Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

SELLER  

PURCHASER

 

Name: Eco-Stim Energy Solutions, Inc.   Name: Porter Capital Corporation By: /s/
Alexander Nickolatos                             [signature]   By: /s/ Marc
Porter                                            [signature] Officer’s Name
Printed: Alexander Nickolatos   Officer’s Name Printed: Marc Porter Its: Chief
Financial Officer   Its: President Street Address: 2930 W. Sam Houston Pkwy N.  
Street Address: 2112 First Avenue North,   Houston, TX 77043     Birmingham, AL,
35203 Mailing Address: (Same)   Mailing Address: PO Box 12105, Birmingham, AL,
35202 Email Address: *****   Email Address: ***** State of Organization: Nevada
  State of Organization: Alabama Federal Tax ID: *****   Federal Tax ID: *****
State and County of Principal Office: Texas, Harris County   State and County of
Principal Office: Alabama, Jefferson County           Name: EcoStim, Inc.      
By: /s/ Alexander Nickolatos                             [signature]      
Officer’s Name Printed: Alexander Nickolatos       Its: Chief Financial Officer
      Street Address: 2930 W. Sam Houston Pkwy N., Suite 275         Houston, TX
77043       Mailing Address: (Same)       Email Address: *****       State of
Organization: Texas     Federal Tax ID: *****       State and County of
Principal Office: Texas, Harris County                         State of
Texas                                                ) County of
Harris                                                 )    

On February _8___, 2018, before me, the undersigned, a Notary Public in and for
said State, personally appeared the above-named representative of Seller, who is
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he or she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument, the persons, or the
entity upon behalf of which the person acted, executed the instrument.

          WITNESS my hand and official seal. Notary Signature: /s/ Pamela E.
Veasey           (Seal)

 

This RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT (“Agreement”) is made as
of the 8th day of February, 2018 by and between the above-named Seller
(“Seller”) and Porter Capital Corporation (“Purchaser”).

 

1. DEFINITIONS. The following terms used herein shall have the following
meanings. All capitalized terms not herein defined shall have the meanings set
forth in the Alabama Uniform Commercial Code:

 

“Account Debtor” – an account debtor (as defined in the Uniform Commercial Code
as adopted in the State of Alabama) on any Purchased Account.

 

“Accounts” – any right to payment for goods sold or leased or for services
rendered which is not evidenced by an instrument or chattel paper, whether or
not it has been earned by performance, or such additional meaning as shall be
given to the term Accounts under the Uniform Commercial Code as adopted in the
State of Alabama.

 

“Accounts Transmittal” – a form supplied by Purchaser from time to time wherein
Seller lists such of its Accounts as it requests that Purchaser purchase under
the terms of this Agreement and to which are attached copies of all invoices
which relate to the Accounts described therein.

 

“Advance Rate” – the Advance Rate set forth on “Schedule A.”

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

“Actual/365 Computation” - a method used by Purchaser in determining the annual
effective yield by taking the stated (nominal) rate for a year’s period and then
dividing said rate by 365 to determine the daily periodic rate to be applied for
each day in the applicable period.

 

“Clearance Days” - Three (3) business days for Account Debtors located in the
United States

 

“Collateral” – all of Seller’s Accounts (including Accounts purchased by
Purchaser hereunder and repurchased by Seller); Chattel Paper; Instruments; and
Inventory now or hereafter acquired; all of Seller’s Equipment listed on
“Schedule B” attached hereto; and the Proceeds or Proceeds of Proceeds of all of
the foregoing including, but without limitation all insurance proceeds and all
claims against others for loss or destruction of or damage to any of the
foregoing.

 

“Dispute” - a claim by an Account Debtor that the goods or services which are
the subject of a Purchased Account were not delivered or accepted in accordance
with the agreement between the Account Debtor and Seller, whether or not such
dispute is valid.

 

“Due Diligence Fee” – the Due Diligence Fee set forth on “Schedule A.”

 

“Eligible Account” - An Account which is acceptable for purchase as determined
by Purchaser in the exercise of its reasonable credit or business judgment.

 

“Events of Default” – the Events of Default set forth in Section 11.1.

 

“Face Amount” -The face amount due on an Account.

 

“Initial Term” – the Initial Term set forth on “Schedule A.

 

“Insolvency Event” – the filing of a petition under any state or federal debtor
relief or liquidation statute by or against an Account Debtor.

 

“Interest Rate” – the Prime Rate plus the margin set forth on “Schedule A.”

 

“Late Fee” - any fee charged pursuant to section 3.4 of this Agreement.

 

“Line Amount” - the Line Amount set forth on “Schedule A.”

 

“Minimum Term Fee” – an amount equal to the monthly Interest Rate multiplied by
the Minimum Average Monthly Volume set forth on “Schedule A” multiplied by the
number of months in the Initial Term or any Renewal Term provided that no Event
of Default has occurred. Upon the occurrence and during the continuation of an
Event of a Default arising under Section 11.1(ii) of this Agreement, the
“Minimum Term Fee” shall be three percent (3.0%) multiplied by the Minimum
Average Monthly Volume multiplied by the number of months in the Initial Term or
any Renewal Term. If an Event of a Default arises under Section 11.1(i), (iii),
(iv) or (v) of this Agreement, and such Event of Default is not remedied or
waived within 45 days of the date an officer of Seller becomes aware of such
Event of Default (the “MTF Waiver Period”), commencing on the first day
immediately following the MTF Waiver Period, the “Minimum Term Fee” shall be
three percent (3.0%) multiplied by the Minimum Average Monthly Volume multiplied
by the number of months in the Initial Term or any Renewal Term. Notwithstanding
anything to the contrary contained herein, if the Purchaser determines that an
Account from an Account Debtor previously approved by Purchaser in writing is
not or is no longer an Eligible Account or refuses to purchase an Account from
an Account Debtor previously approved by Purchaser in writing, the Minimum
Average Monthly Volume will be reduced by the Face Amount of such Account and
the Minimum Term Fee will be reduced by such Face Amount multiplied by the
Interest Rate for a sixty day period.

