ASSET PURCHASE AGREEMENT

Exhibit 10.2

EXECUTION COPY

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT, dated as of February 4 ^th , 2008 (the “ Agreement ”), is by and among Teledrift Acquisition, Inc., a Delaware corporation (“ Purchaser ”), Flotek Industries, Inc., a Delaware corporation (“ Flotek ”), Teledrift, Inc. an Oklahoma corporation (“ Teledrift ”), and the following stockholders of Teledrift: Floyd Bergen, Dean DuCray, Max Weldon, and Manoj Gopalan (referred to herein collectively as the “ Stockholders ,” or individually as a “ Stockholder ”).

RECITALS :

WHEREAS, Purchaser desires to acquire substantially all of the assets of Teledrift;

WHEREAS, Teledrift desires to sell to the Purchaser substantially all of its assets in exchange for the consideration herein provided; and

WHEREAS, the Stockholders own all of the stock of Teledrift and therefore will materially benefit from the consummation of the transactions 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, Purchaser will purchase from Teledrift, and Teledrift will sell to Purchaser, the following assets, rights, properties, and interests of Teledrift (the “ Acquired Assets ”):

(a) All land described on Schedule 1.1(a) hereto, together with all buildings, structures, improvements, and fixtures located thereon, and all easements and other rights and interests appurtenant thereto;

(b) All rental tools, machinery, equipment, furniture, computers, office supplies, vehicles, fixtures, and other items of tangible personal property;

(c) All Intellectual Property (as defined in Section 9.1) including the Intellectual Property described on Schedule 1.1(c) hereto;

(d) All leasehold rights pursuant to any lease of real or personal property including the leases described on Schedule 1.1(d) hereto (the “ Assigned Leases ”);

(e) All rights under any Contracts including the Contracts and purchase orders described on Schedule 1.1(e) (the “ Assigned Contracts ”);

(f) All files, books, ledgers, customer lists, correspondence, drawings, specifications, studies, reports, and records, other than corporate records relating to the organization or governance of Teledrift and tax records;

(g) All inventories of finished goods, tooling inventory, parts, work in progress and raw materials as of the Effective Time;

(h) All accounts receivable as of the Effective Time;

(i) All franchises, approvals, permits, licenses, orders, registrations, certificates, authorizations, variances, and similar rights obtained from Governmental Authorities to the extent assignable.

(j) All prepaid items including all equipment, lease and other deposits existing as of the Effective Time but excluding prepaid Taxes and prepaid insurance;

(k) All of the goodwill of Teledrift and all of the rights of Teledrift to use the tradename “Teledrift, Inc.” or any similar name; and

(l) Claims, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery, rights of set off, and rights of recoupment ((i) relating to the Acquired Assets, or (ii) arising under any guarantees, warranties or rights against suppliers and manufacturers) with respect to any of the other Acquired Assets listed under this Section 1 but excluding such items to the extent relating to Taxes and insurance policies maintained by Teledrift prior to the Closing.

Section 1.2 Excluded Assets . Notwithstanding the foregoing, the Acquired Assets shall not include the cash of Teledrift, the prepaid Taxes and prepaid insurance of Teledrift, or any of the assets listed on Schedule 1.2 (collectively, the “ Retained Assets ”).

Section 1.3 Purchase Price for Acquired Assets . As consideration for the sale to it of the Acquired Assets, Purchaser shall (i) assume the accounts payable of Teledrift as provided in this Section 1.3, (ii) assume certain obligations of Teledrift pursuant to the Assigned Contracts as provided in this Section 1.3, and (iii) pay Teledrift a purchase price (the “ Purchase Price ”) equal to Ninety-Five Million Two Hundred Thousand Dollars ($95,200,000). Purchaser shall at the Closing:

(a) Pay Teledrift $95,200,000 in cash payable by wire transfer or the delivery of other immediately available funds;

(b) Assume the accounts payable (as defined pursuant to GAAP) of Teledrift as of the Effective Time which are either (i) reflected in the September 30, 2007 balance sheet of Teledrift included in Financial Statements, (ii) reflected in the Disclosure Schedules, or (iii) incurred in the ordinary course of business after September 30, 2007; and

(c) Assume from Teledrift any obligation to perform pursuant to the express terms of any Assigned Contract which is disclosed in the Disclosure Schedule, which accrues subsequent to the Effective Time.

