FLOTEK INDUSTRIES, INC. WARRANT AGREEMENT
EXHIBIT
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.
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Warrant
No. A-1
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20,000
Shares
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(Subject
to terms
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herein)
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THIS
WARRANT AGREEMENT (“Warrant”),
dated
as of February 11, 2005 is between Flotek Industries, Inc., a Delaware
corporation (the “Company”),
and
▇▇▇▇▇ 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.
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(i)
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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.
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(ii)
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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.
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(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:
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(i)
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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”);
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(ii)
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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
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(iii)
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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.
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(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:
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(i)
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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;
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(ii)
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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;
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(iii)
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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;
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(iv)
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the
Holder is an “accredited investor” as such term is defined in Rule 501
promulgated under the Securities
Act;
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(v)
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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
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(vi)
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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.
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(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-
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(i)
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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.
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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:
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If
to Holder:
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▇▇▇▇▇
Fargo Bank, N.A.
1000
Louisiana, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ 77002
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No. (▇▇▇) ▇▇▇-▇▇▇▇
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If
to Company:
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Flotek
Industries, Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chief Financial Officer
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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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/
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Chief Executive Officer
Chief Executive Officer
Agreed
to
and Accepted as of this
14th
day
of February, 2005.
HOLDER
▇▇▇▇▇
FARGO BANK, N.A.
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇▇
Name:
▇▇▇▇
▇▇▇▇▇▇▇
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