for (10) years thereafter,
                be
                treated as confidential and shall not be disclosed without the prior
                consent of the PARTIES, except for information that:
                

            


    

    


    
      	7.1.1  	
              at
                the time of the disclosure or thereafter is generally available to
                and
                known by the public (other than as a result of its disclosure by
                the
                receiving PARTY), unless the information consists of a compilation
                of
                information that, despite the individual components of information
                being
                generally available to and known by the public, is not itself generally
                available to and known by the public;


            


    

    


    
      	7.1.2  	
              was
                available to a receiving PARTY hereto on a non-confidential basis
                prior to
                disclosure by the disclosing PARTY;
                or

            


    

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	7.1.3  	
              becomes
                available to a receiving PARTY hereto on a non-confidential basis
                from a
                person who is not otherwise bound by a confidentiality agreement
                with the
                disclosing PARTY, or is not otherwise prohibited from transmitting
                the
                information to the receiving PARTY.


            


    

    


    
      	7.2  	
              If
                a PARTY is required by law to disclose all or any part of such
                information, such PARTY agrees to:

            


    

    


    
      	7.2.1  	
              immediately
                notify the other PARTIES of the existence, terms, and circumstances
                surrounding such a request;

            


    

    


    
      	7.2.2  	
              consult
                with the other PARTIES on the advisability of taking legally available
                steps to resist or narrow such request; and


            


    

    


    
      	7.2.3  	
              exercise
                its commercially reasonable best efforts to obtain an order or other
                reliable assurance that confidential treatment will be accorded to
                such
                portion of the information required to be
                disclosed.

            


    

    


    
      	7.3  	
              Information
                to be treated as confidential under this AGREEMENT shall include,
                but not
                be limited to, MARKET REPORTS, information regarding the INVENTION,
                the
                PARTIES' customer lists, unpublished designs, marketing and business
                plans, telemarketing and other unique sales techniques, and sources
                of
                supply.

            


    

    


    
      	7.4  	
              This
                duty of confidentiality pertains to both PARTIES' directors, officers,
                employees, agents, and representatives, if any.


            


    

    


    
      	8.0  	
              LIABILITY
                AND DUTIES

            


    

    


    
      	8.1  	
              The
                LICENSOR and the LICENSEE each acknowledges and represents to the
                other
                that neither shall incur any liability on behalf of the other, purport
                to
                pledge the credit of the other, or accept any order or obligation
                to be
                binding upon the other.

            


    

    


    
      	8.2  	
              None
                of the PARTIES or their management or members shall owe a fiduciary
                duty
                to each other under this AGREEMENT.

            


    

    


    
      	9.0  	
              WARRANTY
                OF OWNERSHIP

            


    

    


    
      	9.1  	
              LICENSOR
                represents and warrants that it is the owner of the entire right,
                title,
                and interest in and to the INVENTION, the LICENSED PATENT, and any
                RELATED
                PATENTS.

            


    

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	10.0  	
              PATENT
                PROSECUTION AND MAINTENANCE

            


    

    


    
      	10.1  	
              The
                LICENSEE, at the LICENSOR’s expense, shall have the responsibility for and
                control over the prosecution and maintenance of the LICENSED PATENT
                and
                any RELATED PATENTS. The LICENSEE shall take no action with respect
                to the
                LICENSED PATENT or any of the RELATED PATENTS where the purpose or
                effect
                of that action is to limit or diminish the LICENSEE’s obligation to pay
                the ROYALTY set forth in Section 5.0 of this AGREEMENT. The LICENSOR,
                at
                the expense of the LICENSOR, shall cooperate in any way necessary
                to
                enable the LICENSEE to conduct such prosecution and maintenance.
                The
                amount of the ROYALTY due under Section 5.1 shall be offset by the
                costs
                of such prosecution and
                maintenance.