 

“Minimum Average Monthly Volume” – the Minimum Average Monthly Volume set forth
on “Schedule A.

 

“Misdirected Payment Fee” – the greater of $5,000.00 or twenty-five (25%) of the
amount of any payment on account of a Purchased Account which has been received
by Seller and not delivered in kind to Purchaser within five (5) business days
following the date of receipt by Seller.

 

“Notation” – Invoice is assigned and payable to:

 

i. If by check, mail to the following address:

 

PORTER Capital Corporation

PO Box 12105

Birmingham, Alabama 35203

For Account of:

 

Please show invoice and/or account number on check.

ii. If by electronic remittance, to:

 

Compass Bank

Birmingham, AL

Account Name: Porter Capital Corporation

ABA Routing Number: *****

Account Number: *****

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

For Account of:

 

“Obligations” – all obligations of Seller under this Agreement and all present
and future indebtedness and obligations due or owing by Seller to Purchaser
whether or not for the payment of money, whether or not evidenced by this
Agreement, a note or any other instrument, whether direct or indirect, absolute
or contingent, due or to become due, joint or several, primary or secondary,
liquidated or un-liquidated, secured or unsecured, original or renewed or
extended, including but not limited to any obligations arising pursuant to other
financial accommodations; and all principal, Reserve Shortfall, interest, Due
Diligence Fees, Origination/Renewal Fees, Wire Transfer Fees, ACH Transfer Fees,
late charges, fees, expenses, attorneys’ fees and accountants’ fees chargeable
to Seller or incurred by Purchaser in connection with this Agreement and/or the
transaction(s) related thereto.

 

“Origination/Renewal Fee” – the Origination/Renewal Fee set forth on “Schedule
A.”

 

“Parties” - Seller and Purchaser.

 

“Prime Rate” – the Prime Rate as used herein shall be the prime rate as
published in the Wall Street Journal as the “Prime Rate” (base rate on corporate
loans posted by at least 75% of the nation’s 30 largest banks)

 

“Purchase Price” - The Face Amount.

 

“Purchased Accounts” - Accounts purchased hereunder which have not been
Repurchased.

 

“Recourse Account” – shall mean the portion of any Purchased Account that
remains unpaid for more than the Repurchase Period from the date of the invoice.

 

“Repurchase Period” – the Repurchase Period as set forth on “Schedule A.”

 

“Repurchased” - an Account has been repurchased when Seller has paid to
Purchaser the then unpaid Face Amount upon demand by Purchaser under the terms
hereof.

 

“Required Reserve Amount” - the Reserve Percentage multiplied by the unpaid
balance due Purchaser on the Purchased Accounts.

 

“Reserve Account” – a bookkeeping account on the books of the Purchaser
representing an unpaid portion of the Purchase Price, maintained by Purchaser to
ensure Seller’s performance with the provisions hereof.

 

“Reserve Percentage” – the Reserve Percentage as set forth on “Schedule A.”

 

“Reserve Release Frequency Period” – The time period during which Seller may
make one request that the funds in the Reserve Account in excess of the Required
Reserve Account be paid to Seller. The time period for the Reserve Release
Frequency Period is specified in “Schedule A.”

 

“Reserve Shortfall” - The amount by which the Reserve Account is less than the
Required Reserve Amount.

 

2. SALE; PURCHASE PRICE; BILLING; NOTATION; RESERVE.

 

2.1 Assignment and Sale. Seller shall sell to Purchaser as absolute owner, with
full recourse, such of Seller’s Accounts as are listed from time to time on
Accounts Transmittal. Each Accounts Transmittal shall be accompanied by such
documentation evidencing the Account as Purchaser shall from time to time
request. Purchaser may purchase from Seller such Accounts as Purchaser
determines to be an Eligible Account, so long as the total outstanding Face
Amount of Purchased Accounts does not exceed, before and after such purchase,
the Line Amount. Purchaser shall incur no liability to Seller for refusal to
purchase an Account determined not to be an Eligible Account. All Accounts
Transmittals, whether or not it is specifically set forth therein, shall
constitute a representation by the Seller that it is solvent, has not and is not
contemplating filing bankruptcy and that all Accounts represented thereby are
valid, enforceable, payable and actual and not subject to setoffs, defenses or
competing claims by any party. Seller shall make all appropriate accounting
entries on its books and records to reflect that Purchased Accounts have been
sold to Purchaser.

 

2.2 Purchase Price. Purchaser shall pay the Purchase Price as follows: Within
two (2) business days following the determination that an Account is an Eligible
Account and Purchaser’s receipt of an Accounts Transmittal, countersigned by the
Seller, Purchaser shall pay Seller an amount equal to the Advance Rate times the
Face Amount of Eligible Accounts reflected on such Accounts Transmittal
whereupon the Eligible Accounts set forth in the Accounts Transmittal shall be
deemed purchased. The balance of the Purchase Price shall be applied to the
Reserve Account and/or any Obligations then due Purchaser by Seller under this
Agreement.

