Document:

EXHIBIT
        10.7

      

      ASSET
        PURCHASE AGREEMENT

      

      

      THIS
        ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into this
        25th
        day of January, 2005, by and between PHOENIX E & P TECHNOLOGY, L.L.C., a
        Texas limited liability company (“Seller"), and TURBECO INC., a Texas
        corporation ("Purchaser").

      

      W I T N E
60;S S E T H

      

      WHEREAS,
        the Seller owns and operates a business relating to the manufacture, service,
        and sale of screens and screening machines (the “Business”);

      

      WHEREAS,
        in connection with the Business, the Seller owns the patents listed on Exhibit
        A
        (the “Patents”);

      

      WHEREAS,
        the Purchaser desires to purchase the assets of the Business from the Seller,
        and the Seller is willing to sell the assets of the Business to the Purchaser
        pursuant to the terms set forth herein;

       

      NOW,
        THEREFORE, for and in consideration of the premises, the mutual representations,
        warranties and covenants herein contained and other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        the
        parties hereby agree as follows:

      

      1.     PURCHASE
        AND SALE OF THE ASSETS; CLOSING DATE.

      

      1.1     Purchase
        and Sale.
        Seller
        hereby agrees to sell, assign, transfer and deliver to Purchaser all right,
        title and interest in and to (i) the Patents, (ii) the trade names and
        trademarks “Vibra-screen” and “NNF Screening Machine”, (iii) the assets of the
        Business listed on Exhibit B, and (iv) the other intangible assets of Seller
        which relate to the Business, including but not limited to all of its know-how
        and technology relating to the Business, the operating manuals, promotional
        literature, marketing ideas or expressions (in any medium) which have been
        copyrighted, or are subject to copyright, used in connection with the
        Business(collectively the “Assets”), in each case free and clear of any liens or
        encumbrances of any nature whatsoever. Purchaser hereby agrees to purchase
        the
        Assets from Seller in consideration for the Purchase Price (as hereinafter
        defined).

      

      1.2     Closing;
        Closing Date.
        The
        closing of this transaction is taking place on the date (the “Closing Date”) of
        the execution of this Agreement (the "Closing") at the offices of the Purchaser
        in Houston, Texas.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.3     Delivery
        and Transfer Documents.
        At and
        after the Closing, Seller shall take all steps necessary to transfer the
        Assets
        to Purchaser, free and clear of any liens or encumbrances of any nature
        whatsoever. Specifically, but not by way of limitation, Seller at the Closing
        has delivered to Purchaser: (i) a duly executed assignment covering the Assets
        (the “Assignment”) (ii) assignments relating to the Patents in the form provided
        for by the US Patent and Trademark Office (the “USPTO”), and (iii) such other
        duly executed transfer documents which Purchaser requested to evidence the
        transfer of the Assets to Purchaser free and clear of any liens or encumbrances
        of any nature whatsoever.

      

      2.     PURCHASE
        PRICE.

      

      2.1     Price
        and Payment.
        The
        consideration paid by the Purchaser to the Seller for the Assets are $46,640
        (the “Purchase Price”) and contingent consideration equal to twelve and one half
        percent of the screen sales covered by the patents listed in Exhibit A of
        the
        Bill of Sale and Agreement, for a period of three years subsequent to the
        date
        of this Agreement. The Purchaser has prior to the date of this Agreement
        paid on
        behalf of the Seller $24,778.00 of the expenses of the Seller (the Prior
        Payments”). The Purchaser and the Seller have agreed that the Prior Payments
        will be considered payments of the Purchase Price and accordingly only
        $20,212.00 of the Purchase Price remains unpaid prior to Closing, which amount
        will be paid in full by Purchaser to Seller at the Closing. The Seller will
        be
        paid twelve and one half percent (12.5%) of net screen sales produced by
        this
        equipment for a three year period ending beginning February 1, 2005 payable
        on a
        monthly basis.

       

      2.2     Excluded
        Liabilities and Obligations.
        The
        Purchaser shall not assume and shall not be liable or responsible for any
        debt,
        obligation or liability of the Business or the Seller, including but not
        limited
        to any taxes of Seller or sales tax imposed on this transaction of any kind,
        whether known or unknown, contingent, absolute or otherwise. 

       

      3.     REPRESENTATIONS
        AND WARRANTIES OF SELLER.
        Seller
        hereby represents and warrants to Purchaser as follows:

      

      3.1     Organization
        and Good Standing.
        Seller
        is duly organized, validly existing, and in good standing under the laws
        of the
        state of Texas and has all requisite power and authority to own, operate,
        and
        lease its properties and to carry on the Business.