            


    

    


    
      	11.0  	
              INFRINGEMENT
                BY LICENSEE/INDEMNIFICATION

            


    

    


    
      	11.1  	
              In
                the event of any claim, suit, demand, action, or litigation against
                the
                LICENSEE, on account of any claim of infringement arising out of
                the
                manufacture, use, importation, offer for sale, or sale of the LICENSED
                PRODUCTS (a “LICENSEE INFRINGEMENT CLAIM”), the LICENSOR agrees to furnish
                to the LICENSEE, on request and at the expense of the LICENSOR, all
                evidence and information in possession relating to the defense of
                such
                litigation. Any such expenses incurred by the LICENSEE, but owed
                by the
                LICENSOR, shall be deducted from the amount of the next paid ROYALTY
                payment.

            


    

    


    
      	11.2  	
              The
                LICENSOR shall indemnify and hold the LICENSEE,
                its AFFILIATES, and their respective officers and directors harmless
                from
                all LICENSEE INFRINGEMENT CLAIMS s, including reasonable legal fees
                and
                court costs, that the LICENSEE may incur or suffer.
                Upon the initiation of, and until the finalization of, any LICENSEE
                INFRINGMENT CLAIM, all ROYALTY payments, minus all losses, damages,
                and
                costs, including reasonable legal fees and court costs, that the
                LICENSEE
                may incur or suffer in connection with same, shall be paid into escrow.
                Should an injunction, damages, or other relief not be awarded to
                the third
                party plaintiff, any amount remaining in escrow shall be released
                to the
                LICENSOR upon the final, non-appealable conclusion of the claim,
                suit,
                demand, action, or litigation against the LICENSEE. Should an injunction,
                damages, or other relief be awarded to the third party plaintiff,
                any
                amount remaining in escrow shall be released to the LICENSEE to the
                extent
                required to receive the indemnification to which it is entitled pursuant
                to this Section and thereafter shall be paid to the
                LICENSOR.

            


    

     

    
      	12.0  	
              INFRINGEMENT
                BY THIRD PARTY

            


    

    


    
      	12.1  	
              In
                the event that the LICENSED PATENT or any of the RELATED PATENTS
                shall be
                considered by the LICENSEE to be infringed by others, the LICENSEE,
                at its
                own expense, shall have the right, but not the obligation, to
                institute any action or proceeding that the LICENSEE may deem necessary
                or
                advisable, including, without limitation, the filing of a lawsuit
                seeking
                damages and/or an injunction against such infringement, as well as
                to
                prosecute, settle, compromise, or otherwise dispose of the same.
                The
                LICENSOR waives any right, if any such right exists, to prevent or
                enjoin
                the LICENSEE from filing or pursuing an action for infringement by
                reason
                of the LICENSOR not being a party to the action. The LICENSOR cannot
                join
                any action brought by the LICENSEE per this AGREEMENT unless the
                LICENSEE
                requests such joinder or a court orders that the LICENSOR be a party,
                in
                which instance the LICENSOR shall join such action by filing the
                appropriate pleadings or papers with the Court having jurisdiction.
                In
                situations where the LICENSOR is or becomes a party to any proceeding
                or
                action, the LICENSOR shall be entitled to non-controlling participation
                through counsel of its selection, in which the LICENSEE shall be
                responsible for paying the necessary and reasonable attorney fees
                and
                expenses of the LICENSOR.

            


    