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The Liabilities of Teledrift which will be assumed by Purchaser pursuant to the terms of this Section 1.3 are referred to herein collectively as the “ Assumed Liabilities .”

Section 1.4 No Assumption of Liabilities . Except as expressly provided for in Section 1.3, Purchaser has not and will not assume from Teledrift any Liability. Specifically, but not by way of limitation, Purchaser shall not assume the following Liabilities of Teledrift:

(a) any Liability for income Taxes;

(b) any Liability for Taxes (other than income Taxes) arising with respect to conduct of the Business through the Effective Time;

(c) any Liability to indemnify any Person (including any of the Stockholders) by reason of the fact that such Person was, a director, officer, employee, or agent of any entity or was serving at the request of any such entity as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement or otherwise);

(d) any Liability for costs and expenses incurred by Teledrift or any Stockholder in connection with this Agreement and the Transactions;

(e) any Liability of Teledrift under this Agreement (or under any agreement between Teledrift on the one hand and Purchaser on the other hand entered into on or after the date of this Agreement);

(f) any Liability for Funded Debt;

(g) any Liability arising prior to the Effective Time, or as a result of the Closing, to any employee, agent, or independent contractor of Teledrift, whether or not employed by Purchaser after the Effective Time, or under any benefit arrangement maintained by or for the benefit of Teledrift with respect thereto;

(h) any Liability for wages, commissions, vacation, holiday, workers’ compensation and sick pay obligations with respect to employees of Teledrift, accrued through the Effective Time and all bonuses and fringe benefits as to such employees accrued through the Effective Time, and all severance pay obligations to such employees, if any, resulting from the consummation of the transactions contemplated by the Agreement; and

(i) any Liability arising out of any employee benefit plan maintained by or covering employees of Teledrift, or to which Teledrift has made any contribution or to which Teledrift could be subject to any Liability.

Section 1.5 Net Assets Adjustment . In the event that the Net Assets as of the Effective Time varies from the Targeted Net Asset Amount (as such terms are defined in Section 9.1), the Purchase Price shall be adjusted upwards or downwards to the extent that the net impact of such variance exceeds $1,000,000. The procedure for determining whether an adjustment shall be made pursuant to this Section 1.5 is set forth in Appendix A.

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Section 1.6 Prorations . Except as otherwise set forth in this Agreement, the following prorations relating to the Acquired Assets will be made as of the Effective Time, with Teledrift liable to the extent such items relate to any time period on or prior to the Effective Time and Purchaser liable to the extent such items relate to periods after the Effective Time: (i) ad valorem, personal property, real estate, occupancy and other similar property Taxes, if any, on or with respect to the Acquired Assets; and (ii) the amount of charges for water, telephone, electricity and other utilities. The net amount of all such prorations will be settled and paid at the Closing. In the event that the amount of any of the items to be prorated pursuant to this Section 1.6 is not known by Teledrift and Purchaser at the Closing, the proration shall be made based upon the amount of the most recent cost of such item to Teledrift. After Closing, Purchaser and Teledrift each shall provide to the other, promptly after receipt, each third party invoice relating to any items so estimated. Within ten (10) business days thereafter, Purchaser and Teledrift shall make any payments to the other that are necessary to compensate for any difference between the proration made at the Closing and the correct proration based on the third party invoice, and amounts owed by Teledrift shall remain the responsibility of Teledrift and amounts owed by Purchaser shall be considered an Assumed Liability.

