Document:

Unassociated Document

    PROMISSORY
      NOTE

     

    
      	
              $2,500,000

            	
              October
                17, 2005

            
	
            	
              Denver,
                Colorado

            
	 	 

    

    FOR
      VALUE
      RECEIVED, the undersigned (“Maker”) promises to pay to the order of Jipangu
      Inc., a Japan corporation (“Holder”), on June 1, 2006, the principal sum of Two
      Million Five Hundred Thousand Dollars ($2,500,000), plus interest thereon from
      December 1, 2005 at a rate of seven and three tenths percent (7.3%) per annum
      through payment in full; provided, that any amount of principal and interest
      which is not paid when due shall bear interest at the default rate of twelve
      percent (12%) per annum from the day when due through payment in full.

     

    All
      interest shall be calculated on the basis of a year of 365 days, for the actual
      number of days (including the first day but excluding the last day) elapsed.
      Payments shall be made in funds current and available in Tokyo, Japan, in lawful
      money of the United States of America, at such place as Holder may specify
      from
      time to time.

     

    Upon
      the
      occurrence of any one of the following events, all
      obligations of Maker hereunder shall become immediately due and payable without
      any action by Holder:

     

    (i) Maker
      or
      any of its subsidiaries makes an assignment for the benefit of creditors, or
      applies for or consents to the appointment of a receiver or trustee for it
      or
      for a substantial part of its property or business, or such a receiver or
      trustee shall otherwise be appointed; 

     

    (ii) bankruptcy,
      insolvency, reorganization or liquidation proceedings or other proceedings
      or
      relief under any bankruptcy law or any law for the relief of debtors shall
      be
      instituted by or against Maker or any of its subsidiaries; or

     

    (iii) Maker
      or
      any of its subsidiaries defaults in any payment to any third party or parties
      in
      an aggregate amount in excess of $500,000 or otherwise defaults or fails to
      perform in any agreement in a manner resulting in a right by any third party
      or
      parties to accelerate the maturity of any indebtedness of Maker or any of its
      subsidiaries in an amount in excess of $500,000;

     

    Maker
      agrees to pay all costs and expenses which Holder may incur by reason of any
      default, including without limitation reasonable collection costs and attorneys’
      fees with respect to legal services relating to any default and to a
      determination of any rights or remedies of Holder under this Note or under
      any
      other instrument or document made by Maker with or in favor of Holder, and
      reasonable attorneys’ fees relating to any actions or proceedings which Holder
      may institute or in which Holder may appear or participate and in any reviews
      of
      and appeals therefrom.

     

    Maker
      waives demand, presentment for payment, protest, notice of protest, and notice
      of nonpayment. Maker further agrees that any modification or extension of the
      terms of payment of this Note made by Holder shall not diminish or impair
      Maker’s liability for the payment hereunder and that none of the terms or
      provisions hereof may be waived, altered, modified or amended except as Holder
      may consent thereto in a writing duly signed by Holder. Holder may delay or
      forgo enforcing any of its rights or remedies under this Note without losing
      them.

     

    THIS
      NOTE
      SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF
      COLORADO WITHOUT RESPECT TO CONFLICT OF LAW PRINCIPLES. IF A LAWSUIT IS
      COMMENCED IN CONNECTION WITH THIS NOTE, MAKER AGREES THAT EXCLUSIVE JURISDICTION
      AND VENUE FOR ANY SUCH ACTION SHALL LIE IN DENVER, COLORADO, AND MAKER AGREES,
      UPON HOLDER’S REQUEST, TO SUBMIT TO THE PERSONAL JURISDICTION OF THE STATE AND
      FEDERAL COURTS THEREIN.

     

    

    Apollo
      Gold Corporation, a Yukon corporation

     

    By: 
      /s/ R. David Russell

    
      
        

      

    

    Print
      Name:  R. David Russell

    Print
      Title:    President and CEOEXHIBIT
        4.2

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
        AND
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
        ANY
        STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
        ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR TRANSFER IS EXEMPT FROM
        THE
        REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT OF
        1933
        OR SUCH STATE LAW.

       

      THIS
        WARRANT IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER THAT ARE DESCRIBED
        IN
        SECTION 8 HEREOF.

       

      FLOTEK
        INDUSTRIES, INC.