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	12.2  	
              The
                LICENSEE shall notify the LICENSOR of its intention not to institute
                any
                such action or proceeding relating to the infringement by a third
                party,
                including correspondence or discussions regarding the infringement
                without
                the filing of a lawsuit, within ninety days of knowing of any potential
                infringement by a third party. Upon such notice, the LICENSOR, at
                its own
                expense, shall have the right, but not the obligation, to institute
                any
                action or proceeding that the LICENSOR may deem necessary or advisable,
                including, without limitation, the filing of a lawsuit seeking damages
                and/or an injunction against such infringement, as well as to prosecute,
                settle, compromise, or otherwise dispose of the same. The LICENSEE
                waives
                any right, if any such right exists, to prevent or enjoin the LICENSOR
                from filing or pursuing an action for infringement by reason of the
                LICENSEE not being a party to the action. The LICENSEE cannot join
                any
                action brought by the LICENSOR per this AGREEMENT unless the LICENSOR
                requests such joinder or a court orders that the LICENSEE be a party,
                in
                which instance the LICENSEE shall join such action by filing the
                appropriate pleadings or papers with the Court having jurisdiction.
                In
                situations where the LICENSEE is or becomes a party to any proceeding
                or
                action, the LICENSEE shall be entitled to non-controlling participation
                through counsel of its selection, in which the LICENSOR shall be
                responsible for paying the necessary and reasonable attorney fees
                and
                expenses of the LICENSEE. 

            


    

    


    
      	12.3  	
              The
                PARTY bringing any action or proceeding described in Sections 12.1-12.2
                shall retain the moneys collected through such action or proceeding.
                The
                non-controlling PARTY is not entitled to any award and/or collection
                of
                damages from such action.

            


    

    


    
      	12.4  	
              Sections
                12.1-12.3 include actions involving the filing of a declaratory judgment
                action or the filing of any counter-claim for infringement and
                damages.

            


    

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	12.5  	
              Should
                the LICENSOR become a party to an action brought by the LICENSEE
                pursuant
                to this AGREEMENT, the LICENSOR waives and agrees not to assert in
                the
                action or proceedings, any claim that: (1) the LICENSOR is not subject
                to
                the jurisdiction of the court or of any other court to which the
                proceedings in the court may be appealed; (2) the suit, action, or
                proceeding is brought in an inconvenient forum; or (3) the venue
                of the
                suit, action, or proceeding is
                improper.

            


    

    


    
      	12.6  	
              The
                LICENSOR and LICENSEE shall each promptly inform the other of any
                suspected infringement of the LICENSED PATENT or the RELATED PATENTS
                by a
                third party.

            


    

    


    
      	12.7  	
              Should
                a lawsuit, reexamination, reissue or other proceeding be commenced
                in
                which the validity or enforceability of any of the LICENSED PATENT
                or any
                of the RELATED PATENTS is contested or challenged (the “CHALLENGED
                PATENT”) or in which certain of the claims of the CHALLENGED PATENT are
                challenged or asserted as being invalid (the “CHALLENGED CLAIMS”), then in
                the event that a court or other tribunal of competent jurisdiction
                holds
                in a final, non-appealable judgment that the CHALLENGED PATENT is
                unenforceable, and not withstanding anything to the contrary in this
                AGREEMENT, the LICENSEE shall have no obligation to make any further
                ROYALTY payments to the LICENSOR for the sales of what were formerly
                LICENSED PRODUCTS in the country of the CHALLENGED PATENT but shall
                still
                retain the rights under this AGREEMENT as to what were the formerly
                the
                LICENSED PRODUCTS in that country.

            


    

     

    
      	13.0  	
              TERM

            


    

    


    
      	13.1  	
              The
                TERM of this AGREEMENT shall, unless terminated earlier in accordance
                with
                Section 14 below, remain in effect as long as at least one of the
                LICENSED
                PATENT or any RELATED PATENTS has
                (1) not been found by the relevant country’s patent office or court of law
                to be invalid or unenforceable; or (2) has not expired or lapsed.
                

            


    

    


    
      	14.0  	
              TERMINATION

            


    

    


    
      	14.1  	
              The
                LICENSOR or the LICENSEE may terminate this AGREEMENT at any time
                by
                giving the other notice to that effect, stating the precise reasons
                therefore, in any of the following
                events:

            


    

    


    
      	14.1.1  	
              any
                material breach by the other for which effective remedial action
                has not
                been undertaken within sixty days after written notice is given specifying
                the breach and requiring remedy of the same,
                the written notice being effective after the remedial period or any
                subsequent date specified in the notice;
                or

            


    

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	14.1.2  	
              if
                the other shall be unable to pay its debts in the ordinary course
                of
                business, shall enter into liquidation (otherwise than for reason
                of
                corporate amalgamation or reconstruction), shall become bankrupt
                or
                insolvent, or shall be placed in the control of a receiver or trustee,
                whether compulsorily or voluntarily, the notice being effective on
                the
                date when notice is given or any subsequent date specified in the
                notice.