      

      3.2     Authorization.
        All
        requisite limited liability company action and proceedings with respect to
        the
        Seller have been obtained or have occurred to authorize the execution and
        delivery of this Agreement and the consummation of the transactions contemplated
        hereby.

      

      3.3     Binding
        Effect.
        This
        Agreement has been duly executed and delivered by Seller and constitutes
        a valid
        and binding agreement with respect to Seller, except as the enforceability
        hereof may be subject to applicable bankruptcy, insolvency, reorganization,
        or
        other similar laws affecting creditor rights generally and to general principles
        of equity.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.4     The Patents.
        The
        Seller is the owner of the Patents and has not granted, and there are no
        outstanding, any options, licenses, or agreements of any kind relating to
        the
        Patents. The Seller is not, and the Purchaser as a result of this transaction
        will not become, subject to any obligation to pay any royalties or other
        similar
        obligation to third parties with respect to the marketing, sale or distribution,
        manufacture, license, or use of any products in connection with the Business
        or
        the use of any of the Assets. To the best of Sellers knowledge, the Business
        has
        not infringed on the rights of any third party and Seller has not received
        any
        communication alleging that Seller or its predecessors have infringed or,
        by
        conducting the Business has infringed, any of the rights of any third party.
        Seller has not filed any patent application or made any filings with the
        USPTO
        which is not disclosed in Exhibit A.

      

      3.5     Tradename.
        The
        Seller owns the exclusive trade name and trademark rights to the names described
        in Section1.1. The use by the Seller before Closing and by the Purchaser
        after
        Closing of these trade names and trademarks did not and will not infringe
        on the
        rights of any third party.

      

      3.6     Effect of
        Agreement.
        The
        execution and delivery of this Agreement and the consummation of the transaction
        contemplated hereby will not (i) result in any breach of any of the terms
        or
        conditions of, or constitute a default under any commitment, mortgage, note,
        bond, debenture, deed of trust, contract, agreement, license or other instrument
        or obligation to which Seller is now a party or by which Seller or any of
        its
        properties or assets may be bound or affected; (ii) result in any violation
        of
        any governmental requirement; (iii) cause Purchaser to lose the benefit of
        any
        right or privilege included in the Assets; or (iv) relieve any person of
        any
        obligation (whether contractual or otherwise) or enable any person to terminate
        any such obligation or any right or benefit enjoyed by Seller or to exercise
        any
        right under any agreement in respect of the Assets or the Business

      

      3.7     Properties
        and Assets.
        Except
        for the lien held by Redstone Bank which will be released at Closing, Seller
        has
        good title to all the Assets, free and clear of all mortgages, liens, pledges,
        conditional sales agreements, charges, easements, covenants, assessments,
        options, restrictions and encumbrances of any nature whatsoever.

       

      3.8     Suits,
        Actions and Claims.
        There
        are no suits, actions, claims, inquiries or investigations by any person,
        or any
        legal, administrative or arbitration proceedings in which Seller is engaged
        or
        which are pending or, to the best knowledge of Seller, threatened against
        or
        affecting Seller or any of its properties or assets or the Business, or to
        which
        Seller is or might become a party, or which challenge the validity or legality
        of the transactions contemplated hereby.

       

      3.9     Solvency.
        After
        the Closing, the Seller will be solvent.

      

      3.10     Brokers
        and Finders.
        No
        broker or finder has acted for Seller in connection with this Agreement or
        the
        transaction contemplated by this Agreement, and no broker or finder is entitled
        to any brokerage or finder's fee or to any commission in respect thereof
        based
        in any way on agreements, arrangements or understandings made by or on behalf
        of
        Seller.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.     INDEMNIFICATION.
        Seller
        shall, and hereby does indemnify, hold harmless and defend Purchaser and
        its
        officers, directors, shareholders, employees, agents, representatives and
        consultants at all times from and after the date of this Agreement, from
        and
        against any and all damages, losses, liabilities, suits, costs, costs of
        any
        settlement or judgment, claims of any and every kind whatsoever, remediation
        costs and expenses (including, without limitation, reasonable attorneys'
        fees),
        of or to any of the indemnified parties ("Damages"), which may be paid, incurred
        or suffered by or asserted against the indemnified parties by any Person
        resulting or arising from or incurred in connection with any one or more
        of the
        following: (i) any liability or claim for liability related in any way to
        the
        Assets or the Business, to the extent such liability arises in connection
        with
        any action, omission or event occurring on or prior to the Closing Date;
        and
        (ii) any misrepresentation, breach of warranty or nonfulfillment of any covenant
        or agreement on the part of Seller under this Agreement.