 

2.3 Reserved.

 

2.4 Notation. Seller shall instruct all Account Debtors on the Purchased
Accounts to make payments pursuant to the Notation, and Purchaser may instruct
all Account Debtors to make payments pursuant to the Notation upon the
occurrence and during the continuation of an Event of Default following the
failure of the Seller to repurchase such Purchased Account pursuant to the terms
of this Agreement within five (5) business days upon the written demand of the
Purchaser.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

2.5 Reserve Account. Purchaser may apply a portion of any Purchase Price to the
Reserve Account in the amount of the Reserve Shortfall. Without limiting the
foregoing, Seller shall pay to Purchaser within five (5) business days upon the
written demand of the Purchaser the amount of any Reserve Shortfall. Purchaser
shall pay to Seller upon Seller’s request any amount by which collected funds in
the Reserve Account are greater than the Required Reserve Amount. Purchaser may
charge the Reserve Account with any Obligation due from Seller to Purchaser
hereunder. Purchaser may pay any amounts due Seller hereunder by a credit to the
Reserve Account. Amounts Purchaser is entitled to charge to the Reserve Account,
which remain unpaid after Purchaser’s demand, shall accrue Late Charges.

 

2.6 Collection of Purchased Accounts. Purchaser (as purchaser of the Purchased
Accounts) shall administer the collection of all of the Purchased Accounts.
Purchaser shall have the right of endorsement of the Purchased Account and all
payments received in connection with each Purchased Account. The Seller hereby
appoints Purchaser the attorney-in-fact and agent of the Seller for this
purpose, which appointment is coupled with an interest and is irrevocable during
the term of this Agreement. Purchaser shall have no liability to the Seller for
any mistake in the application of any payment received by it with respect to any
Purchased Account, so long as Purchaser acts in good faith and so long as such
mistake is not caused by Purchaser’s gross negligence or willful misconduct. So
long as Seller provides Purchaser written confirmation from the Account Debtor
on each Purchased Account confirming that the charges set forth on the invoices
are valid and that the face amount is due to be paid, Purchaser shall initiate
no direct contact with any Account Debtor without first obtaining Seller’s
consent or upon the occurrence and continuation of an Event of Default following
the failure of the Seller to repurchase such Purchased Account pursuant to the
terms of this Agreement within five (5) Business Days upon the written demand of
the Purchaser.

 

3. PAYMENT; OBLIGATION OF SELLER. While this Agreement establishes the agreement
of Purchaser to purchase and pay Seller for Eligible Accounts set forth in the
Accounts Transmittal, it also establishes payment and performance obligations of
Seller to Purchaser. With respect to such Obligation owed by Seller to
Purchaser, Seller shall pay to Purchaser:

 

3.1 Interest. Interest, at the Interest Rate on an amount equal to (i) the
unpaid balance of the Purchase Price minus the Reserve Account, as such amounts
change from time to time plus (ii) outstanding fees or other Obligations owed by
Seller to Purchaser hereunder, which shall be computed on the basis of a an
Actual/365 Computation; and

 

3.2 Minimum Term Fee. An amount equal to the Minimum Term Fee less the amount of
actual Interest paid during the Initial Term, or if applicable during any
Renewal Term. The Minimum Term Fee shall be paid at the end of the Initial Term,
the end of any Renewal Term (if applicable) and upon any other the termination
of this Agreement.

 

3.3 Calculation of and Payment of Interest. All accrued interest shall be
calculated monthly on the last calendar day of the month in which it accrues
using the Interest Rate in effect as of the first business day of that month and
paid by Seller on the first business day of the next month. Any change in the
Interest Rate shall take place simultaneously with any corresponding change as
set forth in the Prime Rate from time to time.

 

3.4 Late Charges. In addition to the foregoing, Seller shall also pay to
Purchaser a late fee of .05% per day on any and all overdue amounts due to
Purchaser from Seller pursuant to this Agreement until such amounts are paid in
full. Late Charges will not apply to amounts due to Purchaser on Accounts (but
shall apply to other amounts) unless and until Seller is obligated under this
Agreement to repurchase such Accounts, at which time Late Charges will accrue
until the Account and Late Charges are paid in full. Late Charges shall be paid
and are due within one (1) business day following the occurrence of the event
which makes Seller obligated to Purchaser for any Late Charges.

 

3.5 Due Diligence Fee; Origination/Renewal Fee. In addition to the foregoing,
Seller shall pay to Purchaser the Due Diligence Fee upon execution of this
Agreement, and the Origination/Renewal Fee at the time of the first funding
during the Initial Term and at the beginning of each succeeding Renewal Term.

 

3.6 Other Amounts. All other Obligations or expenses, including, without
limitation, Misdirected Payment Fees, Wire Transfer Fees, ACH Transfer Fees, any
attorney fees reasonably incurred and documented, UCC search fees, UCC filing
fees, out of pocket expenses, or any wire transfer, postage, audit or returned
check fees that are incurred by Purchaser or are specified on “Schedule A” shall
be paid to Purchaser by Seller within five (5) business days following the
written request of the Purchaser to reimburse such expenses.

 

4. REPURCHASE OF ACCOUNTS. Purchaser may require that Seller repurchase, by
payment of the unpaid Face Amount thereof together with any unpaid fees relating
to the Purchased Account on demand, or, at Purchaser’s option, by Purchaser’s
charge to the Reserve Account: (i) any Purchased Account in Dispute, subject to
an Insolvency Event, or for which Purchaser is required to disgorge; (ii) all
Purchased Accounts upon the occurrence of an Event of Default or upon the
termination date of this Agreement; or (iii) any Purchased Account that remains
unpaid after the expiration of the Repurchase Period. Purchaser shall retain a
security interest in any Purchased Account that is repurchased.

 

5. SECURITY INTEREST. Seller grants to Purchaser a continuing first priority
security interest in and to the Collateral to secure the Obligations. Seller
shall take all actions reasonably requested by Purchaser necessary to perfect
the Purchaser’s security interest in the Collateral and authorizes Purchaser to
create and file any and all financing statements, amendments corrections or
releases as are necessary to perfect and maintain its security interest in the
Collateral; provided, that Purchaser shall not be permitted to describe the
Collateral in such financing statements as “All Assets” of the Seller.