      WARRANT
        AGREEMENT

      

       

      
        	
                Warrant
                  No. A-1

              	
                20,000
                  Shares

              
	 	
                (Subject
                  to terms

              
	 	
                herein)

              

      

      

      THIS
        WARRANT AGREEMENT (“Warrant”),
        dated
        as of February 11, 2005 is between Flotek Industries, Inc., a Delaware
        corporation (the “Company”),
        and
        Wells Fargo Bank, N.A., a national banking association (the “Warrantholder”
        and,
        together with any permitted assignee of the Warrant, the “Holder”).

       

      WHEREAS,
        this Warrant is one of the Warrants issued on February 11, 2005 by the Company
        in connection with a Credit Agreement between the Company and the Holder;
        and

       

      WHEREAS,
        at the times and under the conditions set forth below the Holder shall be
        entitled to purchase Common Stock (as hereinafter defined) of the
        Company.

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual agreements herein
        set
        forth, the parties hereto agree as follows:

       

      Section
        1.    Warrants.

       

      (a)    Number
        of Initial Warrant Shares.
        At the
        time set forth below, and subject to the terms and conditions herein set
        forth,
        the Holder will be entitled to purchase 20,000 shares (the “Initial
        Warrant Shares”)
        of the
        Company’s common stock, no par value (the “Common
        Stock”).
        This
        number shall be subject to adjustment as set forth in Section 3
        below.

       

      Section
        2.    Duration;
        Purchase Price; Exercise of Warrants.

       

      (a)    Initial
        Purchase Price.
        The
        initial purchase price for the Initial Warrant Shares, commencing as of the
        date
        hereof, shall be $5.35 per share of Common Stock in lawful money of the United
        States of America, which purchase price shall hereafter be subject to adjustment
        as provided in Section 3 hereof. Except as the context otherwise requires,
        the
        term “Purchase Price” as used in this Warrant shall mean the purchase price per
        share of Common Stock then in effect as of the relevant date and shall reflect
        all adjustments made in accordance with the provisions of Section 3 hereof.
        “Aggregate
        Purchase Price”
        means
        the aggregate Purchase Price payable for the shares of Common Stock purchasable
        under this Warrant.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)    Exercise
        Periods.
        (i)
General.
        The
        Holder may exercise the Warrants in whole or in part, at any time after the
        date
        hereof until 5:00 p.m., Houston, Texas, time, on February 11, 2007.

       

      (c)    Manner
        of Exercise; Method of Payment.
        The
        Holder may exercise all or a portion of the Warrants by delivering the Form
        of
        Exercise attached hereto as Exhibit
        A
        to the
        Company at the address set forth in Section 13 hereof, together with payment
        of
        the portion of the Aggregate Purchase Price applicable to the shares of Common
        Stock being purchased.

       

      
        	 	
                (i)

              	
                Payment
                  may be made in the form of cash, or by certified check, bank draft
                  or
                  money order payable in lawful money of the United States of America
                  to the
                  order of the Company. No adjustments shall be made for any cash
                  distributions, whether paid or declared, on any shares of Common
                  Stock
                  issuable upon exercise of the
                  Warrants.

              

      

       

      
        	 	
                (ii)

              	
                The
                  Holder may also exercise all or any part of the Warrants in a “cashless”
                  or “net-issue” exercise by delivering to the Company (A) the Form of
                  Exercise and (B) the Warrant. For purposes of this subparagraph
                  (c)(ii),
                  each share of Common Stock as to which such Warrants are surrendered
                  will
                  be attributed a value equal to (x) the fair value per share of
                  the shares
                  of Common Stock minus
                  (y) the then-current exercise price per share of Common Stock as
                  to which
                  Warrants are surrendered. Solely for the purposes of this paragraph,
“fair
                  value” shall be equal to (A) if listed and quoted on a national or
                  regional stock exchange, or on the Nasdaq National Market if quoted
                  thereon, the closing sales price per share of the Common Stock
                  as quoted
                  on the trading day immediately preceding the date on which the
                  Form of
                  Exercise is deemed to have been sent to the Company, or (B) if
                  not so
                  listed, the value determined reasonably and in good faith by the
                  independent members of the Board of Directors of the Company as
                  of the
                  date which the Form of Exercise is deemed to have been sent to
                  the
                  Company.