      

      5.     NONDISCLOSURE
        OF CONFIDENTIAL INFORMATION.
        Seller
        recognizes and acknowledges that certain confidential information of Seller
        is
        included in the Assets (including, but not limited to, list of customers)
        that
        after the consummation of the transactions contemplated hereby will be valuable,
        special and unique property of Purchaser. Seller agrees that it will not
        disclose, and it will use its best efforts to prevent disclosure by any other
        Person of, any such confidential information to any Person, except to authorized
        representatives of Purchaser. Seller recognizes and agrees that violation
        of any
        of the agreements contained in this Section 5 will cause irreparable damage
        or
        injury to Purchaser, the exact amount of which may be impossible to ascertain,
        and that, for such reason, among others, Purchaser shall be entitled to an
        injunction, without the necessity of posting bond, therefor, restraining
        any
        further violation of such agreements. Such rights to any injunction shall
        be in
        addition to, and not in limitation of, any other rights and remedies Purchaser
        may have against Seller. 

      

      6.     COMPETITION.
        Seller
        agrees that it will not directly or indirectly participate, whether as an
        owner,
        consultant, employee, licensor, or otherwise, in any business similar to
        the
        Business during the two year period beginning on the Closing Date. The Purchaser
        shall be entitled to specific performance and other injunctive relief to
        enforce
        this Section.

      

      7.     FURTHER
        ACTIONS.
        From
        time to time, at the request of any party hereto, the other parties hereto
        shall
        execute and deliver such instruments and take such action as may be reasonably
        requested to evidence the transactions contemplated hereby. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      8.     NOTICES.
        All
        notices, requests, demands and other communications required or permitted
        to be
        given hereunder shall be in writing and shall be deemed to have been duly
        given
        if delivered personally, given by facsimile or other similar instantaneous
        electronic transmission device or mailing first class, postage prepaid,
        certified United States mail, return receipt requested, as follows:

      

      (a)     If
        to
        Purchaser, at:

      

      7030
        Empire Central Drive

      Houston,
        Texas 77040

      

      

      (b)     If
        to
        Seller, at:

      

      2425
        West
        Loop South, Suite 765

      Houston,
        Texas 77027

      

      Any
        party
        may change its address for notice by giving to the other party written notice
        of
        such change. Any notice given under this Section 8 shall be effective (i)
        if
        delivered personally, when delivered; (ii) if sent by facsimile or other
        similar
        instantaneous electronic transmission device, 24 hours after sending; and
        (iii)
        if mailed, 48 hours after mailing. 

      

      9.     GENERAL
        PROVISIONS.

      

      9.1     Governing
        Law; Interpretation; Section Headings.
        This
        Agreement shall be governed by and construed and enforced in accordance with
        the
        laws of the State of Texas, without regard to conflict-of-laws rules as applied
        in Texas. The section headings contained herein are for purposes of convenience
        only, and shall not be deemed to constitute a part of this Agreement or to
        affect the meaning or interpretation of this Agreement in any way. 

      

      9.2     Severability.
        Should
        any provision of this Agreement be held unenforceable or invalid under the
        laws
        of the United States of America or the State of Texas, or under any other
        applicable law of any other jurisdiction, then the parties hereto agree that
        such provision shall be deemed modified for purposes of performance of this
        Agreement in such jurisdiction to the extent necessary to render it lawful
        and
        enforceable, or if such a modification is not possible without materially
        altering the intention of the parties hereto, then such provision shall be
        severed herefrom for purposes of performance of this Agreement in such
        jurisdiction. The validity of the remaining provisions of this Agreement
        shall
        not be affected by any such modification or severance.

      

      9.3     Entire
        Agreement.  This
        Agreement sets forth the entire agreement and understanding of the parties
        hereto with respect to the transactions contemplated hereby, and supersedes
        all
        prior agreements, arrangements and understandings related to the subject
        matter
        hereof. No representation, promise, inducement or statement of intention
        has
        been made by any party hereto which is not embodied in this Agreement, and
        no
        party hereto shall be bound by or liable for any alleged representation,
        promise, inducement or statement of intention not so set forth. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.4     Binding
        Effect.
        All the
        terms, provisions, covenants and conditions of this Agreement shall be binding
        upon and inure to the benefit of and be enforceable by the parties hereto
        and
        their respective heirs, executors, administrators, representatives, successors
        and assigns. 