 

6. COLLECTION CLEARANCE PERIOD. For all purposes under this Agreement, Clearance
Days will be added to the date on which any payment is received by Purchaser.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

7. AUTHORIZATION TO PURCHASER.

 

7.1 Seller hereby irrevocably authorizes Purchaser and any designee of
Purchaser, at Seller’s sole expense, and irrevocably appoints Purchaser as
Seller’s attorney in fact to exercise at any times in Purchaser’s or such
designee’s discretion and in Seller’s name all or any of the following powers
until all of the Obligations have been paid in full: (a) receive, take, endorse,
assign, deliver, accept and deposit, in the name of Purchaser or Seller, any and
all cash, checks, commercial paper, drafts, remittances and other instruments
and documents relating to the Collateral or the proceeds thereof, (b) upon the
occurrence and during the continuation of an Event of Default, or upon Seller’s
written consent, take or bring, in the name of Purchaser or Seller, all steps,
actions, suits or proceedings deemed by Purchaser necessary or desirable to
effect collection of or other realization upon any Account, following the
failure of the Seller to repurchase such Account pursuant to the terms of this
Agreement within five (5) business days upon the written demand of the
Purchaser, or other Collateral, (c) upon the occurrence and during the
continuation of an Event of Default, extend the time of payment of, compromise
or settle for cash, credit, return of merchandise, and upon any terms or
conditions, any and all Accounts, following the failure of the Seller to
repurchase such Account pursuant to the terms of this Agreement within five (5)
business days upon the written demand of the Purchaser, or other Collateral
which includes a monetary obligation and discharge or release any Account Debtor
or other obligor (including filing of any public record releasing any lien
granted to Seller by such Account Debtor), without affecting any of the
Obligations, (d) file against Seller in favor of Purchaser financing statements
or amendments with respect to the Collateral, (e) pay any sums necessary to
discharge any lien or encumbrance which is senior to Purchaser’s security
interest in the Collateral, which sums shall be included as Obligations
hereunder, and in connection with which sums the Late Charge shall accrue and
shall be due and payable, (f) upon the occurrence and during the continuation of
an Event of Default, or upon Seller’s written consent, file in the Seller’s or
Purchaser’s name or both any mechanic’s lien or claim under a payment bond
connected to the goods or services of Seller following the failure of the Seller
to repurchase a Account forming the basis of such lien or claim pursuant to the
terms of this Agreement within five (5) business days upon the written demand of
the Purchaser; and (g) upon the occurrence and during the continuation of an
Event of Default, or upon Seller’s written consent, notify any Account Debtor
obligated with respect to any Account, following the failure of the Seller to
repurchase such Account pursuant to the terms of this Agreement within five (5)
business days upon the written demand of the Purchaser, that the underlying
Account has been assigned to Purchaser by Seller and that payment thereof is to
be made to the order solely to Purchaser.

 

7.2 Seller hereby releases and exculpates Purchaser, its officers, employees and
designees, from any acts under this Agreement or in furtherance thereof whether
of omission or commission, and whether based upon any error of judgment or
mistake of law or fact, except for any acts caused by such person’s gross
negligence or willful misconduct. In no event will Purchaser have any liability
to Seller for lost profits or other special or consequential damages.

 

7.3 Seller authorizes Purchaser to initiate electronic debit or credit entries
through the ACH system to any deposit account maintained by Seller to satisfy
any of the Obligations.

 

8. COVENANTS BY SELLER.

 

8.1 Seller warrants, represents, covenants and recognizes that the Purchased
Accounts are the sole property of Purchaser, and Seller shall not, collect same,
or without Purchaser’s prior written consent, compromise or adjust any Purchased
Account or grant any additional discounts, allowances or credits thereon.
Further Seller shall, immediately upon the sale of a Purchased Account, make
proper entries on its books and records disclosing the absolute sale and
assignment of such Purchased Account to Purchaser.

 

8.2 Automatically, without notice, after the occurrence of and during the
continuation of an Event of Default, Seller shall not, without the prior written
consent of Purchaser in each instance, (a) grant any extension of time for
payment of any of the Collateral which includes a monetary obligation, (b)
compromise or settle any of the Collateral for less than the full amount
thereof, (c) release in whole or in part any Account Debtor or other person
liable for the payment of any of the Collateral, or (d) grant any credits,
discounts, allowances, deductions, return authorizations or the like with
respect to any of the Collateral.

 

8.3 From time to time as requested by Purchaser (which shall not be more than
one (2) times per calendar year so long as no Event of Default has occurred and
is continuing), at the sole expense of Seller, Purchaser or its designee shall
have access, during reasonable business hours if prior to an Event of Default
and at any time if on or after an Event of Default has occurred and is
continuing, to all premises where Collateral is located for the purposes of
inspecting (and removing, if after the occurrence of and during the continuation
of an Event of Default) any of the Collateral, including Seller’s books and
records, and Seller shall permit Purchaser or its designee to make copies of
such books and records or extracts therefrom as Purchaser may request. Upon the
occurrence and during the continuation of an Event of Default, without expense
to Purchaser, Purchaser may use any of Seller’s personnel, equipment, including
computer readable media, supplies and premises for the collection of Accounts
and realization on other Collateral as Purchaser, in its sole discretion, deems
appropriate. Seller hereby irrevocably authorizes all accountants and third
parties to disclose and deliver to Purchaser at Seller’s expense all financial
information, books and records, work papers, management reports and other
information in their possession relating to Seller.

 

8.4 Before sending any invoice evidencing a Purchased Account to the Account
Debtor, Seller shall mark same with the Notation, or such other notation as
Purchaser shall have advised Seller in writing.