Section 1.7 Allocation . The consideration paid for the Acquired Assets and the Restrictive Covenants, together with any Assumed Liabilities, shall be allocated as shown on an allocation schedule (the “ Allocation Schedule ”) to be prepared by Purchaser and approved by Teledrift as soon as may be reasonably practicable. The allocation set forth in such Allocation Schedule shall comply with the rules of Section 1060 of the Code and the treasury regulations promulgated thereunder. Except to the extent that a contrary position is required by law, Purchaser and Teledrift agree to be bound by the allocation set forth in the Allocation Schedule for all purposes of Tax reporting, including the filing of IRS Form 8594 in accordance with the Allocation Schedule, and the filing of an amended IRS Form 8594 in the event a revised Allocation Schedule is deemed necessary by Purchaser. The Allocation Schedule shall include an allocation by state where necessary to calculate applicable state sales or transfer taxes applicable to the transaction.

Section 1.8 Closing . The closing (the “ Closing ”) of the Transaction shall take place at the offices of counsel to Purchaser in Houston, Texas on the earliest of the following two dates to occur: (i) the date which is specified by Purchaser, which shall not be later than five days following the date of the closing of the Financing (as hereinafter defined) or (ii) the Termination Date, or at such other time and place as Purchaser and Teledrift shall agree. At the Closing, each of the parties hereto will take actions and execute such documents and instruments as may be reasonably required to consummate the Transaction. The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date .” At the Closing, each of the parties shall take such actions as shall be required pursuant to the terms hereof to be taken at the Closing, or which are otherwise reasonably required to cause the Transaction to be consummated. The Closing shall be effective as of 12:01 a.m. Houston Texas time on the Closing Date (the “ Effective Time ”).

Section 1.9 Definitions; Rules of Construction

(a) The definitions of certain terms are set forth in Section 9.1. An index indicating the locations of the definitions of certain terms used herein is set forth in Section 9.2.

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(b) All article, section, schedule and exhibit references used in this Agreement are to articles, sections, schedules and exhibits to this Agreement unless otherwise specified. The schedules and exhibits attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes.

(c) If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Terms defined in the singular have the corresponding meanings in the plural, and vice versa. Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa. The term “includes” or “including” shall mean “including without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,” “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular section or article in which such words appear.

(d) The Parties acknowledge that each Party and its attorney has reviewed this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement.

(e) The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

(f) All references to currency herein shall be to, and all payments required hereunder shall be paid in, US dollars.

(g) Except as specifically provided otherwise in this Agreement, all accounting terms used herein that are not specifically defined shall have the meanings customarily given them pursuant to GAAP.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND FLOTEK

Purchaser and Flotek, jointly and severally represent and warrant to Teledrift and the Stockholders as follows:

Section 2.1 Organization and Qualification . Each of Purchaser and Flotek is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation 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) Each of Purchaser and Flotek has full corporate power and authority to execute and deliver this Agreement and to consummate the Transaction. This Agreement has

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been approved by the Boards of Directors of Purchaser and Flotek, and no other corporate proceedings on the part of Purchaser and Flotek, including, without limitation, any stockholder approval with respect to Purchaser or Flotek, are necessary to authorize the execution and delivery of this Agreement or the consummation by Purchaser or Flotek of the Transaction, including, without limitation, under the applicable requirements of any securities exchange. This Agreement has been duly executed and delivered by Purchaser and Flotek, and, assuming the due authorization, execution and delivery hereof by Teledrift and the Stockholders, constitutes a valid and legally binding agreement of Purchaser and Flotek 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.

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

(c) Except for any filings or approvals required pursuant to the HSR Act, no declaration, filing or registration with, or notice to, or authorization, consent or approval of, any Governmental Authority is necessary for the execution and delivery of this Agreement by Purchaser or Flotek or the consummation by Purchaser of the Transaction.

Section 2.3 Brokers and Finders . Neither Purchaser nor Flotek has entered into any contract, arrangement or understanding with any Person or firm which may result in the obligation of Purchaser or Flotek to pay any finder’s fees, brokerage or agent commissions or other like payments in connection with the Transaction. There is no claim for payment by Purchaser or Flotek 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 Transaction.