              

      

       

      (d)    Delivery
        of Common Stock.
        Upon
        receipt of such notice and payment, the Company shall issue to the Holder
        the
        number of shares of Common Stock (rounded down to the whole share) to be
        purchased, together with cash made available by the Company pursuant to Section
        4 hereof in respect of any additional fraction of a share of Common Stock
        otherwise issuable upon such exercise.

       

      (e)    Partial
        Exercise.
        If any
        Warrants shall have been exercised only in part, the Company shall, at the
        time
        of delivery to the Company of the Warrant by the Holder, deliver to such
        Holder
        a new Warrant evidencing the rights of such Holder to purchase the remaining
        shares of Common Stock called for by the Warrant, which new Warrant shall
        in all
        other respects be identical with the original Warrant, or, at the request
        of
        such Holder, appropriate notation may be made on the original Warrant and
        same
        returned to such Holder.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      (f)    Withholding
        Taxes.
        Upon
        the exercise of any Warrants as provided in this Section 2 with respect to
        which
        there is a federal, state or local income tax withholding obligation, in
        satisfaction of such withholding obligation, the Holder shall remit to the
        Company (i) a cash payment from the Holder, (ii) if the shares are then readily
        tradeable on a national securities market or quoted on a Nasdaq system, a
        direction from the Holder to deliver the shares to a broker who will remit
        directly to the Company a sufficient amount of the proceeds from the sale
        of
        such shares to satisfy such obligation, or (iii) any combination of the
        foregoing. Any fraction of a share of Common Stock required to satisfy such
        obligation shall be disregarded and the amount due shall instead be paid
        in cash
        by the Holder to the Company.

       

      Section
        3.    Adjustments
        to Number of Shares and Purchase Price.
        The
        number of shares of Common Stock issuable upon exercise of this Warrant and
        the
        Purchase Price shall be subject to adjustment from time to time after the
        date
        hereof as follows:

       

      (a)    Common
        Stock Dividends, Splits and Combinations.
        In case
        the Company shall (i) pay a dividend in, or make a distribution of, Common
        Stock
        or of any other interests in the Company convertible into shares of Common
        Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
        number of such shares or (iii) combine its outstanding shares of Common Stock
        into a smaller number of such shares, the total number of shares of Common
        Stock
        issuable upon the exercise of this Warrant outstanding immediately prior
        thereto
        shall be adjusted so that the Holder thereafter shall be entitled to receive
        upon exercise of the unexercised Warrants, at the same Aggregate Purchase
        Price
        (as in effect at the time of such event and from time to thereafter), the
        number
        of shares of Common Stock that the Holder would have owned or have been entitled
        to receive immediately following any of the events described above had such
        Warrants been exercised in full immediately prior to any such event. An
        adjustment made pursuant to this subsection shall, in the case of a dividend
        in
        Common Stock or a distribution of Common Stock or interests in the Company
        convertible into shares of Common Stock, become effective as of the record
        date
        therefor and, in the case of a subdivision or combination, be made as of
        the
        effective date thereof. If, as a result of an adjustment made pursuant to
        this
        subsection, the Warrantholder thereafter shall become entitled to receive
        shares
        of Common Stock together with one or more other interests in the Company
        upon
        the exercise of its Warrants, the Company shall reasonably determine the
        allocation of the adjusted Purchase Price between or among such shares of
        Common
        Stock and such interests.

       