      

      9.5     Assignment.
        This
        Agreement and the rights and obligations of the parties hereto shall not
        be
        assigned or delegated by any party hereto without the prior written consent
        of
        the other party hereto. 

      

      9.6     Amendment;
        Waiver.  This
        Agreement may be amended, modified, superseded or cancelled, and any of the
        terms, provisions, representations, warranties, covenants or conditions hereof
        may be waived, only by a written instrument executed by all parties hereto,
        or,
        in the case of a waiver, by the party waiving compliance. The failure of
        any
        party at any time or times to require performance of any provision hereof
        shall
        in no manner affect the right to enforce the same. No waiver by any party
        of any
        condition contained in this Agreement, or of the breach of any term, provisions,
        representation, warranty or covenant contained in this Agreement, in any
        one or
        more instances, shall be deemed to be or construed as a further or continuing
        waiver of any such condition or breach, or as a waiver of any other condition
        or
        of the breach of any other term, provision, representation, warranty or
        covenant. 

      

      9.7     Gender;
        Numbers.
        All
        references in this Agreement to the masculine, feminine or neuter genders
        shall,
        where appropriate, be deemed to include all other genders. All plurals used
        in
        this Agreement shall, where appropriate, be deemed to be singular, and vice
        versa. 

      

      9.8     Counterparts.
        This
        Agreement may be executed simultaneously in two or more counterparts, each
        of
        which shall be deemed an original, but all of which together shall constitute
        one and the same instrument. This Agreement shall be binding when one or
        more
        counterparts hereof, individually or taken together, shall bear the signatures
        of the parties reflected hereon as signatories.

      

      9.9     Telecopy
        Execution and Delivery.
        A
        facsimile, telecopy or other reproduction of this Agreement may be executed
        by
        one or more parties hereto, and an executed copy of this Agreement may be
        delivered by one or more parties hereto by facsimile or similar instantaneous
        electronic transmission device pursuant to which the signature of or on behalf
        of such party can be seen, and such execution and delivery shall be considered
        valid, binding and effective for all purposes. At the request of any party
        hereto, all parties hereto agree to execute an original of this Agreement
        as
        well as any facsimile, telecopy or other reproduction hereof. 

      

      9.10     Cross
        References.
        References in this Agreement to Articles, Sections, Exhibits, or Schedules
        shall
        be deemed to be references to Articles, Sections, Exhibits, and Schedules
        of
        this Agreement unless the context specifically and expressly requires otherwise.
        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the date
        first
        above written.

       

      
        
          	 	 	 
	 	"PURCHASER"
	 	 
	 	TURBECO INC.
	 
 	 
 	 
 
	 	By:  	/s/ Jerry
                  D. Dumas, Sr.
	 	
                  
Name:
                  Jerry D. Dumas, Sr.
	 	Title:
                  Chairman & CEO

        

      
        	 	 	 
	 	"SELLER"
	 	 
	 	PHOENIX
                E & P TECHNOLOGY, L.L.C.
	 
 	 
 	 
 
	 	By:  	/s/ John
                W. Chisholm
	 	
                
Name:
                John W. Chisholm
	 	Title:
                Managing DirectorEXHIBIT
        10.8

      

      ASSET
        PURCHASE AGREEMENT

      

      THIS
        ASSET PURCHASE AGREEMENT, dated as of August 4, 2005 (the “Agreement”),
        is by
        and among Harmon’s Machine Works, Inc., a Texas corporation (the “Company”),
        Jimmy
        Harmon, an individual residing in Midland, Texas (“JH”),
        and
        Turbeco, Inc., a Texas corporation (“Turbeco”).