Section 2.4 No Financing Contingency . Purchaser and Flotek acknowledge that consummation of the Transaction is not subject to any financing contingency and that they would, accordingly, be obligated to close the transaction on or prior to the Termination Date notwithstanding any inability to close the Financing if the Purchaser is otherwise obligated to close pursuant the terms of this Agreement.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF TELEDRIFT AND THE STOCKHOLDERS

Teledrift and each Stockholder severally (with each Stockholder’s several liability being based on his Proportionate Ownership) represent and warrant to Purchaser that, except as provided in the Disclosure Schedule:

Section 3.1 Organization and Qualification . Teledrift is a corporation duly organized, validly existing and in good standing under the laws of the State of Oklahoma 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. Teledrift is duly qualified to do business as a foreign 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, each of which jurisdiction is listed in the Disclosure Schedule. True, accurate and complete copies of the charter and bylaws of Teledrift, in each case as in effect on the date hereof, including all amendments thereto, have heretofore been delivered to Purchaser.

Section 3.2 Stock Ownership . The Stockholders own all of the issued and outstanding equity stock of Teledrift, as more particularly reflected on Schedule 3.2.

Section 3.3 Subsidiaries . Teledrift does not have any Subsidiaries.

Section 3.4 Authority; Non Contravention; Approvals .

(a) Teledrift and such Stockholder have full power and authority to execute and deliver this Agreement and to consummate the Transaction. This Agreement has been approved by the Board of Directors and stockholders of Teledrift, and no other corporate proceedings on the part of Teledrift are necessary to authorize the execution and delivery of this Agreement or the consummation by Teledrift of the Transaction. This Agreement has been duly executed and delivered by Teledrift and such Stockholder, and, assuming the due authorization, execution and delivery hereof by Purchaser, constitutes a valid and legally binding agreement of Teledrift and such Stockholder, enforceable against Teledrift and such Stockholder in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles.

(b) Except as set forth in the Disclosure Schedule, the execution and delivery of this Agreement by Teledrift and such Stockholder and the consummation by Teledrift and such Stockholder of the Transaction 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, upon any of the properties or assets of Teledrift under any of the terms, conditions or provisions of (i) the charter or the Bylaws of Teledrift, (ii) any statute, law, ordinance, rule, regulation, judgment, decree, order, injunction, writ, permit or license of any court or

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Governmental Authority applicable to Teledrift or its properties or assets, or (iii) any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, concession, or any Material Contract (as defined in Section 3.20) to which Teledrift is now a party or by which Teledrift or any of its respective properties or assets may be bound or affected.

(c) Except for any filings or approvals required pursuant to the HSR Act, no declaration, filing or registration with, or notice to, or authorization, consent or approval of, any Governmental Authority is necessary for the execution and delivery of this Agreement by Teledrift and such Stockholder or the consummation by Teledrift and such Stockholder of the Transaction.

Section 3.5 Financial Statements . Teledrift has furnished Purchaser with unaudited balance sheet, income statement and statement of cash flow for Teledrift for the fiscal years ending December 31, 2005 and December 31, 2006, and unaudited balance sheet and income statement for the nine months ending September 30, 2007 (collectively, the “ Financial Statements ”). The Financial Statements were prepared in accordance with the accounting methods described in the Financial Statements and in the Disclosure Schedule and are accurate and complete in all material respects (except the absence of footnote disclosures and for the absence of normal year-end audit adjustments which are not material in the aggregate) and fairly present the financial condition and result of operations of Teledrift. Teledrift has also furnished Purchaser with unaudited balance sheet and income statement for Teledrift for the months of October, November and December 2007 (collectively, the “ Interim Financial Statements ”). The Interim Financial Statements were prepared on a basis consistent with the manner in which the Financial Statements were prepared (provided the Interim Financial Statements have not undergone Teledrift’s year end review process or been reviewed by Teledrift’s outside accountants), and, to the Knowledge of Teledrift, the Interim Financial Statements are accurate and complete in all material respects (except, the absence of footnote disclosures and for the absence of normal year-end audit adjustments which are not material in the aggregate) and fairly present the financial condition and result of operations of Teledrift.