 

8.5 Seller shall pay when due all payroll and other taxes, and shall provide
proof thereof to Purchaser upon Purchasers reasonable request.

 

8.6 Seller shall not, without the prior written consent of Purchaser suffer to
exist any lien (including any encumbrance or security interest) of any kind upon
any of the Collateral, whether now owned or hereafter acquired.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

8.7 Seller shall not change its state of incorporation or organization;
consolidate or merge with another entity; change its name; or transfer, sell,
lease or assign any of the Collateral out of the ordinary course of business to
another entity without written notice to Purchaser at least ten (10) calendar
days prior to any such proposed change.

 

8.8 If payment of any Purchased Account is made directly to Seller, such payment
shall be deemed to have been received in trust for Purchaser, and Seller shall
not deposit or convert such funds and by the next banking day following the date
of receipt, shall send the same, properly endorsed, if necessary, to the
“Notation” designated herein.

 

8.9 Seller shall maintain insurance on all insurable property owned or leased by
Seller in the manner, to the extent and against at least such risks (in any
event, including but not limited to fire and business interruption insurance) as
usually maintained by owners of similar businesses and properties in similar
geographic areas. All such insurance shall be in amounts and form and with
insurance companies reasonably acceptable to Purchaser, with Purchaser shown as
additional insured. Seller shall furnish to Purchaser upon written request, any
and all information concerning such insurance carried. All policies of insurance
shall provide for not less than thirty (30) days prior written cancellation
notice to Purchaser (or upon not less than 10 days’ prior written notice with
respect to non-payment of premiums).

 

8.10 Seller is solely responsible for paying all expenses of its business
including but not limited to the timely filing and depositing on all payroll tax
contributions, required or withholding levied or fixed by any governmental
authority of Seller’s permanent and temporary employees.

 

8.11 Seller shall indemnify Purchaser from any loss arising out of the assertion
of any avoidance claim or preference action initiated under the United States
Bankruptcy Code and shall pay to Purchaser on demand the amount thereof. Seller
shall notify Purchaser within two (2) business days of Seller becoming aware of
any avoidance claim or preference action. The Seller’s duties with regard to
avoidance claims or preference actions shall survive the termination of this
Agreement.

 

8.12 Seller also will not, under any circumstances or in any manner whatsoever,
interfere with any of Purchaser’s rights under this Agreement or misdirect the
payment of any Purchased Account.

 

8.13 Seller shall not factor, finance, give a security interest or sell any of
its Accounts to any person or entity other than Purchaser during the term of
this Agreement, nor shall any Accounts to be purchased under this Agreement be
previously sold, pledged or encumbered by Seller or any other person or entity
in any manner whatsoever.

 

8.14 Seller shall give Purchaser prompt written notice of any levy, attachment,
legal process, or notice of default with regard to Accounts or Collateral or
claiming an amount in excess of $500,000 as soon as same is received by Seller
or as to which Seller has knowledge.

 

8.15 Seller shall defend title to the Collateral against all persons and against
all claims and demands whatsoever, which Collateral, except for the security
interest granted hereby, is lawfully owned by the Seller and is now free and
clear of any and all liens, security interests, claims, charges, encumbrances,
taxes and assessments except as may be set forth specifically herein.

 

8.16 Seller shall pay, when due, all taxes, assessments, and license fees
relating to the Collateral.

 

8.17 Seller shall keep the Collateral, at the Seller’s own cost and expense, in
good repair and condition and not to misuse, abuse, waste, or allow to
deteriorate except for normal wear and tear and to make the same available for
inspection by Purchaser at all reasonable times.

 

8.18 If requested by Purchaser, Seller shall cause Purchaser to be shown as
lender’s loss payee or mortgagee on all insurance policies insuring the
Collateral, and deposit with Purchaser such certificates of insurance or
policies as from time to time requested by Purchaser. Seller shall give
immediate written notice to Purchaser and to insurers of loss or potential loss
or damage to the Collateral and shall promptly file proofs of loss or potential
loss with insurers.

 

8.19 Seller shall immediately notify Purchaser in writing of any change in or
discontinuance of Seller’s place or places of business.

 

9. ACCOUNT DISPUTES. Seller shall notify Purchaser promptly of and, if requested
by Purchaser, will settle all Disputes concerning any Purchased Account, at
Seller’s sole cost and expense. However, Seller shall not, without Purchaser’s
prior written consent, compromise or adjust any Purchased Account or grant any
additional discounts, allowances or credits thereon. Upon the occurrence and
during the continuation of an Event of Default following the failure of the
Seller to repurchase such Purchased Account pursuant to the terms of this
Agreement within five (5) business days upon the written demand of the
Purchaser, Purchaser may, but is not required to, attempt to settle, compromise,
or litigate (collectively, “Resolve”) the Dispute upon such terms as Purchaser
in its sole discretion deem advisable, for Seller’s account and risk and at
Seller’s sole expense. Upon the occurrence and during the continuation of an
Event of Default following the failure of the Seller to repurchase such
Purchased Account pursuant to the terms of this Agreement within five (5)
business days upon the written demand of the Purchaser, Purchaser may resolve
such issues with respect to any Purchased Account of Seller.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

10. REPRESENTATION AND WARRANTY. Seller represents and warrants that: it is
fully authorized to enter into this Agreement and to perform hereunder; this
Agreement constitutes its legal, valid and binding obligation; Seller is solvent
and in good standing in the state of its organization; Seller’s state of
incorporation or organization and exact legal name are set forth in the box of
this Agreement; Seller’s chief executive office is located at the address set
forth in the box of this Agreement; and the Purchased Accounts are bona fide
existing obligations without adjustment, claims, defenses, disputes or rights to
setoff or cancellation, are not sales to affiliated entities, parent companies
or subsidiaries of the Seller and Seller has received no notice or otherwise
learned of any actual or imminent bankruptcy, insolvency or material impairment
of the Account Debtors and Purchased Accounts.