      

      W I T N E S S E T H:

      

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

      

      WHEREAS,
        JH owns a controlling 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, Turbeco
        will purchase from the Company, and the Company will sell to Turbeco, all
        of the
        assets, rights, properties, and interests of the Company other than the assets
        specifically excluded pursuant to the terms of Section 1.2 (the “Acquired
        Assets”).
        The
        Acquired Assets will specifically include, but shall not be limited to, the
        following:

      

      (a)    Fee
        title
        to the real property described on Schedule 1.1(a) (the “Real
        Estate”);

      

      (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
        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(c) (the “Tangible
        Personal Property”);

      

      (d)    The
        inventories of finished goods, tooling inventory, work in progress and raw
        materials of the Company as of the Effective Time (the “Purchased
        Inventory”);

      

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

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (f)    The
        rights of the Company under the Operating Agreements (as defined in Section
        3.17;

      

      (g)    All
        prepaid expenses and deposits of the Company, and the claims, deposits, rights
        of recovery and causes of action of the Company;

      

      (h)    The
        goodwill, tradename and trademarks of the Company;

      

      (i)    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;

      

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

      

      (k)    All
        of
        the other assets and properties of the Company, other than the assets listed
        on
        Schedule 1.2.

      

      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, Turbeco
        shall:

      

      (a)    Assume
        from the Company, up to a maximum aggregate assumed amount of $1,000,000,
        (i)
        the liabilities and obligations listed on Schedule 1.3(a), and (ii) the accounts
        payable of the Company (the “Accounts
        Payable”)
        set
        forth on the June 15, 2005 Financial Statements or arising subsequent to
        June
        15, 2005, in the ordinary course of business which are identified in the
        Closing
        Statement (as defined in Section 1.7) (collectively, the “Assumed
        Liabilities”);
        and

      

      (b)    Pay
        the
        Company a cash payment at Closing in the amount of $3,405,000, less any offsets
        provided for in Section 1.9 (the “Cash
        Payment”);

      

      (c)    Cause
        Flotek Industries, Inc. (“Flotek”)
        to
        issue to the shareholders of the Company, as additional purchase price for
        the
        Acquired Assets, the number of shares (the “Flotek
        Shares”)
        of the
        common stock of Flotek, .0001 par value per share (the “Flotek
        Common Stock”)
        determined by dividing $600,000 by the Share Value. The Flotek Shares shall
        be
        allocated among the shareholders of the Company as indicated on Schedule
        1.3(c).
        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 the Closing Date of daily closing trading prices of the
        Flotek
        Common Stock on the American Stock Exchange.

      

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      Section
        1.4.    Assumption
        of Liabilities.
        Turbeco
        has not and will not assume from the Company any liability or obligation
        other
        than the Assumed Liabilities.

      

      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
        determined by Turbeco, subject to the approval of the Company, which approval
        will not be unreasonably withheld.

      

      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 Turbeco 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 VIII is
        fulfilled or waived, or at such other time and place as Turbeco 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 at the election of Turbeco: (i) as of the beginning
        of
        the Closing Date, or (ii) as of the beginning of the first day of the month
        which the Closing Date occurs (in either case, 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 and JH shall:

      

      (i)    execute,
        acknowledge and deliver to Turbeco 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 Turbeco
        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
        (the “Assignment”).

      

      (ii)    deliver
        or cause to be delivered to Turbeco possession of all of the Acquired Assets
        capable of being physically delivered as contemplated in Section
        1.10.

      

      (iii)    deliver
        to Turbeco a closing statement, in a form reasonably satisfactory to Turbeco,
        selling forth the balances of Cash, Accounts Receivable, and Accounts Payable
        as
        of the Effective Time (the “Closing
        Statement”);
        and

      

      (iv)    deliver
        the executed Agreements Not To Compete (as defined in Section 5.2).

      

      (b)    Turbeco
        shall:

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (i)    deliver
        to the Company the Cash Payment, in the form of a bank check or wire
        transfer;

      

      (ii)    execute
        and deliver the Assignment; and

      

      (iii)    cause
        the
        Flotek Shares to be issued as provided in Schedule 1.3(c).

      

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

      

      Section
        1.9.    Offsets.
        The
        Cash Payment shall be offset and reduced at Closing to reflect any Working
        Capital Deficit and/or Environmental Remediation Expense. The term “Working
        Capital Deficit”
        means
        the excess, if any, of the aggregate balance of the Accounts Payable over
        the
        sum of the Cash and the aggregate balance of the Cash and Accounts Receivable.
        The term “Environmental
        Remediation Expense”
        means
        amounts paid or incurred by the Company in connection with the Environmental
        Remediation (as defined in Section 5.5). 

      

      ARTICLE
        II

      REPRESENTATIONS
        AND

      WARRANTIES
        OF TURBECO

      

      Turbeco
        represents and warrants to the Company and JH as follows:

      

      Section
        2.1.    Organization
        and Qualification.
        Turbeco
        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.