Section 3.6 Absence of Certain Changes or Events . Since September 30, 2007 and as reflected in Schedule 3.6 of the Disclosure Schedule:

(a) there has not been (i) any Material Adverse Effect, (ii) any damage, destruction, loss or casualty to property or assets of Teledrift, whether or not covered by insurance, which property or assets are material to the operations or business of Teledrift taken as a whole, (iii) any declaration, setting aside or payment of any dividend or distribution (whether in cash, stock or property) in respect of the capital stock of Teledrift or any redemption or other acquisition by Teledrift of any of the capital stock of Teledrift or any split, combination or reclassification of shares of capital stock declared or made by Teledrift, (vi) any increase in compensation payable or benefits to directors, executive officers or key employees of the Teledrift or (v) any commitment or agreement to do any of the actions in subsections (iii) or (iv); and

(b) there has not been with respect to Teledrift (i) any extraordinary losses suffered, (ii) any material assets mortgaged, pledged or made subject to any Lien, other than a Permitted Lien or a Lien which will not continue following the Closing, (iii) any increase in any

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bad debt, contingency or other reserve, except, in each case, in the ordinary course of business and consistent with past practice, (iv) any Liabilities paid, discharged or satisfied, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of Liabilities reflected or reserved against in the Base Balance Sheet or incurred in the ordinary course of business and consistent with past practice since the Base Balance Sheet Date, (v) any write off as uncollectible of any notes or accounts receivable, except write-offs in the ordinary course of business and consistent with past practice, (vi) any write down of the value of any asset or investment on Teledrift’s books or records, except for depreciation and amortization taken in the ordinary course of business and consistent with past practice, (vii) any change in any method of accounting or accounting practice, (viii) any cancellation of any debts or waiver of any claims or rights in excess of $25,000 or sale, transfer or other disposition of any properties or assets (real, personal or mixed, tangible or intangible) in excess of $25,000, other than sales of inventory in the ordinary course of business, (ix) any single capital expenditure or commitment in excess of $50,000 for additions to property or equipment, or aggregate capital expenditures and commitments in excess of $100,000 (on a consolidated basis) for additions to property or equipment other than the capitalization of rental tools and component parts for rental tools in the ordinary course of business, (x) any transaction other than in the ordinary course of business, or agreement to do any of the foregoing, or (xi) the taking of any action described in Section 4.1.

Section 3.7 Accounts Receivable . The accounts receivable of Teledrift reflected in the Base Balance Sheet and/or which are taken into account in the determination of Net Assets 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. Any such accounts receivable owed by a specific debtor and its Affiliates which has an aggregate balance in excess of $50,000 as of the Effective Time, are current and collectible net of any reserves shown on the Financial Statements, and subject to such reserve, will be collected in full, without any set off and without resort to litigation, within 180 days after the Closing.

Section 3.8 Inventory . To the Knowledge of Teledrift, the inventory reflected in the Base Balance Sheet (the “ Inventory ”) consists of items that are usable in the ordinary course of business by Teledrift, except for applicable inventory reserves reflected on the Base Balance Sheet and except as set forth on Schedule 3.8 of the Disclosure Schedules. No items included in the Inventory are held by Teledrift on consignment from others. The Inventory is valued based on a rolling average basis on a basis consistent with that of prior years.

Section 3.9 Real Property .

(a) Teledrift does not own any fee interest in any real property, except the real estate described as now owned by Teledrift in Schedule 1.1(a) of the Disclosure Schedule (the “ Owned Real Estate ”). The Owned Real Estate is owned by Teledrift, free and clear of any Lien, except for Permitted Liens. None of the Owned Real Estate is subject to (i) any leases or any right of any third party to use or occupy any portion of the Owned Real Estate, or (ii) any outstanding options, rights of first offer or rights of first refusal.

(b) Teledrift does not lease or occupy any real estate not owned by it other than the premises described as leased by Teledrift in Schedule 1.1(d) of the Disclosure Schedule (the “ Leased Premises ”). Teledrift has delivered to Purchaser a true and complete copy of each

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lease document with respect to the Leased Premises (a “ Lease ”). Each Lease is valid, binding, and enforceable in accordance with its terms, and, to the Knowledge of Teledrift, there is no dispute with respect to any such Lease.