 

11. DEFAULT.

 

11.1 Events of Default. The following events will constitute an Event of Default
hereunder: (i) Seller fails to pay any payment of the Obligations within three
(3) business days after such payment becomes due in accordance with the terms
hereof, (ii) Seller or any guarantor of the Obligations becomes subject to any
debtor-relief proceedings, (iii) any such guarantor fails to perform or observe
any of such guarantor’s obligations to Purchaser or shall notify Purchaser of
its intention to rescind, modify, terminate or revoke any guaranty of the
Obligations, or any such guaranty shall cease to be in full force and effect for
any reason whatever, (iv) Seller breaches any present or future covenant or
agreement contained in this Agreement, or any other present or future contract
or agreement with the Purchaser and such failure continues unremedied or
unwaived for a period of five (5) business days after the earlier of (A) the
date an officer of the Seller becomes aware of such default and (B) receipt by
the Seller of notice from the Purchaser of such default, or (v) Seller breaches
of any term, provision, warranty, or representation under any other agreement or
contract between Seller and CapitalPartners Leasing LLC and/or Porter Bridge
Loan Company, Inc., and such breach continues unremedied or unwaived for a
period of five (5) business days after the earlier of (A) the date an officer of
the Seller becomes aware of such default and (B) receipt by the Seller of notice
from the Purchaser of such default, or fails to pay any obligation within three
(3) business days after such obligation is due to CapitalPartners Leasing LLC
and/or Porter Bridge Loan Company, Inc.

 

11.2 Effect of Default. Upon the occurrence of any Event of Default, in addition
to any rights Purchaser has under this Agreement or applicable law, with or
without notice to Seller, Purchaser may immediately terminate its duties under
this Agreement, at which time all Obligations shall immediately become due and
payable without notice and Purchaser shall have the right to withhold any
payments due to Seller until such times as all the Obligations are satisfied and
paid in full. In addition Purchaser shall have all of the rights of a secured
party under the Uniform Commercial Code, including without limitation the right
to take possession and control of any Collateral and sell the same either
collectively or in lots at one or more private or public sale and Seller will
remain liable for any deficiency. If Purchaser sells any of the Collateral upon
credit, Seller will be credited only with payments actually made by the
purchaser of the Collateral, received by Purchaser and applied to the
indebtedness of the purchaser. In the event the purchaser of the Collateral
fails to pay for the Collateral, Purchaser may resell the Collateral, and Seller
will be credited with the proceeds of the sale. Purchaser may but shall not be
required to proceed against Collateral but may proceed against the Seller or any
guarantor of Seller and the Obligations directly. Purchaser waives any and all
rights it may have to marshalling of assets.

 

In addition to the foregoing, Purchaser may declare the Obligations immediately
due and payable, enforce the security interest given hereunder, require Seller
to assemble any Collateral secured hereunder and the records pertaining thereto
and make them available to Purchaser at a place designated by Purchaser, enter
the premises of Seller and take possession of any Collateral not then in its
possession and of the records pertaining thereto, grant extensions, compromise
claims, and settle collection of any Accounts forming the basis of the
Collateral for less than face value, all without prior notice to Seller, use, in
connection with any assembly or disposition of the Collateral, any trademark,
trade name, trade style, copyright, patent right, or technical process used or
utilized by Seller, and return any surplus realized and hold Seller liable for
any deficiency.

 

11.3 No Waiver. Any failure to or decision by Purchaser not to exercise all of
its rights upon an Event of Default shall not constitute or be deemed a waiver
of such rights as to current or future Events of Default. Any rights and
remedies of Purchaser herein against the Seller or any guarantor of Seller or
the Obligations are cumulative and not alternative.

 

12. TERMS

 

12.1 This Agreement shall be effective for a period commencing on the date
hereof and shall continue until the end of the Initial Term. This Agreement
shall be deemed to be automatically renewed for an additional term equal in
length to the Initial Term (the “Renewal Term”) at the expiration of the Initial
Term, and thereafter to be automatically renewed for succeeding terms at the end
of the first and each succeeding Renewal Term, unless the Seller shall deliver
written notice of cancellation to Purchaser no later than 30 business days prior
to the expiration date of the Initial Term or any succeeding Renewal Term. No
such termination shall terminate or otherwise affect Seller’s obligations
hereunder incurred or accrued prior to such termination. Notwithstanding the
foregoing, Seller can terminate this agreement upon written notice to the
Purchaser and payment in full of all Obligations payable hereunder, including
the Minimum Term Fee (less the amount of actual Interest paid during the Initial
Term, or if applicable during any Renewal Term), upon which, as soon as possible
but no later than three (3) business days after payment in full, all Collateral
will be released, Purchased Accounts will be reassigned to Seller and the funds
remaining in the Reserve Account will be returned to Seller. Purchaser
authorizes Seller to make all lien release filings following termination and
payoff.

 

12.2 The representations, warranties and covenants of the Seller and the
remedies of Purchaser for a breach of such representations, warranties and/or
covenants, shall survive the termination of this Agreement, and such termination
shall not effect the rights of Purchaser to enforce its remedies under the
agreements executed in connection herewith against the Seller or against any
Collateral after a default by the Seller. Upon termination, the Seller shall
remain fully responsible to Purchaser for any Purchased Accounts purchased prior
to such termination. Additionally, Purchaser shall maintain its security
interest in the Collateral until all of the Obligations have been paid in full.
Upon payment in full of any and all Obligations by Seller at termination and
Seller’s release of Purchaser from any and all liability under the Agreement,
Purchaser shall release its Security Interest in all Collateral and terminate
all financing statements.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

 

13. AMENDMENT. No part of this Agreement may be changed, waived, discharged or
terminated, nor may any consent to the departure from the terms hereof be given,
orally (even if supported by new consideration), but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. Any waiver or consent so given shall be
effective only in the specific instance and for the specific purpose for which
given.