      

      Section
        2.2.    Authority;
        Non-Contravention; Approvals.

      

      (a)    Turbeco
        has full corporate power and authority to execute and deliver this Agreement
        to
        consummate the transactions contemplated hereby. This Agreement has been
        approved by the Board of Directors of Turbeco and Flotek, and no other corporate
        proceedings on the part of Turbeco or Flotek are necessary to authorize the
        execution and delivery of this Agreement or the consummation by Turbeco of
        the
        transactions contemplated hereby. This Agreement has been duly executed and
        delivered by Turbeco, and, assuming the due authorization, execution and
        delivery hereof by the Company and JH, constitutes a valid and legally binding
        agreement of Turbeco enforceable against it 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.

      

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      (b)    The
        execution and delivery of this Agreement by Turbeco and the consummation
        by
        Turbeco 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 Turbeco under any of the terms, conditions or provisions
        of (i) the charter or bylaw of Turbeco, (ii) any statute, law, ordinance,
        rule,
        regulation, judgment, decree, order, injunction, writ, permit or license
        of any
        court or governmental authority applicable to Turbeco or any of its 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 Turbeco is now a party or by which Turbeco
        or
        any of its properties or assets may be bound or affected.

      

      Section
        2.3.    Flotek
        Shares.
        The
        Flotek Shares have been duly authorized and when issued and delivered in
        accordance with the terms of this Agreement, will have been validly issued
        and
        will be fully paid and non-assessable, and the issuance thereof is not subject
        to any preemptive or other similar right. Flotek has previously made available
        or delivered to the Company and its shareholders copies of the Form 10-KSB
        filed
        by it with the Securities and Exchange Commission (the “SEC”)
        with
        respect to the year ended December 31, 2005 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. Flotek has not
        made
        any other representation 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.
        Turbeco
        has not entered into any contract, arrangement or understanding with any
        person
        or firm which may result in the obligation of Turbeco 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 Turbeco
        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 JH

      

      The
        Company and JH jointly and severally represent and warrant to Turbeco
        that:

      

      Section
        3.1.    Organization
        and Qualification.
        The
        Company 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. The Company is duly qualified
        to do
        business as a corporation 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
        Turbeco.

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      

      Section
        3.2.    Capitalization.
        JH owns
        90% of the issued and outstanding stock of the Company. All of the shareholders
        of the Company are listed on Schedule 1.3.

      

      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 corporate power and authority to execute and deliver this
        Agreement and to consummate the transactions contemplated hereby. This Agreement
        has been approved by the Board of Directors and shareholders of the Company,
        and
        no other corporate 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 and JH, and, assuming the due authorization,
        execution and delivery hereof by Turbeco, constitutes a valid and legally
        binding agreement of the Company and JH, enforceable against the Company
        and JH
        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 and JH and the
        consummation by the Company and JH 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 Operating 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 Turbeco with a balance sheet of the Company as of July
        31,
        2004 and the related statement of income for the calendar years then ended
        (including the notes thereto) and a balance of the Company as of June 15,
        2005
        and the related statement of income for the period then ended (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.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      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 June 15, 2005, 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.
        Except
        as disclosed in the Disclosure Schedule, since June 15, 2005, 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 June 15, 2005,
        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 or effect that
        is or
        could reasonably be anticipated to be materially adverse to the business,
        assets
        (including intangible assets), liabilities, financial condition, results
        of
        operations, properties (including intangible properties) or business prospects
        of the Company, as applicable, taken as a whole, which is not reflected in
        the
        June 15, 2005 Financial Statements 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.    Inventory.
        The
        inventory reflected in the June 15, 2005 Financial Statements consists of
        items
        that are usable and saleable in the ordinary course of business by the Company
        (the “Financial
        Statement Inventory”).
        Except as disclosed in the Disclosure Schedule, all items included in the
        Financial Statement Inventory and the Purchased Inventory are owned by the
        Company free and clear of any lien or encumbrance, and are not missing (except
        for sales made in the ordinary course of business since June 15, 2005) and
        are
        in good condition. No items included in the Financial Statement Inventory
        or the
        Purchased Inventory are held by the Company on consignment from others.

      

      Section
        3.10.    Tangible
        Assets.
        The
        Real Estate, the Tangible Personal Property and the Leased Assets constitute
        all
        of the tangible property necessary for the conduct by the Company of its
        business as now conducted. The Company has good and indefeasible title to
        the
        Real Estate and the Tangible Personal Property, free and clear of all mortgages,
        liens, pledges, charges, or encumbrance of any nature whatsoever, except
        as
        indicated on the Disclosure Schedule. All of the Tangible Personal Property
        and
        the 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.