            


    

    


    
      	15.0  	
              CONSEQUENCES
                OF TERMINATION

            


    

    


    
      	15.1  	
              Upon
                termination of this AGREEMENT:

            


    

    


    
      	15.1.1  	
              the
                LICENSEE shall promptly pay to the LICENSOR all amounts due by way
                of
                ROYALTY, or otherwise to the date of termination (which shall be
                deemed to
                be the end of the calendar quarter in which it
                falls);

            


    

    


    
      	15.1.2  	
              the
                LICENSEE shall make no further use or sale of the LICENSED PRODUCTS
                (subject to Section 15.1.3);

            


    

    


    
      	15.1.3  	
              the
                LICENSOR will, except where termination is based on material breach
                of
                this AGREEMENT by the LICENSEE by reason of the LICENSEE’s gross
                misconduct, permit the LICENSEE to dispose of any stock then in hand
                within up to six months following the date of termination. The LICENSOR
                shall be entitled to ROYALTY payments on this stock in
                hand.

            


    

    


    
      	16.0  	
              REPRESENTATIONS
                AND WARRANTIES

            


    

    


    
      	16.1  	
              The
                LICENSOR hereby represents and warrants to the LICENSEE that neither
                the
                LICENSED PATENT nor any of the RELATED PATENTS has been held invalid
                or
                unenforceable, that to the knowledge of the LICENSOR, the LICENSED
                PATENT
                and the RELATED PATENTS are valid and enforceable, and neither the
                LICENSED PATENT nor any of the RELATED PATENTS is the subject of,
                or
                involved in, any suit, action or reexamination or reissue
                proceeding.

            


    

    


    
      	16.2  	
              The
                LICENSOR hereby represents and warrants to the LICENSEE that the
                LICENSOR
                owns and holds all right, title, claim, and interest in and to the
                LICENSED PATENT and the RELATED PATENTS, subject to no restrictions
                or
                encumbrances of any kind.

            


    

    


    
      	16.3  	
              The
                LICENSOR further represents and warrants that there are no current
                licenses or commitments or agreements to license any rights in and
                to
                LICENSED PATENT or any of the RELATED PATENTS other than the rights
                granted in this AGREEMENT.

            


    

    


    
      	16.4  	
              The
                LICENSOR and the LICENSEE hereby represent and warrant that they
                have full
                and complete power and authority to enter into and carry out their
                obligations under this AGREEMENT and under any documents, which may
                be
                executed in connection herewith.

            


    

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	16.5  	
              The
                LICENSOR represents and warrants that they have provided all information
                concerning notices or allegations made by the LICENSOR concerning
                the
                LICENSED PATENT and the RELATED PATENTS, any litigation involving
                the
                LICENSED PATENT or any of the RELATED PATENTS, and other license
                agreements or proposals concerning the LICENSED PATENT or any of
                the
                RELATED PATENTS.

            


    

    


    
      	16.6  	
              The
                LICENSOR agrees to indemnify and hold the LICENSEE harmless from
                any
                liabilities, costs and expenses (including reasonable attorneys'
                fees and
                expenses), obligations, and causes of action arising out of or related
                to
                any breach of the representations and warranties made by the LICENSOR
                herein.

            


    

    


    
      	16.7  	
              The
                LICENSOR
                represents and warrants that all maintenance or equivalent fees have
                been
                paid on the LICENSED PATENT and the RELATED PATENTS and that neither
                the
                LICENSED PATENT nor any of the RELATED PATENTS has expired for failure
                to
                pay any fees.