      (b)    Adjustments.
        In the
        event of any adjustment of the total number of shares of Common Stock issuable
        upon the exercise of the unexercised Warrants pursuant to Subsection (a)
        above,
        the per share Purchase Price (in effect immediately prior to such adjustment)
        applicable to the Initial Warrant Shares and any additional number of shares
        of
        Common Stock (“Additional
        Warrant Shares”
        together with the Initial Warrant Shares, the “Warrant
        Shares”)
        shall
        be proportionately adjusted; provided that in no event shall the Purchase
        Price
        be less than the par value per share of Common Stock.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      (c)    Other
        Dividends.
        In case
        the Company shall distribute to all holders of its Common Stock (the
“Company
        Shareholders”)
        interests in the Company (other than Common Stock or other interests convertible
        into Common Stock), evidences of its indebtedness, cash or assets, or rights
        or
        warrants to subscribe for or purchase such interests, evidences of indebtedness
        or assets, then in each such case the Purchase Price applicable to each Initial
        Warrant Share and each Additional Warrant Share in effect thereafter shall
        be
        adjusted by multiplying the Purchase Price applicable to each Initial Warrant
        Share and each Additional Warrant Share (as in effect immediately prior thereto)
        by a fraction, the numerator of which shall be the total number of outstanding
        shares of Common Stock multiplied by the current market price per share of
        Common Stock (as defined in Subsection (e) below) on the record date mentioned
        below, less the then fair market value, as reasonably determined in good
        faith
        by the Board of Directors of the Company, of the interests, assets or evidences
        of indebtedness or of such rights or warrants so distributed to all such
        holders, and of which the denominator shall be the total number of outstanding
        shares of Common Stock, multiplied by such current market price per share
        of
        Common Stock. Such adjustments shall be made whenever any such distribution
        is
        made, and shall become effective as of the record date for the determination
        of
        the Company Shareholders entitled to receive such distribution.

       

      (d)    Reorganizations
        and Recapitalizations.
        In the
        event of any capital reorganization or any reclassification of the Common
        Stock
        (except as provided in Subsection (a) above or Subsection (g) below), the
        Holder, upon exercise of its Warrants, shall be entitled to receive, in lieu
        of
        the shares of Common Stock to which the Holder would have become entitled
        upon
        exercise immediately prior to the reorganization or reclassification, the
        shares
        of Common Stock, or other interests in the Company or property of the Company
        that it would have been entitled to receive at the same Aggregate Purchase
        Price
        upon such reorganization or reclassification if its Warrants had been exercised
        immediately prior thereto; and in any such case, appropriate provision (as
        reasonably determined by the Board of Directors of the Company), shall be
        made
        for the application of this Section 3 with respect to the rights and interests
        thereafter of the unexercised Warrants (including but not limited to the
        allocation of the adjusted Purchase Price between or among shares of Common
        Stock and any other interests in the Company), to the end that this Section
        3
        (including the adjustments of the number of shares of Common Stock or other
        interests in the Company purchasable and the Purchase Price thereof) shall
        thereafter be reflected, as nearly as reasonably practicable, in all subsequent
        exercises of the Warrants for any shares of Common Stock or other interests
        in
        the Company, or other property, thereafter deliverable upon the exercise
        of the
        Warrants.

       

      (e)    Current
        Market Price Per Share of Common Stock.
        For the
        purpose of any computation under Subsection (c) above, the “current market price
        per share of Common Stock” at any date shall be deemed to be the average of the
        daily closing market prices for the 20 consecutive trading days before the
        day
        in question in the principal market in which the Common Stock is traded or,
        if
        no such market exists, the value as determined reasonably and in good faith
        by
        the independent members of the Board of Directors of the Company; provided,
        if the
        Holders of a majority of the outstanding Warrants dispute the determination
        of
        the “current market price per share of Common Stock” by the Board of Directors
        of the Company, the determination shall be made as follows:

       

      
        	 	
                (i)

              	
                the
                  Holders of a majority of the outstanding Warrants shall agree upon
                  and
                  deliver to the Company, within 30 days after written notice of
                  an
                  applicable adjustment by the Company, an alternative “current market price
                  per share of Common Stock” at the applicable date based upon a valuation
                  prepared by an independent financial advisor (such notice by the
                  Holders,
                  the “Valuation
                  Notice”);

              

      

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      
        	 	
                (ii)

              	
                the
                  Company and the Board of Directors shall review the proposed valuation
                  and, if deemed appropriate, agree upon a revised valuation of “current
                  market price per share of Common Stock” with such Holders, the effect of
                  which shall be binding and conclusive on all holders of the Warrants;
                  and

              

      

       

      
        	 	
                (iii)

              	
                if
                  the Company and such Holders cannot agree within 20 days after
                  the
                  delivery of the Valuation Notice from such Holders to the Company,
                  the
                  valuations of the Company and such Holders (which may be different
                  from
                  the original “current market price per share of Common Stock” proposed by
                  the Company or such Holders, provided it is a valuation offered
                  by such
                  party and not accepted by the other party in negotiations) shall
                  be
                  submitted as soon as practicable to an independent appraiser mutually
                  agreed upon by the Company and such Holders (the “Appraiser”),
                  together with any information relating to the Company deemed appropriate
                  by the Company or such Holders. The Appraiser shall, within 20
                  days of
                  engagement, select either the “current market price per share of Common
                  Stock” valuation of the Company, the valuation of such Holders or a
                  valuation between such valuations. If the valuation selected exceeds
                  the
                  Company’s valuation by more than 10%, the Company shall pay the fees and
                  expenses of the Appraiser. If the valuation selected exceeds the
                  Company’s
                  valuation by 10% or less, such Holders shall pay the fees and expenses
                  of
                  the Appraiser.