(c) The Owned Real Estate and the Leased Premises are sometimes referred to herein collectively as the “ Company Facilities .” The improvements included in the Company Facilities are adequate for the operation of the Business as presently conducted. To the Knowledge of Teledrift, there are no facts or circumstances affecting any of the Company Facilities that would, individually or in the aggregate, interfere in any material respect with the use or occupancy of the Company Facilities as currently operated. The possession and quiet enjoyment of the Company Facilities by Teledrift has not been disturbed, nor has Teledrift received notice of any condemnation, expropriation, or other proceedings in eminent domain affecting any of the Company Facilities.

(d) To the Knowledge of Teledrift, the use by Teledrift of the Company Facilities in the normal conduct of its business does not violate any applicable building, zoning or other law, ordinance or regulation.

(e) Teledrift has not experienced and/or received any notice any material interruption in the delivery of adequate quantities of any utilities or other public services to the Company Facilities required by Teledrift in the normal operation of its business.

Section 3.10 Personal Property .

(a) Teledrift owns and has good and marketable title to all of the Acquired Assets which comprise personal property, free and clear of all Liens except Permitted Liens and Liens to be released in connection with the Closing.

(b) All Acquired Assets are in such operating condition and repair (reasonable wear and tear excepted) as to allow Teledrift to conduct its Business as presently conducted. Except for rental tools which are in the possession of customers and tools and/or equipment being assembled and/or repaired or in transit and except as reflected in Schedule 3.10(b) of the Disclosure Schedule, all of the Acquired Assets, whether owned or leased, are and will be in the possession and control of and owned by Teledrift at the Closing, and no other party has any right or interest in or to the Acquired Assets.

(c) The Acquired Assets, comprise all of the assets currently used or held for use by Teledrift to operate the Business, and are collectively sufficient to provide Purchaser with the means and capability to operate the Business, as and in the manner the Business has been performed by Teledrift prior to the date of this Agreement.

Section 3.11 Intellectual Property .

(a) Neither Teledrift nor its Business as presently conducted has or will, in any material respect, interfere with, infringe upon, misappropriate, or otherwise come into conflict with, any Intellectual Property rights of third parties; and Teledrift has not received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or conflict with any Intellectual Rights of third parties (including any claim

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that Teledrift must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of Teledrift, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with, any Intellectual Property rights of Teledrift.

(b) Schedule 3.11 of the Disclosure Schedule identifies each patent or registration that has been issued to Teledrift with respect to any of its Intellectual Property, identifies each pending patent application or application for registration that Teledrift has made with respect to any of its Intellectual Property, and identifies each material license, agreement, or other permission that Teledrift has granted to any third party with respect to any of its Intellectual Property. Teledrift has delivered to Purchaser correct and complete copies of all such patents, registrations, applications, licenses, agreements, and permissions (as amended to date). With respect to each item of Intellectual Property identified in Section 3.11 of the Disclosure Schedule:

(i) Teledrift possesses all right, title, and interest in and to the item, free and clear of any Lien other than Permitted Liens;

(ii) Teledrift is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge restricting its use of such item;

(iii) No action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of Teledrift, is threatened that challenges the legality, validity, enforceability, use, or ownership of the item; and

(c) Section 3.11(c) of the Disclosure Schedule identifies each item of Intellectual Property that any third party owns and that Teledrift uses pursuant to license, sublicense, agreement, or permission. Teledrift has delivered to Purchaser correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). With respect to each such item of used Intellectual Property required to be identified in Section 3.11(c) of the Disclosure Schedule:

(i) The license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect in all material respects;

(ii) To the Knowledge of Teledrift, no party to the license, sublicense, agreement, or permission is in breach or default, and no event has occurred that with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder.

(iii) To the Knowledge of Teledrift, no party to the license, sublicense, or permission has repudiated any provision thereof;

(iv) Teledrift has not granted any sublicense or similar right to any third party with respect to the license, sublicense, agreement, or permission; and

(v) To the Knowledge of Teledrift, no loss or expiration of the item is threatened, pending, or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by Teledrift, including without limitation, a failure by Teledrift to pay any required maintenance fees).

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Section 3.12 Labor, Benefit and Employment Agreements .