            


    

    


    
      	16.8  	
              The
                LICENSOR hereby further represent and warrant that:
                

            


    

    


    
      	16.8.1  	
              The
                LICENSOR shall not make any license, assignment, commitment or other
                agreement which is inconsistent with the terms of this AGREEMENT
                

            


    

    


    
      	16.8.2  	
              The
                LICENSOR owns and holds the exclusive right, title, and interest
                in and to
                the LICENSED PATENT and the RELATED PATENTS, and that such rights
                and the
                LICENSED PATENT and the RELATED PATENTS are subject to no liens,
                restrictions, or encumbrances of any kind, and that no other person
                or
                entity has any right, title, interest, or claim in or to the LICENSED
                PATENT or any of the RELATED PATENTS as a result of any action taken
                by
                the LICENSOR.

            


    

    


    17.0  IMPROVEMENTS

    


    If
      the
      LICENSEE, AFFILIATES of the LICENSEE, or any of the officers, agents, or
      employees of the LICENSEE or its AFFILIATES devise or acquire any improvement
      in
      the INVENTION, the LICENSEE or its AFFILIATE shall own all patent rights and
      any
      other intellectual property related to such improvement, not subject to any
      of
      the terms under this AGREEMENT, as long as said improvements are not covered
      by
      the LICENSED PATENT or RELATED PATENTS.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	18.0  	
              EXPENSES

            


    

    


    
      	18.1  	
              The
                expenses incurred by the PARTIES in performance of this AGREEMENT,
                including all travel and out-of-pocket expenses, shall be solely
                for their
                own account. 

            


    

    


    
      	19.0  	
              TRANSFERABILITY

            


    

    


    
      	19.1  	
              The
                LICENSOR may not assign or transfer all or any portion of its rights
                under
                this AGREEMENT or of its title in the LICENSED PATENT or any of the
                RELATED PATENTS without providing at least thirty days written notice
                of
                such to and receiving written approval of such from the
                LICENSEE.

            


    

    


    
      	19.2  	
              The
                LICENSEE agrees not to unreasonably withhold approval of such assignment
                or transfer under Section 19.1.

            


    

    


    
      	19.3  	
              The
                LICENSEE may transfer, assign, and/or sublicense all or any portion
                of its
                rights under this AGREEMENT, provided that the LICENSEE shall guarantee
                the performance by its assignee of the obligations of the LICENSEE
                pursuant to this agreement which accrue subsequent to such assignment
                and
                provided further that the LICENSEE must provide at least 30 days
                advance
                written notice of the assignment to the LICENSOR.
                

            


    

     

    
      	20.0  	
              SUCCESSORS

            


    

    


    
      	20.1  	
              Upon
                execution, this AGREEMENT shall be binding upon each of the PARTIES
                and
                inure to the benefit of the PARTIES and their successors and
                assigns.

            


    

     

    
      	21.0  	
              SEVERABILITY

            


    

    


    
      	21.1  	
              Should
                any part or provision of this AGREEMENT be held unenforceable or
                in
                conflict with the law of any jurisdiction, the validity of the remaining
                parts or provisions shall not be affected by such
                holding.

            


    

     

    
      	22.0  	
              WAIVER

            


    

    


    
      	22.1  	
              A
                waiver of any breach of any provision of this AGREEMENT to be enforceable
                must be in writing and shall not be construed as a continuing waiver
                of
                other breaches of the same or other provisions of this
                AGREEMENT.

            


    

     

    
      	23.0  	
              INTEGRATION

            


    

    


    
      	23.1  	
              This
                AGREEMENT embodies the entire understanding between the PARTIES with
                respect to the grant of license under the LICENSED PATENT and the
                RELATED
                PATENTS, there are no prior representations, warranties, or agreements
                between the PARTIES relating hereto, and this AGREEMENT is executed
                and
                delivered upon the basis of this
                understanding.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	24.0  	
              GOVERNING
                LAW, JURISDICTION, AND PLACE OF
                SUIT

            


    

    


    
      	24.1  	
              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.