              

      

       

      (f)    Minimum
        Adjustment.
        No
        adjustment under this Section 3 to the Purchase Price or the number of Warrants
        purchasable hereunder shall be made unless such adjustment would require
        an
        increase or decrease of at least one percent in the Purchase Price or number
        of
        Warrants; provided, however, that any adjustments which by reason of this
        subsection are not required to be made shall be carried forward and taken
        into
        account in any subsequent adjustment. All calculations under this Section
        3
        shall be made to the nearest cent or to the nearest one-tenth of one share
        of
        Common Stock, as the case may be.

       

      (g)    Mergers
        and Consolidations.
        In case
        of any consolidation of the Company with, or merger of the Company with or
        into
        another corporation or any other entity (other than a consolidation or merger
        that does not result in any reclassification or change of the outstanding
        Common
        Stock), or in case of any sale or conveyance to another entity of the property
        of the Company as an entirety or substantially as an entirety, the corporation
        or any other entity formed by such consolidation or merger or the entity
        that
        shall have acquired such assets, as the case may be, shall execute and deliver
        to the Holder a supplemental warrant agreement providing that the Holder
        shall
        have the right thereafter to receive, upon exercise of the then unexercised
        Warrants, the kind and amount of corporate interests and other securities
        and
        property receivable upon such consolidation, merger, sale or transfer by
        a
        holder of the number of shares of Common Stock for which such Warrant might
        have
        been exercised immediately prior to such consolidation, merger, sale or
        transfer. Such supplemental warrant agreement shall provide for adjustments
        that
        shall be as nearly equivalent as may be practicable to the adjustments provided
        in this Section 3. The above provision of this subsection shall similarly
        apply
        to successive consolidations, mergers, sales or transfers.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      (h)    Adjustment
        by Board of Directors.
        If any
        event occurs as to which, in the good faith opinion of the Board of Directors
        of
        the Company, the provisions of this Section 3 are not strictly applicable
        or if
        strictly applicable would not fairly protect the rights of the Holder of
        this
        Warrant in accordance with the essential intent and principles of such
        provisions, then the Board of Directors shall make an adjustment in the
        application of such provisions, in accordance with such essential intent
        and
        principles, so as to protect such rights as aforesaid, but in no event shall
        any
        adjustment have the effect of increasing the Aggregate Purchase Price as
        otherwise determined pursuant to any of the provisions of this Section 3
        except
        in the case of a combination of shares of a type contemplated in Section
        3(a)
        and then in no event to an amount larger than the Aggregate Purchase Price
        as
        adjusted pursuant to Section 3(a).

       

      Section
        4.    Reservation
        and Authorization of Warrant Shares.

       

      (a)    Reservation.
        The
        Company shall at all times reserve and keep available, free from preemptive
        rights, solely for issue upon the exercise of Warrants as herein provided,
        such
        number of its authorized but unissued Warrant Shares deliverable upon the
        exercise of Warrants as will be sufficient to permit the exercise in full
        of all
        outstanding Warrants.

       

      (b)    Listing.
        The
        Company shall use its best efforts to cause all Warrant Shares, at all times
        that Warrants are exercisable, to be duly approved for listing subject to
        official notice of issuance on each securities exchange, if any, or the Nasdaq
        National Market, if applicable, on which the shares of Common Stock are then
        listed or traded.

       

      (c)    Authorization.
        The
        Company covenants that all Warrant Shares that may be issued upon due exercise
        of Warrants shall upon issuance be duly and validly authorized, issued, fully
        paid and nonassessable and free of preemptive or similar rights.

       

      Section
        5.    Payment
        of Taxes.
        The
        Company shall pay when due and payable any and all federal and state original
        issue taxes that may be payable in respect of the issuance of any shares
        of
        Common Stock or other interests upon the exercise of Warrants.