(a) The Disclosure Schedule lists all of the employees of Teledrift and describes any obligation on the part of Teledrift to any of its employees (the “ Employees ”) to pay regular salaries or hourly compensation and bonus opportunity during the period of their employment and the manner in which they have been paid. Except as indicated in the Disclosure Schedule, Teledrift is not utilizing the services of any individual independent contractor on a regular weekly basis.

(b) There are no material controversies pending or, to the Knowledge of Teledrift, threatened between Teledrift on the one hand and any of the Employees on the other. The Disclosure Schedule describes all bonuses and other compensation and any obligation of Teledrift to pay severance or other payments which will be payable to any of the Employees as a result of, or in connection with, the consummation of the Transaction.

(c) The Disclosure Schedule sets forth each (i) collective bargaining agreement or other written agreement covering unionized employees with respect to which Teledrift has any Liability, (ii) bonus, deferred compensation, stock option, stock purchase, retirement, severance, welfare, incentive, pension, profit sharing, retirement, change in control, or retention plan, policy, arrangement or agreement, including any plan constituting an “employee benefit plan” within the meaning of the Employee Retirement Income Security Act of 1974 (“ ERISA ”), as amended, maintained by Teledrift or any organization which, together with Teledrift, would be treated as a “single employer” within the meaning of Section 414(b) or (c) of the Code, or to which Teledrift or any such organization contributes (or has any obligation to contribute) or is a party or with respect to which Teledrift has any Liability (collectively, the “ Employee Plans ”), and (iii) written employment or other compensation policies, arrangements and agreements with respect any non hourly and/or non union employee(s) of Teledrift (collectively, the “ Employment Agreements ”).

(d) No union is now certified or has claimed in writing the right to be certified as a collective bargaining agent to represent any employees of Teledrift, and there are no organizational activities or labor disputes existing or, to the Knowledge of Teledrift, threatened, involving organizational activities, picketing, strikes, slowdowns, work stoppages, job actions or lockouts of any employees of Teledrift.

(e) Teledrift has not received written notice of any unfair labor practice charges or petitions for election filed, pending or being litigated before the National Labor Relations Board or any State labor relations board involving Teledrift. Teledrift has not received any written notice of any actual or alleged violation of any law, regulation, order or contract term affecting the collective bargaining rights of employees, equal opportunity in employment, or employee health, safety, welfare, or wages and hours involving Teledrift.

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(f) No Employee Plan is an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) subject to Section 412 of the Code or Section 302 or Title IV of ERISA.

(g) Each Employee Plan has been administered and operated in compliance with all applicable statutes, rules and regulations, except as could not reasonably be expected to result in a material Liability to Teledrift;

(h) No Employee Plan provides for post-employment or retiree welfare benefits, except as required under Section 4980B of the Code;

(i) Teledrift has not filed an application under the IRS Employee Plans Compliance Resolution System or the Department of Labor’s Voluntary Fiduciary Correction Program with respect to any Employee Plan;

(j) No claim, action or litigation, has been made, commenced or, to the Knowledge of Teledrift, threatened with respect to any Employee Plan (other than routine claims for benefits payable in the ordinary course, and appeals of denied claims), which could reasonably be expected to result in material Liability to Teledrift;

(k) No Employee Plan has assets that include securities issued by Teledrift;

(l) Neither Teledrift, nor, to the Knowledge of Teledrift, any other “disqualified Person” or “party in interest” (as defined in Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in any transactions in connection with any Employee Plan that could reasonably be expected to result in the imposition of a penalty pursuant to Section 502 of ERISA, damages pursuant to Section 409 of ERISA or a tax pursuant to Section 4975 of the Code;

(m) To the Knowledge of Teledrift, the execution of this Agreement and the consummation of the transactions contemplated hereby, do not constitute a triggering event under any Employee Plan, Employment Agreement, policy, arrangement, statement, commitment or agreement, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (whether of severance pay or otherwise), “parachute payment” (as such term is defined in Section 280G of the Code), acceleration, vesting or increase in benefits to any employee or former employee or director of Teledrift.