            


    

    


    
      	24.2  	
              The
                PARTIES consent to the jurisdiction of the State of Texas, U.S.A.
                for all
                purposes in connection with this AGREEMENT.


            


    

    


    
      	24.3  	
              Any
                process, notice, motion, or other application to a Court or to a
                Justice
                of the State of Texas, U.S.A. may be served within or without the
                territorial jurisdiction of the State of Texas, U.S.A., by registered
                or
                certified mail, return receipt requested, or by personal service,
                or in
                such other manner as is permissible under the Rules of a Court in
                the
                State of Texas, U.S.A., provided a reasonable time for appearance,
                not
                less than twenty business days, is allowed.


            


    

    


    
      	24.4  	
              The
                PARTIES agree that the proper jurisdiction and venue for resolution
                of any
                dispute arising from the terms of or performance under this AGREEMENT
                (hereinafter “LICENSE DISPUTE”) shall be Harris County Texas. In the event
                of a LICENSE DISPUTE, the Parties agree to submit the dispute to
                non-binding mediation and then, if necessary, binding arbitration
                conducted by the American Arbitration
                Association.

            


    

    


    
      	25.0  	
              MULTIPLE
                COUNTERPARTS

            


    

    


    
      	25.1  	
              This
                Agreement may be executed in multiple counterparts, each of which
                shall be
                deemed an original.

            


    

    


    
      	26.0  	
              MODIFICATION

            


    

    


    
      	26.1  	
              This
                AGREEMENT may not be modified otherwise than by written instrument
                signed
                by all PARTIES.

            


    

    


    
      	27.0  	
              HEADINGS

            


    

    


    
      	27.1  	
              The
                headings of this AGREEMENT shall serve only reference purposes and
                for
                convenience and are not binding or intended to limit or expand the
                breadth
                of the provisions of this
                AGREEMENT.

            


    

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
      	28.0  	
              NOTICES

            


    

    


    
      	28.1  	
              All
                notices and communications required or permitted to be sent by the
                PARTIES
                to each other shall be deemed sufficient if transmitted in writing
                by
                registered mail addressed as
                follows:

            


    

    


    
      	 	If to LICENSOR:	
              Gary A. Weiss

              4270 W. Greens Pl

              Wilson, WY 83014

            
	 	 	 
	 	If to LICENSEE:	
              7030 Empire Central Drive

              Houston, Texas
                77040

            


    

              
      

    IN
      WITNESS WHEREOF, the PARTIES hereto have executed this AGREEMENT as of the
      date
      set forth above.

    


     

    


    
      	 	 	 
	 	TOTAL
              WELL
              SOLUTIONS, LLC
	 
 	 
 	 
 
	 	By:  	
              /s/
                Gary
                A. Weiss

            
	 	
              
Gary
              A. Weiss, Managing Member
	 	 


    

     

     

    
      	 	 	 
	 	USA
              PETROVALVE,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Jerry D. Dumas Sr.
	 	
              

              Jerry
                D. Dumas, Sr., Chairman and 

              Chief
                Executive Officer

            
	 	 




     

    


    
      	 	 	 
	 	FLOTEK
              INDUSTRIES,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Jerry D. Dumas Sr.
	 	
              
                

              

              Jerry D. Dumas, Sr., Chairman and 

              Chief
                Executive Officer

            
	 	 


    

     

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    


    


    SCHEDULE
      A

    


    List
      of
      Patents and Patent Applications Being Licensed

    


    
      	1.  	
              U.S.
                Patent No. 6,761,215;

            


    

    
      	2.  	
              Eurasian
                Patent Application No.
                200500439/26;

            


    

    
      	3.  	
              Australian
                Patent Application No. 2003278716;

            


    

    
      	4.  	
              Canadian
                Patent Application No. 2497929; and

            


    

    
      	5.  	
              Chinese
                Patent Application No. 03824239.7

            


    

    


    
      
        
        

      

      
        15