       

      Section
        6.    Conditions
        to Holder Exercise of Warrant.
        The
        right of the Holder to exercise the Warrant for shares of Common Stock of
        the
        Company, and the obligation of the Company to sell shares of Common Stock
        pursuant to the Warrant, is subject to the fulfillment of the following
        conditions:

       

      (a)    The
        Holder shall represent and warrant to the Company that:

       

      
        	 	
                (i)

              	
                the
                  Holder is purchasing the shares of Common Stock for its own account,
                  for
                  investment purposes and not with a view to the distribution
                  thereof;

              

      

       

      
        	 	
                (ii)

              	
                the
                  Holder acknowledges that the Common Stock into which the Warrant
                  may be
                  exercised has not been registered under the Securities Act of 1933,
                  as
                  amended (the “Securities
                  Act”),
                  and the rules and regulations promulgated thereunder, or any state
                  securities laws, and, in the absence of such registration (or and
                  exemption therefrom), the Holder may be required to hold such Common
                  Stock
                  for an indefinite period of time, and that the Company is not under
                  any
                  obligation to register such Common Stock on the Holder’s behalf or to
                  assist the Holder in complying with an exemption from registration
                  under
                  the Securities Act or any state securities
                  law;

              

      

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      
        	 	
                (iii)

              	
                the
                  Holder has such knowledge and experience in financial and business
                  matters
                  that it is capable of evaluating the merits and risks of its investment
                  in
                  the Common Stock, that it understands that the investment in the
                  Common
                  Stock is highly risky and is able to bear the complete loss of
                  its
                  investment in the Common Stock and acknowledges that the financial
                  condition of the Holder is such that it has no need for liquidity
                  with
                  respect to its investment in the Common Stock and no present or
                  foreseeable need to dispose of any portion of the Common Stock
                  to satisfy
                  an existing or contemplated undertaking or
                  indebtedness;

              

      

       

      
        	 	
                (iv)

              	
                the
                  Holder is an “accredited investor” as such term is defined in Rule 501
                  promulgated under the Securities
                  Act;

              

      

       

      
        	 	
                (v)

              	
                the
                  Holder has made its own investigation whether or not to invest
                  in the
                  Common Stock and the Company has afforded the Holder and its advisors
                  the
                  opportunity to discuss an investment in the Common Stock and to
                  ask
                  questions of its representatives concerning the Common Stock and
                  such
                  representatives have provided answers to such questions concerning
                  the
                  Common Stock, and that the Holder has consulted its own financial,
                  tax,
                  accounting and legal advisors, if any, in each case, with respect
                  to the
                  Holder’s investment in the Common Stock and the consequences thereof and
                  risks associated therewith and the Holder has received satisfactory
                  answers to such questions concerning the Common Stock and the Company
                  as
                  it has asked; and

              

      

       

      
        	 	
                (vi)

              	
                the
                  Holder is not an entity required to be registered as an “investment
                  company” within the meaning of the Investment Company Act of 1940, as
                  amended.

              

      

       

      (b)    The
        Holder shall agree not to sell, transfer, exchange or otherwise dispose of
        the
        shares of Common Stock into which the Warrant is exercised unless such shares
        of
        Common Stock are sold, transferred, exchanged or otherwise disposed of pursuant
        to an effective registration statement under the Securities Act or in a
        transaction exempt from the registration requirements of the Securities Act
        and,
        in either case, such sale, transfer, exchange or other disposition shall
        be in
        compliance with, or exempt from, applicable state securities laws. In connection
        herewith, the Holder agrees that the shares of Common Stock into which the
        Warrant is exercised shall bear the following legends:

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      
        	 	
                (i)

              	
                THE
                  SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
                  AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
                  AS AMENDED,
                  OR ANY STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD OR
                  TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
                  SALE OR
                  TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
                  REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR SUCH STATE
                  LAW.

              

      

       

      Section
        7.    No
        Rights as a Company Stockholder.
        This
        Warrant shall not be deemed to provide the Holder with any rights as a
        stockholder of the Company or to confer to the Holder any right to vote upon
        any
        matter submitted to the Company stockholders, or to give or withhold consent
        to
        any corporate action (whether upon any recapitalization, issuance of Common
        Stock, reclassification of Common Stock, consolidation, merger, conveyance
        or
        otherwise), or to receive notice of meetings or other actions affecting the
        Company stockholders or to receive distributions or subscription rights,
        or
        allocations of any corporate items of income, gain, loss, deduction or credit,
        or notice of Internal Revenue Service proceedings or adjustments, or
        otherwise.