(n) Teledrift has delivered or caused to be delivered to the Purchaser or its counsel true and complete copies of each Employee Plan, together with all amendments thereto, and, to the extent applicable, (i) all current summary plan descriptions; (ii) the annual report on Internal Revenue Service Form 5500-series, including any attachments thereto, for each of the last three (3) plan years; (iii) the most recent determination letter related to any of the Employee Plans intended to qualify under Section 401(a) of the Code; and (iv) any materials relating to any government investigation or audit or any submissions under any voluntary compliance procedures.

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Section 3.13 Litigation . Except as reflected on Schedule 3.13 of the Disclosure Schedule, there are no claims, suits, actions, or proceedings pending or, to the Knowledge of Teledrift, threatened against or relating to Teledrift, before any court, Governmental Authority, or any arbitrator. Teledrift is not subject to any judgment, decree, injunction, rule or order of any court or Governmental Authority.

Section 3.14 No Violation of Law . Teledrift is not in violation, in any material respect, of or has not been given written notice or been charged with any violation of, any law, statute, order, rule, regulation, ordinance or judgment (including, without limitation, any applicable Environmental Law, as hereinafter defined) of any Governmental Authority, and specifically, but not by way of limitation, the Foreign Corrupt Practices Act. Except as disclosed in the Disclosure Schedule, as of the date of this Agreement, to the Knowledge of Teledrift, no investigation or review by any Governmental Authority with respect to Teledrift is pending or threatened, nor has any Governmental Authority indicated an intention to conduct the same. Teledrift has all permits (including without limitation Environmental Permits (as defined in Section 3.19)), licenses, franchises, variances, exemptions, orders and other governmental authorizations, necessary to conduct its Business as presently conducted (collectively, the “ Company Permits ”). Teledrift is not in violation, in any material respect, of the terms of any Company Permits.

Section 3.15 Insurance Policies . The Disclosure Schedule sets forth a true and accurate list and summary of current insurance coverage or information concerning any self insurance program with respect to Teledrift. Teledrift has not received written notice from any current insurance carrier of the intention of such carrier (a) to discontinue any material insurance coverage afforded to Teledrift; or (b) to materially increase the premium costs of such insurance.

Section 3.16 Suppliers . Except as set forth in the Disclosure Schedule, no single supplier accounted for more than 5% of the raw materials, services or merchandise purchased by Teledrift, on an aggregate basis, during the year ended December 31, 2006, or during the nine months ended on the Base Balance Sheet Date. Since December 31, 2006 there has not been (a) any adverse change in the business relationship of Teledrift with any such supplier which would have a material and adverse impact on the Business, or (b) any material change in any term (including credit terms) of the agreements with any such supplier made outside the ordinary course of business. To the Knowledge of Teledrift, there are no existing, announced or anticipated changes in the policies of any supplier which will materially affect the amount of business Teledrift conducts with such supplier after the date of this Agreement.

Section 3.17 Customers and Distributors . Except as set forth in the Disclosure Schedule, no single customer (with respect to direct sales by Teledrift) or distributor accounted for more than 5% of the sales of Teledrift during the year ended December 31, 2006, or during the nine months ended on the Base Balance Sheet Date. The Disclosure Schedule sets forth the amount of sales of Teledrift which were to customers located outside of the United States of America during such periods, itemized by country. Except as set forth in the Disclosure Schedule, since December 31, 2006 there has not been (a) any adverse change in the business relationship of Teledrift with any customer or distributor identified in the Disclosure Schedule which would have a material and adverse impact on the Business; or (b) any material change in any term (including credit terms) of the agreements with any such customer or distributor which

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would have a material and adverse impact on the Business. To the Knowledge of Teledrift, there are no existing, announced or anticipated changes in the policies of any customers or distributors which will materially affect the amount of business Teledrift conducts with such customers or distributors after the date of this Agreement.

Section 3.18 Taxes .

(a) All returns and reports, including, without limitation, information and withholding returns and reports (“ Tax Returns ”), of or relating to any Tax that are required to be filed on or before the Closing by or with respect to Teledrift have been or will be duly and timely