 

14. NO LIEN TERMINATION WITHOUT RELEASE. In recognition of Purchaser’s right to
have its attorneys’ fees and other expenses incurred in connection with this
Agreement secured by the Collateral, notwithstanding payment in full of all
Obligations by Seller, Purchaser shall not be required to record any
terminations or satisfactions of any of Purchaser’s liens on the Collateral
unless and until Seller has executed and delivered to Purchaser a general
release in a form reasonably satisfactory to Purchaser.

 

15. FINANCIAL STATEMENTS. During the term of this Agreement, Seller agrees to
provide Purchaser with such financial statements and records monthly and such
other information as may be reasonably requested by Purchaser from time to time,
and each quarter, within twenty days following the end of the respective
quarter, shall furnish an updated customer list with customer names, contact
names, addresses, and phone numbers, as well as a complete and current
payables-aging report.

 

16. SEVERABILITY. In the event any one or more of the provisions contained in
this Agreement is held to be invalid, illegal or unenforceable in any respect,
then such provision shall be ineffective only to the extent of such prohibition
or invalidity, and the validity, legality, and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

 

17. RELATIONSHIP OF PARTIES. The relationship of the Parties hereto shall be
that of Seller and Purchaser of Accounts and not that of borrower and lender,
and neither party is or shall be deemed a fiduciary of or to the other. This is
a purchase and sale transaction and it does not constitute financing. The
rights, obligations and remedies contained herein shall inure to and be binding
on the parties hereto and on their respective legal representatives, successors
and assigns

 

18. ATTORNEYS’ FEES. Seller is obligated to pay to Purchaser all of Purchaser’s
reasonable and documented out-of-pocket attorneys’ fees, legal costs and
expenses, collection, prosecution or defense costs, travel expenses, and other
reasonable and documented out-of-pocket expenses incurred by Purchaser in
connection with this Agreement or in connection with enforcing Purchaser’s
rights hereunder, or in connection with being involved in a legal action related
hereto, or in responding to legal process concerning Seller or any account
purchased hereunder.

 

19. ENTIRE AGREEMENT. This Agreement, including all terms and conditions
specified in any of the Schedules attached hereto, supersedes all prior or
contemporaneous agreements and understandings between the Parties, verbal or
written, express or implied, relating to the subject matter hereof. No course of
dealing, course of performance or trade usage, and no parole evidence of any
nature, shall be used to supplement or modify any terms of this Agreement.

 

20. CHOICE OF LAW. This Agreement and all transactions contemplated hereunder
and/or evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the State of Alabama.

 

21. JURY TRIAL WAIVER. THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION INVOLVING BOTH OF THEM, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.

 

22. LEGAL ACTION. Any action between the Parties shall, if Purchaser so elects,
be instituted in the federal or state court located in Jefferson County, Alabama
(the “Acceptable Forum”). Each party irrevocably submits to the jurisdiction of
the Acceptable Forum, and waives all attempts to transfer to any other forums.
Should any action be initiated in any other forum, Seller shall not oppose any
attempt to have the action transferred to the Acceptable Forum.

 

23. INDEMNIFICATION. Seller agrees to indemnify, defend and hold Purchaser
harmless from any and all claims, damages, actions, or judgments, including
without limitation those for attorney’s fees, which Purchaser may have to pay
and defend against with respect to any third party claims arising out of the
transactions entered into pursuant to the terms and conditions of this
Agreement.

 

24. NOTICE. All notices required hereunder must be in writing (paper or
electronic) and shall be deemed received by Seller upon the earlier of actual
receipt via electronic transmittal, express courier, or other means or, if that
fails, via first class United States Mail properly addressed to the address
first set forth above with a copy to 2112 First Avenue North, Birmingham, AL,
35203. All notices required to be given to Seller shall be deemed given upon the
first to occur of: deposit thereof in a receptacle under the control of the
United States Postal Service; transmittal by electronic or telephonic means to a
receiver under the control of Seller, or actual receipt by Seller or an employee
or agent of Seller. All notices required to be given to Purchaser hereunder
shall be deemed given upon actual receipt by a responsible officer of Purchaser.

 

25. TIME IS OF THE ESSENCE. In all matters pertaining to this Agreement, time is
of the essence.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT
  SCHEDULE A – PRICING AND TERM SHEET

 

This schedule is Schedule “A” to that Recourse Receivables Purchase & Security
Agreement by and between Porter Capital Corporation (Purchaser), and Eco-Stim
Energy Solutions, Inc.; EcoStim, Inc.(Seller) and is incorporated therein and
apart thereof.

 

Seller Eco-Stim Energy Solutions, Inc.; EcoStim, Inc. Credit Facility Recourse
Receivables Purchase & Security Agreement Minimum Average Monthly Volume
$5,000,000.00 Line Amount $12,500,000.00 Initial Term One (1) Year Advance Rate
80% of Eligible Accounts being purchased Reserve Percentage 20% of the Unpaid
Balance of Purchased Accounts Reserve Release Frequency As requested by Seller
provided same is available. Repurchase Period Ninety(90) days From Invoice Date
                    Interest Rate (Prime +) Prime Rate + 8.25% Due Diligence Fee
$***** (If necessary, up to $*****) Origination/Renewal Fee ***** Percent
(*****%) of the Line Amount Wire Transfer Fee $25.00 Per Transfer ACH Transfer
Fee $10.00 Per Transfer Other Considerations Purchaser shall purchase only
Eligible Accounts originating within the United States.