       

      Section
        8.    Regulatory
        Approvals and Listings.
        Notwithstanding anything contained in this Warrant to the contrary, the Company
        shall have no obligation to issue or deliver certificates of Common Stock
        upon
        the exercise of any Warrant prior to (i) the obtaining of any approval of
        any
        governmental agency that the Company shall, in its reasonable discretion,
        determine to be necessary, (ii) the admission of such shares to listing on
        any
        securities exchange on which the Common Stock is then listed and (iii) the
        completion of any registration or other qualification of such shares under
        any
        state or federal law or ruling of any governmental body that the Company
        shall,
        in its reasonable discretion, determine to be necessary. The Company shall
        take
        such action as may be required to satisfy such conditions as to permit the
        exercise of the Warrants.

       

      Section
        9.    Piggyback
        Registration Rights.
        Whenever the Company proposes to register any of its securities under the
        Securities Act and the registration form to be used may be used for the
        registration of the Warrants and the Common Stock (a “Piggyback
        Registration”),
        the
        Company shall give prompt written notice to the Holder of its intention to
        effect such a registration and shall include in such registration, at its
        cost,
        the Warrants and the Common Stock subject to the Warrants with respect to
        which
        the Company has received written requests for inclusion therein within 20
        days
        after the Company’s notice. The Holder shall provide to the Company such
        information concerning the Holder as the Company may reasonably request in
        order
        to prepare a registration statement to be used in connection with such
        registration. The Company shall take such further action as the Holder may
        reasonably request in order to facilitate the disposition of the Warrants
        and/or
        Common Stock pursuant to such registration.

       

      Section
        10.    Amendments
        and Waivers.
        This
        Warrant may be amended, supplemented, waived, discharged or terminated by
        a
        written instrument signed by the Holder and the Company.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      Section
        11.    Notices.
        All
        notices, requests, communications or demands pursuant to this Warrant Agreement
        to be given to or made on the Company, or to be given to or made on the Holder,
        shall be in writing, and may be given or made if sent by (1) first-class
        mail or
        registered mail, postage prepaid, or (2) nationally recognized overnight
        courier
        at the addresses specified below. Notice deposited in the mail as herein
        provided shall be effective from and after the expiration of three days after
        it
        is so deposited. The mailing addresses of the parties are as
        follows:

       

      
        	
                If
                  to Holder:

              	
                Wells
                  Fargo Bank, N.A.

                1000
                  Louisiana, 3rd
                  Floor

                T5001-031

                Houston,
                  Texas 77002

                Attention:
                  Chad Johnson

                Telecopy
                  No.: (713) 739-1086

                Telephone
                  No. (713) 319-1332

              
	 	 
	
                If
                  to Company:

              	
                Flotek
                  Industries, Inc.

                7030
                  Empire Central Drive

                Houston,
                  Texas 77040

                Attention:
                  Chief Financial Officer

                Telecopy
                  No.: (713) 466-8386

                Telephone
                  No.: (713) 849-9911

              

      

      

      The
        address of either party may be changed by notice given to the other party
        in the
        manner provided in this Section 11.

       

      Section
        12.    Successors.
        All of
        the covenants and provisions of this Warrant by or for the benefit of the
        Company or the Holder shall bind and inure to the benefit of their respective
        successors and assigns hereunder.

       

      Section
        13.    Choice
        of Law.
        This
        Warrant, including, without limitation, the interpretation, construction,
        validity and enforceability thereof, shall be governed by the laws of the
        State
        of Texas.

       

      Section
        14.    Submission
        to Jurisdiction.