      

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      Section
        3.11.    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.

      

      Section
        3.12.    Litigation.
        Except
        as described in the Disclosure Schedule, 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. Except as described
        in
        the Disclosure Schedule, 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
        the actual knowledge after reasonable inquiry of officers of the
        Company.

      

      Section
        3.13.    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.

      

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      Section
        3.14.    Real
        Property.
        

       

      (a)    The
        Company does not own or has ever owned any interest of any kind (whether
        ownership, lease or otherwise) in any real property, except the Real
        Estate.

       

      (b)    The
        improvements included in the Real Estate (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. The Real Estate
        is
        not subject to any leases.

       

      (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
        3.15.    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 or JH 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.

      

      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;

      

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      (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.

      

      Section
        3.17.    Material
        Contracts.
        The
        Disclosure Schedule 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, supply agreements, distribution or distributor agreements, real
        estate leases, purchase orders, license agreements, customer orders and
        equipment rental agreements (the "Operating
        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.    Brokers
        and Finders.
        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 JH 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 JH 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
        3.19.    Disclosure.
        No
        representation or warranty of the Company or JH set forth hereunder or in
        the
        schedules attached hereto or in any certificate delivered pursuant to Section
        6.3(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. JH 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:

      

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      (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)    Make
        or
        declare a dividend, distribution or other payment to any of its members,
        or
        redeem any of its capital stock;

      

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

      

      (d)    Amend
        or
        terminate any Operating Agreement;

      

      (e)    Enter
        into any transaction or agreement with JH, any family member of JH, or any
        entity owned or controlled by JH;

      

      (f)    Make
        any
        payment or distribution to JH except payments of salary up to $59,705 per
        annum;

      

      (g)    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

      

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

      

      Section
        4.2.   Business
        Organization.
        Prior
        to the Effective Time, the Company and JH 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 Turbeco 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,

      

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      Section
        5.2.    Other
        Agreements.
        At the
        Closing, JH shall execute and deliver, and shall cause Ronald Warrick and
        Lloyd
        P. Hart to execute and deliver, agreements not to compete substantially
        identical to the form attached hereto as Exhibit 5.2 (the “Agreements
        Not To Compete”).

      

      Section
        5.3.    Further
        Assurances.
        JH and
        the Company shall execute, acknowledge and deliver or cause to be executed,
        acknowledged and delivered to Turbeco such assignments or other instruments
        of
        transfer, assignment and conveyance, in form and substance satisfactory to
        counsel of Turbeco, as shall be necessary to vest in Turbeco all of the right,
        title and interest in and to the assets of the Company, 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 Turbeco
        in
        connection with this Agreement.

      

      Section
        5.4.    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
        5.5.    Environmental
        Remediation.
        Turbeco
        has received a copy of the Limited Phase II Assessment prepared by Phase
        Engineering, Inc. with respect to the Real Estate (the “Phase
        II Assessment”).
        The
        Company will perform all of the remediation and cleanup work recommended
        pursuant to the Phase II Assessment, and any other environmental remediation
        and
        cleanup work identified by Turbeco before the Closing Date, to the reasonable
        satisfaction of Turbeco (collectively, the “Environmental
        Remediation”).

      

      Section
        5.6.    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.

      

      Section
        5.7.    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.

      

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      Section
        5.8.    Employee
        Matters.
        

      

      (a)    Effective
        immediately following the Closing, Turbeco shall offer employment to all
        of the
        employees of the Company who are engaged in the business in the United States,
        each of which who accepts a position shall hereinafter be referred to as
        a
“Affected
        Employee”
        and
        shall become an employee of Turbeco, 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 Turbeco, the Company will
        remain responsible for medical expenses covered under their plans actually
        incurred prior to the Effective Time and Turbeco 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 Turbeco 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 Turbeco.

      

      (d)    Turbeco
        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 5.8.

      

      (e)    The
        Company agrees that it shall be solely responsible for all liability, costs
        and
        expenses (including attorneys’ fees) for all employment claims (collectively,
        the “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. Turbeco agrees that it shall be responsible for
        all
        Employment Claims by any Affected Employee who accepts employment with Turbeco
        which accrued after 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 the Affected Employees. The Disclosure Schedule
        sets
        forth a brief 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.