 

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Porter Capital Corporation   RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT
  SCHEDULE B – EQUIPMENT

 

This schedule is Schedule “B” to that Recourse Receivables Purchase & Security
Agreement by and between Porter Capital Corporation (Purchaser), and Eco-Stim
Energy Solutions, Inc.; EcoStim, Inc.(Seller) and is incorporated therein and
apart thereof.

 

Equipment

 

See attached.

 

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PORTER RECOURSE RECEIVABLES PURCHASE & SECURITY AGREEMENT

SCHEDULE B

 

****

 

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Porter Capital Corporation   SECRETARY’S CERTIFICATE

 

SECRETARY’S CERTIFICATE

 

I, Christopher J. Arntzen, hereby state that I am the duly elected, acting and
qualified Secretary of, Eco-Stim Energy Solutions, Inc., an entity organized and
existing under and by virtue of the laws of the state of Nevada (the “Company”),
that I am the keeper of the entity records and seal of the Company, and that:

 

Through a unanimous written consent in lieu of a board of directors meeting in
accordance with the Company’s bylaws, organizational or governing documents and
the aforesaid laws, the following resolutions were duly and regularly adopted:

 

RESOLVED, that the form, terms and provisions of all of the documents and
instruments in the form attached hereto to be executed by the Company with
and/or in favor of PORTER CAPITAL CORPORATION (the “Agreements”), and the
transactions contemplated thereby be, and the same are, in all respects
approved, and that the President, the Chief Financial Officer, any Vice
President, and each other officer of the Company (the “Authorized Persons”), or
any of them, be, and they hereby are, authorized, empowered, and permitted to
execute and deliver the Agreements and any and all other agreements, documents,
instruments and certificates required or desirable in connection therewith, if
necessary or advisable, with such changes as they may deem in the best interest
of the Company, and their execution and delivery of the Agreements, and all such
other agreements, documents, instruments and certificates, shall be deemed to be
conclusive evidence that the same are in all respects authorized and approved;
and be it further

 

RESOLVED, that the actions of any Authorized Person heretofore taken in
furtherance of the Agreements be, and hereby are, approved, adopted and ratified
in all respects.

 

The above resolutions: (a) are not contrary to the articles of incorporation, ,
bylaws or other governing documents of the Company, as applicable, and (b) have
not been amended, modified, rescinded or revoked and are in full force and
effect on the date hereof.

 

The following persons are duly qualified and acting officers of the Company,
duly elected to the offices set forth opposite their respective names, and the
signature appearing opposite the name of each such officer is his authentic
signature:

 

Name   Officer   Signature           J. Chris Boswell   President   /s/ J. Chris
Boswell           Alexander Nickolatos   Chief Financial Officer   /s/ Alexander
Nickolatos           Christopher J. Arntzen   Secretary   /s/ Christopher J.
Arntzen

 

IN WITNESS WHEREOF, I have executed this Certificate, this 8th day of February,
2018

 

  /s/ Christopher J. Arntzen       Christopher J. Arntzen   Secretary

 

[SEAL]

 

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Porter Capital Corporation   SECRETARY’S CERTIFICATE

 

SECRETARY’S CERTIFICATE

 

I, Christopher J. Arntzen, hereby state that I am the duly elected, acting and
qualified Secretary of, EcoStim, Inc., an entity organized and existing under
and by virtue of the laws of the state of Texas (the “Company”), that I am the
keeper of the entity records and seal of the Company, and that:

 

Through a unanimous written consent in lieu of a board of directors meeting in
accordance with the Company’s bylaws, organizational or governing documents and
the aforesaid laws, the following resolutions were duly and regularly adopted:

 

RESOLVED, that the form, terms and provisions of all of the documents and
instruments in the form attached hereto to be executed by the Company with
and/or in favor of PORTER CAPITAL CORPORATION (the “Agreements”), and the
transactions contemplated thereby be, and the same are, in all respects
approved, and that the President, the Chief Financial Officer, any Vice
President, and each other officer of the Company (the “Authorized Persons”), or
any of them, be, and they hereby are, authorized, empowered, and permitted to
execute and deliver the Agreements and any and all other agreements, documents,
instruments and certificates required or desirable in connection therewith, if
necessary or advisable, with such changes as they may deem in the best interest
of the Company, and their execution and delivery of the Agreements, and all such
other agreements, documents, instruments and certificates, shall be deemed to be
conclusive evidence that the same are in all respects authorized and approved;
and be it further

 

RESOLVED, that the actions of any Authorized Person heretofore taken in
furtherance of the Agreements be, and hereby are, approved, adopted and ratified
in all respects.

 

The above resolutions: (a) are not contrary to the articles of incorporation, ,
bylaws or other governing documents of the Company, as applicable, and (b) have
not been amended, modified, rescinded or revoked and are in full force and
effect on the date hereof.

 

The following persons are duly qualified and acting officers of the Company,
duly elected to the offices set forth opposite their respective names, and the
signature appearing opposite the name of each such officer is his authentic
signature:

 

Name   Officer   Signature           J. Chris Boswell   President   /s/ J. Chris
Boswell           Alexander Nickolatos   Chief Financial Officer   /s/ Alexander
Nickolatos           Christopher J. Arntzen   Secretary   /s/ Christopher J.
Arntzen

 

IN WITNESS WHEREOF, I have executed this Certificate, this 8th day of May, 2018

 

  /s/ Christopher J. Arntzen       Christopher J. Arntzen   Secretary

 

[SEAL]

 

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