       

      (a)    Any
        legal
        action or proceeding with respect to this Warrant, the shares of Common Stock
        or
        any document related thereto may be brought in the courts of the State of
        Texas
        or of the United States of America for the Southern District of Texas, and,
        by
        execution and delivery of this Warrant, the Company and each party hereby
        accepts for itself and in respect of its property, generally and
        unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
        The
        parties hereto hereby irrevocably waive any objection, including, without
        limitation, any objection to the laying of venue or based on the grounds
        of
forum
        non conveniens,
        which
        any of them may now or hereafter have to the bringing of any such action
        or
        proceeding in such respective jurisdictions.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      (b)    The
        Company and each party irrevocably consent to the service of process of any
        of
        the aforesaid courts in any such action or proceeding by the mailing of copies
        thereof by registered or certified mail, postage prepaid, to the Company
        or such
        party, respectively, at its address provided in Section 11.

       

      (c)    Nothing
        contained in this Section 14 shall effect the right of any party hereto to
        serve
        process in any other manner permitted by law.

       

      Section
        15.     Waiver
        of Jury Trial.
        Each of
        the parties hereto waives any right it may have to trial by jury in respect
        of
        any litigation based on, or arising out of, under or in connection with this
        Warrant, any shares of Common Stock or any course of conduct, course of dealing,
        verbal or written statement or action of any party hereto.

       

      Section
        16.     Counterparts.
        This
        Warrant may be executed in any number of counterparts, each of which shall
        be an
        original; but such counterparts shall together constitute one and the same
        instrument.

       

      Section
        17.     Headings.
        The
        headings of this Warrant have been inserted as a matter of convenience and
        shall
        not affect the construction hereof.

       

      Section
        18.     Severability. If
        any
        provision of this Warrant is held illegal, invalid or unenforceable under
        any
        present or future law, such provision will be fully severable, this Warrant
        will
        be construed and enforced as if such illegal, invalid or enforceable provision
        had never compromised a part hereof and the remaining provisions of this
        Warrant
        will remain in full force and effect and will not be affected by the illegal,
        invalid or unenforceable provision or by its severance from this
        Warrant.

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
        as of
        the day and year first above written, by its proper corporate officers,
        thereunto duly authorized.

       

      Flotek
        Industries, Inc.

       

      By:
         /s/
        Jerry D. Dumas, Sr.
Chief
        Executive Officer

       

      Agreed
        to
        and Accepted as of this

      14th
        day
        of February, 2005.

       

      HOLDER

       

      WELLS
        FARGO BANK, N.A.

       

      By:
        /s/
        Chad Johnson

      Name:
        Chad
        Johnson

      Title:
        Relationship
        Manager

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      EXHIBIT
        A

       

      Form
        of Exercise

       

      In
        accordance with and subject to the terms and conditions hereof and of the
        Warrant Agreement dated as of February 11, 2005 (the “Warrant”),
        between Flotek Industries, Inc. (the “Company”)
        and
        _____________, the undersigned hereby irrevocably elects to exercise the
        Warrant
        and represents that the Warrantholder has:

       

      o (a)   tendered
        the
        Aggregate Purchase Price (as defined in the Warrant) for the  Warrant
        being exercised hereby in the aggregate amount of $_________ in  the
        indicated combination of:

       

      (i)    cash
        ($____________);

       

      (ii)   certified
        bank check in funds payable to the order of the Company  ($________);

       

      (iii)   official
        bank check in funds payable to the order of the Company  ($_________);
        or

       

      (iv)    money
        order in funds payable to the order of the Company  ($__________).

       

      o  (b)    elected
        the “net-issue exercise” option pursuant to Section 1(c)(ii) of the  Warrant
        Agreement, and requests delivery of a net of _______ shares of  Common
        Stock.

       

      The
        undersigned requests that the shares of Common Stock issuable upon exercise
        be
        in such denominations and registered in such names and delivered, together
        with
        any other property receivable upon exercise, in such manner as is specified
        in
        the instructions set forth below.

       

      The
        undersigned hereby makes the representations and warranties set forth in
        Section
        6(a) of the Warrant.

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, Holder has caused this Form of Exercise to be duly executed
        on
        this  ____
        day
        of _______________, 200__.

       

      

       

      HOLDER

       

      By:
        _______________________________

      __________________________________

      __________________________________

       

       

      Address:
        ___________________________

      ___________________________________

       

       

      The
        above
        Form of Exercise is confirmed and accepted

      this
        ______ day
        of
        ____________ 200 .

       

      FLOTEK
        INDUSTRIES, INC.

       

      By:________________________________

      Name:
        _____________________________

      Title:
        ______________________________

       

      
        
           

        

        
          A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]