      

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      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:

      

      (a)    Turbeco
        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 Turbeco 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 Turbeco by the President or a Vice President of Turbeco and on behalf
        of
        Turbeco by the Chief Executive Officer of Turbeco to that effect;
        and

      

      Section
        6.2.    Conditions
        to Obligations of Turbeco to Effect the Purchase Transaction.
        Unless
        waived by Turbeco, the obligations of Turbeco 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 and JH 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
        and JH 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 Turbeco shall
        have
        received a certificate executed on behalf of the Company by the President
        and
        Chief Executive Officer of the Company to that effect;

      

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      (b)    since
        June 15, 2005, 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)    Turbeco
        shall have received the amount of debt and equity financing reasonably required
        to consummate the Purchase Transaction, from parties and pursuant to terms
        acceptable to Turbeco, in its sole and absolute discretion.

      

      ARTICLE
        VII

      INDEMNIFICATION

      

      Section
        7.1.    Indemnification
        of Turbeco.
        JH and
        the Company shall jointly and severally indemnify Turbeco and its 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 or JH in this Agreement, (b) any violation or
        breach
        by the Company or JH of or default by the Company or JH under the terms of
        this
        Agreement, (c) any event or occurrence relating to the business of the Company
        occurring prior to the Effective Time, including specifically, but not by
        way of
        limitation, the Environmental Remediation, and/or (d) any product liability
        or
        other claims concerning products sold by the Company prior to the Effective
        Time
        except the Warranty Obligation (as defined in Section 7.2). 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.

      

      Section
        7.2.    Indemnification
        of JH and the Company.
        Turbeco
        shall indemnify JH and the Company against, and hold each of them harmless
        from
        and against, any and all Indemnified Amounts incurred by JH 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 Turbeco in this
        Agreement, (b) any violation or breach by Turbeco of or default by Turbeco
        under
        the terms of this Agreement, and/or (c) the cost to repair and/or replace
        defective products sold by the Company prior to the Effective Time, to the
        extent required pursuant to the warranty policy of the Company in effect
        at the
        time of the sale (the “Warranty
        Obligation”).
        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.

      

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

      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 active, passive
        or
        concurrent negligence of the indemnified party.
        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. 

      

      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 Turbeco 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 30 days after written notice
        of
        such failure is given to Turbeco by the Company; 

       

      (ii)    if
        the
        Purchase Transaction is not completed by December 31, 2005 (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 to fulfill any obligation
        to Turbeco 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
        Turbeco (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 Turbeco by the Company.

      

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      (b)    Turbeco
        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 30 days after written notice
        of
        such failure is given to the Company by Turbeco;

      

      (ii)    if
        the
        Purchase Transaction is not completed by December 31, 2005 (provided that
        the
        right to terminate this Agreement under this Section 8.1(b)(ii) shall not
        be
        available to Turbeco if the failure of Turbeco 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

      

      (iii)    if
        the
        Company or JH (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 Turbeco.

      

      Section
        8.2.    Effect
        of Termination.
        In the
        event of termination of this Agreement by either Turbeco
        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, Turbeco, or its respective officers or directors, or JH 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 5.4 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.

      

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

      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 Turbeco: 

                	
                  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 JH:

                	
                  11317
                    West Country Road, Suite 128

                
	 	
                  Odessa,
                    Texas 79765

                
	 	
                  Telefax
                    No. (432) 563-1873

                

        

         

      

      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.

      

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

      Section
        8.10.   Multiple
        Counterparts.
        This
        Agreement may be executed in multiple counterparts, each of which shall be
        deemed an original.

      

      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.

      

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

       

      
        
          	 	 	 
	 	THE COMPANY:
	 	 
	 	HARMON’S
                  MACHINE WORKS, INC., a Texas corporation
	 
 	 
 	 
 
	 	By:  	/s/ Jimmy
                  Harmon
	 	
                  
Name:
	 	Title:

        

        
          	
                	 	 
	 	TURBECO:
	 	 
	 	TURBECO,
                  INC., a Texas corporation
	 
 	 
 	 
 
	 	By:  	/s/ Jerry
                  D. Dumas Sr,
	 	
                  
Name:
	 	Title:

        

      

       

      
        
          	
                	 	 
	 	JH:
	 	 
	 	/s/
                  Jimmy Harmon
	 	
                  
Jimmy
                  Harmon

        

         

         

      

      
        
          
          

        

        
          -19-

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